author: Wood, J.

text:
    Farmers' Mutual Fire Insurance Company v. Defries.
    Opinion delivered November 28, 1927.
    1. Judgment — belief on account of fraud. — Under Crawford & Moses’ Dig-., § 6290, authorizing- judgments to be set aside for fraud practiced by the successful party, a judgment by default” will not toe set aside because the defendants failed to appear for trial by reason of having- been informed by the clerk that the case had not been set and that he would notify them when the case would be called, which he subsequently failed to do.
    2. Judgment — unavoidable casualty or misfortune. — Under Crawford' & Moses’ Dig., § 6290, subds. 4 and 7, a judgment by default' will not be set aside “for unavoidable casualty or misfortune,” where the defendants were prevented from attending the trial by reason of the clerk’s failure to keep his promise to inform them when their case would be called for trial. •
    3: Judgment — petition to set aside judgment — diligence.—It is the duty of a litigant to keep himself informed of the progress of his case, and a party seeking relief against a judgment on the ground of unavoidable casualty or misfortune preventing him from defending, must show that he himself is not guilty of negligence, and he cannot have relief if the taking of the judgment appears to have been due to his own carelessness.
    Appeal from Independence -Circuit Court; D.ene H. Coleman, Judge;
    affirmed.

      D. D. Glover and D. M. Halbert, for appellant.

      W. K. Buddell, for appellee.
   Wood, J.

On the 23rd day of March, 1926, J. K. Defries instituted an action in the Independence Circuit Court against the Farmers’ Mutual Fire Insurance Company of - Malvern, Arkansas, and J. E. Stanley, W. L. Knight, W. K. Smith, T. J. Fowler, J. W. Lee, W. A. Callis, E. 0. Kilpatrick, J. C. Minen, W. W. Bray, and R. J. Hodges, bondsmen for said company. The plaintiff set up the policy, alleged that he had complied with its terms, and that the defendant company refused to pay the loss, to his damage in the sum of $1,000. He also set up a bond executed by the defendants in the sum of $20,000, and alleged that the condition of the bond was that the defendant company would make prompt assessments and promptly pay the same over to any person having a claim by virtue of the policy, and that this bond was in full force and effect at the time of the destruction of the plaintiff’s property by fire. He alleged also that the defendants had refused to make any assessments or to pay the same over, all to his damage in the sum of $1,000, for which he prayed judgment, together with 12 per cent, penalty and a reasonable attorney’s fee and costs.

The defendants answered. The company admitted that it was a mutual fire insurance company, and issued the policy sued on. It denied the other allegations of the complaint. The defendants, bondsmen, answered, and alleged that the only condition of their bond was that the insurance company, in case of loss or damag’e under the policy, would make an assessment and pay over any moneys collected on said assessment. They alleged that the assessment was made, and that the members failed and refused to pay such assessment, and therefore no money had been received by the company to be paid over to the plaintiff. They denied that the plaintiff was entitled to any judgment whatever against them.

Oh the 19th day of April, 1926, the same being the thirteenth day of the spring term of the Independence Circuit Court, the following judgment was entered:

‘ * On this day this cause came on to '■be heard on the regular call of the docket, and appeared the plaintiff in person and by attorney, but the defendants appeared not, and the court, after hearing all the evidence and the exhibits made and produced by the plaintiff, doth find from the evidence that the defendant, Farmers’ Mutual Fire Insurance Company, failed and refused to make an assessment under said policy and for the loss of the plaintiff, and that they failed and refused to pay any assessment over to the plaintiff; and the court doth further find from the evidence that the loss of the plaintiff by fire was to the same and identical property insured more than $2,000; and the court doth further find from the evidence that the plaintiff paid all assessments as they became due, and that said plaintiff has complied with all the conditions of said policy made and provided; and the court doth further find that this suit was not commenced until more than ninety days after the proof of loss was received by the defendant company; and the court doth further find that the defendants, nor either of them, ever made any abjections or exceptions to said proof of loss; the court doth further find that the plaintiff should recover the sum of $1,000, the amount of damage sustained by plaintiff under said policy by reason of said loss, and 12 per cent, of said sum as damages, and $150 attorney’s fees, as provided by § 6155 of Crawford & Moses’ Digest.
‘ ‘ Tlio court further finds from the' evidence that the defendants, Farmers’ Mutual Fire Insurance Company of Malvern, Arkansas, made and executed a bond with the following persons as sureties thereon, to-wit: J. E. Stanley, W. L. Knight, "W. K. Smith, T. J. Fowler, J. W. Lee, W. A. Callis, E. 0. Kilpatrick, J. C. Minen, W. W. Bray, and R. J. Hodges; and the court doth further find from the evidence that the sureties and each of them have been duly served with process more than 20 days, having been duly served on the 26th day of March, 1926, and the court doth further find from the evidence that there has been a breach in the condition of said bond, and that the sureties on said bond are liable to the plaintiff for the amount of his loss and all damages.
“Wherefore it is by the court considered, ordered and adjudged that the plaintiff, J. K. Defries, do have and recover of and from the defendants, Farmers’ Mutual Fire Insurance Company of Malvern, Arkansas, J. E. Stanley, W. L. Knight, W. K. Smith, T. J. Fowler, J. W. Lee, W. A. Callis, E. 0. Kilpatrick, J. C. Minen, W. W. Bray, and R. J. Hodges, the sum of $1,000, the amount of the loss under said policy, 12 per cent, of said $1,000 as damages, and an attorney fee of $150, together with all the costs of this suit. ” .

The spring term of the Independence County Circuit Court continued in session thereafter until May 5, 1926, when the same was adjourned until court in course. On the 28th day of April, 1926, this action was instituted by the insurance company and its bondsmen above named against the defendant Defries to vacate the above .judgment. The plaintiffs in their complaint set up the proceedings on the policy by the defendants against the plaintiffs, resulting in the judgment. They alleged that the plaintiff insurance company was a mutual fire insurance company, based on the assessment plan; that the policy provides as follows: “Only one assessment can be made oii a member for one loss, and the company shall never be liable to any member on a loss for a greater amoutit than themembersingood standing and responding shall pay into the treasury when the assessment of said loss shall be made, which said member agrees to accept for said loss as provided in the by-laws.” They alleged that the policy provides that it shall be governed by the constitution and by-laws adopted by the company, and further, that, in case of loss, an assessment will be made against each member in the group, and whatever amount is collected from the membership in the group, after the assessment of said loss is made, shall be paid by the company to the holder of the policy. They alleged that the plaintiff in the original action, the defendant herein, ag’reed to accept whatever amount was collected from such assessment in full satisfaction of his policy, and the company was not to be liable for any further sum. They alleged that they signed the bond of the company to this effect only, that the moneys collected by said company under an assessment would be paid over to the person entitled to receive the same. They set up their answer to the original complaint, in which they denied that they had failed or refused to make an assessment, and denied that they had refused to pay over any moneys collected on such assessment and that any moneys were collected on such assessment. They set up that the plaintiff had' exercised diligence to find out from the clerk of the circuit Court the time the cause would be set for trial, and set forth the correspondence between the secretary of the company and the circuit clerk of Independence County concerning the setting of the cause for trial. They set up that, on March 30, the secretary of the insurance company at Malvern, Arkansas, wrote a letter to Oscar T. Jones, the clerk of the circuit court at Batesville, Arkansas. This letter is set forth in the complaint. It called attention to the number and style of the case, and asked the clerk to give information as to his manner of setting the docket, whether the clerk set the cases or whether they were set by the attorneys, and when the case would be set for trial. The secretary states in this lettér that the answer would be due the 15th day of April, and that he would be summoned on the Federal grand jury,' which would hold him until about the 24th of April, and asked whether the case would be called before that time. On the following day the secretary of the company received a letter from the clerk of the circuit court as follows: “Tour case not set. Service had not matured at the time of the setting of the docket last Saturday. ’ ’ On April 5, 1926, the secretary again wrote the clerk, asking him to send copy of the complaint so that the defendants could file an answer, and requesting' the clerk to watch the case and call the secretary when the same was set down, and to state the cost of filing the answer. The complaint states that a day or two after the letter of April 5, 1926, the secretary received a letter from the clerk containing copy of the original complaint, and stating that the filing of the answer would be ten cents, order twenty cents, and index ten cents. The plaintiff alleged that, after receiving this letter, the secretary wrote to1 the clerk, inclosing the answer to the original complaint, and sent the amount of costs for filing same. The plaintiff alleged that it relied on the request made of the clerk to notify it at its expense when the case was set for trial, if the court and .clerk determined to set the cause for trial at that term of the court. They alleged that, on the 21st of April, 1926, the secretary of the company called the clerk over the ’phone to ascertain whether the case would be set for trial; that the person to whom he talked stated that he was the deputy clerk, and that he would get the information and call the secretary over the telephone, which he failed to do. They alleged that plaintiffs were not informed of the day when the cause was set for hearing, nor of the day when judgment was entered against them, and if the clerk had informed the plaintiffs they would have had time to file their motion to set aside the judgment before the adjournment of the term of the court when same was rendered. They alleged that they received no notice of the- setting of the cause or of the judgment until April 26, 1926, when the secretary again called the clerk to know when the cause would be set, if at all, during the spring term. They alleged that the judgment obtained against them in the above manner was without notice and void, and a franc! upon their rights; that the plaintiff in the original suit was not entitled to any judgment at all, as shoAvn by their answer filed in the original suit; that, in any event, the defendant in this action, plaintiff in original action, was not entitled to recover attorney’s fee and penalty, since the insurance company was doing business on the assessment plan. The prayer of the complaint was that the judgment be set aside and that the cause bexset for trial on its merits.

The pleadings in the original cause were made exhibits, and likewise £he correspondence between Bray and the circuit clerk, and affidavits of W. W. Bray, secretary of the insurance company, and D. D. Glover, attorney of the plaintiffs, to sustain the allegations of the complaint that neither the plaintiffs nor their attorney had received any notice of the setting of the cause for trial at the April term of the court.

The defendants demurred to the complaint on the ground that the plaintiffs were not diligent in the prosecution of their suit, and that the facts stated were not sufficient to entitle the plaintiffs to vacate the judgment. The cause was heard upon the complaint, exhibits, and demurrer of the defendants, the judgment in the former case, and the court record showing that the court did not adjourn until May 5, 1926, and the admission of the attorney for the defendant that the letters, and telephone calls as testified to by the secretary of the insurance company in his affidavit and his statements in the complaint were true and correct. The court thereupon found that the demurrer of the defendant should be overruled, but the court found that the original judgment entered in the cause should not be set aside, and entered its judgment to that effect, from which '.judgment the plaintiffs duly prosecute this appeal.

■Section 1275 of C. & M. Digest provides: “The law docket shall be made out for each term of the court, and the actions shall be set for particular days, and so arranged by the clerk that the cases set for each day shall bo tried tvs nearly as may bo on that day.” The correspondence between Bray, the secretary of the insurance company, and the clerk of the circuit court of Independence County shows that, as early as March 30, 1926, and after the defendants in the original action had received notice of the filing’ of the action against them by J. K. Defries, the defendants, through Bray, requested the clerk to send them a copy of the complaint, and also to advise about the date that the case would be set down for trial. In answer to this request the appellants were notified, on March 31, 1926, by the circuit clerk that the case had not been set, as “service had not matured at that time.” Again, on April 5, the defendants in the original action, appellants here, through Bray, requested the clerk “to watch the case and to call them when the case was set down,” requesting him to give amount of cost of filing answer, and stating that he' would remit for same. A few days thereafter, before the convening of the circuit court, the clerk notified Bray of the costs, and' the defendants remitted the amount of such costs, and inclosed their answer. The record shows that the answer of the defendants was filed by the clerk and the costs thereof paid by the defendants on April 15, 1926,- after the spring term of the court convened. On April 21, 1926, two days after the judgment had been rendered, the defendants, through Bray, called the clerk to find out whether the case would be set for trial, and the person to whom he talked over the ’phone stated that he was a deputy clerk, and that he would get the information and call Bray over the ’phone, which he failed to do, and failed to inform the defendants in that cause that the judgment had already been entered. It is alleged that, if he had done so when requested, the defendants in that cause, plaintiffs here, would have had time to file motion to set aside the judgment for want of notice before the adjournment of the court for that term. They received no notice thereafter that judgment had been rendered until April 26, 1926, when Bray again called the circuit clerk over the ’phone to know when the case would be called, if at all, during that term of the court. The court orders show that the court adjourned from April 24 to May 1, 1926, and from May 1 to May 5, 1926, and on May 5, 1926, until court in course.

The appellants alleged that, under the above facts, the judgment entered against them was without notice, and a fraud on their rights.' Among the grounds specified in the statute for vacating the judgment after expiration of the term at which the same is rendered are the following: “For fraud practiced by the successful party in the obtaining of a judgment or order,” and “for unavoidable casualty or misfortune preventing the party from appearing or defending.” Section 6290, C. & M. Digest, subdivisions 4 and 7. Under the facts above set forth the judgment cannot be set aside on the ground of fraud. No fraud whatever was practiced by the successful party in obtaining the judgment. It does not appear that either the appellee or his attorney knew of the correspondence that the appellants had with the clerk concerning the .setting of the case. The record does not show that the appellee or his attorney did anything more than appear in court when the case was called for hearing’. The appellants had received due notice of the pendency of the action and had filed an answer in the cause. So far as the appellee and his counsel are concerned, the record shows ‘that the judgment was obtained by them during the regular course of the court proceedings.

Neither does the record show any unavoidable casualty or misfortune that prevented the appellants from appearing and defending the action. The appellants were not justified in relying’ upon any representation or promise of the. clerk, when the court was not in session, that he would notify them of the day when the case would be called for hearing'. The court not being in session, the clerk, in making these representations to the appellants, was not speaking for the court or for the appellee. The appellants must be held to have made the clerk their own agent and representative to ascertain and give them the information concerning the setting and calling of the case for hearing, and they relied upon snch information at their peril. It was certainly neither the fault of the appellee nor the court, at the hearing of the cause, that information concerning the correspondence between the appellants and the clerk of the court was not brought to the attention of the trial court. The failure of appellants to appear and defend the action manifestly was not an unavoidable casualty. If the appellants had not taken for granted that the clerk would notify them in advance of the day when the cause would be called and heard, they could and would, so far as the record shows to the contrary, have appeared when the case was called for trial and made their defense. The cause was not set for hearing when the clerk set the law docket for the spring term of the court, for the reason, as stated by the clerk, that service had not been had at that time. Thereafter court convened before appellants’ answer in the original cause was filed, and after same was filed and the cause was ready for hearing the court proceeded to call the case on the docket and to a hearing thereof at the court’s convenience. We cannot see that there was any unavoidable casualty in such proceeding which prevented the appellants from appearing at the hearing.

It is alleged in the complaint “that the appellants called the clerk on the 21st of April, 1926, to find out when the cause would be set for trial, if at all, during that term, and the party answering over the ’phone stated that he was deputy clerk, and that he would get the information and advise the plaintiffs, but he failed to do so, and that, if he had done so, appellants would have had time to file their motion to set aside the judgment for want of notice before the adjournment of the court and within the time prescribed by statute.” The above allegation is the nearest approach to an unavoidable casualty disclosed by the record. But this allegation falls short of proving an unavoidable casualty. The telephone call, according to the allegation, was on April 21, 1926. From the recitals of the court records it appears that the court adjourned until court in course on May 5, 1926. When appellants failed to receive the information sought from the clerk on April 21, 1926, proper diligence on their part required that they make further inquiry; and, if necessary, appear in the Independence Circuit Court before its adjournment and move the court for a new trial and to vacate the judgment in that cause, for the reasons which they now assert were grounds for vacating the same, and to press such motion at that term of the court. This they did not do. For aught that appears to the contrary, they could have done this by the exercise of proper diligence. They did file the complaint herein, and have summons issued thereon as an original action against the defendant, appellee, on April 28, 1926. But service was not had upon the defendant herein until May 13, 1926, which was eight days after the court had adjourned for the term. While the court was not in session on the day this complaint was filed, it was thereafter in regular session May the first. Instead of inviting the attention of the court to this pleading and asking that it be treated as a motion for new trial, or to vacate the judgment in the same cause, they elected to pursue the defendant, appellee, as in an independent action, and, by so doing, let the term lapse, and thus killed their only chance to haves the judgment set aside at the term when it was rendered. Therefore appellants do not show any unavoidable casualty, but they do show a lack of diligence.

In Trumbull v. Harris, 114 Ark. 493, 170 S. W. 222, we held, quoting syllabus: “It is the duty of a litigant to keep himself informed of the progress of his case, and a party seeking relief against a judgment on the ground of unavoidable casualty, or misfortune, preventing’ him from defending, must show that he himself is not guilty of ne’gligence, and he cannot have relief if the taking of the judgment appears to have been due to his own carelessness.” See also Jackson v. Woodruff, 57 Ark. 599-604, 22 S. W. 566; Weller v. Studebaker Mfg. Co., 93 Ark. 462, 125 S. W. 129; Kohn v. Smith, 122 Ark. 74-77, 182 S. W. 533.

The judgment is therefore correct, and it is affirmed.


source: Caselaw Access Project

license: Public Domain

text:
    Union Sawmill Company v. Pagan.
    Opinion delivered November 28, 1927.
    1. Taxation — validity of donation deed. — A donation deed purporting to convey land as having forfeited to the" State for taxes is ineffective to convey any title, where, at the time of the alleged forfeiture, the land was not subject to taxation, being the property of the State.
    2. Adverse possession — payment of taxes for seven years. — Where lands in controversy in a suit to quiet title were uninclosed and unimproved, one who paid taxes for more than seven years acquired title under Crawford & Moses’ Dig., § 6943.
    3. Adverse possession — payment of taxes. — Payment of taxes on uninelosed and unimproved land for more than seven years in succession was constructive possession of such land, under Crawford & Moses’ Dig., § 6943.
    4. Adverse possession — constructive possession. — Constructive possession follows the title, and can only he overcome or defeated by actual possession adverse thereto.
    Appeal from Union Chancery Court, Second Division; J. Y. Stevens, Chancellor;
    reversed.

      Gaughan & Sifford, for appellant.

      Goodwin ■& Goodwin, for appellee.
   Wood, J.

This in an action by the Union Sawmill Company against W. G. Pagan et al., in the Union Chancery Court. The plaintiff alleges that it is the owner and entitled to the southeast quarter of the southeast quarter of section 3, township 18 south, range 13 west, Union County, Arkansas, and it deraigns title from the United States Government to the State of Arkansas, and from the State, through mesne conveyances, to the plaintiff. The plaintiff alleges that the land had at all times been uninclosed and unimproved, and that it and those under whom it holds had paid the taxes regularly and consecutively for each year since 1905. The plaintiff alleged that the defendants were asserting title under a donation deed from the State to Mary McHenry, dated April 12, 1921. The plaintiff alleged that one of the defendants, W. G. Pagan, ivas engaged in cutting timber on the land; that Pagan was insolvent, and that, unless restrained, he would continue to cut the timber, to the great damage of plaintiff. Plaintiff alleged that it had no adequate remedy iat law, and prayed that Pagan be restrained from cutting the timber, and for damages in the sum of $1Q0 for the timber already cut, and that plaintiff’s title be quieted against the defendants, and that all deeds under which defendants claimed be canceled.

The defendants answered, denying .all material allegations of the complaint, and set up that, on June 4, 1885, Mary McHenry, obtained a donation deed from the State of Arkansas to the land mentioned in the complaint, and that she took immediate possession of the land and improved a part thereof, and had continued in the possession thereof until the present time, openly, peaceably, and adversely to all the world. It was also alleged that Pagan and his immediate predecessors in title were solvent, and that they had been damaged by the action of the plaintiff in having a restraining order issued, in the mm. of $500. Defendants prayed for dissolution of the restraining order and for judgment against the plaintiff in the sum of $500, and that the record title in the plaintiff be canceled.

The cause was heard upon the pleading’s, the depositions of the witnesses and record of deeds introduced by agreement of counsel, and also agreement of counsel showing that the taxes on the land in controversy had been regularly paid by the plaintiff and its predecessors in title every year since 1904, except for the year 1923. The court entered a decree dismissing the plaintiff’s complaint for want of equity, and quieting title to the lands in the defendants as against the plaintiff, and dis-' missing the defendants’ prayer for damages against the plaintiff. The plaintiff duly prosecutes this appeal.

1. The appellant proved record title to the land from the United States Government. The land was granted to and selected by the State under act of Con-' gress approved September 4, 1841. The record of deeds shows that the. State deeded the land to J. D. Hostetter, January 22,1904, and by him, through mesne conveyances ' by warranty deed to various parties, the land was conveyed to the appellant on January 22, 1906. True, there was introduced in evidence at the trial .of this cause a duplicate donation deed, showing that the lands were deeded by the Commissioner .of State Lands to Mary McHenry, on June 4, 1885, which deed recited that the lands were forfeited to the State for the nonpayment of taxes for the year 1878. But it appears from the record of deeds in evidence that, at the time of this alleged forfeiture, the title to the land was still in the State of Arkansas. The first evidence of any conveyance from the State was. the patent to J. D. Hostetter on January '27, 1904.

In Brinneman v. Scholem, 95 Ark. 65, 128 S. W. 584, we held (quoting syllabus): “A donation deed purporting to convey land as having forfeited to the State for taxes is ineffective to convey any title where, at the time of the alleged forfeiture, the land was not subject to taxation, being property of the State.” It follows that the appellant had legal record title to the land, and that Mary McHenry and those claiming under her acquired no title to the land by virtue of the donation, deed to her of June 4, 1885.

2. The next question is, did Mary McHenry and those claiming title under her to the land in controversy acquire title thereto by adverse possession thereof under the seven-year statute of limitations!? A decided preponderance of the evidence — indeed, practically the undisputed testimony — shows that the tract of land in controversy is unimproved and uninclosed. This forty-acre tract is in section 3, township 18 south, range 13 west; it was embraced in the donation deed to Mary McHenry, together with the south one-half of the southwest quarter of section 2, being eighty acres, in the same township and range. It is stipulated by the parties to the record that the taxes on the lands in controversy have been paid by the appellant each and every year since 1905, with the exception of the year 1923. The lands in controversy being unimproved and uninclosed, the appellant acquired title thereto by such payment of taxes. Section 6934, C. & M. Digest; Fenton v. Collum, 104 Ark. 624, 150 S. W. 140, and oases there cited.

Bnt it is the contention of the appellees that, inasmuch as they entered on, and, for more than seven years, were in actual, open, continuous, and adverse possession of u part of the east eighty-in section 2, adjoining the land in controversy, under the donation deed of 1885, this would give them title by constructive adverse possession to all of the east eighty as well as the land in controversy in section 3.

To sustain their contention the appellees cite the recent caisie of Moore v. McHenry, 167 Ark. 483, 268 S. W. 858, in which the title to the eighty acres in section 2 under this same donation deed was involved. But the decision and opinion in that case, as we construe it, has no application to the facts of this record. The decision in that case, as shown fejr the pleadings and testimony adduced by the respective parties, turned upon the issue as to whether or not the plaintiffs in that case acquired title by adverse possession to the eighty acres of land under the seven-year statute of limitations. The plaintiffs in that case claimed, and proved to the satisfaction of the jury, that they entered into possession of a part of the eighty-acre tract of. land in controversy under the donation deed to Mary McHenry, and had occupied and improved the same, and continuously held open, exclusive and adverse possession- thereof for a period of more than seven years, Avhich gave them title to the entire eighty ¡acres. But there was no allegation in that case, and no proof that defendants had paid the taxes on the land consecutively and continuously for seven years, and that the lands in controversy in that case were uninclosed and unimproved. That issue was not raised. In that case we held that the donation deed to Mary McHenry was color of title for' the purpose of marking the boundaries of the lands claimed and occupied by her and her heirs. The jury found, upon sufficient proof, as we have stated, that a part of the land in controversy had been in adverse possession of the plaintiffs (appellees in that case) for a period of seven years. But in the case at bar, as we have seen, no part of the land in controversy had been actually occupied by the appellees. On the contrary, the entire tract of forty acres in controversy ivas unimproved and uninclosed land, to Avhich the appellant had acquired legal title by deeds of record, and also on AAThich the appellant had paid the taxes continuously each year for more than seven years.

In Moore v. McHenry, supra, we reannounced the doctrine of many former cases that, ‘Svhere adverse possession is entered under color of title, the grantee in the instrument constituting color of title aat.11 be deemed in constructive possession of the entire body of land described in the instrument, if in the actual possession of any part, thereof.” See also Thornton v. McDonald, 167 Ark. 114, 266 S. W. 946, and oases there cited at page 118, 266 S. W. 947. The doctrine of these cases has no application here, because of the difference in the facts. The appellees here, with only color of title, seek to acquire title by constructive adverse possession against the true OAATier of uninclosed and unimproved lands, who has continuously paid the taxes thereon each year since the time of his purchase thereof for more than seven years. The doctrine applicable here is that the true owner of aatM and unimproved lands, Avho has continuously paid taxes thereon from the time he acquired title thereto and for more than seven years in succession, cannot be defeated of his title and right to the actual possession olhis lands by one who merely claims title thereto under color of title and by only a constructive adverse possession. The general rule is that constructive possession folloAvs the title, and can only be overcome or defeated by an actual possession adverse, thereto. Gates v. Kelsey, 57 Ark. 523-528, 22 S. W. 162; Haggart v. Ranney, 73 Ark. 344-354, 84 S. W. 703; Watts v. Moore, 89 Ark. 19-22, 115 S. W. 931; Arnold v. Abeles & Co., 98 Ark. 367, 135 S. W. 833; Smith v. Boynton Land & Lumber Co., 131 Ark. 22, 198 S. W. 107. Furthermore, since the land was unincloised and unimproved when Hos tetter acquired the legal title from the State and began paying taxes thereon, and continued the payment thereof for seven years in succession, this, of itsielf, was constructive possession and eviction of all who claim title by constructive possession of the land. For, under the plain terms of § 6943, C. & M. Digest, “unimproved and uninclosed land shall be deemed and held to be in the possession of the person who pays the taxes thereon, if he have color of title thereto,” etc.

In Towson v. Denson, 74 Ark. 302-305, 86 S. W. 661, 662, construing this statute, we said:

“When the Legislature said that, as to the taxpayer under color of title who paid taxes on unimproved and uninclosed land, such payment should legally constitute possession of such land, it is not reasonable to suppose that they meant anything different from what they declared,” etc.

In Paragould Abstract & Real Estate Co. v. Coffin, 100 Ark. 582, 140 S. W. 730, L. R. A. 1915B, 1006, quoting from Updegraff v. Marked Tree Lbr. Co., 83 Ark. 159, 103 S. W. 606, we said:

“It will be observed that the act merely declares that the person who pays the taxes on unimproved and uninclosed lands shall he deemed to be in possession thereof if he have color of title. The statute does not undertake to fix the period of limitation, but merely declares the continuous payment of taxes under color of title to be possession, and leaves the general statute of limitations applicable thereto. The only proviso or condition in the act is that the person who pays the taxes, before he can claim the benefits thereof, must have paid at least seven years in succession, three of which must have been since the passage of the statute. It follows from this that, where lands continue to be unimproved and uninclosed, and seven successive payments of taxes have been made, the possession continues and becomes complete, unless the possession be broken by adverse entry or by commencement of an action before expiration of tlie seven-year period from tlie date of the first payment. By such payment of taxes under color of title appellee acquired a valid title thereto, as against appellants and all others, as has often been held by this court; (citing cases).”

See also Smith v. Boynton Land & Lbr. Co. supra, where we said:

“In the case of Seldom v. Dudley E. Jones Co., 74 Ark. 348, 85 S. W. 778, Mr. Chief Justice Hill, in rendering the opinion, said: ‘The general rule is that, to charge a person on a warranty, eviction must be alleged. But, where the land is wild and unimproved, as in this case, actual eviction is not necessary. The possession follows the legal title, and a paramount title carries possession with it, amounting to constructive eviction’.”

It follows therefore that, under the law applicable to the facts of this record, the appellees have no title or right to possession of the lands in controversy. The decree is therefore reversed, and the cause is remanded, with directions to grant the prayer of appellant’s complaint.


author: Smith, J.

text:
    Benefit Association Railway Employees v. Hayden.
    Opinion delivered November 28, 1927.
    Insurance — “engaged in aeronautics” — exemption clause; — A telegraph operator killed while a passenger in an airplane, held not “engaged in aeronautics,” within the meaning' of the exemption clause in an insurance policy.
    Appeal from Craighead Circuit Court, Jonesboro District; W. W. Bamdy, Judge;
    affirmed.

      Rose, Hemingway, Gamtrell & Loughborough, for appellant.

      Basil Baker, for appellee.
   Smith, J.

The appellant insurance company issued its policy of insurance to Paul Trotter, a telegraph operator, insuring his life in the isum of $3,000, and appellee was designated as the beneficiary therein. This suit was brought by the beneficiary to recover on this -policy, and the cause was submitted to the court below, sitting aw a jury, on the following- agreed statement of facts:

“We agree that Paul Trotter, the insured, was killed at Stuttgart, Arkansas, on October 17, 1926, in an airplane accident. The facts in relation to the accident or how it occurred are as follows:
“Bichard Schillberg was operating an airplane at a rice carnival or rice fair, at -Stuttgart, Arkansas, and ivas charging passengers $2.50 for each trip -on which they rode with him. Some time during the -day Paul Trotter took an airplane trip with Schillberg, riding a-s passenger, and paid the usual fee or fare therefor. Later in the day, as he -stood near the airpl-ane, Sichillbe-rg, the pilot of the airplane, in -soliciting passengers for another trip, saw Paul Trotter, and aisked -him if he did not want to take another ride. On this occasion Paul Trotter accepted the invitation to become a passenger to ride for a second time, and the second flight was made. The second flight was upon the same condition of payment as the first flight, but it is not known by the- parties whether the payment was made on either occasion before ascending or after alighting from the airplane. On the occasion of the -second flight the pilot of the machine, Sehillberg, attempted to perform ¡siome ‘stunts,’ -and, in doing so, lost control of bis machine-, when perhap-s not more than 300 feet from the ground, and the -airplane fell, killing Trotter and seriously injuring Schillberg. Prior to the time of taking out insurance Paul Trotter bad been on one -or two ‘plane’ trips. .The place or location where these trips were made, purpose or reason for- taking them, -or the conditions under which they were made, are not known to the partie-s executing this agreement. ’ ’

The policy sued on contained thi-s clause: “This policy does not cover -disability -or fatal injury received by the insured * ■ * * (3) While engaged in aeronautics or underwater navigation,” and the company denied liability by virtue of this clause.

At the trial from which this appeal comes the insurance company requested the court to find the fact to he that the insured received his fatal injury while engaged in aeronautics, and that death while so engaged was a risk not assumed, but expressly excepted, toy the policy.

The court declined to make that finding, but, on the contrary, made the following finding.

“Finding of fact No. 1. The court finds that the occupation of Haul Trotter was: that of telegraph operator, and that he received his fatal injury while riding in an aeroplane as a passenger; that riding as a passenger in an aeroplane does not constitute an exception or excepted risk under the terms of the policy of insurance sued upon, but the phrase ‘engaged in aeronautics’ implies that the risk excepted is for the insured to have taken part in the operation of the aeroplane as an occupation or otherwise, and that merely riding as a passenger therein does not come within the exception of the policy.”

Upon this finding judgment was rendered against the insurance company for the amount* of the policy, with penalty and attorney’s fee, and the insurance company has appealed.

It is not questioned that the insured was killed while riding in an aeroplano, and the insurance company insists that the trial court should have declared that the insured was, at the time of his death, “engaged in aeronautics” within the meaning of the clause above quoted, and that there is no liability under the policy sued on. Oases are cited by appellant which fully sustain the contention.

Appellee insists, however, that the phrase, “engaged in aeronautics,” should be strictly construed, as it constitutes an exemption from the general liability assumed by the company upon the issuance of the policy, and that it means active cooperation or faking part in, the aeronautical enterprise resulting in the death of the insured.

Appellee contrasts the use of the words, “engaged in,” quoted above, with language employed in § 5 of the policy, providing for double indemnity in certain cases, one of these being for an injury sustained ‘by the insured “while riding as a passenger in a passenger elevator,” and another provision in the same section for double indemnity for an injury sustained by the insured Avhile riding as a passenger of a common carrier; and also with an exception from liability contained in § (f) “Avhile engaged in military or naval service during the time of war.”

It is insisted by appellee that the words, “engaged in, ’ ’ should be construed as having the same meaning in each of the instances where they were employed, and that the proper construction of those words is that actual employment or participation avus contemplated, and that, if merely riding as a passenger in an aeronautical device was intended, language should have been employed which did more than inhibit one from engaging in that business.

We do not review the oases cited by counsel for appellant, ias it is thought by the majority of the court that the instant ease is ruled by the decisions of this court in the cases of Sovereign Camp W. O. W, v. Compton, 140 Ark. 313, 215 S. W. 372; Miller v. Illinois Bankers’ Life Assn., 138 Ark. 442, 212 S. W. 310; Benham v. American Cent. Life Ins. Co., 140 Ark. 612, 217 S. W. 162; and Nutt v. Security Life Ins. Co., 142 Ark. 29, 218 S. W. 672.

In the case of Benham v. Ins. Co. supra, the facts were that Benham, the insured, enlisted in the aviation branch of the military service of the United States, on February 11, 1918, at which time the United States was at war with Germany, and while still in the aviation service and during the continuance of the war, the insured died from .influenza. The policy there sued on contained the following exemption from liability: “Death while engaged in military or naval service in time of war, or in consequence of such service, shall render the company liable for only the reserve under this policy, unless the company’s permission to engage in such service shall have been obtained and such extra premium or premium® as the company may require .shall have been paid.”

Permission of the insurance company for the insured’s enlistment had not been obtained, nor had he paid the extra premium, and the company contended that it was liable only for the reserve value of the policy; but this court held that the company was liable for the full face value of the policy, and in so holding it was there said:

‘ ‘ The words in the restricted clause now under consideration mean something more than death to the insured during the period of time he was in military service of the United States. The word ‘engaged’ denotes action. It means to take part in. To illustrate, a servant injured while in the operation of a train, means that he must be injured while assisting or taking part in the operation of the train. An officer engaged in the discharge of the duties of his office is one performing the duties of his office. So here the words, ‘death while engaged in military service in time of war,’ means death while doing, performing, or taking part in some military service in time of war. In other words, it must be death caused by performing some duty in the military service. That is to say, in order to exempt the company from liability, the death must have been caused while the insured was doing something connected with the military service, in contradistinction to death while in the service due to causes entirely and wholly unconnected with such service. This construction, we think, would be according to the natural and ordinary meaning of the words. By the use of the word ‘engaged’ it .must have been intended that some activity in the service should have caused the death, in contradistinction to merely a period of time while the insured was in the service. This view is strengthened when we consider the words following. The words, ‘or in consequence of such service,’ relate to the word death. So that death in ‘consequence of such service’ means death resulting from some act of the insured connected with the. service, whether such death occurred during the period of Mb service or afterwards.”

The doctrine of that case was reaffirmed in the later ease of Nutt v. Security Life Ins. Co., supra.

The decision of this court in the Benham case, supra, was approved by the Supreme Court of Oklahoma in the case of Barnett v. Merchants’ Life Ins. Co., 87 Okla. 42, 208 Pac. 271; by the Supreme Court of Iowa in the ease of Boatwright v. American Life Ins. Co., 191 Ia. 253, 180 N. W. 321, 11 A. L. R. 1085; and by the Kansas City Court of Appeals in the case of Long v. St. Joseph Life Ins. Co., 225 S. W. 106, which case.was affirmed on the appeal to the Supreme Court of that State, 248 S. W. 923.

It is therefore the opinion of the majority — in which the writer does not concur — 'that the insured was not “engaged in aeronautics” within the meaning of the clause above quoted, and that the trial court was correct in so holding, and the judgment of the court below will therefore be affirmed, and it is so ordered.


text:
    Cazort v. Road Improvement District No. 3.
    Opinion delivered November 28, 1927.
    1. Highways — jurisdiction to establish. — The county court alone possesses, jurisdiction to lay out and establish public roads.
    2. Certiorari — relief against invalid order. — In a proceeding by certiorari to quash an order establishing a public road, the invalidity of the order must be determined from inspection of the face of the record itself, and relief must he denied unless its invalidity so appears.
    3. Highways — presumption of establishment of road. — In a proceeding by certiorari to quash an order of the circuit court authorizing a road improvement district to construct a highway across defendant’s land, the Supreme Court will presume that the county court established the road which the district proposed to improve.
    4. Eminent domain — jurisdiction.—Exclusive jurisdiction is not conferred on the county court to ascertain the compensation due. to landowners in case of the construction of a public road, so that a road improvement district may institute condemnation proceedings in the circuit court, which may authorize the construction after requiring the district to give bond to indemnify the landowner.
    Certiorari to Jolmson Circuit Court; J. T. Bullock, Judge;
    writ quashed.

      Hugh Basham and Starbird & Starbird, for appellant.
   Smith, J.

Road Improvement District No. 3 of Johnson County instituted suit in the circuit court of that county by filing a complaint which contained the following allegations:

“Road Improvement District No. 3 of Johnson County is a road district organized and existing under the general laws of the State of Arkansas, and its purpose and object is to improve and build a road from the town of Lamar, through Lutherville and to the line between Johnson and Pope counties. Said road runs over and through a small tract of land owned by the defendant, G-. T. Cazort, and said defendant refuses to agree upon the amount of damages, if any, he has sustained by reason of said road running over and across his said land.
“Plaintiff further alleges and states that said road, if built across the land owned by said defendant, will take less than one acre of said defendant’s land, and that said land is worlli not more than $25 per acre, and that said defendant will not be damaged otherwise.
“That said Road District No. 3 of Johnson County, Arkansas, has used every effort possible to obtain an agreement, and did obtain an agreement with the said defendant whereby he agreed that said road district could build said road over and across his said real property, but, at this time, he refuses to permit said district to construct said road over his said real property, notwithstanding Hie fact that said road is practically completed over liis said real properly. That the work on said roiad is being retarded by reason of the fact that said defendant refuses to agree or permit said district to construct said road over his said real property.
“Said plaintiff, Road Improvement District No. 3, by B. E. Wilson, J. D. Daniels and J. C. Harris, as commissioners, is desirous that the damages be settled by a trial by a jury in the circuit court.”

There was a prayer that the court fix the amount to be deposited by the said district until the final hearing, and that, upon making this deposit, the commissioners for the district “be permitted to go in and upon said real property owned by said defendant, over which said road has been surveyed, and continue the building of said road.” It was further prayed that, upon the final submission of the cause, a jury be impaneled to assess defendant’s damages. The court made the following order: .

“On this 12th day of July, 1927, came the plaintiffs, and presented the within complaint, seeking to condemn for Road Improvement District No. 3: in Johnson County, Arkansas, the lands therein described, and, after hearing testimony, the court fixes the amount which plaintiff shall deposit with the circuit clerk of Johnson County at the sum of $400, to indemnify- defendant, and, upon the deposit of said sum, the plaintiff, Road Improvement District No. 3, is hereby authorized and empowered to enter upon said lands and construct the improvement, making a public highway across said lands, and the question of damages shall be submitted to a jury of the Johnson Circuit Court.”

The landowner has proceeded by certiorari to quash this order, and alleges that it is invalid, for the reason that the circuit court has attempted to exercise an original jurisdiction vested by the Constitution of the State exclusively in tbe county court. It is insisted that the purpose and effect of the order quoted above is to lay out and establish a public road over the land of the petitioner, and that this is a jurisdiction possessed only by the county court.

It may be conceded that the county court alone possesses this' jurisdiction. City of El Dorado v. Union County, 122 Ark. 184, 182 S. W. 899; Road Imp. Dist. No. 2 v. Winkler, 102 Ark. 553, 145 S. W. 209; Craig v. Greenwood District of Sebastian County, 91 Ark. 274, 121 S. W. 280; Parkview Land Co. v. Road Imp. Dist. No. 1, 92 Ark. 93, 122 S. W. 241; Brumley v. State, 83 Ark. 236, 103 S. W. 615; Board of Dir. v. Redditt, 79 Ark. 154, 95 S. W. 482; Humphreys v. Fort Smith T. L. & P. Co., 71 Ark. 152, 71 S. W. 662; Numes v. Coyle, 148 Ark. 365, 230 S. W. 11; Fulton Ferry & Bridge Co. v. Blackwood, 173 Ark. 645, 293 S. W. 2.

But we think petitioner is mistaken as to the purpose and effect of the order. It must be remembered that this is a proceeding by certiorari, and the validity of the order sought to be quashed must be determined from an inspection of the face of the record itself, and the relief prayed must be denied unless the invalidity of the order so appears. Martin v. Hargrove, 149 Ark. 383, 232 S. W. 596; Hilger v. J. R. Watkins Medical Co., 139 Ark. 400, 214 S. W. 49.

The order of the county court establishing the road improvement district has not been brought before us, and the regularity of the proceedings by which the district was brought into existence must be. presumed. The complaint upon which the order sought to be quashed was made alleges the existence of the district and states the termini of the road to be improved. Its route is alleged to be across the lands of petitioner, and it is further alleged that its construction will require an acre of his land. We must therefore presume, in a proceSding of this character, that, by appropriate and necessary orders, the county court has established the road which the improvement district is proposing to improve. It remains therefore only to consider whether the circuit court had the jurisdiction, under this state of facts, to make the order which petitioner seeks to quash, and which is copied above.

This exact question ivas decided adversely to. petitioner’s contention in the case of Road Dist. No. 6 of Lawrence County v. Hall, 140 Ark. 241, 215 S. W. 262, and it would serve no useful purpose to again review the authorities which led to the conclusion there announced. The case cited affords ample authority for here holding that the circuit court had the jurisdiction to make the preliminary order which was made, and has also jurisdiction to assess and adjudge the damages which petitioner will sustain by reason of the improvement of the proposed road.

It follows therefore that the order complained of is not void; at least it does not appear so to be from an inspection of the record presented for our review, and the writ of certiorari which heretofore issued will be quashed. It is so ordered.


author: Humphreys, J.

text:
    Easterling v. Cook.
    Opinion delivered November 28, 1927.
    1. Counties — disposition of interest on sinking fund. — Interest derived from the sinking fund raised by taxation for the purpose of paying a compromised bonded indebtedness pursuant to Acts 1895, p. 167, constitutes “property of the county,” and is subject to disposal by the quorum court, such interest not being within the inhibition of Const., art 16, § 11, there being no provision in the act for lending the sinking fund, and interest derived therefrom comes from a source not contemplated in the act.
    2. Counties — -authority of quorum court. — The quorum court has authQrity to appropriate money to pay the expenses of the county judge in going to Washington, D. C., for the purpose of attempting to obtain restoration of Federal aid for road building in this State, which had previously been withdrawn, and which withdrawal materially affected the road work within the county.
    Appeal from Chicot Chancery Court; Pat Henry, Special Chancellor;
    affirmed.
    ' R. W. Wilson and J. R. Parker, for appellant.

      J. C. Gillison and Streebb & Burnside, for appellee.
   Humphreys, J.

This is a suit brought in the chancery court of Chicot County by appellant, a resident landowner and taxpayer in said county, for the benefit of himself and all other taxpayers in the county, to recover from appellees, officers of the county, $42,934.56 alleged to have been illegally diverted by them from the compromise loan bond fund, which was a fund raised by taxation for the purpose of paying the compromised bonded indebtedness of said county to the general revenue fund and to other funds, and used in repairing the courthouse, buying records, constructing bridges and buying in general county warrants, and for $500 alleged to have been misappropriated and paid out of the county general revenue fund and used by one of the appellees, Harry E. Cook, for the purpose of taking a trip on a special train, known as “Arkansas on Wheels,’’ to Washington, D. C.

Appellees filed an answer, denying that the $42,934.14 expended by them for the purposes alleged in the complaint was a part of the fund raised by taxation for the payment of the compromise bonded indebtedness, but that same was derived from a different source, and was legitimately expended by appellees as officers of the county; and that the item of $500 was properly appropriated and expended for the necessary conduct of the county government.

The case was submitted to the court upon the pleadings and testimony adduced at the trial, which resulted in a decree dismissing appellant’s complaint for want of equity, from which is- this appeal.

The record reflects the following facts: In 1895 the Legislature passed Act No. 114, authorizing any county in the State to refund its bonded indebtedness. This act provided that any county issuing bonds for said purpose should also provide for a levy and collection of an annual tax sufficient to pay the annual interest on such funding bonds as they became due and to create a sufficient sinking fund for the payment of the principal when it became due. It also provided that the treasurer of the county might purchase one or more of the-funding bonds at any time be had sufficient funds arising from the tax to do so,' in case the purchaser thereof would sell same. It also provided that the fund arising from the tax should be held and deemed an inviolable sinking fund for the purpose of extinguishing said indebtedness, and to be used for no other purpose.

In 1909 the quorum court of Chicot County proceeded under said act to refund its old bonded indebtedness of $246,600. The refunding bonds were made payable on July 1, 1929, and a tax of five mills was levied from year to year upon all the property in the county to pay the semi-annual interest accruing upon the bonds and to retire the bonds at maturity. A resolution was adopted creating a sinking fund board, consisting of the county judge, county clerk, and the county collector of said county, and directing that funds derived from the special tax as it accrued should be turned over to said hoard and loaned out by it, to the best interest of the county. The fund derived from the special tax was turned over annually to the sinking fund board by the treasurer of the county, which was. loaned to certain banks in said county by said board at five per cent, interest per annum, and, at the time of the trial of this cause, interest on said fund in the sum of $71,348.51 had been earned and collected. All the fund, including the special taxes collected and the accumulated interest, was held and kept together and loaned from time to time to the banks by said board.

Harry E. Cook, one of the appellees, was county judge of said county from 1906 to 1916, during which time the old bonded indebtedness was refunded, and was a member of the sinking fund board that received from the treasurer the compromise sinking fund and loaned same to the banks. In 1916 he went out of office, was reelected in 1920, and again assumed the duties of office in 1921. From that time on he has served the county in the capacity of county judge by election. George Elder, also an appellee herein, has served the county in the capacity of county clerk by election for sixteen years. W. J. Splawn, also an ajipellee herein, lias served the county as its treasurer by election since, January 1, 1917.

When Harry E. Cook assumed the duties of county judge, it was ascertained that about $80,000 in county warrants were outstanding against the general revenue fund, and, in addition to making other provisions to rehabilitate the general revenue fund, which was greatly depleted, so much so that scrip was worth from forty-five to fifty cents on the dollar, it occurred to him that a part of the interest which had been derived from lending the compromise bonded sinking fund might be used to purchase a part of the outstanding warrants and to make necessary repairs on the courthouse, to buy necessary records, and to construct bridges, leaving sufficient in said fund to pay the interest on the compromise funding bonds and to retire them at maturity, and at the same time reduce the five-mill levy materially. He revealed this information by letter to the circuit judge, prosecuting attorney and grand jury, and received their written indorsement of his plan. The plan was published, so that the citizens throughout the county became cognizant of it. He then recommended the plan to the quorum court, which authorized him to use the fund for the purposes outlined. Pursuant to the authority thus vested in him, he appointed the county clerk and the county treasurer trustees to purchase the outstanding warrants which could not be redeemed with money received from other sources, to the amount of $26,375.62, which they purchased for eighty cents on the dollar, using $'21,029.14 of the interest in the compromise bond sinking fund in the purchase thereof. Thereafter, pursuant to the same authority, sums amounting to $21,905 were used out of the interest in said fund to repair the courthouse, buy certain records, and construct certain bridges in the county. The method used was to transfer the amounts needed out of the compromise sinking fund to the general revenue fund and such other funds as was necessary in order to expend the money for the purposes designed. The total amount transferred was $42,934.14. The withdrawal of this amount of interest from the fund lacked $28,413.95 of absorbing all of the interest which had accumulated by lending the fund. The tax fund itself remained intact, except that it was in the hands and under the control of the sinking fund board, instead of being in the hands of the treasurer, where it lawfully belonged. As we read the record, there is practically enough left in the fund to take care of the interest as it matures on the funding bonds, and will be enough in the fund to retire the bonds at maturity. The result was obtained by the adoption and practical operation of the plan suggested by Judge Cook, notwithstanding the quorum court reduced the levy for the compromise bond sinking fund in 1922,1923 and 1924 to 3 mills, and-in 1925 .to 2 mills. The transfer of the portion of the accumulated interest of this fund to other funds for the purposes outlined had the effect of rehabilitating the finances of the county, until scrip is exchanged in the market for face value, or thereabouts.

At the October term of the quorum court in 1923 it appropriated $500 to pay the expenses of Judge Cook to Washington, D. C., to confer with the Federal Road Department with reference to the restoration of Federal aid for the building of public roads in Arkansas, which the Government had theretofore withdrawn.

Appellant contends that appellees rendered themselves personally liable for transferring the $42,304.14 from the compromise bond fund to the general revenue fund and other funds for the purposes of buying county warrants, repairing the courthouse, buying records and building bridges, because the transfer of such funds by said officers was contrary to § 11, article 16, of the Constitution of 1874, and § 8 of act 114 of the General Assembly of 1895. Section 11, article 16, of the Constitution of 1874 provides that “No tax shall be levied except in pursuance of law, and every law imposing a tax shall state distinctly the object of the same; and no moneys arising from a tax levied for one purpose shall be used for any other purpose.”

Section 8 of said act 114 provides that the taxes levied and collected “shall be held and deemed an inviolable sinking fund for the purpose of extinguishing such county indebtedness, and for no other purpose.” It will be observed that the inhibition in, both the Constitution and the act referred to is against the use of the money for any other purpose than that for which it was levied and collected, and not against the use of the interest derived therefrom for other purposes. No provision was made in the act for lending the sinking fund, so the interest derived therefrom came from a source not contemplated in the act. Appellees loaned the sinking fund in violation' of the law and at their own peril. Had the money been lost in the lending, they would have been personally responsible for every dollar, and the treasurer, who was the proper custodian thereof, would have been responsible on his official bond for the return of the money. The fruit of the sinking fund derived from illegally lending same was not derived from the levy and collection of the special tax, which the Constitution and act prohibited from being used for any other purpose than that for which same had been levied and collected. It was entirely separate and distinct, and derived by an illegal act of the officers of the county, appellees herein, and necessarily became the property of the county. Being the property of the county, the quorum court had a right to place it in any fund it chose, for use by the county. The undisputed testimony shows that it was transferred from the compromise bond sinking fund to other funds and used for county purposes. Although the interest was mingled with_ the sinking fund Avhioh had been raised by taxation, it was not of such character that it could not be easily separated. There is no difference in the value of the dollars derived from the different sources, and the exact amount derived from each source was knoAvn. The record reflects that the amount transferred from the compromise bond sinking fund and used for other legitimate county purposes was much less than the accumulated interest thereon at the time of the transfer. Only a portion of the accumulated interest was transferred from the compromise bond sinking fund, a sufficient amount being left therein to take care of the semi-annual interest accruing on the refunded bonds and to retire the bonds at maturity, even though the five-mill levy was reduced in 1922, 1928 and 1924 to three mills, and in 1925 to two mills.

• We do not think that appellant’s contention that the quorum court had no right to appropriate $500 to pay the expenses of Judge Cook to Washington, D. C., is tenable. At the time this appropriation was made, the Federal Government had withdrawn Federal aid from the public roads in Arkansas, which materially affected the road work in Chicot as well as other counties in the State. According to the record, the purpose in sending Judge Cook to Washington, along with other representatives of the State, was to obtain a restoration of Federal aid for road building in this State. Under the circumstances we think it a permissible expenditure for Chicot County to have made.

No error appearing, the decree of the chancery court is affirmed.

Mr. Justice Kirby dissents.

Mr. Justice Mehaeey concurs.


text:
    Fitzhugh v. Leonard.
    Opinion delivered November 28, 1927.
    1. Brokers — right to share of profits — evidence.—Under an agreement with a broker whereby a tract of land was priced at $17,000, and the broker was to receive one-third of the profits exceeding that amount, it was error to exclude evidence that the stock of goods received by the principals in exchange would probably not sell for enough to make any profit over $17,000.
    2. Brokers — right to share of profits. — In a broker’s action for commissions on exchange of real property for a stock of goods and other property, under an agreement whereby the broker was to receive one-third of the profits to be made in excess of $17,000, the broker was not entitled to recover, if at the time of trial it was impossible to determine from the evidence what profit the principals had made on exchange of the property.
    3. Brokers — right to commission — burden of proof. — Where a broker claimed that he was entitled to receive as commission for exchange of property one-third of the profits realized over $17,000, the burden was upon him to prove that profits exceeding that amount were actually realized from a sale of the stock of goods and other property received in exchange for the land.
    4. Brokers — right to commission — jury question. — In a broker’s action to recover one-third of the profits over $17,000 realized by the principals on exchange of land for his stock of goods and other property, the questions whether the contract alleged was entered into, and whether profits above $17,000 were realized, held for the jury.
    Appeal from Izard Circuit Court; John C. Ashley, Judge;
    reversed.

      Hill £ Fitzhwgh and S. M. Casey, for ¡appellant.

      H. A. Northcutt and J. Paul Ward, for appellee.
   Humphreys, J.

This is an appeal from a judgment of $3,000 rendered in the circuit court of Izard Oounty in favor of appellee against appellants for a commission on exchanging 600 acres of land owned hy appellants near Jacksonport, Jackson County, valued at $30,000, for a 200-acre tract valued at $10,000, a stock of goods valued at $15,267.73, and cash and notes amounting to $4,732.27 owned by Garner Brothers. Appellee alleged that he was to receive as a commission one-third of any excess above $17,000, the cash price agreed upon between appellants and appellee for their 600-acre tract, which appellants might realize upon the property received by them in exchange for said 600-acre tract, and that, as they gained a net profit of $9,000 over and above $17,000 out of the property received by them, it would entitle him to $3,000 as his part of the profit.

Appellants filed an answer, denying that such a contract was made and that any profits had accrued to them out of the property they received above the cash value of their 600-acre tract, which was fixed at $17,000.

Appellee testified, in substance, that, while selling out a stock of goods in Calico Bock, for which he had traded, he was informed by Garner Brothers that they would like to trade their stock of goods for land; that he mentioned it to W. B. Headstream, who informed him that appellants had land for sale or exchange; that he and Headstream approached J. B. Fitzhugh concerning the trade, and was told by him that he and A. K. Goodnight had 600 acres in the White River bottom for which they wanted $17,000 in cash, and that, in case of exchange, they would have to receive that much net; that they entered into a contract with J. B. Fitzhugh by which he priced the 600-aere tract to them at $17,000, in case they should effect an exchange with Garner Brothers, and to split the profits above $17,000 three ways, one-third to each, and that they should have until the spring of 1926 to work out the profits on the Gamer stock of goods; that the money to be split three ways was net profit that should be made out of the deal above $17,000 which appellants were to first receive for the 600-acre tract of land; that he spent about ten days endeavoring to make the exchange, and, just before it was completed, and while hanging fire on the price of the Delco plant, he was called to Texas on business; that he had priced the 600-acre tract to Garner Brothers for $30,000, which they were willing to give, provided appellants would allow them $10,000 for 200 acres of land they owned in Oil Trough bottom, ninety cents on the dollar on the wholesale price of their stock, $700 for cash register, $700 for safe, $400, less ten per cent., for a Delco lighting system, and fixtures at ten per cent, less than catalogue prices; that J. B. Fitzhugh was objecting to the price of the Delco plant, which was seemingly the only hitch in the deal, when he left for Texas; that Fitzhugh sent him word that he did not want him in the store, and proposed to pay him wages for his services, which he refused to accept; that Fitzhugh made objection to paying $10,000 for the 200-acre tract in Oil Trough bottom, but, before he left, he agreed to allow that in the trade, with the understanding that, between themselves, in settlement of the commission that should be valued at $6,000; that, on Tuesday after he left for Texas, appellants closed the deal with Garner Brothers on practically the same basis that they had figured on; that he was entitled to $3,000 as his part of the profits for his services, in which he estimated the prices fixed on the several properties involved in the trade.

The written contract between appellants and Garner Brothers was introduced in evidence, and is as follows:

“This agreement, by and between J. B. Fitzhugh and A. K. Goodnight, party of the first part, and J. T. and A. B. Garner, party of the second part, witnesseth: That said Fitzhugh and Goodnight agree to make and deliver to the ¡said J. T. ¡and A. B. Garner their warranty deed, with abstract showing good and merchantable title to all the land owned by them in what is known as and called Mason Bend, near Jaeksonport, in Jackson .County, Arkansas, and containing 600 acres, more or less, and also all the land owned by the said Fitzhugh and Goodnight in the town of Jaeksonport. The agreed price for all of said land is $30,000. The said J. T. and A. B. Garner agree to give and deliver to the said Fitzhugh and Goodnight a warranty deed to what is known a.s and called the Lewis Marlow farm, in Oil Trough bottom, Independence County, Arkansas, coartaining 200 acres, more or less, and now owned by the said J. T. and A. B. Garner, and being all the land owned by them in Oil Trough bottom, the. agreed price for said land is $10,000, and they also agree to transfer to the said Fitzhugh and Goodnight their stock of merchandise in their store building at Calico Bock, Izard County, for 90 cents on the dollar of actual wholesale cost; a safe to be valued at $700; a cash register to be valued iat $700 net; a Deloo lighting system valued at $400, less 10 per cent. All usable fixtures to be valued at 10 per cent, less than catalogue prices. And the said J. T. and A. B. Garner are to pay the difference between their land and merchandise and fixtures and the land conveyed to them by the said Fitzhugh and Goodnight, in cash, or ¡a note satisfactory to the said Fitzhugh and Goodnight. The merchandise and fixtures are to be invoiced at once, and the deeds and transfers to he perfected and exchanged within fifteen days, unless delayed by some unavoidable occurrence.
“Signed in four copies, this 23rd day of June, 1926.
(Signed) “Fitzhugh & Goodnight,
“By J. B. Fitzhugh.
“J. T. & A. B. Garner,
“By J. T. Garner.”

Appellants introduced testimony tending to show that the contract entered into between them and Garner Brothers was materially different from the one which appellee attempted to negotiate before he left for Texas, and that, after he failed to consummate the deal and had abandoned further effort to effect same, he agreed to drop out and accept wages for his services.

In the course o'f trial appellants offered to prove that the stock of goods received from Garner Brothers was being disposed of at retail, and that the indication was that they would not sell for enough to make any profit aibove $17,000, and that there was no wa}r to ascertain the profits above $17,000 until the stock was disposed of. The court excluded this evidence, over the objection and exception of appellants, and refused to give the following instruction requested by appellants, to-wit:

“If you find from the evidence that it is impossible to determine at this time what, if any, profit the defendants made on the sale of the farm, your verdict should be for the defendants.”

To which refusal of the court to give said instruction appellants duly excepted.

We think this evidence admissible, and the instruction should have been given. The gist of the complaint was that appellee was to receive as his commission for making the deal one-third of any profits to be derived out of the property received from Garner Brothers above $17,000, which amount appellants were first to receive for their 600-acre tract of land. Appellee testified that he was to receive his pay out of the profits to be derived from tlie sale of tlie stock uf goods, and that he and H'eadstream were to have until the spring of 1927 to work the profits out of the stock of goods. According to the allegation of his complaint and his own testimony, the burden was upon him to show a profit was made above $17,000 out uf the property received from Garner Brothers.

The cause 'should have been sent to the jury upon the grounds as to whether 'Such a contract as alleged was made, and, if 'so, whether any profits above $17,000 had been derived by appellants out of the property received from Garner Brothers in exchange for the 600-acre tract.

On account o'f the error indicated the cause is remanded for a new trial.


author: Ktr-by, J.

text:
    Hudson v. Higgins.
    Opinion delivered November 28, 1927.
    1. Statutes — expense of government — majority required. — Acts 1927, p. 502, authorizing the hoard of control of the Agricultural, Mechanical and Normal School for Negroes to purchase a site and erect a building for such school, held not invalid under Const., art. 5, § 31, because it did not receive two-thirds majority of both houses of the Legislature, as the maintenance of such school is a necessary expense of government.
    2. States — sufficiency of appropriation of money. — Acts 1927, p. 502, authorizing the purchase of a site for the Agricultural, Mechanical and Normal School for Negroes and the construction of a building for that purpose, in providing that the State’s negotiable notes should be issued not to exceed in the aggregate the amount of $275,000, and that the money arising from the sale of said notes should be paid into the fund of such school and used for no other purpose than the erecting and equipping of buildings and for other permanent improvements thereat, held to make an appropriation of money to be raised by the sale of the notes, within the meaning of Const., art. 5, § 29, providing that money shall not be drawn from the treasury except in pursuance of specific appropriation.
    Appeal from Pulaski 'Cliancery Court; Frank H. Bodge, Chancellor;
    affirmed.

      Greed Caldwell, for appellant.

      H. W. Applegate, Attorney General, John L. Garter, Assistant, and Rose, Hemingway, CaAÜrell <fc Loughborough, for appellee.
   Ktr-by, J.

This appeal challenges the validity of act 146 of the Acts of the General Assembly of 1927, as not having been passed by the requisite majority of the Legislature, and the authority of the State Debt Board to issue the notes or bonds, because no specific appropriation of the money to be raised by the bond issue was made therein authorizing its use or expenditure.

Appellant, a taxpayer of Jefferson County, brought suit in the Pulaski Chancery Court for an injunction against the State Debt Board to prevent the issuance and sale of the notes or bonds provided for in said act. It was alleged that no appropriation of the money to be raised by the sale of the bonds had been made by the act; that therefore the money realized from the sale of the bonds, bearing 5 per cent, interest, would have to be kept in the treasury until an appropriation for the expenditure thereof could be made by the 1929 Legislature, at a loss of 2 per cent, interest, the difference between the 5 per cent, and the 3 per cent, paid for the State’s funds by depositories; and that said act was invalid, not having received a two-thirds majority of the members of both houses of the General Assembly, as required under § 31, article 5, of the Constitution, the funds not being provided for defraying the necessary expenses of Government, nor for sustaining the common schools.

The Attorney - General demurred to the complaint, and the demurrer was sustained, and, the plaintiff declining to plead further, judgment was rendered against him, from which this appeal is prosecuted.

It is contended, first, that the act is invalid because it did not receive in passing a two-thirds majority of both houses of the Legislature, as provided in § 31, article 5, of the Constitution, which reads: “No State tax shall be allowed, or appropriation of money made, except to raise means for the payment of the just debts of the 'State, for defraying the necessary expenses of Government, to sustain common schools, to repel invasion and suppress insurrection, except by a majority of two-thirds of both houses of the General Assembly. ’ ’

The Normal School for Negroes at Pine Bluff was' first authorized by the Acts of 1873, and operated as a branch of the State University. The Legislature in 1881 recognized the purchase of a site by the board of trustees of the State University, and made appropriation for a building thereon. In 1927, act 341 created a separate board of trustees for the management of this school, but provides that it shall be governed by the same laws, so far as applicable, as provided for the management of the University by its trustees.

The State having adopted this policy for the education of a part of its citizens, and established this school for that purpose, to be operated by its trustees and agents, its maintenance becomes and is a necessary expense of Government within the meaning of said constitutional provision. Vincenheller v. Reagan, 69 Ark. 460, 64 S. W. 278; State v. Sloan, 66 Ark. 575, 53 S. W. 47, 74 Am. St. Rep. 106.

It is next contended that no appropriation is made by the act of the money to be realized by the sale of the notes within the meaning of § 9, article 5, of the Constitution: “No money shall be drawn from the treasury except in pursuance of a specific appropriation made by law, the purpose of which shall be distinctly stated in the bill, and the maximum amount which may be drawn shall be specified in dollars and cents, and no appropriation shall be for a longer period than two years.”

In Dickinson v. Clibourn, 125 Ark. 101, 187 S. W. 909, the court, construing this provision of the Constitution, said: “Appropriation denotes the setting apart or assigning to a particular use a certain sum of money for a specified purpose, in such a manner that the public officials are authorized to draw and use the sum so iset apart, and no more, for the purpose specified, and no other. Clayton v. Berry, 27 Ark. 129; State v. Moore, 50 Neb. 88, 69 N. W. 373, 61 Am. St. Rep. 538; Stratton v. Green, 45 Cal. 149.” See also Jobe v. Caldwell, 93 Ark. 503, 125 S. W. 423; s. c., 99 Ark. 20, 136 S. W. 966.

The said act 146 authorizes the board of control of the Agricultural, Mechanical and Normal School for Negroes at Pine Bluff to relocate and build a school plant for the institution on lands now owned by it near Pine Bluff, and to acquire any such new property as may be deemed necessary to carry out the purposes of the act. Section 3 authorizes the State Debt Board to’ sell for cash the State’s negotiable or promissory notes from time to time, not to exceed in the aggregate the amount of $275,000, to provide a fund for the purpose of erecting and equipping buildings and for other permanent improvements at said school. Section 4 requires the bonds to be issued in denominations of $1,000, payable serially, through a period of thirty years, and bearing 5 per cent, interest, payable semi-annually. Section 7 provides for the method of sale of the bonds, and that no sale shall be for less than par and accrued interest, or less than the highest bid previously received and rejected. Section 9 provides: “The money arising from the sale of said notes shall be paid into £the Agricultural, Mechanical and Normal School fund,’ and used for no other purposes than the erecting and equipping of buildings, and for other permanent improvements at the Agricultural, Mechanical and Normal School.” Section 11 appropriates out of the fund the sum of $25,000; or so much thereof as necessary, for the payment of expenses incident to the sale of the notes and for any such interest as may fall due in the biemiial period ending June 30, 1929; provided, that the amount paid out under this appropriation shall be deducted from the appropriation made by the General Assembly of 1927 for the support and maintenance of the institution.

Since the maximum amount of money that can he realized from the sale of the bonds, under the provision of the statute, is definitely fixed by the whole amount of the bonds authorized issued, $275,000, which is all required to be put into the treasury for the “Agricultural, Mechanical and Normal School fund,” and used for no other purposes than the erection and equipment of the buildings and other permanent improvements, as provided in § 9 of the act, the majority of the court is of opinion, in which the Chibe Justice, Justice Mehaeey and the writer do not concur, that the act makes an appropriation of the money raised by the sale of the bonds within the meaning of the constitutional provision.

It follows that the court’s action in holding the complaint insufficient, and sustaining the demurrer, was correct, and the decree is affirmed.