text:
    Alston v. Alston.
    4-3498
    Opinion delivered July 9, 1934.

      Abe Collins, for appellant.

      Lake, Lake <<fi Carlton, for appellee.
   Mehaffy, J.

The appellee, Bess Alston, and the appellant, Roy Alston, were married October 12, 1915, and lived together as husband and wife until June 1, 1933', practically 18 years. On September 14, 1933, the appellee filed in the Sevier Chancery Court a suit for divorce on the grounds of indignities. She alleged the indignities as follows: “Treating her with rudeness, vulgarity, unmerited reproach, haughtiness, contempt, contumely, manifest disdain, abusive language, malignant ridicule, intentional incivility and studied neglect, habitually and systematically pursued. That his manner toward her had been repeatedly persistently unkind. That he withdrew from her all confidence. That his conduct toward hen indicated plain manifestation of settled hate, alienation and estrangement, both of word and action.” That such course of conduct upon the part of the defendant commenced some three or four years ago, and has grown in intensity and severity since that time until it finally became impossible for her to longer live, with him.

It will be observed that the complaint does not state any facts, but states mere conclusions based on the statute, without any attempt to set out what the facts are, or when they occurred, other than stating that the course of conduct commenced three or four years ago.

“The indignities of which she complained should have been specifically set out, that it might have been seen whether they were such as to render her condition intolerable as alleged, or a sufficient cause for the divorce she sought.” Brown v. Brown, 38 Ark. 324; Waldren v. Waldren, 187 Ark. 1077, 63 S. W. (2d) 845.

We said in the case last mentioned: “An allegation such as the one in appellee’s complaint would be sufficient to support a decree where no motion to make more specific was filed, if the evidence had been as to specific facts or specific acts of appellant instead of mere conclusions.

“Where one brings suit for divorce alleging indignities and misconduct, as the appellee did in this case, the defendant of course would be. entitled to know what the plaintiff claimed were the facts constituting the indignities, and if a motion was made to make more specific, the court would require the plaintiff to set out the facts.”

The appellee testified about the date of the marriage and the date when she left the appellant; that they had one little girl nine years of age who is with her, except week-end visits to her father; that Mr. Alston made a visit to Vicksburg, Mississippi, in July, and since then they have not lived together as husband and wife; that Mr. Alston is in the mercantile business; he was gone to Vicksburg about ten days, and appellee did not hear from him during that time; did not know when he came back, and when he came back he did not call her up or notify her; the first she knew about his coming back was on Wednesday after he came back on Monday. Appellee, when appellant went to Vicksburg, stayed at her mother’s, and was there when he returned. She was at her mother’s and went out to get some water, and appellant was on the roof of the new home that her mother was building, and when she saw him she said, “Hello,” and he said “Good morning,” and that was all that was said. He stayed" there about five or ten minutes after speaking to her. He did not say anything about the appellee’s going home, and did not call or send for her after he got home. She went home and took her daughter, Joy, and when they got home appellant just looked ugly, and did not have anything to say to her; that they had a bedroom and a sleeping porch, with a door between, and the door had always been left open. That night he closed the door and did not have anything to say. She did not open the door that night. A few nights after that when Joy was away, she opened the door and thought she would joke with him. He was out of tune, and she thought he would get in a better frame of mind. She told him she was lonesome, and asked him why he did not open the door, but he did not answer or look at her, and she closed the door.

Appellee and Joy were in an automobile accident in August. When she tried to talk to appellant, the chances were he would get his hat and go to the store. He was never in a good humor, never undertook to have a pleasant conversation or cohabit with her as husband and wife. The little girl was badly hurt in the accident and appellee was injured. Joy was rendered unconscious. Appellee’s back .and knee were hurt. The bus driver took her to the hospital and her husband got in the front seat. She and Joy were in the back seat. Appellant did not say anything to her, but just looked ugly. He did not ask appellee if she were hurt. The bus driver asked her to explain how the accident occurred. Appellant did not ask the doctor in her presence about the extent of her injuries. She thinks he did not even know she was hurt; thinks he was still pretty mad at her. She was suffering, she said, and the doctor gave her a hypodermic. Appellant sat right over Joy all the time, and when the nurse came in to take Joy’s temperature, appellant said to her, pointing* over her shoulder: “She’s the one that is making the racket.”

She told appellant that she was going to the hospital at Texarkana, and he did not make any arrangements for her to go. When she told him she was going, he said: “Who said so, your mamma?” She told appellant that she had had X-ray pictures made. He just listened and did not say anything. He just had a look of disdain-— just an ugly look that he has for witness.

Appellant said to her, at a time she had gone to DeQueen for some dental work, that he- was getting mighty tired of this, and asked her when she was going to get her lawyers and get a divorce. She told him that if he wanted to talk about it they would talk then, but he said: “No, your aunt is out there-. Go on,’’

Appellee then testified about some conversations with her brother and her father, and then said that appellant told her she was not a nice girl when he married her, and asked her if she had not had dealings with so and so. She also testified that when some lady came into the room and asked appellant how appellee’s knee was, he said: “I do not know what the doctor said about her knee. He has been in there looking at her leg for 3'0 minutes.”

Appellee testified that, after they had been married about two years, he employed Miss Pearl Rogers to work in the store, and she wanted him to get rid of Miss Rogers, and he finally did. She then said that appellant did not like Mr.- Custer Hughes, but that she had known Hughes always. That appellant often got his gun and would take a walk with it. She testified about their going to the country club when appellant did not want to go. She also testified about a diary she said appellant kept, and she complained about it and said it was such trash; that appellant did not confide in her with reference to his business matters.

She left her husband about September 12th and did not presume he wanted her to come back; that he never let any one hear him say very cruel remarks. There was some disagreement about the purchase of a piano for Joy. She also admitted that she told appellant when the baby was born that she was going to teach her to dislike him.

When appellee was asked on cross-examination if it was not a fact that every time Custer Hughes would come around the house he would grab her and kiss her and put his arms around her, she answered: “Don’t you know Custer Hughes well enough to know that he does that with a good many other women?” She said that at one time appellant called her a liar.

The above is substantially the testimony of appellee. She introduced O. C. Kirby, her father, and Mrs. Sarah Graves, but neither of these witnesses introduced by her testified to any facts in corroboration of appellee’s testimony.

We do not set out the testimonjr of appellant because, as we view the testimony of appellee, there is not sufficient evidence to justify the granting of a decree, and appellant does not ask for a divorce. The appellant denied all the appellee’s testimony.

There is very little evidence as to facts constituting indignities. The evidence about appellant’s looking ugly and treating appellee with disdain are merely conclusions, and no facts are testified to with reference to these matters. The evidence of appellee is without sufficient corroboration.

We recently said: “It is the established doctrine in this State that a divorce decree will not be granted upon the uncorroborated testimony of one of the parties.” Sutherland v. Sutherland, 188 Ark. 955, 68 S. W. (2d) 1022; Darrow v. Darrow, 122 Ark. 346, 183 S. W. 746; Johnson v. Johnson, 122 Ark. 276, 182 S. W. 897; Arnold v. Arnold, 115 Ark. 32, 170 S. W. 486; Kientz v. Kientz, 104 Ark. 381, 149 S. W. 86; Rie v. Rie, 34 Ark. 37; Preas v. Preas, 67 S. W. (2d) 1013.

In 2 Nelson on Divorce and Separation, page 742, the rule as to corroboration is discussed, and, among other things it is said: “If both parties testify, and the defendant denies all the plaintiff’s testimony, the evidence is insufficient. In such cases, however, the court must be careful to notice the character of both parties, and the consistency of the testimony, and may refuse a decree if the evidence is not satisfactory. In New Jersey and Arkansas and perhaps other States, the courts have required corroborative evidence for so long a time that the rule has acquired almost the effect of a statute.”

In Keezer on Marriage and Divorce, page 361, it is stated: “While there is no general rule aside from the statute, requiring corroboration, courts are so reluctant to decide cases on such evidence, that it amounts to nearly the same thing, and evidence of the parties should be corroborated, if possible. ’ ’ To support this rule, several Arkansas cases are cited.

Our conclusion is that there was not sufficient evidence to justify the granting of a decree, and the decree therefore must be reversed, and the cause dismissed.

It is so ordered.


source: Caselaw Access Project

author: Butler, J.

license: Public Domain

text:
    Tinsley v. Missouri Pacific Railroad Company.
    4-3511
    Opinion delivered July 9, 1934.

      W. W. Bandy, for appellants.

      Thomas B. Pryor and Daggett Daggett, for appellee.
   Butler, J.

On October 26, 1932, at about 1 o’clock, a. m., tbe appellants were traveling in an automobile along Highway No. 39 within the corporate limits of the city of Paragould. This highway crossed the line of the appellee railroad company at right angles. When appellants reached the intersection of the. highway and the railroad, their automobile ran into a moving passenger train. The automobile was demolished, and the appellants suffered certain personal injuries. Suit was instituted by the appellants to recover for the value of the automobile and for damage to them by reason of the personal injuries sustained. At the conclusion of the testimony, the court directed a verdict for the appellee on the theory that the undisputed evidence showed that the negligence of the appellants was the proximate cause of the collision.

The plaintiffs alleged that the passenger train with which they collided was traveling at a rate in excess of that provided by the ordinance of the city; that the statutory signals were not given as the train approached the crossing; that the bell was not rung or the whistle sounded; and that the train was moving at a high and excessive rate of speed, which acts of negligence were the direct cause of the collision and the injuries sustained. The answer of the defendant was a general denial of the allegations of the complaint with a plea that the injuries sustained were the result of the negligence of the plaintiffs themselves.

The evidence which tended most strongly to establish the liability of the railroad company was that of the appellants themselves, which, viewed in the light most favorable to them, may be stated as follows: The appellants were young men from nineteen to twenty years of age. On the evening of the accident they had been attending some social function in the neighborhood, and after its conclusion had carried some girls home. At the time of the collision they were on their way to their own homes. It was raining and the night was dark. The windows on the sides of the car had water on them. They were traveling in a closed car with all the windows up except the one on the driver’s side which was lowered about two inches. The windshield wiper was working, and the brakes were in good condition. The railroad ran north and south and the highway' crossed it from east to west. The appellants were approaching the railroad from the -west traveling east and their view of the railroad was obscured by houses on the south of the highway to a distance of about 123' feet from, the line of railroad and on the north by houses to a distance approximately forty-five feet from the railroad. When they reached a point where their view to the south was unobstructed, they looked and saw the headlight of a locomotive. One of the appellants judged it to be about 789 feet south of the crossing and the other estimated it at 500 feet. They were traveling at the rate of fifteen to twenty miles an hour and continued, after seeing the headlight, without further looking to the south, to approach the railroad at that speed. When they passed the last house on the north of the highway — about 45 feet from the crossing — they looked to the north and, seeing no sign of danger in that direction, kept driving until within about 24. feet of the railroad track, the locomotive suddenly “loomed” on the track before them. The driver applied his brakes, but was unable to check his car so as to prevent striking the train. The front end of the automobile ran against the baggage coach, striking the steps of the same which descended from the door. The impact bent the steps of the baggage coach and deflected the automobile from the highway causing it to crash through a line of posts and into a ditch. The automobile was practically demolished and the. appellants injured.

The appellants testified that the train was moving at a speed, variously estimated, at from thirty to fifty miles an hour, and offered to introduce the ordinance of the city of Paragould fixing the maximum at which trains should be operated through the city limits. This testimony was objected to by the defendant company, and the objection was sustained over the exception of the appellants. Appellants also introduced testimony to the effect that no signals were being given as the train approached the crossing either by ringing a bell or sounding a whistle. This testimony was excluded by the court.

Appellants insist that the. court erred in refusing to accept the testimony offered relative to the speed limit prescribed by the city ordinance and in excluding from the jury evidence tending to show that no signals were given by the engineer and fireman. They also insist that the testimony raised a question for the jury as to whether or not the collision was the result of the negligence of the railway company and whether or not the collision was occasioned by their negligence.

Under the undisputed facts, it is immaterial whether or not the signals were given and what was the rate of speed of the. moving passenger train. By their own admission the appellants were cognizant of the fact that a train of some character was just south of the crossing, aud therefore, the blowing of the whistle or sounding of the bell would have given them no information not already in their possession, and the failure to give these signals was not the proximate cause of the injury. St. L. S. F. R. Co. v. Ferrell, 84 Ark. 275, 105 S. W. 263; C. R. I. & P. Ry. Co. v. Elzen, 132 Ark. 431, 200 S. W. 1000; Tyler v. St. L. I. M. & S. R. Co., 130 Ark. 583, 198 S. W. 128.

The appellants in their testimony attempted to justify their conduct by saying that they did not realize that the train was on the main line when they saw the headlight, but thought it was on a side track, but, from the testimony of the appellant, McHaney, it appears that the side track intersected with the main line about sixty-eight feet south of the crossing, and both of the appellants were familiar with the surroundings’ in the vicinity of the crossing. It also developed from their testimony that they did not anticipate the approach of any train at that hour, but were of the opinion that it had passed about 11 o’clock. The proof is undisputed, however, that the appellants did in fact see the headlight of the approaching train at a point from 123 to 80 feet of the crossing and paid no further attention to it, but drove heedlessly along taking no precaution for their own safety, and the passing train did not strike them. They struck it after the entire locomotive and tender had passed and one-half of the baggage coach. The conclusion is inescapable that the only cause of the collision was the negligence of the appellants themselves, and that the 'speed of the train was immaterial. Therefore, there was no error in the court’s refusal to permit the introduction of the city ordinance, and the court correctly directed a verdict in favor of the appellee-

judgment affirmed.


author: T. J. Gaughan, Special Chief Justice. Mehaffy, J.,

text:
    Wasson v. Wooten.
    4-3583
    Opinion delivered July 23, 1934.

      W. H. Donham, Moore, Gray, Burrow <S Ghowning and Trieber \é Lasley, for appellant.

      Fred A. Isgrig and House, Moses <S Holmes, for appellee.
   T. J. Gaughan, Special Chief Justice.

On February 28, 1933, the Bankers’ Trust Company, People’s Trust Company and Union Trust Company, all of Little Rock, Arkansas, being* unable to meet the current lawful demands of their respective depositors, continued business under what is termed a restricted deposit basis. On May 1, 1933, the State Bank Commissioner took charge of each of said banks, and soon thereafter issued charters for three new banks.

A part of the assets of each of the banks was pledged to the Reconstruction Finance Corporation to secure a loan for amounts sufficient to pay the respective depositors fifty per cent, of their deposits. Certain other assets, including the cash from the loan, were transferred to the respective new banks, and shares of stock in the new banks were issued to the old banks. The shares of stock were pledged to the Reconstruction Finance Corporation, with the other assets referred to, but later the stock was released and became assets of the old banks in the hands of the Bank Commissioner. The new banks, under their agreement with the Commissioner, paid to all of the depositors of the three old banks fifty cents on the dollar of their deposit claims.

The principle involved in the determination of this case applies equally to each of the three banks. We shall therefore refer to the proceedings of one and the discussion will be equally applicable to the others.

When the common stock of the new Bankers’ Trust-Company was released by the Reconstruction Finance Corporation to the Bank Commissioner, he offered it to the depositors of the old Bankers ’ Trust Company in exchange for a certain percentage of their deposit claims. Each depositor was requested to accept a like proportionate part. According to the brief filed by plaintiff, a majority of the depositors declined to exchange any part of their deposits for stock, while a number of others accepted stock in exchange for a part of their deposits.

The question now presented by the complaint is whether, in making distribution in the future, in order to prevent a preference, the Bank Commissioner should be required to distribute to the depositors, who did not accept stock, a sum equal to the amount of the exchange value of the stock accepted by the other depositors.

In order to simplify the problem, let us suppose that A and B were depositors in the Bankers’ Trust Company, each in the sum of $1,000. They were paid fifty per cent, of their deposits, so that A and B afterwards held deposit claims each in the sum of $500. Both were requested to exchange a certain per cent, of their claim for a certain number of shares of stock in the new bank. A declined to make the exchange. B accepted the stock, and his deposit is, as a result, reduced to $350. A small distribution has, by the Bank Commissioner, been made to the depositors. In the case of A, his percentage is based on a $500 claim and in the case of B, on a $350 claim. The plaintiff is contending that no distribution should have been made to B until after the distributions to A should amount to $150, and that, until this is done, to allow a dividend or distribution to B on the remainder of his claim of $350 is a preference. Obviously this position assumes that the exchange of stock for deposits, made between B and the Bank Commissioner was not an exchange or sale, bnt was in fact a dividend or distribution. A is not asking that the trade between the Commissioner and B be set aside or rescinded, but that the exchange price of the stock be treated as if it were an advancement in legal tender currency.

The stipulation pertinent to the issue is as follows:

“5. Simultaneously with taking charge .as aforesaid, the Bank Commissioner joined with each of.the respective old banks in the procurement of loans from the Reconstruction Finance Corporation upon the security of certain of the assets of each of the said respective old banks, and in, transferring to the respective new banks, which were organized at that time in succession to the said respective old banks pursuant to act 88 of the Acts of the year 1933, effective March 9, 1933, and to the rules and regulations duly made and approved thereunder, substantially all of the assets of the old banks, at their appraised value, other than those assets .pledged as security for the said loans. Included with the assets so transferred to the respective new banks were the proceeds of the respective loans. The said new banks were organized with shares of capital stock having an aggregate par value, in the instance of the one succeeding the said People’s Trust Company of $200,000, in the instance of the one succeeding the said Bankers’ Trust Company, of $300,000, and in the instance of the one succeeding the said Union Trust Company of $300,000. Each share of the stock of the said new banks had a book value on May 1, 1933, in the instance of the one succeeding the said People’s Trust Company of $31.25, in the instance of the one succeeding the said Bankers’ Trust Company, of $28, and in the instance of the one succeeding the said Union Trust Company of $28.75. Of the stock of the new banks, there was issued to the said respective old banks, or the Bank Commissioner in charge thereof, in part consideration for the assets transferred to the respective new banks, in the ease of the People’s Trust Company, 5,086 shares on the basis of book value, but having- a par value of $25 per share; in the case of the said Bankers’ Trust Company 14,650 shares, on the basis of the book value, but having a par value of $20 per share; and in the case of said Union Trust Company 14,107% shares, on the basis of book value, but having a par value of $20 per share. The said amounts of stock so issued to the said respective old banks were included among the assets thereof which were pledged as security for the said respective loans of the Reconstruction Finance Corporation, and were all of the stock which is or can be involved in the within suit; all the remainder of the capital stock of the said respective new banks having at all times belonged to individuals who, at the issuance thereof, subscribed and paid cash therefor at the said respective book values per share. Each of the said old banks guaranteed its respective successor new bank, to the extent of the book value of the number of shares of stock in the new bank issued to the old bank, against loss within three 3ears of any assets transferred to the new bank. * * *
“7. Immediately upon taking charge of the said respective old banks, the Bank Commissioner, on said May 1, 1933, duly levied assessments against the stockholders of each of the said old banks, for the purpose of paying its respective debts, in amounts of 100 per cent, of the par value of the stock holdings of its respective stockholders, aggregating $350,000 in the instance of said People’s Trust Company, of which $21,800 has been collected to this date, aggregating $600,000 in the instance of said Bankers’ Trust Company, of which $8,400 has been collected to this date, and aggregating $500,000 in •the instance of the Union Trust Company, of which $161,-225.92 has been collected to this date.
“8. Sometime prior to February 1, 1934, the said Reconstruction Finance Corporation released to the said Bank Commissioner all of the shares of stock in the respective new banks which had theretofore been pledged on behalf of the respective old banks as aforesaid, and thereupon the said Bank Commissioner, in charge of the respective said old banks, in pursuance of said act No. 88 and of the rules and regulations duly made and approved thereunder, offered to each and all of the depositors of the respective old banks an opportunity to acquire their proportionate parts of the stock so released through purchase thereof by them respectively, and their payment therefor out of their respective remaining deposits in said old banks, and all of the said stock so released to the said respective old banks was disposed of at said time to such of the said depositors as respectively were willing to acquire the same in the manner aforesaid. The respective depositors who elected to acquire said stock paid therefor out of their said remaining deposits for each share of stock the sum of $31.25 in the instance of stock in the new bank succeeding the said People’s Trust Company, $28 in the instance of stock in the new bank succeeding the said Bankers’ Trust Company, and $28.75 in the. instance of stock in the new bank succeeding the said Union Trust Company, said amounts being in each respective instance the then book value. Country banks organized and existing under the laws of the State of Arkansas were depositors of each of the said old banks, and they respectively acquired and paid for considerable aggregates of the said stock in the manner, and at the respective prices aforesaid; but each of the said country banks was forthwith required by the Bank Commissioner to include the said stock among its respective assets at not more than par, and to agree to dispose of the same within not more than one year. No market for the said shares existed at the time when the Bank Commissioner offered the same to the respective depositors of the said old banks, inasmuch as the public generally were then fearful of acquiring bank stock. At the time of this stipulation, there have been very few sales of the shares of stock of the new banks, and the market value, if any, thereof is uncertain. Since the said sales of stock to .depositors of said old banks each of the said new banks has nationalized. * * *
“12. The offer of the Bank Commissioner to dispose of stock in the respective new banks to the depositors of the respective old banks,-hereinabove referred _t.o, was in each instance made on the same terms to all depositors of the said respective old banks proportionately, and without partiality or preference to any of them, and the sales of said stock were consummated only by separate arrangements with such of the depositors as respectively consented to acquire the same in the method and at the purchase price, aforesaid. At the time of the said respective- stock sales there was no way of foretelling with definiteness, nor is there now, the amounts which will ultimately be realized from the. assets and assessments against the stockholders of the respective old banks, but the Bank Commissioner and the respective old banks were hopeful, at the. time of said respective stock sales on the basis of appraisals, that each of said old banks had sufficient assets through orderly liquidation thereof, and the collection of stock assessments to pay all of its respective depositors in full. In disposing of said stock in the manner aforesaid, the Bank Commissioner and each of said old banks acted in good faith, and in the belief that the same was to the best interest of all the depositors of each of said old banks.' Since disposing of said stock in the manner aforesaid, the Bank Commissioner has required all State banks having deposits in any of the respective said old banks to charge off the same as having no value as assets.”
“14. The plaintiff was a depositor of each of said old banks at the close of business on said February 27, 1933, and is now, and has not acquired stock from either of said old banks, and he is not chargeable with laches in the bringing of this suit.”
“The facts set forth in the stipulation were all of the facts before the court in the said cause.”

The court below directed that future distributions of dividends be paid to such depositors, as had not heretofore purchased stock of the Bank Commissioner to the exclusion of depositors who purchased stock, until each depositor not purchasing stock was brought to a parity with depositors who had purchased stock.

The plaintiff contends that, notwithstanding paragraph No. 12 of the stipulation, if it appears from the stipulation as a whole that there was, in fact, a prefer-, ence created by the sale of stock in exchange for dedeposits, the court should remove the inequality in the manner prayed for in the complaint.

The general doctrine is well settled that preference in distributing trust property is forbidden. Yet our statute authorizes the Bank Commissioner, in liquidating banks, under supervision of the chancery court, to compound debts, sell assets in piecemeal, and exchange property for deposits. It must have been known by the lawmakers that inequalities would result. The Commissioner may act in perfect good faith, and for what he conceives to be the best interest to all concerned, and yet he may sell a doubtful note in exchange for a deposit, and the buyer may, contrary to his own expectations, collect the note in full. On the other hand, the buyer of the note may fail to collect any sum whatever. In each instance a preference resulted. In one instance, against the seller, and in the other, against the buyer. It is not this character of preference that is condemned. In determining whether depositors suffer injury or discrimination on account of sale of assets or exchange for all or part of deposit liability, we must consider the transaction as of the timé the sale or exchange occurred.

Now, applying this rule to the present case, do the facts .justify us in holding that the sale complained of was a preference as between the depositors who retained their deposits, and those who exchanged a part for stock?

After carefully studying the stipulation and taking cognizance of the well-known financial conditions of our country at the time, we have reached the conclusion that at the time the exchange was made, neither the stock nor the deposit liability had a market value, nor could the Bank Commissioner or anyone else foretell, with any reasonable certaint3, the future return from either.

Plaintiff presents two reasons for -his contention that the stock, at the time of the sale, was of more value than the deposits canceled in exchange. The two reasons relied on are: First, the guarantee of the old bank, set out in paragraph No. 5 of the stipulation; and, second, because, since the sale of the stock, the Bank Commissioner has permitted country banks to retain the stock obtained by them among their assets, as set out in stipulation No. 8, and also has required them to charge off any deposit claim held against any of said banks. See stipulation No. 12.

The difficulty in enforcing, in a practical way, the guarantee referred to renders it doubtful whether the guarantee added substantial value to the stock of the new banks.

No explanation of the action of the Bank Commissioner in respect to the so-called country banks is offered, and we are left to conjecture as to what reasons prompted him to this action. The fact is presented in evidence, no doubt as a circumstance to establish the claim of preference. Unexplained and without proof that the action of the Commissioner truly reflected the respective fair market value of the stock and the deposit liability at the time of the exchange, we think the circumstance can have but little, if any, probative force.

It is observed that the country banks must dispose of the stock within one year, and that up to this time, but little has been sold. What loss the country banks will sustain in disposing* of the stock within the year named, and what sums those who retained their deposits may ultimately receive, we cannot, under the stipulation of fact, know with sufficient certainty to enable us to disapprove the action of the Commissioner, admittedly made in good faith, and in what he conceived to be to the best interest of all depositors alike.

We have also carefully considered the question of fact as to whether the transfer of the stock in the new banks to the depositors of the old banks in exchange for their deposit claims, or a part thereof, amounted to a separate sale to each of the depositors or to a dividend or distribution; and have reached the conclusion that each such transaction was in fact a separate sale.

Since the facts do not establish that a preference, ■within the legal meaning of this term, was given by the Commissioner in the exchange of stock for deposits, and since each such transaction was in fact a sale, it only remains for us to determine whether or not the Commissioner was clothed with authority to sell the stock for deposits. We think the authority, subject to the supervision of the chancery court, is fully sustained in the following recent decisions of our court: Dunkin v. Taylor, 185 Ark. 1033, 50 S. W. (2d) 978; Lummus Cotton Gin Co. v. Taylor, 188 Ark. 100, 64 S. W. (2d) 90.

Under the facts presented, we think the acts of the Commissioner should be approved. The decree appealed from is reversed, and the cause remanded with directions to approve the acts of the Commissioner in disposing of the stock of the new banks, and in distributing the funds- of the old banks. It is so ordered.

Mehaffy, J.,

(dissenting). I do not agree, with the majority that the facts in this case do not establish a preference. The majority opinion correctly states the issue as follows: “The question now presented by the complaint is whether, in making distribution in the future, in order to prevent a preference, the Bank Commissioner should be required to distribute to the depositors who did not accept stock a sum equal to the amount of the exchange value of the stock accepted by the other depositors.”

The majority opinion states: “The general doctrine is well settled that preference in distributing trust property is forbidden.”

Therefore the majority holds that, if there was a preference, it would be unlawful. The question then is: Was there a preference?

The majority opinion supposes that A and B were depositors in the Bankers’ Trust Company each in the sum of $1,000. They were paid 50 per cent, of their deposits so that A and B afterwards held deposit claims each in the sum of $500. Both were requested to exchange a certain per cent, of their claims for a certain number of shares of stock in the new bank. A declined to purchase stock in the new bank. B purchased stock to the amount of $150, and was paid $150 of his $500 deposit. Neither of them were required to purchase the stock, but the stock was offered to stockholders and others at a fixed price.

I think it makes no difference whether they paid B $150 of his deposit in money or permitted him to use it in tlie purchase of stock of the value of $150. In either event, he received $150 of his deposit, and A received nothing.

But suppose that B was a depositor in the sum of $5,000 and A in the sum of $500. When the 50 per cent, dividend was paid, 'B’s deposit would be reduced to $2,500 and A’s to $250. Then, if B purchases $1,250 worth of stock in the new bank and A does not purchase any stock, B’s deposit then would be $1,250 and A’s would be $250. The plaintiffs contend that, since B has received $1,250 of his deposit in stock, he is not entitled to any further dividend until A receives the same per cent, that B has received. It is true that A is not asking that the trade between the Commissioner and B be rescinded, but he is asking that he receive the same per cent, of his deposit that B received. How it can be contended that when A has received 50 per cent, in dividends and B has received 75 per cent, of his deposit in dividends, that this is not a preference or discrimination, I am unable to understand. According to the opinion of the majority, it is conclusively presumed that B received $1,250 in value on his deposit and that A received nothing. But it is said that this is not the character of preference that the law condemns.

It is true that the laAv authorizes the Bank Commissioner under the supervision of the chancery court to compound debts, sell assets in piecemeal, and exchange property for deposits. I think a complete ansA\?er to this is that the trade in the instant ease was not made under the supervision of the chancery court. No order was made by the chancery court authorizing the sale, and the chancery court refused to approve it.

This court has never held that these things could be done except under the supervision of the chancery court. The majority opinion cites tAVO cases only: Dunkin v. Taylor, 185 Ark. 1033, 50 S. W. (2d) 978, and Limmus Cotton Gin Company v. Taylor, 188 Ark. 100, 64 S. W. (2d) 90.

In the Dunkin case it was held that the order of the chancery court did not go any further than tlie statute, and that the parties were endeavoring to carry out the letter and spirit of the order of the chancery court. The chancery court had made an order authorizing the Bank Commissioner to do just what he did in that case.

In the Lummus Cotton Gin case the court said: ‘ The only difference between the two cases is that in the Dun-kin case an order was obtained from the chancery court to compound or settle the claims before the Commissioner compounded or settled them. In the instant case, the chancery court confirmed the settlement of the claims after they were adjusted with the depositors by the Bank Commissioner. The confirmation in the instant case of the several settlements had the same effect as if the settlement had been ordered originally by the chancery court.”

The court therefore impliedly held in that case that the settlement would have been void without the order of the chancery court. I think the decisions in both cases would justify the affirmance of the instant ease.

As I have already said, there was no order of the chancery court either authorizing the settlements or confirming them. Moreover, the question that we have here was not involved in either of the above cases.

It is not contended here that the sale of the stock or the trade of deposits for stock was a preference, but the contention is that, after B has received stock for a part of his deposit, it would give him a preference to pay him any further dividends until A had received the same per cent, of his deposit that had been paid to B.

Of course it is not contended that A could be required to purchase stock. I think we may assume that A’s deposit was all the money he had to provide food for his family, and that he could not afford to go into the banking business, even if he had desired to do so. But it is immaterial whether he was unable or unwilling to go into the banking business. The payment to B of any dividend after he had received the stock was wrongful until A had received the same per cent, in payment of his deposit that B had received, and any such payment constituted a preference.

It seems to me that the decision of the majority is an application of the rule announced in Matthew 25:29:

“For unto every one that hath shall be given, and he shall have abundance; but from him that hath not shall be taken away even that which he hath.”

“The general rule that a private debtor may lawfully prefer one creditor over another, as expressed in the case of Jackson v. Citizens’ Bank & Trust Co., 55 Fla. 265, 44 So. 516, does not apply in a case where the debtor, a banking institution, is charged with quasi-public duties and obligations and its business is so burdened with a public interest as to require the exercise by the State of its police power to regulate and supervise.” Leyvraz v. Johnson, 154 So. 159; Baird v. First Nat. Bank, 55 N. D. 856, 215 N. W. 810, 56 A. L. R. 200; Baird v. Reinerston, 253 N. W. 159.

“With such a spirit and understanding of the law, may the officers of a bank, knowing its insolvency, realizing that its receivership is imminent, thus prefer certain depositors over all others by the subterfuge of trading the best assets in the bank’s note case for deposits, in some instances not yet due? We think not. To decide otherwise could be a manifest travesty upon justice.” Luikart v. Hunt, 124 Neb. 642, 247 N. W. 790; Divide County v. Baird, 55 N. D. 45, 212 N. W. 236.

“A preference, however, is the paying or securing to be paid in all or in part of one claim to the exclusion'of other claims.” Preference-Security Savings & Trust Company v. Portland Flour Mills Co., 124 Or. 276, 261 P. 432-454.

I think that payment to B until A has an equal per cent, paid on his deposit is clearly a preference, and that the decree of the chancellor is correct and should be affirmed.


author: McHaney, J.

text:
    Wasson v. Lillard.
    4-3490
    Opinion delivered June 18, 1934.

      J. G. Washom, for appellants.

      Maddox <& Greer, for appellees.
   McHaney, J.

Aaron McMullin and Lula McMullin, his wife, were for a long time residents of Tyronza in Poinsett County. The former became quite prosperous and was the owner of substantial properties. His wife, Lula, died intestate January 14, 1929. He died testate August 7, 1930. No administrator was appointed on the estate of Lula McMullin until after the death of her husband. At the time of her death she had on general deposit in the Bank of Tyronza, hereinafter referred to as the bank, $3,220 and a time deposit of $3,115.32. Shortly after her death, to-wit, on February 5, 1929, the bank, of which Aaron McMullin was a stockholder, director and vice-president, permitted him to withdraw the sums above mentioned to her credit amounting with interest to $6,368.20, and deposit same to his credit. This transaction forms the basis for the first suit by her administrator and was brought against the bank and his executor to recover said sum of money. The bank was later found to be insolvent, was taken over by the Bank Commissioner for liquidation, and appellant J. A. Emrich was appointed Deputy Bank Commissioner for this purpose, he having agreed with the Commissioner, if appointed, to pay all creditors of the bank in full. The complaint was thereafter amended to make the Bank Commissioner and Emerich parties defendant, and judgment was sought against Emrich who was president of the bank for the wrongful misappropriation of said funds and on his promise to pay all claims in full. Trial resulted in a decree for the administrator against all defendants for said sum with interest. One branch of this appeal challenges the correctness of the decree in this respect.

In 1928 Aaron McMullin purchased from the Odd Fellows Lodge a plot of ground in Tyronza, paying the purchase price of $1,000 in cash, and thereafter erected a brick building thereon at a cost of some $6,000 a portion of which was leased for theater purposes and will hereafter be referred to as the picture show property. Warranty deed dated April 21,1928, was executed by the Odd Fellows Lodge, through its officers and delivered to Aaron McMullin. This deed has been lost or destroyed, but was recorded August 20, 1928, and the record shows the grantees were Lula McMullin and Aaron McMullin. On May 15,1929, after the death of Lula, Aaron McMullin mortgaged this picture show property and certain of his farm lands to J. L. Dean as trustee for the bank to secure a large indebtedness to it, which mortgage was promptly recorded the next day. In October, 1929, Aaron McMullin conveyed all the lands mortgaged to the bank to his nephew, Ivan McMullin, including the picture show property. After Aaron McMullin’s death, the administrator and heirs at law of Lula McMullin, deceased, brought an action against the bank and Ivan McMullin, to reform the deed to the picture show property in which it was alleged that the conveyance was to Lula McMullin alone, and that the name of Aaron McMullin had been inserted in said deed fraudulently before the record thereof; and that the conveyance to Ivan was fraudulent, and, Aaron McMullin not having any title, the mortgage to the bank was void. Prayer was for reformation so as to place the title to the picture show property in the heirs of Lula McMullin and to cancel the deed to Ivan and the mortgage to the bank.

After the insolvency of the bank, the Commissioner brought suit to foreclose the mortgage given it by Aaron McMullin. Two creditors, Abston, Wynne & Company and Dillard & Coffin Company, intervened and alleged the insolvency of Aaron McMullin at the time of the conveyance of the properties by him to Ivan McMullin and prayed a cancellation thereof as'a fraud on creditors. The court entered a decree denying reformation of the deed to the picture show property, foreclosing the mortgage in favor of the bank and refusing to cancel the deed to Ivan McMullin. Another branch of this appeal challenges the correctness of the decree refusing to reform the deed to the picture show property to show a conveyance thereof to Lula McMullin alone. The two intervening creditors prayed but were not granted an appeal in the trial court, and no appeal has been granted them in this court.

A brief has been filed by counsel for said creditors, but counsel for Ivan McMullin has moved to strike same on the ground that they have not appealed. This motion must be granted, as the judgment against them has become final, no appeal haying been taken by them within the time provided by law. Camden National Bank v. Donaghey, 145 Ark. 529, 237 S. W. 457. Nor can they be treated as cross-appellants, as provided in § 2166, Crawford & Moses’ Digest. See Porter v. Morris, 131 Ark. 382, 199 S. W. 106; Myers v. Linebarger, 144 Ark. 389, 222 S. W. 720; Gordon v. Reeves, 166 Ark. 601, 267 S. W. 133; Scott v. Stephenson, 168 Ark. 763, 271 S. W. 714. Said creditors are neither appellants nor co-appellees. Said brief will be stricken.

As to the deposit of Lula McMullin in the bank which was withdrawn by her husband after her death, we are of the opinion the court erred in rendering judgment against appellants The undisputed evidence shows that she had no income of her own, except small amounts from, the sale of butter, eggs and milk; that the deposit was made with funds belonging to Aaron McMullin and deposited to her credit for his convenience; that at the time the account was opened, and at all times, it was agreed and understood between them and the bank that either could check against the account; and that in reality it was his account in her name. Checks were drawn by him against this account from time to time, and no objection was ever made by her to the bank or to any one else. Having paid the money to Aaron McMullin, the apparent and actual owner of the deposit, it would be a great injustice to require appellants to pay it again on the suit of the administra ■ tor of her estate who waited until afer his death to institute the suit. This part of the judgment will be reversed and the cause dismissed.

As to the suit to reform, we are of the opinion that the court correctly refused reformation. While it is true the three trustees of the Odd Fellows Lodge who signed the deed and the notary who wrote it and took the acknowledgments testified very positively that the conveyance of the picture show property was to Lula McMullin alone, and that Aaron McMullin was not a grantee therein, there are other facts and circumstances that speak louder than the memory of witnesses. The deed has been lost or destroyed and was not in evidence. The record of the deed was in evidence, and it showed a conveyance to Lula McMullin and Aaron McMullin and unto their heirs and assigns forever. If it had been originally written to Lula McMullin alone, it would have required the interlineation of the name of Aaron Mc-Mullin four times, and the word “her” would have been changed to the word “their” two times. No such changes were noted on the record although the statute, § 8629, Crawford & Moses’ Digest, provides: “Each recorder shall record every deed by entering them word for word and letter for letter, and noting at the foot of each record all interlineations, erasures, etc.” There is a presumption of law, rebuttable, of course, that the recorder performed his duty in this regard. Since no interlineation or erasures were noted, the presumption is that none appeared in the deed. Another circumstance is that Aaron McMullin at all times handled or managed the property as his own. He rented it to the picture show owner and others as his own, collected the rents and bandied them as bis own. He occupied an office in the building himself. Another fact testified to by the cashier of the bank is that, when he took the mortgage, McMullin delivered to him the deeds to the property so that it could be properly described in the mortgage, and that the deed to the picture show property was made to Lula and Aaron McMullin, and that it did not show any interlineations and erasures. There are other facts and circumstances tending to support the court’s finding in this regard, but we deem it -unnecessary to detail them. Suffice it to say that the decree is proper and is supported by the weight of the evidence. At least, we are convinced that the evidence is not sufficient to meet the clear and convincing rule for the reformation of written instruments as the law requires, announced in many decisions of this court.

This branch of the appeal will be affirmed. Costs will be adjudged against appellees.


text:
    Browne v. Dugan.
    4-3465
    Opinion delivered June 25, 1934.

      James R. Campbell, G. T. Cotham and Walter Hebert, for appellants.

      Geo. P. Whittington, for appellee.
   Butler, J.

Mrs. Katheryn O. Dugan is the owner of an office building in the city of Hot Springs. She leased offices to the appellant, Dr. Browne, and thirteen others. These tenants abandoned their leases, and Mrs. Dugan brought suit to collect for the rents which had accrued up to the time of the bringing of her suit. The trial resulted in a verdict for the defendants, and Mrs. Dugan appealed to this court, which, in an opinion delivered March 13', 1933, reversed the judgment of the lower court for error in refusing to give certain instructions requested by Mrs. Dugan. Dugan v. Browne, 187 Ark. 12, 58 S. W. (2d) 426. On remand, the case was again submitted to a jury, which found in favor of Mrs. Dugan, and from the judgment based upon that verdict comes this appeal.

At the beginning of the trial, it was stipulated that the fourteen leases exhibited with the complaint were executed by the defendants and the plaintiff lessor; that the defendants had paid no other rent than that stated in the complaint, with the exception of Dr. W. H. Dead-rick; that they had not paid the amounts alleged in the complaint as the balance due of rent, except the said Deadrick who would be entitled to a credit of $480. The lease provided that the lessor should furnish necessary heat, light, gas, water, elevator and janitor service during the term of the lease. The defense tendered by defendants when the case was first tried was that the lessor had failed to comply with this agreement, thereby breaching the contract and justifying the defendants in abandoning the lease. At the trial on remand, the same defense was pleaded, and by an amendment to the answer the following further defense was offered: ‘ ‘ That, ill connection with and incident to the express covenant made by plaintiff (appellee here) to furnish defendants (appellants here) as tenants of said office building the necessary heat, light, gas, water, elevator and janitor, service required by defendants as such tenants, the plaintiff undertook to furnish and install the necessary plumbing fixtures, lavatories, water closets, sewer pipes, etc., required to accommodate the defendants as tenants of said building and undertook and agreed to keep such fixtures in proper condition and repair during the term of said leases.” The defendants alleged that plaintiff did not furnish the necessary plumbing fixtures, etc., but allowed the same to become defective and out of repair, and, although frequently requested to put them in proper condition, she neglected and refused to remedy them, ' (hereby breaching her contract and justifying the defendants in abandoning the premises.

To the answer as amended the plaintiff replied, denying the allegations, and upon the issues thus tendered the case was submitted to a jury upon the evidence adduced and the instructions of the court.

The appellants make seven contentions for reversal, the last being that the verdict was against the evidence. This we shall first consider. The testimony of the appellants was to the effect that there was insufficient janitor service, that the offices were poorly kept and were suffered to become and remain unclean; that they failed to receive the necessary heat, and there was trouble in entering and leaving their offices because of poor elevator service; that the plumbing was bad and the general conditions so unsatisfactory that they were compelled to abandon their offices and move into a new building; that they had complained of the failure of the lessor to comply with her agreements to the superintendent of the building, and some of them testified that they had complained to Mrs. Dugan personally, but that none of these complaints were considered or the defects remedied.

The evidence adduced by the testimony of witnesses for the appellee was in direct conflict with that given by those for the appellants, and was to the effect that all of the services agreed to were performed; that the offices were kept in good condition with the necessary attendants, the plumbing kept in proper condition, the elevator properly maintained and efficiently operated. Both Mrs. Dugan and the superintendent of the building, Mr. King, stated that they had never received any complaint other than was usual or ordinary, and that these they attended to and complied with the requests of the tenants, although inspections disclosed that the causes for these complaints were often brought about by the negligence of the tenants in the use of the offices and their equipment. They also testified that the first they knew of the intention of the tenants to vacate was when they had already left or were in the act of leaving.

The evidence also developed the fact that a new office building was in course of construction during the time of the occupancy by the tenants of Mrs. Dugan’s building. This was known as the “Medical Arts Building, ’ ’ a large and modern structure; that the. tenants, before abandoning their leases and before the Medical Arts Building had been completed, had contracted to rent offices therein.

We think there is sufficient evidence to warrant the submission of the defenses pleaded to the jury. It is the sole judge of the credibility of the witnesses and weight and value of their testimony, and its conclusion is binding upon us.

It is also contended by the appellants that the court erred in admitting certain testimony. The specific complaint made is that “counsel for appellee, on cross-examination of certain witnesses over the protest of the appellants, read to the jury certain portions of the transcript of their former testimony without laying a proper foundation therefor.” We are not favored with the names of the witnesses or the questions propounded to them relative to their former testimony, but we have examined the record and are unable to see in what particular appellants could have been prejudiced. Complaint is also made of the action of the court in permitting appellee’s counsel to interrogate, appellants “concerning a lease which was not material or competent to any of the issues involved in this case and was injected into the case for the sole purpose, of prejudicing the jury.” We presume that counsel refer to the testimony elicited from the appellants on cross-examination to the effect that, while they were still occupants of the Dugan building and before they had given notice of an intention to abandon same, they had signed leases for offices in the new building which was being erected. We think this testimony pertinent to the issue and competent as tending to show a motive for the abandonment of their leases other than that alleged in their answer.

An amendment had been filed to the answer of the defendants (appellants) on a certain Saturday morning. It was shown that they had met in the office of one of them, and on cross-examination they were asked as to whether or not they had talked over the case and discussed their respective defenses. This was over their objection. In the closing argument of one of the attorneys he was permitted to say: “I say they (the doctors) had a meeting last Friday night to discuss this case, and I suspect at that meeting the subject of additional claim was discussed and formulated, because on Saturday morning the amended answer was filed. That was alleged, and it was not done before Friday. You can draw your own conclusion. I am drawing mine. I do say that it came out Saturday morning that they made additional claim.” The appellants objected to this argument and here urge the same as reversible error. It will be observed that the attorney merely argued the meeting of the doctors on Friday night as a circumstance tending to show that the grounds set up in the amended answer were an afterthought, as the case had been once fully tried without these grounds of the answer having been mentioned. He said to the jury, “You can draw your own conclusion. I am drawing mine. ” It is our opinion that no prejudice could have resulted from this argument.

In the motion for a new trial it was urged that the verdict, which purported to be a unanimous one, was not such in fact. Jurors were called and testified to the effect that the verdict as returned, correctly reflected the action of the jury.

An attorney at the hearing on the motion for a new trial offered to testify as to statements made by jurors to him tending to contradict their testimony. The court refused to hear or consider the offered testimony, and this action of the court is assigned by defendants as error.

When the verdict was announced, either party might have required the jury to be polled (§ 1299, Crawford & Moses’ Digest), and when this has not been done, the jury’s verdict becomes final. Section 1300, Crawford & Moses’ Digest. Therefore, if any error was committed, it was one of which defendants can not complain.

There were two instructions numbered “7” given by the court, one at the request of the appellee, and one on its own motion at' the conclusion of the argument of one of the attorneys for the appellants. In the testimony of Dr. Deadrick, he complained of the refusal to permit him to use the passenger elevator for the purpose of taking a safe down to be sent out to be repaired. The court, by instruction No. 7 given on its own motion, excluded that testimony from, the jury in the following language: “I want to eliminate that complaint from the consideration of the jury. That is just one isolated instance, and does not apply to the other defendants; and, so far as Dr. Deadrick himself is concerned, that particular complaint will not be considered by you. It would not be enough to warrant him in abandoning his lease, so you will eliminate that from your consideration of the case.” It was shown by the doctor’s own testimony that the rule of the building, which was posted at the elevator, was: “This elevator is to be used for passengers only from 8:00 a. m. until 7 p. m:,” and the time that he desired the safe to be removed was about.the middle of the morning which was ordinarily a time when passengers were most frequently using it. It was not attempted to be shown that the rule relating to the. use of the elevator was unreasonable or unnecessary. The court therefore properly excluded this complaint from the jury.

At the request of the appellee the other instruction numbered “7” was given, which is as follows: “You are instructed that, in considering your verdict, you shall consider the evidence and instructions as applicable to each of the defendants, irrespective of whether you find against or for any other defendant or-defendants.” • The contention is that this instruction is improper arid prejudicial. Counsel for appellants has not pointed out in what particular prejudice might have resulted, and we are unable to see how any could have. There were fourteen defendants, and the court merely, and very properly, by this instruction, informed the jury that the evidence and instructions applicable to each should be-considered by it in determining what its verdict should be as to any one of them. This, we think, is the purport of the instruction, and, if it was inaptly drawn, specific objection should have been made, to its language.

It is insisted that the instruction last above quoted is in conflict with the one relating to the testimony of Dr. Deadrick. We see no connection between them, nor any conflict between the two.

Instruction No. 2, given at the request of the appellee, placed the. burden upon the appellants to establish their defense by preponderance of the evidence. It is urged that this is error, the contention of the appellants being that the burden was upon the lessor to establish affirmatively the fact that the defenses pleaded were unfounded. This contention is based upon an allegation of the complaint “that plaintiff has performed each and every agreement and covenant stipulated in said lease to be kept and performed.” The contention of the appellants in this particular is unsound. The stipulation of counsel heretofore noted was offered in evidence by the appellee together with the lease, and she thereupon rested her case. The appellants assumed the burden of establishing their defense and contended that the burden of proof in the whole case would be on them, which would entitle them to the opening and closing of the argument. The court, answering this contention, said: “We will determine that later.” Whereupon, to sustian their several defenses, evidence was adduced by the defendants. In further recognition that the burden rested upon them, defendants requested the court to give an instruction which, in part, is as follows: “You are instructed that if you believe from a preponderance of the evidence during the. period of said leases the plaintiff breached the same by failure to comply with the provisions of said leases incumbent upon her in furnishing the defendants with necessary heat, light, gas, water and elevator and janitor service * * #, the defendants had the legal right to abandon the rooms embraced in said leases and to vacate same.” This instruction was not given by the court because it was covered by other instructions given. No complaint is made as to the refusal of the. court to give this instruction, but we call attention to it simply for the purpose of showing that at all times the defendants voluntarily assumed the burden of proving the affirmative defenses offered by them. This being the case, there was no error committed by the court in instruction No. 2, placing the burden upon the appellants. Complaint was made of instruction No. 5 on the same ground as made to instruction No. 2.

Appellants requested instruction No. 11a which the court refused and which action of the court is assigned as error. That instruction in effect declared the law to be that a leasehold interest might be terminated by the mutual assent of the tenant and landlord, either express or implied, and the jury was told that, if it should find “from the evidence in this case that the defendants, or any of them, abandoned the rooms occupied by them under a written lease with the plaintiff before the expiration of the term of said lease and that by her actions the plaintiff took possession of any of the rooms abandoned by any of the defendants for her own benefit and to the exclusion of the defendants, or any of them, then it will be your duty to find that there has been a surrender of such premises, although there was no express agreement to that effect between the parties.” This instruction was abstract, the evidence relied on by appellants to support it being entirely insufficient. This evidence goes no further than to show that the signs were removed from the windows of one of the appellants after he had vacated his rooms; that another gave the key to his offices to the manager a while after he had left, and after this he noticed that there were no lights in the office and all the doors were open; that the offices of Dr. Deadrick were rented to another party sometime after he moved, without his consent; and another one of the appellants testified that lights were removed from his offices after he had moved from the building and that he did not know who had removed them. None of this evidence is sufficient to show any assent by the lessor to the action of the lessees in vacating the premises. The evidence is undisputed that the lessor was advised by the conduct of the lessees that they had no thought other than to absolutely and permanently vacate the premises, and it is clear that the renting of Dr. Deadrick’s rooms was for his account. This is shown by the efforts made to get Dr. Deadrick to consent to the renting.

In the case of Hays v. Goldman, 71 Ark. 251, 72 S. W. 563, cited and relied upon by the appellants, the lessee of a store building was holding under a lease for a period of nine months, terminating on December 30, 1899. The lease gave the lessee the option to continue the same for a period of one year at the same rental. On the day of the expiration of the lease, the lessee served written notice upon the agent of the lessor that he would not continue the lease through the year 1900, but would like to retain it for the month of January. This notice was delivered to a clerk in the agent’s office who read it and remarked, “That is all right.” Without taking further steps to notify the agent, the lessee remained in the store and paid the rent for January in advance. Learning that the agent considered that he had elected to keep the property under his contract for another year, he protested against this view, and declared his intention of holding only during the month of January. At the end of that month he moved out and returned the keys to the agent. The owner, during the-month of January learning that the lessee intended to abandon the store, rented it to another for the remainder of the year at a monthly rental fifteen dollars per month less than he had been receiving and afterward brought suit to recover this difference from the lessee. To this suit the lessee answered that plaintiff consented that he might occupy the premises during the month of January and quit at the end of that time, and also that, at the end of that month he had surrendered possession of the store to plaintiff’s agent, which surrender had been accepted by said agent. This cotirt held that the circumstances entitled the lessee to have these defenses submitted to the jury and stated the law to be that “if the landlord takes charge of the property after the tenant has abandoned it merely to protect it from injury, or if, knowing that the tenant does not intend to return, he rents it for the account of the tenant, these acts may not show assent on his part, but if after an abandonment he takes possession and rents the premises on his own account, this is conclusive evidence of a surrender.” The circumstances of the instant case fall far short of those in the case cited and did not create evidence of a substantial nature, to warrant the - giving of the instruction above referred to.

Instructions Nos. 3 and 4 requested by the appellants and refused by the court are not abstracted, but from the argument made we judge that they in effect would have told the jury that it was the duty of the lessor, on abandonment by the lessee of the premises, to use a reasonable effort to let the premises to others to thus minimize the damage. The court properly declined to so instruct the jury. The general rule is stated in 16 B. C. L. 969, § 481, as follows: “If the tenant wrongfully abandons the possession of the demised premises, the landlord may re-enter and determine the contract of lease and in so entering is not guilty of a trespass. On the other hand, it is well settled that a tenant cannot by an abandonment of possession before the expiration of the term for which he has agreed to pay rent affect his liability for the subsequently accruing rents; in such a case the. landlord may let the premises lie idle and recover rent for the whole term. In such a case, according to the better view, the landlord is under no obligation to attempt to relet the premises on account of the tenant; the latter cannot by his own wrong in abandoning the premises impose this duty upon the landlord.” The rule announced is supported by the weight of authority and approved by this court in the cases of Meyer v. Smith, 33 Ark. 627, and Grayson v. Mixon, 176 Ark. 1123, 5 S. W. (2d) 312.

We find no prejudicial error in the rulings of the court as to any of the particulars presented by the appellants, and, as there is substantial evidence to support the verdict of the jury, the judgment is affirmed.


author: Johnson, C. J. Smith, J.,

text:
    Pledger v. Cutrell.
    4-3571
    Opinion delivered July 2, 1934.

      Bridges, McGaughy & Bridges and Coleman $ Gantt, for appellant.

      Evan W. Crawford, for appellee.
   Johnson, C. J.

This is a taxpayer’s suit instituted by appellees against appellant, county treasurer of Jefferson County, seeking to permanently restrain and enjoin him as such treasurer from paying out or disbursing any funds now or which may hereafter come into his hands as such treasurer from taxes arising under an eighteen-mill district levy voted by the electors of Pine Bluff Special School District at the annual elections of March 7, 1933, and March 6, 1934.

The cause was submitted for trial and decree upon the following agreed statement of facts:

“1. That Claude Pledger, treasurer of Jefferson County, Arkansas, is ex officio the legal custodian of the school funds of Pine Bluff Special School District of Pine Bluff, Arkansas.
“2. That there are. now outstanding bonds of said school district of Pine Bluff approximately $490,500 accruing in annual principal and interest installments.
“3. That the form and titles of the printed ballots used in the annual school elections held in the years 193'3 and 1934 were:
“ ‘For General Tax...............................................18 Mills.
For Building Tax...................................................... Mills.
Total tax not to exceed eighteen (18) mills.
Against Tax ................................................................................’
“4. All of the bonds of said Special School District were issued prior to act 169 of 1931 upon the following dates, to-wit:
“ ‘ (a) Third Mortgage Bonds, August 1,1917.’
“ ‘(b) Fifth Mortgage Bonds, December 15, 1923.’
“ ‘(c) Sixth Mortgage Bonds, September 1,1927.’
“5. All the bonds are secured by mortgages on the various school buildings and pieces of real property belonging to said district and by a pledge executed at the same time with each mortgage on the part of the district, pledging all the income of the district from all yearly taxes for the purpose of paying off and retiring said bonded indebtedness and interest thereon, in yearly installments as same should accrue.
“6. At the annual school elections in said Special School District of Pine Bluff which were held therein on the 7th day of March, 1933, and the 6th day of March, 1934, there was voted and carried ‘For General Tax 18 Mills.’ That at neither of said elections was a specific millage tax voted for the payment of ‘Bonds or Interest,’ * * * nor for ‘Building Fund,’ nor for ‘General School Purposes.’
“7. That the county board of education on March 10, 1933, after the holding of said election March 7,1933, did find and certify to the county levying court, as provided by law, that at said school election there was voted for ‘School Tax’
“ ‘For 18 mills.......................................................................1,573’
“ ‘For 15 mills........................................................................ 1’
“ ‘For 12 mills........................................................................ 7’
“ ‘For 10 mills........................................................................ 25’
as shown by the county educational board record of said Jefferson County, page 117. And the levying court of said county on November 13, 1933, made the ‘tax levy’ of said school district 18 mills, as shown by county court record BB of said county at page 209. And the county court of said Jefferson County on March 10, 1934, found, determined and adjudgéd that at the election of said Special School District held on March 6, 1934, the vote was as follows:
“ ‘For General Tax 18 mills..........................................282’
“ ‘For 10 mills............................................................................ 2’
“ ‘For Building Tax............................................................... 1’
“ ‘Against Tax ........................................................................... 14’
And also found and adjudged that the result of said election was ‘For General Tax 18 Mills,’ as shown by Record BB of the. records of the county court of said county at page 254.
“8. That there has been paid into the hands of defendant to the credit of said district from the collection of the 18 mills school taxes so voted therein for the school year 1933-1934 approximately the sum of $45,000, and that additional revenues from said source will be paid into his hands during said year. That all of said revenues are collected under the ‘general tax’ of eighteen mills mentioned herein.
“9. That during the school year 1934-1935 there will accrue and be paid into the hands of the defendant to the credit of said district revenue in like manner as that mentioned in paragraph 8 hereof.
“10. That during the school year 1933-1934 there will become due the sum of approximately $19,500 of bonds and approximately $24,500 in interest on said bonds; or in the aggregate the sum of $44,000 principal and interest. That of the $45,000 paid into the hands of the defendant, heretofore, a portion of said amount has already been expended by him for the payment of accrued bonds and interest, and further expenditures for said purposes having been pledged will be made by him. That the revenue on said 18 mills general tax approximates $218,000 each year.
“11. That said eighteen mills school tax has thus been customarily voted upon each year and likewise devoted in part to the payment of the yearly accruing installments of the outstanding bonds of the district, since the effective date of the. constitutional amendment providing for the eighteen mills school tax.
“12. That the plaintiffs, E. O. Cutrell and E. M. Long, are residents, citizens and taxpayers of Pine Bluff School District No. 3 of Jefferson 'County, Arkansas.”

The chancellor awarded a permanent injunction as prayed, and this appeal is therefrom. The school fund here under consideration arises and accrues exclusively under Amendment No. 11 to the Constitution of 1874, which provides: ‘‘ The General Assembly shall provide by the general laws for the support of common schools by taxes which shall never exceed in any one year three mills on the dollar on the taxable property in the State, and by an annual per capita tax of one dollar, to be. assessed on every male inhabitant of this State over the age of twenty-one years. Provided, that the General Assembly may, by general law, authorize school districts to levy by a vote, of the qualified electors of such districts a tax not to exceed 18 mills on the dollar in any one year for the maintenance of schools, the erection and equipment of school buildings and the retirement of existing indebtedness for buildings. Provided, further, that no such tax shall be appropriated for any other purpose nor to any other district than that for which it is levied.”

It appears from the 11th amendment last quoted that it levies no taxes and that no tax may be levied thereunder save by an affirmative vote of the qualified electors of the school district in which such levy is sought, and then such levy is limited to 18 mills on the dollar in value for any one year. Therefore it definitely appears that the levy of any tax under this amendment is exclusive^ optional with the qualified electors in the school district affected. On the question here under consideration we decided in Horn v. Paragould Special School District, 186 Ark. 1000, 57 S. W. (2d) 568; “Three purposes are named in the amendment (1) ‘for the maintenance of schools’; (2) for ‘the erection and equipment of school buildings’; and (3) for ‘the retirement of existing indebtedness for buildings.’ And it is then provided ‘that no such tax shall be appropriated for any other purpose nor to any other district than that for which it is levied.’ This appears to be very simple language, imambiguous, and not difficult of comprehension. The electors of any school district may vote a tax at any rate they wish for any or all said purposes, provided the tax voted for all does not exceed 18 mills. For instance, they might vote 6 mills for bond and 12 mills for school purposes, as they did in this case, and, when so levied and collected, neither sum could ‘be appropriated for any other purpose * * * than that for which it is levied.’ In other words, the 12 mills voted for school .purposes could not lawfully be appropriated for payment of bonds or the interest thereon, nor could the 6 mills voted for bond purposes be appropriated for schools. Such is the plain language of the amendment. No other construction can be given, and any other in the present case would probably work disaster to both parties. For, since the voting- of any tax for any purpose is optional with the district’s electors, the taking of the 12 mills voted for general school purposes to pay bonds would close the schools and keep them closed for many years, it would seem reasonably certain the electors would not vote a tax on themselves and have no schools. The bondholders would lose the 6-mill tax now being received, a substantial loss to them, and the district would be without a free public school for years to come, which would be. disastrous to it and its people.”

It follows from what we have said that neither creditors nor any one else can acquire a vested right or interest in or to any levy of taxes under Amendment No. 11 or to any part thereof until same has been voted by the qualified electors each year. The question then arises, did the qualified electors in Pine Bluff Special School District at the elections in March, 1933 and 1934, vote a tax or dedicate, a part of the tax so voted under amendment No. 11 to the payment of outstanding bonds and interest of the school district? The agreed statement of facts heretofore copied shows that the electors in said school district at the elections aforesaid voted upon the following questions :

“For General Tax”
“For Building Tax”
“Against Tax”

At the election in March, 1933, all votes east by the qualified electors were in favor of “For General Tax 18 nulls” and none were cast in favor of “For Building Tax.” At the election in March, 1934, all votes cast by the qualified voters, save one, were in favor of “For General Tax 18 mills” and only one vote was cast in favor of “For Building Tax.”

Therefore, it definitely and certainly appears that the qualified electors of Pine Bluff Special School District did not vote a building tax at the elections in said district for either the year 1933 or 1934.

It necessarily follows that, if “For Building Tax” as it appeared on ballots east by the qualified electors in the elections for 1933 and 1934 has reference to funds for the retirement of bonds and interest thereon owed by the district, then certainly no tax was voted by the qualified electors for this purpose, and the chancellor was correct in so deciding.

Section 66 of act 169 of 1931 defines “Building Fund” as follows:

“A building fund in an amount sufficient to pay the maturities of bonds, principal and interest, as they accrue, of said issue of bonds, that said building fund shall be set aside out of the. first revenues of the district from whatsoever source derived, and shall be held by the county treasurer solely in the manner and for the purposes set out throughout this act.”

Tested by the definition of “Building Fund” as it appears above, there can be no doubt that the qualified electors of Pine Bluff Special School District at the elections held in 1933 and 1934 refused to vote or dedicate any part of the 18 mills tax for schools to the purpose of paying or retiring the outstanding bonds of said district or the accrued interest thereon.

We cannot agree that the electors by voting in favor of “For.General Tax 18 mills” intended to grant to the directors of the school district a discretion in the application of this fund to any purpose authorized by Amendment No. 11. The affirmative, vote of the electors “For General Tax 18 mills” dedicated this fund to one purpose only, and this purpose was neither “Building Fund” nor the “Retirement of existing indebtedness for Buildings.” Therefore, the only remaining purpose for which the levy could have been effected under Amendment No. 11 was “For the maintenance of schools.”

Therefore, the county treasurer of Jefferson County was without authority in law in paying- or asserting the right to pay out any of the funds arising from the 18-mill levy of taxes accruing to the school district under Amendment No. 11 for the retirement of bonds or accrued interest thereon owed by said school district, and the injunction was properly awarded restraining such misapplication of funds.

For the reason stated, the chancellor was correct in awarding- a permanent injunction ag*ain.st appellant treasurer, and the decree will therefore be affirmed.

Smith, J.,

(dissenting). The case of Horne v. Paragould Special School District, 186 Ark. 1000, 57 S. W. (2d) 568, upon which the majority of the court relys, does not, in my opinion, support the conclusion which the majority have announced, and I therefore respectfully dissent.

The record is silent as to whether the .school directors had complied with the law defining their duties in the matter of holding the election at which the school tax was voted, and we must therefore presume that those duties had been performed. Section 97 of act 169 of the Acts of 1931 (Acts 1931, pages 476-588) defines these duties. Subsection H of § 97 requires the school directors to prepare an estimate of the. amount of money needed by the district for the year following the school'election, showing separately the amount needed “for general control instruction, operation of the plant, maintenance of the plant, auxiliary agencies, fixed charges, capital outlay, and debt service,” and to send a copy of the estimate to the county board of education, and to publish it once a week for three consecutive weeks in a newspaper published in the county at least twenty-five days before the annual election. The obvious purpose of this requirement is to advise the electors what amount of money will be required for school purposes and the uses to which it will be devoted. This may be done by voting a given number of mills for each purpose, or by voting any number of mills, not exceeding 18, for all purposes, or for a general school tax. It is a matter of common knowledge that the latter is the method ordinarily employed in the districts throughout the State, and it is stipulated that the tax was so voted in the instant case. The tax voted was “For General Tax,” and it is respectfully submitted that this does not include any one purpose to the exclusion of any other purpose for which a school tax may be legally voted.

In the Horne case the majority of the electors voted a tax of 6 mills “for the building or bond payment fund and 12 mills for general school purposes,” thus specifically limiting to 6 the number of mills for the building’ or bond payment fund. The remaining 12 mills was not voted for any one of the purposes designated in subsection 4, above quoted, but was voted for all those purposes except for the building or bond payment fund, for which 6 mills was specifically voted.

Not so in the instant case. No certain number of mills was voted for any specific purpose. The electors, on the contrary, voted “For General Tax.” Now, what is “General Tax”? The obvious answer is that it is a tax for all purposes for which the electors had authority to vote, leaving to the directors of the school district the duty to apportion the tax collected to the items embraced in the budget, which had been submitted to the electors. If ■ the electors are unwilling to confer this authority, they must vote such number of mills for a particular purpose, as was done in the Horne case, supra.

The authority to vote the 18 mills is derived from the 11th Amendment to the Constitution, as is said in the majority opinion, and I submit that a vote “For General Tax” includes each and all of these purposes, and it should be assumed, in the absence of a showing to the contrary, that the electors had dedicated the tax to all the purposes shown in the budget report of the school directors.

It must be remembered that the electors voted “For General Tax,” and a more comprehensive adjective could hardly have been employed. ■ Many definitions of the word “general” are given in Webster’s New International Dictionary, and these, among others: “ Of or pertaining to the whole of a body, society, organization, or the like; pertaining to, affecting, or applicable to, each and all of the members of a class, kind, or order; universal within the limits of the reference; not particular; not precise or definite.”

A tax thus voted, when not otherwise limited, as was done in the Horne, ca/se, supra, covers all items for which the tax may be voted. If this is not true, then no tax whatever was voted. There is no more reason for saying the general tax is applicable for maintenance of schools than it is for the retirement of existing indebtedness. Neither was written on the ballot. ■ The electors might have voted a definite number of mills for either purpose, but they did not do so.

The term “General Tax” is not a synonym for “Maintenance” nor for “Indebtedness,” and it, therefore, no more includes one than it does the other, and unless it includes both it does not include either. But it does include both, because a tax for maintenance or to pay indebtedness is a general tax, all being for school purposes and all permissible under both the constitutional amendment and under act 169, supra.

As was said in the Horne case, supra, the three purposes for which a tax may be voted under the constitutional amendment are: “1) for the maintenance of schools; (2) for the erection and equipment of school buildings; and (3) for the retirement of existing indebtedness for buildings. ” It is true the printed ballot contained the words, “For Building Tax,” which was for the second purpose, above-named, but no tax was voted for that purpose. But there is no question in this case about using this money for building purposes. The relief prayed and granted in the court below was that the directors be enjoined from using any of the taxes for the retirement of existing indebtedness (some of which had been outstanding since 1917), the third purpose named in the amendment for which taxes may be voted. There was no specific vote on this question no more than there was on the first purpose, that of maintenance, and I, therefore, repeat that if a vote “For General Tax” did not authorize an expenditure for the third purpose, there is a lack of authority to expend it for either the first or second.

The decree of the court below should, therefore, be reversed, and the directors allowed to complete the payment of the installment of the bonded debt and interest, a portion of which, according to the stipulation, has already been made.