text:
    Ætna Casualty & Surety Company v. Sengel.
    Opinion delivered February 9, 1931.

      Powell, Smeacl S Knox, for appellant.

      Mahony, Yocum S Saye, for appellee.
   Butler, J.

The appellant company insured the appellee against loss by burglary of property in appellee’s safe in its place of business. While the policy was in force, burglars entered appellee’s place of business and feloniously abstracted from said safe a sum of money. The appellant denied liability under the terms of its policy, and this suit was then instituted and the case submitted to the trial court on the policy of insurance and an agreed statement of facts.

The facts necessary for an understanding of the issues and such as are relevant to the question presented are as follows: the safe insured was not a burglar-proof safe and was not so stated in the policy, but was a fireproof safe. It had two doors — the outer door was provided with a combination lock and immediately inside the outer door was a small compartment or chest closed by a door of thin steel and provided with a lock which was manipulated by a key. This inner chest was used as a receptacle for the cash on hand. At the close of the day’s business both the door to the small inside chest and the outer door were closed and securely fastened. During the night burglars entered the appellee’s place of business and secured entrance into the safe through the outer door b3r manipulating the combination thereof so that it was opened without force or violence. Entrance was gained to the inner compartment b3r use of force upon the inner door by some tool directly upon the exterior of same, of which there were visible marks upon the exterior of such inner door, and the cash within the chest was abstracted.

Under insuring clause No. 1 of the policy, the appellee was indemnified for loss by burglary of property designated in “condition R” within the safe, inside or outside of any chest, caused by the abstraction of such property while the safe was closed and locked “after entry into such safe or vault has been effected by force and violence by the use of tools, explosives, electricity, gas, or other chemicals directly upon the exterior thereof, of which force and violence there shall be visible marks.” The .property designated in “condition R,” subdivision (a) thereof, was money and securities “in safe No. 1 inside or outside of any chest.” By “condition B” the appellant provided that, it should not be liable in para-g’raph No. 7 “for loss of property from within any safe containing a chest unless both the safe and chest have been entered in the manner specified in insuring clause No. 1, unless insurance is specifically provided in subdivision (a) or (c) of “condition R,” and by paragraph No. 9 of said “condition B,” “for any loss effected by opening any safe or vault insured hereunder by the use of any key or by the manipulation of any lock. ’ ’

The question for our determination is, did the entry by violence of the door of the inner chest render the appellant company liable under the terms of its policy, although the outer door was opened without the application of any force, 'but by the manipulation of the combination lock?

In numerous cases under provisions insuring against the felonious abstraction of property from safes where the entry into them was effected by the extraneous forcible use of tools or explosives, it is held that such policies cover loss where entry was made into the inner chambers by such means, even though the outer safe was not so entered. These cases are collected in the note in vol. 41 A. L. R. at page 857, and to the same effect is the holding in a case decided by the Supreme Court of Utah, January 5, 1929, Schubach v. American Surety Co. etc., 273 Pac. 974. But in the case of Blank v. National Surety Co., 181 Iowa 648, 165 N. W. 46, L. R. A. 1918B, 562, a contrary rule was announced. In that case it was held that the loss was not covered where the burglary was effected by working the combination of the outer door and breaking into the inner door.

We have examined the various eases noted in 41 A. L. R, supra, and those cited in 181 Iowa, supra, to support the rule there announced, and can find no essential dissimilarity in the insurance clauses in the policies considered in those cases. The arrangement and verbiage in some are different from those in others, but, in our opinion, the clauses, taken as a whole and giving to them a common sense interpretation, have essentially the same meaning; to protect the insured from loss from a forcible felonious entry, where marks of such are visible upon any of the doors through, which entry from the outside was necessary to reach the property insured.

In Blank v. National Surety Co., supra, the court cites in support of the conclusion there reached the case of First National Bank v. Maryland Casualty Co., 162 Cal. 61, 121 Pac. 321, Ann. Cas. 1936, 1170; Maryland Casualty Co. v. Ballard County Bank, 134 Ky. 354, 120 S. W. 301; and Brill v. Metropolitan Surety Co., 113 N. Y. Supp. 476. These cases do not support the broad statement of the Iowa court. In the case of First National Bank v. Maryland Casualty Co., supra, there was a burglar-proof chest inside the outer safe, and the policy provided that force must be used against both. The proof was that tools were used only upon one, while the combination lock was worked on the other. Maryland Casualty Co. v. Ballard County Bank, supra, was a case where an officer of the bank was held up by burglars and forced to open the vault and the safe within the vault was opened by working the combination lock. The court held that the force used upon the officer to compel bim to open the safe was not the force contemplated by the policy. The point decided in the case of Brill v. Metropolitan Surety Co., supra, was that the evidence failed to show “visible” marks of force, but that the reasonable inference was that the outer door was opened by the working of the combination and the inner door by a key.

Typical of those cases -holding that liability is established where entrance is made by force upon the inner door, although the outer door was not forcibly entered, is the case of Moskovitz v. Travelers’ Indemnity Co., decided by the Supreme Court of Minnesota and reported in 144 Minn. 98, 174. N. W. 616. The insurance was against loss by “entry into such safe or vault by actual force and violence, of which force and violence there shall be visible marks made upon such safe or vault by tools, etc.” By another clause in the policy liability was excluded though there was an entry and burglary “unless all vault, safe and chest doors are properly closed and locked by a combination or time lock at the time of the loss or damage; nor if the entry is effected by opening the door of any vault, safe or chest by the use of a key or the manipulation of any lock. ’ ’ The plaintiff sustained a loss by burglary from his safe. There was no actual force used in effecting an entry through the outer' door, but the court held that “liability arises when there is an entry by actual force through the inner door by tools of which there are visible marks, though entrance through the outer door is effected by the manipulation of a lock and no marks of force are upon it. ”

One of the latest cases is that of Schubach v. American Surety Co., supra. The safe in that case had an outside door and an inner door, referred to as a fire-proof door, and in the interior of the safe was a small chest. This chest was made of steel and had a single door which closed with a spring lock which was operated by the use of a key, the two exterior doors being opened by the manipulation of combination locks with which they were fastened. No force was used upon the outer doors which in any way enabled the burglars to gain admission to the safe. The question was whether the door of the chest was opened by force, and the court held that a reasonable construction of the terms of the policy was that if such was the case the indemnity should extend to and protect the insured against loss resulting from forcibly gaining entrance into the inner chest. The language of the insurance clause of the policy was, “for all loss by burglary occasioned by the abstraction of any such property from the interior of any safe or vault described in the schedule * * * by any person or persons making felonious entry into such safe or vault by actual force and violence, of which force and violence there shall be visible marks made upon such safe or vault by tools, etc.”

In the case at bar the appellant relies upon the case of Blank v. National Surety Co., supra, and the case of Frankel v. Massachusetts Bonding & Ins. Co., decided by the Kansas City Court of Appeals and reported in 177 S. W. 775, the latter case being cited as a case directly in point. In that case entry was made through the outer doors without the use of force. Within the safe was a receptacle closed by a small iron or steel door which was found to have been broken open and visible marks appeared of the force exerted. The insuring clause of the policy under which liability was asserted is not quoted, but the statement is made that the burglarious entry insured against was “by the use of tools or explosives applied directly to the outside thereof,” the court holding that this was a limitation of liability for a loss occasioned by burglary committed by making an entry into the safe by the use of tools or explosives applied directly to the outside of the safe and excluded liability where the outside door was opened b3r the manipulation of a combination and the inner door closing the cash box was opened b3r force.

In none of the cases to which we have been referred was the insuring clause construed in connection with any subsequent explanatory or limiting paragraph; but in the instant case there is a subsequent paragraph which explains and limits the liability1- under the insuring clause. It is argued that the words “exterior thereof” in the insuring clause under review means that the force must have been exerted solely ag’ainst the outside door, but these words must be considered in connection with the provisions of “condition R” and of the description of the safe contained in the pobtyu From these it is apparent that defendant was fully apprized of the nature of the safe, the uses for which it was intended, and where the property insured would be deposited. It knew of the inner chest, and it is fairly inferable that the defendant had knowledge that valuables would be placed therein. The contract was to protect the plaintiff against burglary accomplished by force and violence, and by the seventh paragraph of “condition B,” which must be considered in connection with the insuring clause, the insurer exempts itself from liability “for loss of property from within any safe containing a. chest unless both the safe and chest have been entered in the manner specified in insuring clause 1, unless insurance is specifically provided in subdivision (a) of “condition R.”

Insurance is specifically provided in that subdivision, and when therefore the property insured is in the safe, “inside or outside of the chest,” it is not necessary that both be entered by force by the use of tools directly upon the exterior thereof, and if not both, then which? The policy does not say that it must be the outside door or that it must be the inner door. Hence it is obvious that all that -would be necessary to bring the loss within the terms of the policy is that the force be exercised upon either door. This construction, we think, is warranted by the plain provisions of the policy. But, if doubtful, it must be construed in favor of the insured and in aid of his right to recover.

The rule is familiar that the clauses of an insurance policy must be read together, and, whatever may be the construction of a particular clause standing alone, it must be read in connection with subsequent clauses which limit ■or extend the insurer’s liability, and, where the policy is susceptible of two different interpretations, that most favorable to the insured must be adopted. Applying these rules to the construction of the insuring clause here in question, as explained in subsequent paragraphs of the policy, we hole! that the entry by force of the inner door is sufficient under the policy to affix liability, although the outer door was opened without the use of any force. As is said in Moshovitz v. Travelers’ Indemnity Co., supra: “It was not difficult to write a policy making a forcible entry through the outside door attended by visible marks a prerequisite to liability. If the insuranee company intended to offer the plaintiff such a policy, it could have made its meaning sufficiently clear by the use of a few apt words, and, wishing its liability thus limited, it should have done so.”

It is lastly argued that, irrespective of the construction placed upon the insuring clause, there is no liability because of paragraph No. 9 of “condition B,” which provides, “The company shall not be liable for any loss effected by opening any safe * * * by the use of any key or by the manipulation of any lock. ’ ’ In view of the preceding provisions of the policy, it is difficult to know just what was in the mind of the insurer when it wrote this paragraph. This was not pleaded as a defense to the plaintiff’s complaint, nor is it such. "Whatever might have been the purpose of the insurer, it cannot be given the effect suggested, for the reason that to do so would conflict with the liability of the insurer fixed by the preceding provisions, and it could mean only that where the entry was not effected by violence there would be no liability. We can think of only two ways by which entry might have been effected; one, by force, and the other by the use of keys or by manipulation of locks, and where the latter method was employed there would necessarily be no force, and, hence, no recovery. Paragraph No. 9 of “condition B” merely emphasizes the condition that there must be a forcible entry to affix liability.

The judgment of the trial court is in all things correct, and it is therefore affirmed.

Kirby, J., dissents.


source: Caselaw Access Project

author: Butler, J.

license: Public Domain

text:
    Union Trust Company v. Madigan.
    Opinion delivered February 9, 1931.

      Rose, Hemingway, Cantrell i& Loughborough, for appellant.

      Lee Miles and Bonham Fulk, for appellee.
   Butler, J.

Mrs. Theresa O. Donohue died testate in 1909, leaving surviving- as her only descendants Edward Donohue, a son now forty-eight years old, Annie L. Kleine, a daughter who died at the age of fifty-two in the year 1928, intestate, and two grandchildren, Lennon Sminek and his sister, Mrs. Bernadine S. Madigan, appellee Here. Mrs. Kleine left one child surviving who is now Mrs. Maie K. Ayres. Mrs. Donohue left a considerable estate disposed of under the terms of a will, which, omitting formal parts, is as follows:

1. I desire that all my just debts and funeral expenses, including the sum of $100, which I hereby give and bequeath to Father Enright for saying- Mass for the repose of my soul, be paid out of any estate which I may die seized and possessed.
“2. I devise and bequeath to my sisters, Katie Lennon of Kingston County, Dublin, Ireland, and Elizabeth Lennon of London, England, each, the sum of $100, to be paid to them by my executor hereinafter appointed.
“3. I devise and bequeath to Mother Superior Antoine of the Convent of the Sisters of Mercy, of Little Bock, Arkansas, the sum of $200. I further devise and bequeath to my daughter, Annie E. Kleine of the city of Little Bock, the sum of $1,000; to my grandson Lennon Sminek, the sum of $1,000; and to my granddaughter Bernadine Sminek the sum of $1,000; for the last three bequests of $1,000 each, I desire that my executor assign certificate of deposits held by me, in payment of same.
“4. I devise and bequeath to my daughter, Annie L. Kleine: The east 47 feet of lot 7, block 84 in the city of Little Rock, Arkansas, being on the northwest corner of 5th and Louisiana streets, in said city. I also devise and bequeath to my said daughter, Annie L. Kleine, the home in which I now live, being lot 9, and the north half of lot 8, block 196, in the city of Little Rock, Arkansas, conditioned, however, that this bequest of my home to my said daughter is that my son, Edward Donohue, shall have one room in the house on said premises for his home as long as he shall live, conditioned' further that the bequest to Annie L. Kleine, as mentioned in this item is that the said Annie L. Kleine shall pay the improvement tax as is now levied or that may be levied for the improvement of Louisiana Street upon all of lot 7, block 84, Little Rock, Arkansas, also the improvement tax for the pavement of Center Street upon all of lots 7, 8, 9, 10, block 196, Little Rock, Arkansas.
“5. I devise and bequeath to my grandson, Lennon Sminck, lot 7 and the south half of lot 8, block 196, Little Rock, Arkansas, and devise and bequeath to my granddaughter, Bernadine Sminck, lot 10, block 196, Little Rock, Arkansas. The said Lennon Sminck and the said Bernadine Sminck each to hold the said property bequeathed to them in this item, for and during their natural lives, that they use and enjoy the income from said property during their life, but not to dispose of or incumber same, and should either die without issue, then the same to go to the survivor, but at their death, if they should have issue, they and each of them, may devise and bequeath as they think advisable.
“6. I give to my grandson, Lennon Sminck, and to my granddaughter, Bernadine Sminck, to be held by them in common during their natural lives, the west 50 feet of the east 90 feet of lot 7, block 84, Little Rock, Arkansas, being’ the 50 feet immediately west of the property bequeathed to my daughter, Annie L. Kleine, it is my desire, and a part of this gift, that they use and enjoy the income of said property during their life, but not to dispose of or incumber the same, except that they may incumber same only for the purposes of building thereon or improving the buildings there now on, and, should either die without issue, then to go to the survivor, but at their death, if they should have issue, they may devise and bequeath as they may think advisable.
“7. I devise and bequeath to my grandson, Lennon Sminck, and to my granddaughter Bernadine Sminck, lots 4, 5, 6, block 195, Little Bock, Arkansas, also lots 3, 4, block 91, Little Bock, Arkansas, to be held by them in common, and, should either die without issue, then the same to go to the survivor.
“8. I devise and bequeath to Annie L. IQeine as trustee, for my son Edward Donohue, to be held by her as trustee, during his'natural life, the west 56% feet of lot 7, block 84, Little Bock, Arkansas, being all of said lot not hereinbefore bequeathed, the said trustee to collect the income from said property using the proceeds for the benefit of the said Edward Donohue, during his natural life, and at his death, the said trusteeship shall cease and the said property shall descend to my grandchildren, Mary IQeine, Lennon Sminck and Bernadine Sminck.
“9. I devise and bequeath to my daughter, Annie L. IQeine, to be held by her, ■ one-half for herself and one-half as trustee for Edward Donohue, my two lots on Broadway Street, being lots 3, 4, block 196, Little Bock, Arkansas, the said one-half interest bequeathed to her as trustee for Edward Donohue and the income from said one-half interest to be used by her for the benefit of said Edward Donohue, and at the death of the said Edward Donohue his interest in said property shall descend and become the property of said Annie L. IQeine.
“10. I hereby constitute and appoint my daughter, Annie L. IQeine, the executor of this my last will and testament and request the probate court to appoint her as such, and that she be allowed to serve without giving bond. At this time I owe no debts, and I ask my said daughter, Annie L. Kleine,.to render such service as she can in carrying out the provisions of this my last will and testament.”

I. This litigation is for the specific performance of a contract for the sale and purchase of the property mentioned in paragraph No. 6 of the above will, and involves its construction. The appellee, plaintiff in the court below, insists that she and her brother, Lennon Sminck, who has conveyed to her his interest by warranty deed, took an estate in fee simple by the terms of the will, while the appellant contends that the estate devised amounted only to a life estate, with a contingent remainder in the heirs of the testator as should then be in being, at the termination of the particular estate.

The paramount principle in the construction of wills is that the general intention of the testator, if not in contravention of public policy or some rule of law, shall govern. The rules by which such intent may be discovered are stated in a general way in Covenhoven v. Shuler, 2 Paige, Ch. 130, 21 Am. Dec. 73, quoted with approval in the case of Cox v. Britt, 22 Ark. 570. “That intent must be ascertained from the whole will taken together ; and no part thereof to which meaning and operation can be given, consistent with the general intention of the testator, shall be rejected. Where the words of one part of a will are capable of a two-fold construction, that should be adopted which is most consistent with the intention. of the testator, as ascertained by other provisions in the will. And where the intention of the testator is incorrectly expressed, the court will effectuate it by supplying the proper words.”

Where the language used by the testator is doubtful in its meaning, rules of construction are invoked to enable the courts to arrive at the intention, and, in case ■of ambiguous provisions, certain presumptions must be indulged.

(1) It may be said, first, that the intention of the testator to dispose of his entire estate will be presumed, unless the language of the will shows to the contrary. Gregory v. Welch, 90 Ark. 152, 118 S. W. 404; Booe v. Vinson, 104 Ark. 495, 149 S. W. 524; Barlow v. Cain, 146 Ark. 160, 225 S. W. 228; Pletner v. So. Lumber Co., 173 Ark. 277, 292 S. W. 370; Lockhart v. Lyons, 174 Ark. 703, 297 S. W. 1018. This presumption, though not controlling, must always 'be taken into account when the language employed is so ambiguous as to require construction. Brock v. Turner, 147 Ark. 421, 227 S. W. 597.

It is also a well-settled rule of construction that wills are liberally construed, and every legitimate conclusion is indulged in order to reach a just and equitable result. Words and sentences are to be considered and construed so as to reach the real purpose and intention of the testator. Cockrill v. Armstrong, 31 Ark. 580. The law favors the early vesting of estates (Gregory v. Welsh, supra; Horrocks v. Basham, 139 Ark. 116, 213 S. W. 372), and in cases of doubt the construction should be in favor of the first taker because it is against the policy of the law to tie up property, and also he is presumed to be the favorite of the testator. 28 R. C. L. (Wills) 191.

Courts, in arriving at the true meaning and intent of the testator, incline against any construction of the will which would double portions to the partial exclusion of others equally meritorious. 28 R. C. L. Wills, § 195; Johnson v. McDowell, 154 Iowa 38, 134 N. W. 419, 38 L. R. A. (N. S.) 589.

(2) In construing wills, the general rule is that a gift for life without a limitation over passes a fee in real estate and an absolute interest in personalty, even though words denoting a life estate was intended were used. However, a clear gift to one for life, without a limitation over, is held not enlarged to a fee by such omission, unless a declared purpose is shown to dispose of all the testator’s estate by will instead of creating an intestacy as to the remainder. Thompson on Construction of Wills, § 428, p. 551, Byrne v. Weller, 61 Ark. 366, 33 S. W. 421. In Schouler on Wills, vol. 2, p. 1015, the reason for the rule is thus stated: “Where the construction of a will is doubtful, the law leans in favor of the primary rather than the secondary intent and in favor of the first rather than the second taker as the principal object of the testator’s bounty, as the first taker in a will is presumed to be the favorite of the testator, and the will should be so construed as to make his gift effective if possible, and the presumption may 'be relied on to support the claim that a gift is absolute rather than a life estate where there is no gift over. However the inclination to give to the first donee an estate of inheritance will yield to a clearly expressed intention to the contrary.”

The will under consideration in Byrne v. Weller, supra, made provision that, after the payment of the testator’s funeral expenses, etc., he gave and bequeathed to his wife his entire property and effects of every character and kind, both real and personal, during her natural life, to use and enjoy the rents and profits arising therefrom. In the following paragraph the testator provided that certain parcels of land should at the death of his wife be by her given to such of the living children of a brother and sister as the wife in the exercise of her judgment might deem best, and as to another parcel provided that, after the death of the wife, it should descend jointly to certain named beneficiaries, and, in the event that the beneficiaries named should die before the wife, that she should dispose of that parcel in the same manner as the first. In the fifth and last clause the remainder of the testator’s goods, chattels and effects of every character and kind, both real and personal, were disposed of as follows: “I will and bequeath to my beloved wife, Julia A. Maddox, to dispose of as she may choose and desire at her death.” Except as to the particular parcels of land mentioned ip the specific devises, the court held that the wife took an estate in fee simple.

In Hysmith v. Patton, 72 Ark. 296, 80 S. W. 151, the language of the first item of the will construed in that case was as follows: “I hereby will and devise to my beloved wife, Jane, forty acres of land, the homestead upon which I now reside * * *, in Woodruff County, Arkansas ; also, all of my personal property I may have at my death, and to hold the same in her own right during her natural life or widowhood,” etc. The construction placed on this language was that the widow took a fee in the homestead devised and not a life estate.

II. It will be seen that the particular paragraph to be construed in this case is a single involved and ambiguous sentence in which the purpose of the testator is not plainly discernible, and therefore, in order to discover her intention, the aforesaid rules of construction must be invoked. Taking the whole will together, it is apparent that all those are remembered who have any claim upon her affection or who were the objects of her care; the personal property is disposed of by specific bequests, and there is an evident attempt to make a just and equitable division of the remainder of the estate between and among her descendants. Considering these circumstances and that the intention to dispose of the entire estate will be presumed unless the language of the will shows to the contrary, and remembering that the testator did not insert a residuary clause, her intention becomes obvious, and, as is said in Hayward v. Rowe, (Mass. 1905), 76 N. E. 286, cited by appellee: “There being no residuary clause, an inference cannot be safety drawn that the (testator’s) intention was otherwise than to make a full testamentary disposition of her property.”

It will next be observed that nowhere in the will is there any language indicative of an intent to reserve the fee in the propert}^ devised in paragraphs No. 5 and No. 6 which shall revert to the donor’s estate. No remainder is suggested or its disposition provided for, and if, indeed, a particular estate for life had been given by “certain and express words,” yet, as the testator was attempting to dispose of all her property by will, the particular estate and the remainder would merge into the fee in the first taker when it appears there was no gift over to another.

However, from a careful analysis and fair construction of the language of paragraph No. 6, it is clear that no life estate only is created by certain and express words, but rather the implication is that no such intent was in the mind of the testator. There was no express devise to the donees of an estate for life. The expression is, “I give to my grandson, Lennon Sminck, and to my granddaughter, Bernadine Sminck, to be held by them in common during their natural lives,” which is quite a different statement to one limiting by express words the nature of the estate. It is one which prescribes not the character or extent of the estate conveyed, but the manner in which it should be held. That the estate conveyed was for life only is negatived by the right of survivorship contained in the expression: “Should either die without issue, then to go to the survivor”; for under this provision, if either died, the estate of the other would be enlarged so as to become the owner of the entire estate in fee.

Something more than a mere life estate is also implied by the power given of disposition by devise in the manner deemed advisable by the devisees. This power could arise only in the event that the devisees should die without issue, so that, had issue been born to them or to either of them, there would be no power to devise, and, the condition for the power being the failure of issue, it must have been in the mind of the testator that the fee passed to the devisees, which, in the natural course of events, would descend to their children. If the construction is as contended for by the appellant — that a life estate only was devised — then the issue surviving would be deprived of a material portion of the estate, while that of others no more meritorious than these would he augmented. This is a construction to which courts are not inclined, and which would do violence to the rule that wills should be construed liberally and every legitimate inference of the testator’s intent be indulged, so that a just and equitable result might follow.

There are certain expressions used by the testator which it is suggested support the construction that a life estate only was intended,' namely, the expressions of the desire that the devisees use and enjoy the income of the property during* their lives, but not to dispose of or incumber the same except for certain purposes. These statements express no wish as to what they shall have or what disposition they may make or not make with respect to others, but merely as to how they should use what had already been given them — a desire that the property should be used with that frugal care which doubtless the testator herself had exercised. This language, considered in connection with that which goes before and that which follows, is but the expression of a hope and does not amount to an affirmative command which the devisees are bound to obey. Fullenwider v. Watson, 113 Ind. 18, 49 A. L. R. 5 and note; Ib. 22 and note; Wallace v. Wallace, 179 Ark. 30, 13 S. W. (2d) 810.

It is unnecessary to consider the evidence relating to the mental capacity of Edward Donohue for his deed could add nothing to the strength of Mrs. Madigan’s title. She obtained the fee by virtue of the devise, and since her co-tenant has conveyed to her his interest, she is the owner of the entire estate and the deed offered by her conveys a good title which the appellant is bound to accept.

The decree of the chancery court is correct, and it is therefore affirmed.

Kirby, J., dissents.


author: Hart, C. J.,

text:
    Smith v. Wheat.
    Opinion delivered February 16, 1931.

      Bridges, McGaughey $ Bridges, for appellant.
   Hart, C. J.,

(after stating the facts). It is the settled rule in equity in this State that conveyances to members of the household and to near relatives of an embarrassed debtor are looked upon with suspicion and scrutinized with care; and, when they are voluntary; they are prima facie fraudulent, and when the embarrassment of the debtor proceeds to financial wreck, they are presumed conclusively to be fraudulent as to existing creditors. Wilks v. Vaughan, 73 Ark. 174, 83 S. W. 913; Davis v. Cramer, 133 Ark. 244, 202 S. W. 239; Barham v. Federal Reserve Bank, 176 Ark. 1082, 5 S. W. (2d) 318; and American Company of Arkansas v. Wheeler, 181 Ark. 444, 26 S. W. (2d) 115.

In this connection, it may be stated that these cases call for the application of that rule of evidence that where parties have it in their power to explain suspicious circumstances connected with a transaction, the court trying the case may regard their failure to do so as a proper subject for comment and regard their failure to produce evidence within their power as a circumstance against them. Miller v. J ones, 32 Ark. 337; Burke v. Napoleon Hill Cotton Co., 134 Ark. 580, 202 S. W. 827; Gallup v. St. Louis I. M. & So. Ry. Co., 140 Ark. 347, 215 S. W. 586; and Ramey v. Fletcher, 176 Ark. 196, 2 S. W. (2d) 84.

This is in application of Lord Mansfield’s maxim that “all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted.” Kirby v. Tallmadge, 160 U. S. 379, 16 S. Ct. 349.

When the circumstances under which a transfer of property by a debtor are suspicious, the failure of the parties to testify or to produce available explanatory or rebutting' evidence is a badge of fraud. 27 C. J. 494.

The rule also applies where the circumstances attending- the transaction are suspicious,- and the parties fail to produce any explanation of the suspicions attending the transfer by testifying or giving some explanatory evidence. Griggs v. Crane’s Trustee, 179 Ky. 48, 200 S. W. 317.

In the present case the evidence shows that Fuller was financially embarrassed when the deed in question was made on the 16th day of October, 1928, to his brother-in-law, Gr. B. Wheat, and that Fuller filed a voluntary petition in bankruptcy on the first of November, 1928. Fuller testified that he did not know that he was insolvent on the 16th day of October, 1928, and that Wheat did not know anything about his financial condition. In this respect, he is corroborated by Wheat, but they are contradicted by the attendant circumstances. According to their own testimony, Wheat came down there about the first of September, 1928, and went to work for Fuller, closing out his barber shop business in Pine Bluff. He advanced $500 in cash to Fuller without making any inquiry whatever about his solvency. He does not give any satisfactory aceouht about where he got the money. According to his testimony, he went from his -own home in Pine Bluff to Shreveport and carried the money in his pocket. He had never kept it in the bank, although he carried a small account in the bank from his barber shop business in Pine Bluff. Neither Fuller nor Wheat had any recollections whatever as to the kind of money which the $500 consisted of. Fuller testified in a general way that he used it in purchasing lumber stock for his firm, but he does not give any detailed or satisfactory account of the transaction. It will be remembered that Fuller testified in the bankruptcy proceeding that the consideration for the deed was an old debt which he owed Wheat. In his testimony in the present case, the old debt passes out and a new consideration in cash is given. In this connection it may be stated that according’ to bis own testimony, Wheat advanced the $500 a month before the deed was executed without any request for the payment of his old debt. Fuller testified that Wheat had been trying- for some time, while he lived at Pine Bluff to purchase the four lots in question, but that he had refused to sell them to him. Later.on in his testimony he stated that for some time he had had the lots in question in the hands -of an agent, and that his agent had been unable to sell them. This he gave as the reason for selling them at a low price to his brother-in-law. When all the attendant circumstances are considered, we are of the opinion that a preponderance of the evidence shows that there was no consideration passed between Wheat and Fuller when the property in question was conveyed by Fuller to Wheat and that the transaction should be treated as a voluntary conveyance. The evidence in the record shows that Fuller was insolvent at the time, and the case calls for the application of the rule of law in this respect above set out.

Therefore, the decree will be reversed, and the cause remanded with directions to the chancery court to set aside the conveyance of the property in question from Fuller to Wheat as fraudulent, and for such further relief as appellant may be entitled to in equity which is not inconsistent with this opinion. It is so ordered.


author: Smith, J.

text:
    Barton-Mansfield Company v. Wells.
    Opinion delivered February 16, 1931.

      Caraway, Baker $ Gcmtney, for appellant.

      L. B. Pomdexter, for appellee Wells, and J. B. Crocker and G. M. Gibson■, for other appellees.
   Smith, J.

Ponder Hillhouse, a building’ contractor, entered into an oral contract with F. S. Wells to build for the latter a bungalow for the agreed sum of $4,300. The contract contemplated a “turn-key” job. Hillhouse was to furnish all labor and material, but it was known that his means were insufficient to comply with his contract unless advances were made to him as the work progressed. Hillhouse commenced work, and Wells made advances amounting to $2,850, when he found himself unable to make further advances or to obtain the necessary credit to make the advances. There then existed two mortgages on the land upon which the house was being' constructed,'one to the Federal Land Bank of St. Louis for $4,000, and another, a second mortgage, to the People’s Bank of Imboden for a smaller amount.

It was estimated that $1,510 would be required to complete the building, and Hillhouse, with the consent of Wells, made application to the Imboden Baúl?; for an additional loan of that amount, the proceeds of the loan to be paid out as the work progressed. The bank agreed to make the loan, and made it with the understanding that Hillhouse should complete the building, and, when he had done so, should file a mechanic’s lien against the building and would assign the lien to the bank for its protection. As an inducement to the bank to make the loan, the representation was made that Hillhouse had taken out, or would take out, builder’s insurance. Wells had previously taken out insurance on the building, but there was such delay in its construction that this policy had expired before the building' was completed.

Pursuant to this agreement, Hillhouse made application to the local agent of a fire insurance company for a $4,000 policy, which was later issued to him. This policy recites that the insurer “does insure P. >S. Wells for the term of sixty days” against loss by fire, and in the loss payable clause this provision was written: “Any loss under this policy that may be proved due the assured shall be payable to the assured and Ponder Hillhouse, Smithville, Arkansas, subject nevertheless to all the terms and conditions of.this policy.” It was testified, both by Wells and the officers of the bank, that Hillhouse agreed that the bank would be protected by a policy of insurance, and that the loan would not have been made but for this agreement.

After negotiating’ this loan, Hillhouse resumed work on the building, but did not complete it, although the bank advanced him the full amount of the loan, less $230.52. On December 30,1928, while the contract of fire insurance was in force, the building burned before it had been completed. The contention is made that Hillhouse had then been paid the amount that would have been due him had the building been completed, but, whether this is true or not, it is very clearly shown that the payments which had been made to Hillhouse exceeded the proportionate part of the building cost up to the date of the fire; in other words, Hillhouse had been paid more than the value of the work done and material furnished according to the building contract.

After the fire Hillhouse refused to permit Wells to examine the insurance policy, nor would the local agent furnish that information, but it is not contended that any change had been made in the policy as issued.

Negotiations were entered into between the bank and Wells, on the one hand, and Hillhouse, on the other, to settle the controversy which arose out of the facts stated, and the proposition was made to Wells that he rebuild the house out of the proceeds of the insurance policy. The offer to permit this to be done was made at the trial, and is renewed in the brief.

Wells proposed that Hillhouse start from the ground, or at the bottom of the basement, and rebuild everything new, but Hillhouse refused to do this, insisting that he could use the foundation and certain walls by patching them, and when Wells declined to agree to this the proposition was dropped and does not appear to have ever been renewed, and the officer of the bank having the matter in charge for the bank testified that Hillhouse stated that he could not rebuild, and that he wanted Wells to collect the insurance.

It does not appear that Hillhouse made any effort to collect the insurance, and the adjustment of the loss was made by Wells, although Hillhouse kept the policy of insurance in his possession until February 23,1929, at which time he assigned his interest therein to Barton-Mansfield 'Company, which company furnished him about $800 worth of material, for which he had not paid. It was thereafter impossible for Hillhouse to rebuild, as he was clearly insolvent.

Hillhouse was killed in an automobile accident on July 4, 1929, and W. B. Rudy qualified as administrator of his estate, and on October 19, 1929, Wells brought this suit to collect the insurance policy. This suit was brought against the insurance company, the Federal Land Bank, the People’s Bank of Imboden, the administrator of Hillhouse, and the Barton-Mansfield Company, it being alleged that all these parties claimed some interest in the insurance, and it was prayed that the rights of all parties therein be decreed.

The insurance company filed an answer admitting its liability on the policy, and, upon paying the amount thereof into court, it was discharged. Numerous pleadings were filed by the various parties, which we find it unnecessary to review. A large amount of testimony was taken, and upon the final submission of the cause the court held that Hillhouse had no interest in the proceeds of the policy, and that the interventions of the Barton-Mansfield Company and of the administrator should be dismissed as being- without equity, and this appeal is from that decree.

Upon the final submission of the cause, it was prayed by the Barton-Mansfield Company that the policy be reformed to conform to the intent of the parties, and made to show that its intent was to protect the interests of the deceased contractor Hillhouse, inasmuch as his liability for the failure to erect the building as required by his contract had not been discharged by his death, and the premium upon the policy had been paid by Hillhouse.

The court denied this relief, and we think properly so. If there was a mistake in the issuance of the policy, it was not mutual. The agent for the insurance company testified that the policy issued conformed to the application for it. Wells, and not Hillhouse, was named as the assured, and we think the fair and correct interpretation of the loss payable clause, which is copied above, was to make the loss payable to Wells and to Hillhouse as his interest might appear at the time of the fire. We are also of the opinion that Hillhouse had no interest in the building at the time of the loss by fire. It is true his obligation to erect the dwelling, for which he had been paid, had not been legally discharged, but as appears from what has been said, this obligation had been repudiated. Hillhouse died on the 4th of July after the occurrence of the fire on December 30, 1928, without evidencing any intent to rebuild, but, on the contrary, the testimony shows that he had no such intention. Hill-house was admittedly insolvent, and his estate was of a value so small that the probate court made an order vesting the whole thereof in the -widow under the statute, and no complaint is made of that action. Before the final submission of the cause the widow of Hillhouse was made a party, but no pleadings were filed on her behalf.

The undisputed fact that Hillhouse paid the premium on the insurance policy is of no controlling importance, for the reason that the testimony clearly shows that his agreement to take the insurance was a part of the consideration which induced the Imboden bank to make the loan to him, and the decree of the court refusing to reform the policy must be affirmed, for the reason that relief of this character is granted only in cases of mutual mistake or the mistake of one party, coupled with the fraud of the other, the proof thereof being clear, unequivocal and decisive, and we are of the opinion that the testimony is not of that character. Nicholson v. Hayes, 166 Ark. 112, 265 S. W. 640; Fagan v. Graves, 173 Ark. 842, 293 S. W. 712; American Alliance Ins. Co. v. Paul, 173 Ark. 960, 294 S. W. 58; Loden v. Paris Auto Co., 174 Ark. 720, 296 S. W. 78. It may also be said that it would be inequitable to grant the relief prayed.

The testimony shows that Hillhouse has been paid for all the work he did and for all the material furnished, and he is now dead and cannot rebuild the house, and would not have done so had he lived, and as his estate is insolvent and has been vested in his widow, no liability for the breach of the contract can be enforced. He has been paid once, and it would be inequitable to again pay his estate, or his creditor, the Barton-Mansfield Company.

It is true the Barton-Mansfield Company has not been paid for its material, but that company acquired, by the assignment of the policy to it by Hillhouse, no greater interest therein than Hillhouse himself had. Hill-house was paid money which he might and should have used in paying his bill to the Barton-Mansfield Company, but he did not do so, and the building was destroyed by fire before any claim for a lien had been filed.

Before the opportunity had been afforded Wells to inspect the policy, he assigned his interest therein to the People’s Bank of Imboden, and that bank contracted with the Federal Land Bank that the proceeds of the policy should be paid the Federal Land Bank, and its first lien on the land should be reduced to that extent.

The decree of the chancery court conformed to this agreement, and, as it appears to be in accordance with the equities of the case, it is affirmed.


author: Mehaffy, J. Mehaffy, J.,

text:
    Lake v. Wilson.
    Opinion delivered January 12, 1931.

      Powell, Smead & Knox, for appellant.

      B. E. Wiley, for appellee.
   Mehaffy, J.

Some time in the early part of the year 1925, F. C. Nickel employed John Bruce Cox, a lawyer at El Dorado, Arkansas, to collect from John Dashko a commission alleged to have been earned by said' Nickel on a $250,000 oil and gas lease sale. He agreed to pay said John Bruce Cox twenty-five ,per cent, of the amount recovered. After spending some time in an effort to adjust the matter without suit and failing to do so, Cox, with the consent of Nickel, employed J. R. Wilson, another lawyer at El Dorado, Arkansas, to assist him in the case.

Suit was brought in the Union Chancery Court for Nickel against Dashko, and both Wilson and Cox took part in the preparation and trial of the case. While the trial was in progress, Dashko was asked where the money received by him for the lease was deposited. Objection was made to this question but the court held that the witness must answer the question. Dashko, through his attorneys, then offered, instead of answering the question, to execute a bond to satisfy any judgment that might be rendered against him. This was agreed to, and a bond was executed by Dashko with P. GS-. Lake as surety. This bond was filed and approved. The trial court rendered judgment in favor of Nickel against Dashko for $500.

The judgment of the trial court was unsatisfactory to Nickel and to Ms attorneys, and it was decided that the ease should be appealed to the Supreme Court. The attorneys, however, thought that the fee originally agreed on between Cox and Nickel, twenty-five per cent., was too small, and after a conference a new contract was entered into as follows:

“El Dorado, Arkansas,
“October 27, 1926.
“Messrs. Jno. Bruce Cox and J. R. Wilson,
“Attorneys at Law,
“El Dorado, Arkansas.
“Gentlemen: Pursuant to our conversation on May 13, 1926, in your office, in which. I agreed to give you a fee of $5,000 provided you win the $12,500 judgment asked for in the case against John Dashko in the Supreme Court, I now desire to confirm that agreement by this letter, and will say that if you win judgment in the sum of $12,500, I will pay you $5,000 out of the proceeds of said judgment, and, in the event the judgment is cut down in any sum below that, then the fee will be pro rata. This is a new contract, and supplants the old contract which was made on a basis of 25 per cent, of the recovery, and our rights will be determined by this contract, without any regard to that contract.
“Witness my hand, this the 27th day of October, 1926.
(Signed) “F. C. Nickel.”

This new contract was accepted by the attorneys and the appeal was perfected. The Supreme Court reversed the decree of the trial court and remanded the cause with directions to enter a decree in favor of Nickel for $12,500 and also against the sureties on the bond given for the performance of the judgment.

On the 7th day of November, 1927, J. R. Wilson filed suit in the Union Chancery Court against F. C. Nickel, John Dashko, P. G. Lake, John Bruce Cox, H. P. Smead, trustee, LI. P. Smead, R. O. Knox and Lamar Smead, doing business under the firm name of Powell, Smead & Knox. The parties named were named as defendants and garnishees.

In the complaint filed by Wilson, the employment of John Bruce Cox by Nickel and the employment of Wilson thereafter with the consent of Nickel are alleged, and the appellee alleged also in this complaint that under the terms of the contract he was entitled to 20 per cent, of the recovery, J. B. Cox was entitled to 20 per cent., and that Nickel was entitled to 60 per cent, of the judgment, less $118.76 that Wilson had paid for printing abstract and brief. He also alleged that J. B. Cox was indebted to him in the sum of $1,014.17 with interest at 8 per cent., evidenced by promissory note, and that said Cox was also indebted to him on open account in the sum of $515.10 with 6 per cent, interest. It was alleged that these amounts represented the balance due Wilson by J. B. Cox on office rent. It was also alleged that J. B. Cox was insolvent, and Wilson asked that the interest of J. B. Cox in and to the fee due from Nickel be impounded and subjected to the payment of the items herein claimed, and that he was entitled to have the same impounded by equitable garnishment.

The prayer of Wilson was that the rights of F. C. Nickel, J. it. Wilson and J. B. Cox in and to the judgment against John Dashko and P. G. Lake be declared and fixed by the court, and for judgment for plaintiff and for judgment against the said J. B. Cox for the sums mentioned, and that the interest of the said J. B. Cox as declared by the court be impounded and subjected to the payment of the judgment as equitable garnishment. He also asked that his pleading be treated as an equitable garnishment against P. G. Lake, F. C. Nickel, John Dashko, H. P. Smead, trustee, and IT. P. Smead, R. C. Knox and Lamar Smead, doing business under the firm name of Powell, Smead & Knox, attorneys, and asked that summons be issued against the parties named directing them to answer and show cause why the plaintiff should not recover the sums asked for in his complaint, and why the funds therein referred to should not be subjected to the payment of the claim of the plaintiff, and that summons issue against the said J.- B. Cox directing him to answer and show cause, if any he can, why personal judgment should not be rendered against him in the sum claimed by plaintiff herein, and why his interest in the judgment above mentioned should not be subjected to the payment of said plaintiff. He also asked for a restraining order and that the parties named be restrained from disbursing any part of the funds that might be found due said J. B. Oox and plaintiff and directing the same to be paid into the registry of the court and delivered to plaintiff upon final judgment as to such sums as plaintiff may be found entitled to recover, and that the defendant, J. B. Cox, be treated as a defendant, and that a judgment in personam be rendered against said J. B. Cox in accordance with the prayer and allegations herein, etc.

On the third day of December, 1927, the appellee, J. R. Wilson, filed in the case of F. C. Nickel against J. Dashko a petition to enforce his attorney’s lien. In that petition he alleged that he had theretofore on the 7th day of November, 1927, filed in the above-stjded cause a petition for judgment on the mandate and further alleged in his petition for lien that by virtue of his contract with Nickel he is entitled to the sum of $2,500 with interest; that said contract was made about the 13th day of May, 1926, and that the same was in writing'; that the substance of said contract was that the petitioner was to have a fee of $2,500 or one-half of $5,000; that the mandate showed that the appeal was won and judgment directed to be entered for $12,500 against Dashko. He then described the work he did in preparing’ and trying the case, and that Nickel has refused to pay his fee. He also stated that petitioner had been notified by Nickel to take no further steps in the case, and he made sufficient allegations in his petition for a lien to entitle him to a lien.

The record shows that Mr. Nickel wrote Mr. Wilson a letter dated November 20, 1927, asking Wilson to take no further steps and telling Mr. Wilson that he desired Mr. Cox to be in exclusive control of the matter. Mr. Wilson testified, however, that he did not receive this letter before Tuesday the 22d, and that, on Monday the 21st before this letter had been received, the judgment in the case of Nickel against Dashko had been paid to J. B. Cox, one of the attorneys, and the judgment had been satisfied on the record.

There is a great mass of evidence, but the rights of the parties must be determined by the contract, and only such evidence will be copied or referred to as appears necessary to an understanding of the rights of the parT ties under the contract.

Appellee first contends that one purpose of our lien statute is to protect attorneys against collusive settlement, and that that purpose is specially applicable in this ease. Appellants argue at length that Mr. Wilson devoted a great deal of time and labor and some money in the preparation and trial of the case. We deem it unnecessary to set out this evidence, but it is sufficient to say that the proof is abundant that Mr. Wilson spent a great deal of time and labor, the result of which was a favorable judgment for his client. The evidence as to the time and labor given to the performance of his duties and as to the money expended for printing briefs is undisputed.

Appellee argues that our lien statute will protect him and cannot be avoided by the principles argued by appellants, and he says that Cox and Wilson were not jointly employed by Nickel, but that Cox was consulted and employed and a fee of twenty-five per cent, promised him; that contract was between Nickel and Cox and, of course, was not joint. We agree with appellee in this statement. The first contract of employment was between Nickel and Cox. Wilson was not a party to it and knew nothing about it. Thereafter Cox employed Wilson, or, as they put it in the evidence, told Wilson he would cut him into the case. If it had ended there, Wilson would simply have been in the employ of Cox, but Wilson was introdued to Nickel, and Nickel consented for him to associate himself with Cox and to assist in the case. Nothing further was said about fee until after the case had been tried in the lower court. However, after Wilson came into the case with the consent of Nickel, he would have had under the original contract a lien for his fee. That-contract was not joint.

But the contract entered into on the 27th day of October 1926, was a joint contract and shows on its face that it was the result of a conversation of May 13, 1926. That contract did not provide for giving Wilson $2,500 and Cox $2,500, but it expressly stated that Nickel had agreed to give them afee of $5,000, provided they secured a judgment for $12,500. As between Nickel on one hand and Cox and Wilson on the other, the contract is plain and unambiguous, and it expressly states: “This is a new contract and supplants the old contract which was made on a basis of twenty-five per cent, of the recovery and our rights will be determined by this contract without regard to that contract.” The contract containing the above quoted clause was accepted by the attorneys, Cox and Wilson. Moreover, the suit filed by the appellee in this case is based on that contract. The contract is a joint contract, and unquestionably under that contract Cox and Wilson would have a lien for their services, a lien on the judgment or funds that they recovered. The judgment had already been paid before the lien was filed.

Payment of a debt to one of the joint obligees in a contract is sufficient payment, and in this State the payment may he made to an attorney of record. The lien created by statute can exist only when there is a debt, and if there has been the payment of the debt there could not be any lien.

“A lien is discharged by a proper and sufficient payment of the debt or obligation which it secures.” 37 C. J. 339.

It will be conceded that, if a payment to Cox was a sufficient payment by the debtor, then Wilson could have no lien. A lien is merely security for the payment of a debt. A lien is a claim which one person has upon the property of another as security for some debt or which is a right to claim satisfaction of the debt ont of the property, and, if there is no debt, of course there can be no claim which one person might have on the property of another. A lien is simply a security given by law to secure the payment of money, and the lien given by statute to an attorney is as much security as a mortgage, but the lien given by statute, like the lien created by mortgage, is for the purpose of securing a debt, and, if the debt has been discharged, there is no longer a lien. Therefore, if Cox, as one of the joint obligees, had the right to collect the judgment and had the right to enter satisfaction on the record, the doing of this by him discharged the lien.

Payment of a debt may be made only to a creditor, of course, or to his assignee, and payment to any other person would not, of course, extinguish the debt, but where two persons are joint creditors, as Cox and Wilson were here, payment may ordinarily be made to either of them. 48 C. J. 590.

The payment of a debt to a creditor, no matter* by whom effected, is an extinguishment of the demand.

“The proposition that a debt, as between the debtor and creditor, can only be discharged by the payment by the debtor, or his agent, is a palpable solecism; for we are clear that the payment of a debt, no matter by whom effected, can be nothing more or less than its extinguishment as a demand, notwithstanding the concession, which we think proper to make, i. e., that the payment of a debt by a stranger to the debtor might not and would not possiblyr create and constitute the original debtor a debtor to the volunteer.” Owens v. Chandler, 16 Ark. 650.

A contract with two or more persons for the payment to them of a sum of money is a joint contract with all, and all the payees have a joint interest, and no one of the obligees in a joint contract can sue alone for his proportion. The joint promisees in a joint contract must all, if alive, join in the action. They cannot sue separately. Page on Contracts, vol. 4, § 2079; Rainey v. Smizer, 28 Mo. 310; Thielman v. Goodnight, 17 Mo. App. 429; Slaughter v. Davenport, 151 Mo. 26, 51 S. W. 471; Henry v. Mt. Pleasant Township, 70 Mo. 500; 21 R. C. L. 30; Thornton on Attorneys at Law, § 561.

In August, 1876, the county court of Conway County employed two lawyers to get the lands belonging to the railway company in Conway County properly assessed and listed for taxation. Under the contract the lawyers were to receive a fee of ten per cent, upon the amount of taxes that should be realized. A compromise was agreed to by which the railway company was to pay and did pay $8,506.94. This amount was paid to one of the lawyers. Of the sum collected the attorney accounted for $6,060.55 and died insolvent. He should have accounted for $7,656.25. The county sued the railway company for the balance. The court said: “We make no doubt that the company in paying the mortgage to Reid acted in perfect guod faith. The only interest it could have had in the matter was to discharge the lien or claim for taxes. It -tyas natural to suppose that the attorney who had obtained the judgment was the proper party to whom payment should be made. Ordinarily an attorney is authorized by virtue of his retainer to collect the judgment and execute in the name of his client a proper acquittance therefor.” Conway County v. L. R. & Ft. S. Ry. Co., 39 Ark. 50.

In the last above case Reid and Henry, two attorneys, were employed and were to be paid a fee of ten per cent, of the amount recovered, not five per cent., to Reid and five per cent, to Henry, but ten per cent, to Reid and Henry. Reid collected the money and entered satisfaction on the record, just as Cox did in this case.

Cox and Wilson, having entered into a joint contract, had the right to collect the judgment and enter satisfaction on the record, and since it was a joint contract either Cox or Wilson had this right, and the debtor had a right to pay it to either of them. Mr. Wilson could have collected the money or Mr. Cox could have collected it. Not only is this a joint contract, but the appellee, Mr. Wilson, wrote the contract. According’ to his testimony, he had in mind at the time that he was to receive $2,500 and Mr. Cox $2,500. However this may be, when he dictated the contract he made a joint contract, employing- both Wilson and Cox, and expressly canceled the former contract which was not joint. And the appellee so wrote the contract that it is plain and unambiguous, and oral testimony is not admissible to contradict its terms.

Appellee states that the appellants rely chiefly on the case of Henry v. Mt. Pleasant Township, 70 Mo. 500, and says that appellants have quoted largely from that opinion but did not quote the last few lines. The last few lines which were not quoted by appellants are as follows: “The cases to which.we have been cited as establishing the doctrine that when one is liable to two or more on a joint contract, and settles with either for his part of the claim, the remaining promisee may sue without joining the other, on the ground that such a settlement is to be regarded as a severance of the cause of action do not apply to the case as made in plaintiff’s petition. The settlement and payment made to Bassett was not a part but the whole amount of the claim, and satisfied the obligation not only as to Bassett but also as to plaintiff.’’

The same thing is true in the case at bar. The payment to Cox was not of a part but of the whole amount of the claim, and the payment of the whole to one of the joint obligees satisfies the obligation, not only as to the one receiving the money, but also as to the other joint obligee. The payment of the whole amount to Cox satisfied the obligation as to Cox and as to Wilson also.

Appellee next calls attention to the rule as stated in 33 C. J. 874. The rule referred to is as follows: “Ordinarily in an action brought upon a debt due to those engaged in a joint adventure, all of the members thereof must be joined as parties plaintiff; but it has been held that if some of the joint adventurers refuse to join in the action because of their complicity with the defendant who had misappropriated the funds of the business the others may sue at law for their proportionate shares of the money misappropriated without joining their involved associates. ’ ’

The paragraph immediately preceding the paragraph cited by appellee in 33 C. J. 874 reads as follows: "Where joint adventurers do work for a third person who pays either one of them, the payment is a discharge of the obligation as to both or all.”

No such case as that exists here. Immediately following the above quotation is: "Where a debt due to two or more joint adventurers has been partially discharged by the payment to one of them of his share of the debt, his associate or associates may sue for the remainder without joining him as a plaintiff.”

If Cox had been paid his portion of the judgment only, the judgment debtor could then have been sued by Wilson, who could recover his share or proportion, but the undisputed proof is that the entire amount was paid to Cox, and Cox accounted to Nickel for only one-third of .the fee. Unquestionably either Cox or Wilson had the right to collect the entire fee, and if this had been done by either of them and the one collecting the amount had not accounted to Nickel for any portion of it, the other would have no cause of action against Nickel.

Appellee next calls attention to Schwartzman v. Pine Rubber Co., 189 App. Div. 749, 179 N. Y. S. 284. In that case the court said the obligation was joint and continuing ; said that the names of the parties appearing in the instrument as covenantees create in them a legal interest according to which, if no higher interest appear in some of them, all must be made parties plaintiff. The court in that case also held that the debtor might name thisj and that if he elected to pay one his portion the other could maintain a cause of action, but if the entire debt was paid to one of the joint obligees the debtor was discharged.

In the case of Lansing v. Bliss, 86 Hun 205, 39 N. Y. S. 310, the court held that where a person was liable to two or more on a joint contract and settled with one of them his part of the claim, this did not discharge the liability to the others.

Appellee cites and relies on the case of Lawson v. Mo. & Kan. Telephone Co., 178 Mo. App. 124, 164 S. W. 138. There was no joint contract involved in that case, but the contract of employment was very similar to the original contract in this case. Lawson employed and associated other lawyers with him just as Cox was originally employed in this case and associated Wilson with him with the consent of the client. There was no joint contract in the Lawson case, but the court held that the payment to one of the attorneys was a satisfaction except as to the lien of a lawyer who was not a joint obligee with the other attorneys.

When a client retains a firm, he is presumed to be entitled to the united exertions of all the partners. * * * If attorneys who are co-partners accept a retainer, the contract is joint, continuing to the termination of the suit. Demand on one is also constructively a demand on both, and renders both liable. Weeks on Attorneys at Law, 498; Thornton on Attorneys at Law, vol. 1, 324.

The contract with Cox and Wilson was a joint contract, and the duties and liabilities of each of them was the same as if they had been partners. When a firm of attorneys is employed, or any two or more attorneys employed under a joint contract, the act of any one of the lawyers so employed is binding on all, and either has the right to collect the entire fee. Of course, if either Cox or Wilson collected the entire fee and did not account to the client for it, the one so collecting the fee would be liable to the other party for his portion of the fee. Since either of the attorneys had the right to collect the entire fee and thereby relieve the client of all obligations to the other attorney, when Cox collected the entire fee in this case, he became liable, or would have been liable, to Wilson -for Wilson’s portion of the fee, but the client would not have been liable; but the undisputed proof shows that Cox accounted to Nickel for one-third of the $5,000. Nickel, by accepting this, agreed to a severance, and thereby became liable to Wilson for the amount of the fee that he received from Cox. Of course, if this was not all the fee to which Wilson was entitled, Cox would have been liable for the difference between what he paid and the amount of Wilson’s fee. In other words, if Wilson was entitled to one-half of the $5,000, when Cox collected it, he would have been liable to Wilson for $2,500. Having accounted to Nickel for a portion of this, and Nickel having accepted it, Nickel became liable to Wilson for the amount he received, one-third of the $5,000.

It is contended by appellee that there was never any authority given Cox making him Wilson’s agent. As we have already said, the contract was a joint contract, and under that contract either attorney was bound by the acts of the other attorney. The difference between this case and the cases relied on by appellee is that in this ease there was a joint contract, and the relation was the same as if Cox and Wilson had been members of a law firm or partners, and the cases relied on by appellee are cases where there was no joint contract, and where neither attorney had a right to collect the fee of the other. An attorney’s lien may always be discharged by payment of the fee or debt to any one authorized to collect it. It does not appear from the evidence just when Cox accounted to Nickel for Wilson’s part of the fee. It does appear, however, that Cox claimed that Wilson was entitled to only one-third of the $5,000 fee, and that this is the amount for which he accounted to Nickel.

It is unnecessary for us to determine whether Wilson was entitled to one-half of the fee or one-third of it because under the facts in this case Nickel would only be liable for the amount that he received because Cox had authority to collect the whole fee.

Wilson, having performed the services, and the undisputed proof shows that Nickel received from Cox one-third of the $5,000 which unquestionably belonged to Wilson, became liable to Wilson for this amount. Dashko paid the entire judgment to the proper party, and, having done this, he was not liable to Mr. Wilson. If Dashko had paid the judgment to Nickel without paying the attorney’s fee, he would have been liable for the attorneys’ fees, and the attorneys would have had a lien on the funds in his hands to secure the payment of the fee. But, since Dashko paid the entire judgment to one of the attorneys who had a joint contract for fee, he is not liable to either Nickel or Wilson, or any one else. Dashko had given a bond to pay the judgment that Nickel might recover against him in the suit of Nickel v. Dashko, but the condition in that bond was as follows: “If the defendant, John Dashko, shall fully pay and satisfy any judgment that shall be finally adjudged against him in this action, then this bond shall be void, otherwise to remain in full force and effect.” The bond was signed by Dashko and P. G-. Lake, surety. In this bond they bound themselves to fully pay and satisfy any judgment that might be rendered against Dashko. A judgment was rendered against Dashko in that action, and it was fully paid and satisfied by paying the money to J. B. Cox, one of the attorneys. When this judgment was paid to Cox, there was no longer any liability against either Dashko or Lake. The judgment against them in this case is erroneous. J. R. Wilson is entitled to recover against P. C. Nickel one-third of the $5,000 with interest from the date the judgment was paid to Cox at the rate of six per cent, per annum, till paid. He is also entitled to a judgment against F. C. Nickel for $118.76 with interest at the rate of six per cent, per annum from December 3, 1927.

It is next contended by appellee that there should have been a judgment against Cox, and that the finding of the chancery court in Cox’s favor should be reversed.

The case against Cox was dismissed by Wilson with prejudice. A dismissal with prejudice is as conclusive of the rights of the parties as if the suit had been prosecuted to' a final adjudication adverse to the plaintiff. Union Indemnity Co. v. Benton County Lumber Co., 179 Ark. 752, 18 S. W. (2d) 327.

The suit of Wilson v. Cox, having been dismissed with prejudice, cannot be litigated again.

“The test of determining a plea of res judicata is not alone whether the matters presented in a subsequent suit were litigated in a former suit between the same parties, but whether such mutters were necessarily within the issues and might have been litigated in the former suit.” Robertson v. Evans, 180 Ark. 420, 21 S. W. (2d) 610; Gosnell Special School District No. 6 v. Baggett, 172 Ark. 681, 290 S. W. 577; Cole Furniture Co. v. Jackson, 174 Ark. 527, 296 S. W. 970; Prewett v. Waterworks Improvement Dist. No. 1, 176 Ark. 1166, 5 S. W. (2d) 735.

“The rule has been often announced in this court that the judgment or decree of a court of competent jurisdiction operates as a bar to all defenses, either legal or equitable, which were interposed or which could have been interposed in the former suit.” Morris & Co. v. Alexander, 180 Ark. 735, 22 S. W. (2d) 558.

Since the suit against Cox was dismissed with prejudice, the decree of the chancery court on cross-appeal will be affirmed. The decree in favor of Wilson is modified and affirmed against F. €. Nickel in favor of J. R. Wilson for $1,666.66 2/3 attorney’s fee and $118.76 for expenses with interest as stated above, and the judgment against Dashko and Lake is reversed, and the case against them dismissed. It is so ordered.

Mehaffy, J.,

(supplemental opinion). This case was decided by this court on January 12, 1931. We held there that Wilson was entitled to recover against P. C. Nickel one-third of the $5,000 with interest and also the sum of $118.76 and judgment was entered modifying the judgment of the lower court in favor of Wilson against Nickel.

Wilson had recovered a judgment in the court below against Nickel for $2,500 attorney’s fee, and $118.76 for expenses.

Since the decision and the denying of the petition for rehearing, our attention has been called to the fact that F. C. Nickel did not prosecute an appeal to this court from the judgment of the lower court awarding J. R. Wilson a judgment against him, P. C. Nickel, for the $2,500 attorney’s fee and the $118.76 expenses.

Since Nickel did not prosecute an appeal, the judgment here modifying the .judgment of the lower court and rendering judgment against Nickel in this court was erroneous and that part of the opinion of January 12, 1931, is recalled and set aside and the judgment of the lower court in favor of Wilson and against Nickel of course is not affected by the judgment in this court, because Nickel did not appeal.

It follows, of course, that the judgment here, awarding one-half the cost of appeal against Nickel, is also erroneous and it is hereby set aside, and the cost is adjudged against the appellee, J. R. Wilson.


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    Missouri Pacific Railroad Company v. Sandifur.
    Opinion delivered November 10, 1930.

      R. E. Wiley and E. W. Moorhead, for appellant.

      Walter L. Brotim and Gus W. Jones, for appellee.
   Butler, J.

W. N. Sandifur, appellee, brought this action in the Union County Circuit Court (for damages to his automobile and injury to himself caused by the operation of a train on appellant company’s line of railroad at a street' crossing in the city of El Dorado. Prom a verdict and judgment in favor of the appellee the appellant has appealed, and here asks for a reversal on the ground that the evidence is not legally sufficient to support the verdict and because of alleged error of the court in giving instruction No. 5 requested by the appellee. This instruction will be set out later in this opinion.

It is insisted by the appellant that there is no conflict in the evidence as to any failure on its part to perform its duty toward the public or the appellee, and that it was appellee’s own contributory negligence which was the proximate cause of the accident. We however are of the opinion that there is a sharp conflict in the testimony with regard to both of these propositions, and in order to reverse the case this court must invade the province olf the jury.

At the point of the accident the main line of appellant’s railway, and a number of its side tracks, cross the street in El Dorado. On one of these side tracks and about eight feet to the west of the main line and from fifteen to twenty-five feet north of the street there were two oars standing which had been placed there by the appellant company. Some of the witnesses described these cars as oil tank cars and others as box-cars. Just preceding the accident the appellee was traveling from the west to the east in an automobile, and, as he reached the crossing and was driving upon the main line track, his automobile was struck by a train consisting of a locomotive and four coaches which was being backed from north of the street down to and upon the crossing. At this crossing, because of the number of tracks and the number of cars that were from time to time left thereon and because of the amount of traffic along the street, the appellant company maintained a flagman whose duty it was to warn the traveling public of approaching trains. On the train in question there were five employees of the appellant company; the fireman, who was on the left or west of the calb of the locomotive as it was being 'backed to- the south, and the engineer and three other employees who were on the right or east side olf the train standing on the steps of the coaches on said east side, except of course the engineer. There were two employees on the last coach from the locomotive, one on the steps at the east side at the south end of the car and one on the steps on the same side of the car'at the north end. All of these employees testified that the bell was ringing at the time the train was approaching the crossing, and that it continued to ring up until the time of the accident. The fireman did not testify that he was keeping a lookout, but the engineer and the three other employees testified that they were, and one, the switchman further from' the locomotive and nearer the street, stated that the flagman was standing in the middle of the street at the crossing with his signal raised in warning of the approaching train, and that, while the hell was ringing and the flagman standing at his proper place making the signals of warning, the appellee suddenly appeared and proceeded to drive in front olf the moving* train in spite of the efforts of appellant’s employees to prevent him.

Another employee of the -appellant company who wa-s repairing a 'box-car on -a, side track west of the main line south of the street and only a short distance from the crossing* corroborated the testimony of the train crew in every particular. This testimony was also corroborated in part by two persons not in the employ of the appellant company who were sitting on the edge of the sidewalk some 375 feet west of the scene of the accident. These two witnesses testified that they -saw the flagman on the street with his signboard and another witness, one Justice, also testified that he saw the flagman waving his stop signal. This testimony, if undisputed, would be sufficient to warrant the contention of the appellant that its employees were not negligent, but that the injury to appellee was the result of his lack oif ordinary care for his own safety. But this testimony is disputed, the appellee testifying that he was traveling along the street toward the east at about twelve miles an hour; that, as he approached the tracks, he looked both to the north and south and saw no moving- train and continued to drive -on his way looking* in both directions until he got to a point where his vision to the north was obscured by the two cars standing on the side track north of the street and west of the railroad; that appellant generally had a flagman to stop traffic when trains were passing*, and that such flagman was not at the crossing; that he was listening* for signals and heard no whistle sounded or bell rung* and assumed that the way was clear, and that his first intimation that the cars were being backed along* the line was when the}'' came from behind the two cars standing on the side track; that he immediately applied his brakes and turned Ms car to the right in an effort to avoid the collision.

A-t this time a witness was about 100 feet to the west of the crossing walking on the street toward the east and in full view of the situation. This witness testified that he saw the train hit the appellee's car, but did not see the train or hear it until it came from behind the two cars standing- on the side track; that he saw no flagman in the street and that he would have seen him had he been there; that he did not hear a whistle sounded or bell rung.

Another witness testified that he was about 225 feet away and saw the accident; that the cars on the side track obstructed the view of one going east, and that he did not see the train until it came (back out into the street and did not hear any whistle blow or bell ring at the time; that he did not see any flagman in the street or any one on the back end of the coach.

Still another witness who was guarding some city prisoners and was on the same side of the railroad as the appellee and about 120 feet away testified that he heard no bell ring- or whistle blow and did not see any flagman in the street at the time of the collision, or any one standing! at the back end of the coach, and further stated that he thought he would have seen them if they had been there.

We think this testimony is in conflict with that testimony introduced on the part of the appellant, and, as the jury has accepted the statement of the appellee and his witnesses as true, so must we, and in determining the sufficiency of such testimony we must give to it its strongest probative value. Tested by this rule, we are of the opinion that it was sufficient to support the verdict. Our conclusion is supported by a number of decisions of this court. Mo. Pac. Ry. Co. v. Robertson, 169 Ark. 957, 278 S. W. 357; St. L. S. F. R. Co. v. Haynes, 177 Ark. 104, 5 S. W. (2d) 737; St. L. S. F. R. Co. v. Horn, 168 Ark. 191, 269 S. W. 576; C. R. I. & P. Ry. Co. v. French, 181 Ark. 777, 25 S. W. (2d) 1071.

Instruction No. 5, the giving of which is here assigned as error, is as follows: “The court instructs you that where an automobile is struck upon a public crossing in this State by cars, operated over the crossing by a railroad that the law presumes negligence upon the part of the railroad, and in this case, should you find that the plaintiff, while driving a car on Hillsboro Street in the city of El Dorado, Arkansas, was struck by cars moved over such street by the defendant, the law presumes that the resulting damage from such collision was due to negligence upon the part of the defendant. The defendant to avoid liability may show by preponderance of the evidence that the striking of such automobile was not the result of negligence upon the part of the railroad or that the plaintiff himself was guilty of negligence equal to or greater degree than that of the defendant.”

The appellant insists that the use olf the word “preponderance” in the above instruction is error and to support this contention cites the case of St. Louis, etc. Ry. Co. v. Cole, 181 Ark. 780, 27 S. W. (2d) 992. We do not. think the case cited supports appellant’s view. In that case the court was not passing upon the correctness of the rule given the jury by which it might reach its conclusion, but upon the sufficiency of the evidence to support the conclusion reached. The rule complained of has been many times given by courts, and was expressly approved in the case of Mo. Pac. Ry. Co. v. Robertson, supra. Therefore, in the case at bar we are of the opinion that there was no error in instruction No. 5, supra.

It is insisted that the verdict is excessive. Appellee’s car was entirely demolished, and he was dragged forty-five or fifty feet down the track and rescued from the wreckage by members of the train crew. His ear was cut, his right side injured, and he was confined to his home for about a week. In seven weeks he attempted to go to work, but was unable to do so. It was about five or six months before he was able to return to work when he found that he could not do the work he had been doing on account of his nervous condition. He still suffers pain from his side and his right shoulder, and there is still a knot below the right shoulder which is sensitive. Appellee was a carpenter making $4 a day at the time of his injury, but he is not now able to work upon a building on account of his nervous condition. The automobile which was destroyed was worth from $175 to $200.' The total verdict for injury to himself and damage to his oar was the sum of $1,500. Appellee’s loss of time and the value of his automobile, as figured by the appellant, is $872, leaving a balance of $628 allowed for his pain and suffering. We are unable to say that the injury was slight as is insisted by the appellant, or that the suffering and physical condition of the appellee resulting from the injury is inconsequential. Appellee was tfaced with imminent death as he was rolled down the track in his wrecked automobile, and the shock to his organism must have been most profound. Just what its consequences may be it is difficult to anticipate or determine. It is reasonable to assume that appellee’s suffering and the shock to his nervous system must have been considerable, and we do not believe that the damages awarded were so excessive as to warrant this court in reducing the same.

The judgment is affirmed.

Kirby, J., dissents.


text:
    McHaney v. Brown.
    Opinion delivered February 2, 1931.

      Coulter '& Coulter, for appellant.

      J. 8. Brooks and L. II. Southmayd, for appellee.
   Hart, C. J.,

(after stating the facts). It is earnestly insisted that the redelivery bond was not in the form prescribed by the statute and that therefore no summary judgment could be rendered against the sureties on it. Reliance is placed upon the case of Martin v. Tennison, 56 Ark. 291, 19 S. W. 922. In that case, the defendant in an attachment suit executed a bond with- T. J. Martin as surety, conditioned that the surety would satisfy the judgment of the circuit court to thé extent of the value of the cotton involved in the case.

The court held that it was not conditioned to perform the judgment appealed from, as required 'by statute; and, because it did not conform to the requirements of the statute, it could not he enforced in the manner provided for summary judgments in such cases. We do not think the principle announced in that case applies here. In this case, the delivery bond provided that the defendant, M. L. Simmons, shall perform the judgment of the court in the case. It was executed in conformity with § 8649 of Crawford & Moses’ Digest, which provides that the defendant may cause a bond to be executed to the plaintiff by one or more sureties in double the value of the property to the effect that- the defendant shall perform the judgment of the court in the action. Thus, it will be seen that the bond was executed in exact conformity with the language of the statute, and it is in all essential respects a statutory bond for the redeliverv of the property to the defendant in the replevin suit. The statute does not require any set form of words for the redeliverv bond, and all that is necessary is that it shall in all essential respects comply with the terms of the statute which authorizes its execution. O’Brien v. Alford, 114 Ark. 257, 169 S. W. 774.

The statute requires the bond to be executed in double the value of the property, and it is insisted that this provision of the statute was not complied with, because the complaint and affidavit in the replevin suit allege the value of the drilling rig to be $3,000, the bond was only executed for that sum instead of in double the value of the property. The amount required ]jy the statute to be named in the bond is not one of the terms or conditions to be performed by those signing the bond. It is written in the bond merely for the purpose of limiting the amount for which they are liable. If an amount greater than that provided by the statute had been written in the bond, it might be well said that different terms or conditions than those prescribed by the statute had been inserted in the bond, and that this rendered it ineffectual as a statutory bond upon which summary judgment might be rendered. Such, however, is not the case where a smaller amount is named in the bond. As we have already seen, the statute provides that the bond shall be conditioned that the defendant shall perform the judgment of the court in the action. Thus, it will be seen that a redelivery bond in a replevin suit is not in the strict sense a substitute for the property released in pursuance thereof, nor has the surety on the redelivery bond the option to return the property. The condition of the bond is that the surety shall perform the judgment of the court in the action. It will be readily seen that in many cases the property, as in the case of automobiles, might be rendered valueless or at least materially diminished in value by the constant use of if from the time of the execution of the redelivery bond until the trial of the case. We think that the conditions of the redelivery bond in the present case in all essential respects complied with the statute, and that it was a statutory bond upon which summary judgment might be rendered against the sureties on the bond.

Again, it is insisted that the summary judgment should not have been rendered because one of the sureties testified that, soon after the redelivery bond was executed, the sureties offered to return the drilling rig to the plaintiff, and that the latter told them to let the drilling rig remain on the lease where it was because he was on a deal to sell or lease it to the defendant Simmons there. This, they contend, was a virtual acceptance of the return of the property to the plaintiff Brown. This testimony *vas not competent in the present suit. The original foreclosure decree in which Brown and Simmons were parties and which was rendered after the execution of the redelivery bond contains an express finding by the chancery court that the return of the rig by the defendant Simmons was not a legal and sufficient tender. A decree was entered of record in accordance with the finding of the chancellor. The most that could be said of the decree in this respect is that it was erroneous. No appeal was perfected from this decree, and it is conclusive of the rights of the parties on the return of the drilling- rig. This question could not thereafter be litigated in the motion for a summary judgment against the sureties on the redelivery bond.

Again, it is contended that the court erred in fixing the relative amounts to be allowed to the plaintiff Brown and J. S. Brooks, his attorney. We need not consider this question. Both Brown and Brooks are parties to this proceeding, and neither of them have appealed from the decree of the chancery court. Thus it will be seen that appellants are protected from any further litigation in the matter by satisfying the decree of the chancery court in this proceeding.

Therefore, the decree will be affirmed.