text:
    Bottrell v. Farmers’ Bank & Trust Company.
    Opinion delivered February 28, 1927.
    1. Landlord and tenant — limitation as to lien. — A cause of action of a landlord having a lien on his tenant’s crop against a bank for receiving the proceeds of sale of the crop with notice of the lien is barred by the six months’ statute of limitations; the remedy being in equity to impress a lien upon the proceeds 'of the crop in the bank’s hands.
    2. Equity — following statute of limitations. — Equity follows the law as to the statute of limitations.
    3. Contract — consideration.—In a suit by a landlord to enforce his lien against one converting the crop on which the lien existed, a promise of the conversioner to pay the rent to the landlord was without consideration where the landlord never promised to forbear or do anything in consideration for the bank’s agreement.
    4. Limitations of actions — suspension.—Though a bank which converted the proceeds of a crop subject to a landlord’s lien agreed to pay the rent to the landlord, such promise, being without consideration, did not suspend the statute of limitations applicable to landlords’ liens.
    Appeal from Mississippi Chancery Court, Chickasawba District; J. M. Futrell, Chancellor;
    affirmed.

      Harrison, Smith S Taylor, for appellant.

      Trieber & Lasley, for appellee.
   Mehaffy, J.

This suit was begun by appellant, plaintiff below, alleging that one S. B. Sweeney was a tenant on the land belonging to him, and raised a crop for the season of .1920, under a contract by which Sweeney was to pay the plaintiff $9,487 for the rent.

Plaintiff alleged that the tenant, Sweeney, harvested. the crop and paid $13,000 of the proceeds thereof to the defendant, Farmers’ Bank & Trust Company, for the satisfaction of a certain mortgage executed by Sweeney to the bank. It is also alleged that the defendant received said money, knowing that Sweeney was the tenant of said plaintiff and that said sum was derived from the sale of crops on the land and was subject to plaintiff’s lien for rent. Plaintiff also alleged that he made a demand on the defendant for the amount due on the rent, and was told that the financial condition of the bank was such that it could not sustain a draft for said sum, but that it was instituting action against Wilson-Ward Company at Memphis for the proceeds of cotton shipped to Wilson-"Ward Company by Sweeney, and that defendant would pay the rent if it was successful. It alleged that it relied on defendant’s promise to pay, and, for that reason, did not enforce or attempt to enforce his lien for rent; also alleged that defendant had recovered the money from Wilson-Ward Company.

The defendant answered, admitting that plaintiff was the owner of the land, and that it was rented to Sweeney, but denied that it was rented for the sum of $9,487; denied that Sweeney had sold the crop and paid $13,000 of the proceeds to the defendant to be applied to the paying of the mortgage, without having paid said rent; denied t£at it received the money with knowledge that said money was proceeds of the crop raised and grown, and subject to plaintiff’s lien for rent; denied that any demand was made upon defendant; denied plaintiff was told that defendant’s financial condition was such that it could not sustain a draft at the time, but that it was instituting action against "Wilson-Ward Company ; denied that it told said plaintiff that it' would pay rent if it was successful; denied that any promise was made and that plaintiff relied on the promise for rent; and further stated that, if plaintiff ever had a claim, it was barred by the statute of limitations at the time of filing of this suit.

The undisputed facts in the case are that the plaintiff was the owner of the land, and that Sweeney was his tenant and raised a crop on which the plaintiff had a lien for the rent, amounting to $9,487, and that Sweeney was indebted to the bank, said indebtedness being secured by a mortgage on some personal property and the crop. Sweeney sold the crop and, without paying the rent, except a small portion of it, paid the proceeds from the sale of the crop to the bank on his indebtedness to it.

Plaintiff’s proof tends to show that the bank promised to pay him the rent if they collected from Wilson-Ward Company, bnt the defendant denies this. The proof does not show, however, that the defendant asked or that the plaintiff promised not to institute suit to enforce the lien. Suit was not begun within six months after the rent was due. It would be useless to set out the testimony, because the undisputed proof is such that, if the suit is not barred by the statute of limitations, plaintiff is entitled to recover. If his cause of action is barred, he is not entitled to recover. This is the only real controversy in the case.

The appellant contends that the action of the bank destroyed the landlord’s lien, and that its action amounted to a conversion, thereby giving rise to an action in tort, which may be brought any time within three years.

The defendant contends that the statute of limitations is six months. Plaintiff calls attention first to the case of Van Etten v. Goldman Cotton Co., 158 Ark. 432, 250 S. W. 338. In that case it was held that “the act of purchasing the cotton destroys the landlord’s lien, and one cannot do this and escape liability for so doing except when he has acted in good faith in making the purchase, and good faith requires a reasonable investigation of any information of which the purchaser has possession calculated to warn him that he is Being offered cotton upon which there exists a landlord’s lien.”

In the above case the landlord sought to make the purchaser of cotton pay, because it was alleged that the purchaser had converted the cotton. The court, however, held that the purchaser bought the cotton without knowledge of the lien, and was therefore an innocent purchaser. But in this case it is not claimed that defendant was an innocent purchaser, but the claim is that the suit was not begun in time. We therefore think the above case has no application to the facts in this case.

Appellants next call attention to and rely on the case of Walker v. Rose, 153 Ark. 599, 241 S. W. 19. We do not think that case has any application. In the first place, there is no controversy about the statute of limitations, but it is a question of an innocent purchaser and of conversion. The proof showed in that case that the cashier of the bank stated that it was his fault that Walker shipped the cotton, that he instructed him to ship it, and knew that he shipped it, and received the drafts, and the court said :

“When the bank, through its cashier, advised Walker to ship cotton to a cotton factor out of the State, the cashier knowing at the time that the appellee had a lien on such cotton for rent and supplies, and when the cashier received from Walker a draft on the factor for the proceeds of such cotton and used such drafts in paying l^alker’s indebtedness, the bank by these acts converted to its own use the proceeds of the cotton, with full knowledge of the fact that the appellee had a lien upon such cotton, or its proceeds, for rents and supplies. The decree of the court holding the bank liable to appellee for such proceeds, under the circumstances, was correct, as disclosed by the above proof. Having’ knowledge of the appellee’s lien, it must be held that the conduct of the bank was tantamount to a destruction by it of such lien.”

It will be observed that the only question in that case was the question of an innocent purchaser, and the court held that, when the bank advised the tenant to ship the cotton out of the State, and, acting on that advice, the tenant did ship it, and turned the proceeds over to the bank, this was tantamount to a destruction of the lien by the bank, but there was no question in the case of Walker v. Rose as to the statute of limitations.

The nest case relied on by appellant, Foster v. Bradley, 143 Ark. 319, 220 S. W. 811, has no application to this case, and does not discuss the question of time in which suit must be brought. And, as we have already said, there is no question here about the landlord having a lien superior to that of the bank, and no question, as we understand the proof, about the knowledge of the bank that Sweeney was a tenant and that the appellant therefore had a lien for rent. Bnt the only question is whether or not he can enforce his lien against the bank after six months, or whether he can maintain a suit to compel the bank to pay because it received the proceeds, if a suit was not begun within six months. We think it may be said that the case of First National Bank v. Farmers’ & Merchants’ Bank, 159 Ark. 389, 252 S. W. 34, has no application to the facts in this case, and it is useless to discuss the law with reference to landlord’s lien and conversion, except so far as it may be necessary to determine when the suit in this case should have been brought, because we think the undisputed proof shows that the plaintiff had a valid lien and a right to enforce it, not only against the tenant, but against the bank. This court has said:' “The lien of the landlord continues but for six months after the rent becomes due. And when there has been a conversion of the crop, or a portion of it, by one with knowledge of the lien, and it attaches in equity to the proceeds in his. hands, its continuance is only for the same period, for equity follows the law. * * * The suit not having been commenced within six months after the rent became due, and the lien having expired, no equity or cause of action was shown in the complaint.” King & Clopton v. Blount, 37 Ark. 115.

“If J. L. Cooke & Company could be made responsible at all to the appellees for the rents of 1891, it would be upon the theory that they had received cotton from the place upon which there was a landlord’s lien for rents, with notice of such lien. But this would not be tenable, for two reasons: First, because the proof is hardly sufficient to charge them with notice of appellee’s lien; and second, if it were sufficient, the lien of a landlord for rent expires in six months after the rent becomes due and payable.” Cocke v. Clausen, 67 Ark. 455, 55 S. W. 846.

It should be kept iii mind in this case that the landlord was not the absolute owner of the property which he claims that the bank converted, but only has a lien for the rent, and this court has said:

“Where the plaintiff has a lien on the property taken and sold by the conversioner, as in the case at bar, his remedy is in equity, not for the value of the property taken, for he is not in that case the owner thereof, but to fix his lien upon the proceeds of the property in the hands of the conversioner, it being an equitable doctrine that a lien may be fixed upon the proceeds of the property where the lien on the property has been destroyed by the wrongdoer.” Judge v. Curtis, 72 Ark. 132, 78 S. W. 746.

It would seem that the above case of Judge v. Curtis settles this case, because it is expressly held that, although the purchaser is guilty of conversion!, the remedy of the landlord is an action in equity to fix his lien on the proceeds, and, as he only has a lien by virtue of the statute, the action must be begun within six months, as provided by the statute.

Appellant calls attention to the case of the Bank of Gillette v. Botts, 157 Ark. 478, 248 S. W. 573; but in that case it will be observed that the suit was begun by the landlord against the tenant and some laborers who were claiming’ laborers' liens on the rice crops. The purpose of this suit, which was brought within six months, was to establish a lien for rent and supplies. After the suit was begun to enforce the lien, a receiver was appointed by the chancery court. The bank in that case took charge of the property and sold it, after the suit was begun to enforce the lien, and the court simply held that in that case the six-months statute had no application. It had no application because the suit to enforce the landlord’s lien for rent and supplies was properly begun within six months, and the bank, after the expiration of six months, took possession of the property and sold it while the suit for rent was pending. We do not think that that case has any application, and, so far as we know, this court has uniformly held, not only that the action by the landlord against the tenant to ’ enforce a lien must be begun within six months, but, when the property on which there is a lien is sold by the tenant, a suit to enforce a lien on the proceeds must be begun within six months. This court also held, in the case of Anderson v. Bowles, 44 Ark. 108, that a suit against the purchaser must be in equity, and must be brought within sis months of the maturity of the rent.

The other contention of the appellant is that the bank promised to pay. On this question there is no proof tending to show that any agreement was reached or that any facts existed that would work an estoppel. As stated by the chancellor in his opinion, the promise of the bank to pay the rents when collections should be made from the Wilson-Ward Company constitutes no estoppel. There is no testimony, even by the appellant, that he promised to forbear, or promised to do anything as a consideration for the agreement he claims the bank made. Testimony is conflicting as to the promise to pay, but,' even if the officer had made the promise, as we view the testimony, there is no consideration, and it did not suspend the operation of the statute.

This suit not having been begun within six months, plaintiff’s cause of action was' barred, and the decree of the chancellor is affirmed.


source: Caselaw Access Project

author: Hart, C. J.,

license: Public Domain

text:
    Phillips v. Phillips.
    Opinion delivered March 7, 1927.
    1. Deeds — agreement to support as consideration. — Where a deed was executed in consideration'of an agreement by the grantee to support the grantor and his wife, and this agreement is made by the grantee for the fraudulent purpose of securing the deed and without intending to carry out the condition of the deed, this constitutes a fraud avoiding the conveyance, and equity will set it aside.
    2. Cancellation of instrument — fraud in procurement of deed. —Refusal of a son to support his mother, pursuant to his agreement to do so, made in consideration of a deed from the father, raises a presumption of abandonment of the contract and of a fraudulent intent in entering into it, justifying cancellation of the deed for fraud in its procurement.
    Appeal from Hot Spring Chancery Court; W. B. Bufjie, Chancellor;
    affirmed.
    statement oe pacts.
    -Sarah Phillips, as administratrix of the estate of Abe Phillips, deceased, brought this suit in equity against Joe Phillips to cancel a deed to a certain forty-acre tract of land in Hot Spring County, Arkansas. The suit was defended upon the ground that the title to the land was in Joe Phillips.
    Sarah Phillips was the principal witness for the plaintiff. According to her testimony, her husband, Abe Phillips, obtained title to the forty acres of land in controversy by deed from their son, Jim Phillips. The deed was not recorded, and was destroyed at the time that their dwelling-house was burned. Jim Phillips refused to execute another deed to his father, and the latter con-suited with an old friend, who was a justice of the peace, about the matter. The justice advised Abe Phillips to make a deed to his son, Joe Phillips, and then let Joe Phillips reconvey the land to him, and that, in this way, there would be a paper title to the land in Abe Phillips which .might be filed for record. Pursuant to this plan Abe Phillips executed a deed to the land to his son, Joe Phillips. The matter ran along for about a year, and Abe Phillips land his wife, Sarah Phillips, continued to live upon the land. Abe Phillips then demanded a deed from Joe Phillips, which the latter refused to execute. Abe Phillips died in a few days thereafter, and Sarah Phillips became administratrix of his estate. Upon the refusal of her son, Joe Phillips, to execute a deed reconveying the land to the estate of Abe Phillips, deceased, she instituted suit in the chancery court to annul his deed. Her testimony was corroborated by that of other witnesses, and it was also shown by the evidence for the plaintiff that Joe Phillips failed and refused to contribute anything to the support of Sarah Phillips after the death of her husband.
    Joe Phillips was the principal witness for himself. According to his testimony, the deed' was executed to him by his father, Abe Phillips, to the forty acres in controversy on July 24, 1919, and the consideration recited in the deed was $500. The real consideration was that Joe Phillips would allow his father to continue to live on the land during his lifetime and would help support him. It was also a part of the consideration, that, if the mother of Joe Phillips should outlive her husband, the son would see that she would not suffer. Joe Phillips promised his father, Abe Phillips, to do this, and that was the real consideration for the execution of the deed.
    The chancellor found the issues in favor of the plaintiff, and it was decreed that the deed to the forty acres in controversy from Abe Phillips to Joe Phillips should be canceled. To reverse that decree Joe Phillips has duly prosecuted an appeal to this court.

      John L. McClellan, for appellant.

      D. J). Glover, for appellee.
   Hart, C. J.,

(after stating the facts). According to the evidence of Joe Phillips, the decision of the chancellor was correct. Accepting his testimony as representing the true facts in the case, Joe Phillips took the land upon a condition .subsequent; the sole consideration' for the conveyance to him by his father was the home comfort he was to give to his father and the support of his mother in her declining years, if she should outlive her husband. Thus, under the real consideration of the deed, a continuous and fixed duty rested upon the son to support his mother. He admitted in his own testimony that no amount of money was paid by him to his father as a consideration for the deed, and that the real consideration was the comfort and support he was to give his parents in their declining years. No part of the $500 recited as the consideration in the deed was ever paid or intended to be paid. The real consideration was to secure the means of support for his father and mother. According to the testimony for the plaintiff, the defendant failed and refused to support his mother after the death of his father. The defendant admits that he quit supporting his mother hut attempts to justify his action on the ground that she refused to live with him any longer, and went to live with some of her other children.

The ground for equitable relief in cases of this sort, under our decisions, arises from the fraud which the circumstances of the case show would be perpetrated but for such interposition of the court upon the party asking such relief. Where a deed is executed in consideration of the agreement by the grantee to support the grantor or the grantor.and his wife, and this agreement is made by the grantee for the fraudulent purpose of securing the deed and without intending to carry out the condition of the deed, this constitutes a fraud avoiding the conveyance, and equity will set it aside. Salyers v. Smith, 67 Ark. 526, 55 S. W. 936; Whittaker v. Trammell, 86 Ark. 251, 110 S. W. 1041; Priest v. Murphy, 103 Ark. 464, 119 S. W. 98; and Goodwin v. Tyson, 167 Ark. 396, 268 S. W. 15.

In the case at bar Abe Phillips, the grantor in the deed, continued to reside upon the land up to the time of his death, and Joe Phillips made no attempt to obtain possession of it. He admits that no paft of the consideration named in the deed was paid and that it was never intended to be paid. He also admits that the real consideration was that he should support his mother if she outlived his father. He did not. do so, and these circumstances give rise to the presumption of the abandonment, of his contract to support his mother and of a fraudulent intent upon his part in entering into it. In other words, his refusal and neglect to carry out the promise of support to his mother raises the presumption that Joe Phillips did not intend to comply with his contract in the first instance, and that therefore the contract was fraudulent in its inception, and the chancery court was justified in canceling the deed for fraud in procuring it.

Therefore the decree will be affirmed.


author: Hart, C. J.

text:
    Dean v. State.
    Opinion delivered March 7, 1927.
    1. Husband and wipe — abandonment op wife. — Under Crawford & Moses’ Dig., § 2596, as amended by Acts 1923, p. 265, making a husband’s abandonment- or desertion of his wife or children without cause punishable by jail sentence, or as felony in case he leaves the State, abandonment or desertion, as used in'the statute, contemplates willful separation without justification, with intent not to return.
    2. Husband and wife — elements op wipe abandonment. — Under Crawford & Moses’ Dig., § 2596, as amended by Acts 1923, p.. 265, providing that if a husband, without cause, abandons or deserts his wife or child and leaves the State, he shall be guilty of a felony, abandonment or desertion of the wife or child in the State and departure therefrom by the husband or father must be shown.
    3. Husband and wife — abandonment op wife. — Where a-husband and wife voluntarily separated in another State, the wife com-mg to Arkansas, the husband, who later returned to his wife on the sickness of a child, but did not resume marital relation, was not guilty of abandonment or desertion on subsequently leaving the State, under Crawford & Moses’ Dig., § 2596, as amended • by Acts 1923, p. 265, § 1, as no abandonment took place in this State.
    4. Criminal law — sufficiency of evidence. — In determining whether evidence was sufficient to support a verdict of conviction, the testimony is viewed in the light most favorable to the State.
    Appeal from Tell Circuit Court, Dardanelle District; J. T. Bullock, Judge;
    reversed.

      Hays, Priddy d Borex, for appellant.

      H. W. xipplegate, Attorney General, and Darden Moose, Assistant, for appellee.
   Hart, C. J.

George 0. Dean was indicted for a felony charged to have been committed by abandoning his wife by leaving the State. The jury trying him found him guilty of a felony and fixed his punishment at nine months in the State Penitentiary. The case is here on appeal.

The indictment was returned under act 331 of the Acts of 1923, amending § 2596 of Crawford & Moses’ Digest, General Acts of 1923, page 256. Section 1 of the act reads as follows:

“If any man shall, without good cause, abandon or desert his wife, or abandon his child or children under the age of fourteen years, born in or" legitimatized by lawful wedlock, or shall fail, neglect or refuse to maintain or provide for such wife, child or children, he shall, upon conviction, be punished by imprisonment in the' county jail for not more than one year, or by a fine not less than fifty nor more than one thousand dollars, or both such fine and imprisonment; provided, however, that if such person, after leaving hiss wife or child, or y/ife and child, or children, shall leave the State of Arkansas, said person shall be guilty of a felony, and punishable by imprisonment in the penitentiary for a time not to exceed one year; and provided, however, that in all cases the court may suspend sentence upon probation, employment and support of his wife or child, or wife and child, or children, as the case may be..”

In the construction of the act this court has held that, in order for the State to convict the accused of such a felony, it is necessary for the State to prove that he left the State as a part of his act of desertion. The reason given was that the punishment is not for leaving the State but for the desertion of the wife or children, committed in this manner. Dunham v. State, 169 Ark. 257, 275 S. W. 325. Desertion or abandonment, as used in the statute, contemplates willful separation by one party from the other, without justification, with the intention of not returning. The elements of the felony offense are abandonment of the wife or child in this State and the going out of the State by the husband or father. .

Tested by this principle, in our opinion, the conviction of the defendant should be set aside and he should be discharged. The wife of the defendant was the complaining witness, and the State relied entirely on her evidence for conviction.

According to the evidence of Mr. Dean, she married the defendant at Centerville, Yell County, Arkansas, on the 18th day of June, 1911. Seven children were born of their marriage, and four of them are now living and are with the defendant at his home in the State of Texas. The defendant and his wife first moved to the State of Oklahoma and li.ved at various places there. The defendant is a preacher. Finally they went to Texas. Mrs. Dean claimed that she could not live in the town where the defendant preached, because of her health. Finally, during the summer of 1924, the defendant fitted up a Ford truck and traveled with his wife in the State of Texas for her health. In November, 1924, the defendant was called to the pastorate of a Presbyterian church at Mule Shoe, Texas, which was a small town. Instead of locating in the town, at Mrs. Dean’s suggestion they lived twelve miles out, in a tent. Mrs. Dean complained that the water there was not good for her and made up her mind that she was going to return to Sulphur Springs, in the Dardanelle District of Yell County, Arkansas. She had an aunt who had gone there, and thought the water would help her. According to her testimony, her husband did not want her to return to Arkansas, hut finally gave his consent. The defendant was not making much, and sent his wife all that he made over and above his living expenses. When the witness came hack to Arkansas, she brought the children with her. Finally one of’ them got sick, and the defendant received a telegram from a friend at Sulphur Springs, Arkansas, notifying him that if he wished to see his child alive he had better return at once. He hurriedly returned to Arkansas and helped nurse the child hack to health. He stayed at a neighbor ?s house most of the time while in Arkansas,' and never resumed marital relations with his wife while there. -Sometimes, while helping to nurse his child, he would sleep under the same roof with his wife, but they never slept in the same room or resumed their .marital relations. After the children got well, the defendant moved them to his mother’s home, and then carried them and his mother back to his home in Texas. According to his testimony, he returned to his pastorate in Texas and carried his children back with him. His 'wife refused to return with him. According to her testimony, she wanted to go back to Texas with him, and begged him to take her and not to separate her from her children.

Now, according to her own testimony, the separate on occurred while they were in the State of Texas, and was a voluntary one on her part. She came back to Arkansas to regain her health, and brought her children with her. It is. true that she says she intended to return to her husband at some indefinite time in the future, when she should regain her health. Giving her testimony its strongest probative force, there was no desertion or abandonment of her by her husband in the State of Texas. At most, there was nothing more than a voluntary separation between them. The defendant returned to Arkansas because he was informed that one of his children was about to die. He helped nurse the child back to. health, and, while doing so, sometimes slept under the same roof with his wife. They never occupied the same room and never resumed their marital relations at all. Hence it is apparent that, whatever separation there was between the parties or abandonment,, occurred in the State of Texas; and, inasmuch as the marital relations were not resumed in the State of Arkansas, there was no abandonment there, and the defendant did not leave the State in consequence of such .abandonment or desertion. According to the defendant’s testimony, he merely returned to Texas to resume his work as the pastor of a Presbyterian Church which had been interrupted by his return to Arkansas for the purpose of visiting his sick child, who was about to die. In any event, according to the testimony of the wife, their separation occurred in Texas, and the defendant could not leave the State‘of Arkansas as a part of his act of deserting his wife unless he first deserted his wife in the State of Arkansas. Moreover, according to the testimony of the defendant, which is not contradicted, he always gave his wife one-half of his income, or at least all that was left after a bare support for himself. He only made a small amount of money, and spent all of it on his family except a bare living for himself. His testimony in this respect was not contradicted.

Hence, as far as the statute under consideration is concerned, no criminal act was committed by the defendant, when the testimony is viewed in the light most favorable to the State. The wife was the complaining witness, and her testimony is set out at length in the transcript. We have only copied the substance of it in this opinion, hut deem it proper to say that the whole case has been thoroughly developed, and no useful purpose could be served by remanding the case for a new trial.

The judgment will be reversed because the evidence is not legally sufficient to support the verdict, the prosecution will be dismissed, and the' defendant ordered discharged.


author: Wood, J. Wood, J.

text:
    Mutual Relief Association v. Ray.
    Opinion delivered March 7, 1927.
    1. INSURANCE — LIABILITY OF MUTUAL RELIEF ASSOCIATION. — A mutual relief association, doing- 'business on the assessment plan, held to be a de facto corporation and liable for damages for a violation of its contract to its policy or certificate holders the same as-any life insurance corporation.
    2. Insurance — authority of mutual benefit association to increase assessments. — A by-law of a mutual assessment association authorizing the directors to raise or lower the incidental fee paid by an applicant for membership to defray expenses incurred in the completion of a company in the association held not to authorize the association to increase the assessments payable by members.
    3. Insurance — authority to increase assessments. — In the absence of any provision in a policy or in the by-laws of a mutual benefit association, authorizing such association to increase its assessments to conform to statutes subsequently enacted, such association had no authority to increase the assessments on policies issued before the enactment of such statutes.
    4. Insurance — payment of benefits. — A provision of a policy of an assessment benefit association that, if the beneficigry dies before the insured, the benefits shall be paid to the insured’s legal representative, defines the rights of the policyholders in such case, and does not apply where the association repudiates liability on the policy before the death of either beneficiary or member.
    5. Insurance — rights of beneficiary. — A provision in a policy of a mutual benefit association making the benefits under the policy payable to insured’s legal representative in case the beneficiary named dies before the insured shows that the beneficiary did not have an absolute and unrestricted vested interest.
    6. Insurance — repudiation of contract — right of' action.— Where a beneficiary’s rights under a mutual assessment association’s policy were not vested and the present value of the policy was uncertain, the beneficiary had no cause of action on the association’s repudiation of the contract, but the insured did have a cause of action.
    7. Insurance — breach of contract — right of action. — The rule that, when one party to an executory contract prevents a performance of the contract or puts it out of his power to perform it, the other party may regard the contract as terminated and demand the damages sustained, applies to insurance contracts.

      8. INSURANCE — LIABILITY ON BOND OF ASSESSMENT ASSOCIATION.— A bond given by an assessment benefit association under Crawf ord & Moses’ Dig., § 6016, conditioned for the prompt payment of all assessments to parties or beneficiaries entitled to them and making- such, sureties liable for any violation of conditions or any loss which may accrue to policyholders or beneficiaries, held to bind the sureties merely to see that the insurer pays over all assessments to parties or beneficiaries entitled thereto, but not to make them liable for the association’s repudiation of any liability.
    9. Insurance — repudiation of contract — damages.—Where an assessment benefit association wrongfully repudiated its contract, the insured may treat the contract as rescinded and recover all assessments paid, with interest from the date of payment of each assessment.
    Appeal from Logan Circuit Court, Southern District; James Cochran, Judge;
    reversed as to sureties; affirmed as to association. .

      John P. Roberts and Carmichael & Hendricks, for appellant.

      Evans & Evans, for appellee.
   Wood, J.

Three separate actions were instituted in the Logan 'Circuit Court by separate plaintiffs against the Mutual Belief Association and W. T. Boberts, John P. Boberts and Chas. X. Williams. It is alleged in the complaints that the defendant association was a mutual life insurance company which «was authorized to do, and was doing, business in this State; that the other defendants were owners, directors and bondsmen of the association. It was alleged that, in consideration of the applications and the payment of the initial premiums, the association issued its policies insuring the lives of the respective plaintiffs in favor of the beneficiaries' named therein, who were also plaintiffs in the actions. The policies provided, among other things, that, in consideration of-the applications, which were made a part of the policies, and the payment of the premiums, the association would pay to the beneficiaries, in case of the death of the assured within six months, the sum of $100, and, if death occurred in the next calendar month, the sum of $112.50, the amount of the payment to increase thereafter in the sum of $12.50 per calendar month for a period of seventy-eight months from the date of the policies, until the maximum amount of $1,000 was reached, which should thereafter remain the sum to he paid. The amounts due under the policies were to he paid from assessments of the members and to he paid only upon condition that the. assessments were paicl under the rules and by-laws of the company. Upon failure of the members to pay the assessments as provided in the contract, the policies became null and void. The policies contained a provision that no suit or proceeding shall he brought after a lapse of one year from the date of the death of a member. The assessments, upon the death of member, equaled the initial assessment plus one cent per month during the time the member had been connected with the association until the seventy-eig’hth month from the date of the policy, when the maximum assessment would be $1.32 in Mrs. Bay’s policy, $1.25 in Mrs. Gtray’s and $1.11 in Mrs. Crawford’s. The certificate or policy contained a provision that, in the event of the death -of the beneficiary prior to the death of the member, the benefits accruing under the policy were to be paid to the legal representative of the member. Mrs. Bay’s policy was issued November 18, 1913, Mrs.- G-ray’s on January 31, 1914, and Mrs. Crawford’s on September 5, 1914. It is alleged in the complaints that the plaintiffs had complied with the terms of the contract of insurance on their part; that, early in 1921, the association, in violation of their contract, increased their monthly assessments above the maximum assessments under the policies. They alleged that they refused to pay these increased sums, but tendered the amount which they were required to pay under the policies, which the association refused to accept and thereby breached the contract- of insurance, to the damage of plaintiff, for which they prayed judgment.

The defendants moved to dismiss the complaints on the ground that the actions were premature, inasmuch as they were instituted before the death of the assured. This motion was overruled, and the defendants answered, admitting the contracts of insurance, 'but denied that they had violated their contract, and admitted that the association, through its directors, had raised the premium rates as alleged in the complaint, but alleged that they had authority to do so under the constitution and by-laws of the association and terms of the insurance contracts. The defendants admitted that they were the bondsmen of the association, and alleged that, under the terms of the bond, they were only liable for the payment of all moneys collected by the assessment from the members, and that they had not violated the terms of the bond and were not indebted to the plaintiffs in any sum under the • bond.

We deem it unnecessary to set out in detail the testimony. Suffice it to say there was testimony on the part of the appellees tending to sustain the allegations of their complaints. It was shown that an attempt was made to incorporate the association under the laws of the State of Arkansas, in the year 1913, its purpose being the mutual relief and insurance of the lives of its members and the protection of the beneficiaries named in the certificates or policies of insurance. • The association was divided into one or more companies, composed of not exceeding 1,000 members to each company, and the amounts due under the policies were paid by assessments levied upon each of the members of the company to which the assured belonged, and no assessment could be made for the beneficiaries of any member who was not in good standing at the time of his death. The association had a president, vice president, secretary and treasurer, general manager, and superintendent of agents, with the customary duties of such officers. Its business affairs were managed by these officers, who were elected by the board of directors. The officers and directors were entitled to reasonable compensation for their services, to be paid out of the funds of the association after all death claims were paid which had then accrued. All. questions of management were decided by a majority vote of the board of directors. The duties of the officers were prescribed by by-laws of the association. There was a provision in the by-laws as follows: “Prompt and dne payment of all assessments made by the association up to the time of the death of any member and policyholder shall be a condition precedent to the right to collect death benefits from this association.”

Section 3 of the by-laws is as follows: ‘£ This association, upon receiving satisfactory proof of the death of a member and policyholder in good standing, will pay to the beneficiaries named in the policy the death benefit as provided for in the policy of such member and in the by-laws of this association, within thirty days after the production of such satisfactory proof. After the payment by this association of such death benefit, the’secretary shall immediately levy an assessment upon each member of the particular company in which the said death benefit had been paid, and mail notice of such assessment to each member of said company. (Each member of said company shall, upon receipt of such notice, pay such assessment to this association at its home office).”

The parties who organized and constituted the association were W. T. Boberts, C. X. Williams, T. H. Ward and J. H. O’Brien. They also constituted its board of directors. The above parties attempted to organize themselves into a corporation under the provisions of § 1788-1797 of C. & M; Digest, but the record does not show that any certificate of incorporation was granted to them under the above provisions. The record shows, however, that they assumed to act as a board of directors of a business corporation known as the Mutual Belief Association. The causes were, by consent, consolidated and tried by the court sitting as a jury. The court rendered judgment in favor of the plaintiff Bay in the sum of $471.41, in favor of the plaintiffs G-ray et al. in the sum, of $397.51, and in favor of- Crawford et al. in the sum of $205.40. Prom these judgments is this appeal.'

1. The appellants first contend that the causes of action should be dismissed because they were premature. They insist that, under the provisions of the contract of insurance and the charter- and by-laws of the association, as above set forth, an action cannot be maintained against the association and the individuals on the bond until the death of the certificate or policyholder; that such is the effect of contracts of mutual life insurance associations organized as was the appellant. But, after a careful consideration of the provisions of the certificate or policy issued by the appellant and the by-laws which constituted a part of the contract of insurance, we are convinced that the appellant is a business organization, carrying on the business of life insurance on the assessment plan, and that it is liable in damages for a violation of its contract to its policy or certificate holders the same as any other corporation or company doing a life insurance business would be liable for a breach of contract. The fact that the appellant is designated a “mutual relief association” does not exempt it from liability in damages to those who hold its contracts of insurance and who have been damaged by reason of the failure of the governing body of such association to comply with the provisions of the contract. While there are record recitals showing that the appellant was constituted a corporation under the provisions of §§ 937-948, inclusive, of Kirby’s Digest, the same being §§ 1788-1797 of C. & M. Digest, yet the testimony in this record by the witnesses and the articles of association prove conclusively that the appellant was not, and could not have been, organized as an eleemosynary corporation for charitable and benevolent purposes, under the above provisions of our law. Under the statutes above mentioned it required nine persons to constitute a corporation, whereas the testimony here shows that this corporation was organized by only four persons. The record also shows that these four individuals elected three of their number as directors of the corporation and these in turn elected themselves as general officers of the corporation. This record nowhere discloses that this association is an eleemosynary corporation organized for benevolent and charitable purposes. The name, Mutual Relief Association, does not accurately characterize the real purpose and business of the corporation, as shown by its- organization, management, by-laws and certificates^ or policies evidencing its contract with its members.

After a careful examination of the récord we are convinced that the appellant at most is a de facto corporation, not fraternal, as set forth in § 6068-6120 of C. & M. Digest, but a business de facto corporation doing a life insurance business in this State on the mutual or assessment plan, and is governed by the statutes pertaining to such corporations as set forth in § 6016-6018]/2 of C. & M. Digest.

In the case of Springfield Mutual Assn. v. Atnip, 169 Ark. 968, 279 S. W. 15, the policies were similar in all essential particulars to the policies in this action. The association in that case set up that it was not liable on the policies because they were mutual benefit certificates .on the assessment plan. Among other things we said:

“It is not pretended that the appellant is not doing a life insurance business in this State. Its only contention is that it is doing an insurance business on the assessment plan. But that does not make it any the less a life insurance association doing a life insurance business in this State. The contracts it issues are life insurance contracts, and such companies come within the purview of the statute applying to all insurance companies unless they are expressly exempted by the later statute, as shown by the decisions supra. See also Sovereign Camp W. O. W. v. Newsom, 142 Ark. 132, where we held in effect that insurance certificates issued by benefit societies to their members must be regarded the same as any other ordinary policy or contract of insurance, so far as relates to the construction and enforcement of such contracts.”

The case of Southern Mutual Life Assn. v. Cocherell, 166 Ark. 202-204, 265 S. W. 595, was likewise 'a case where the policy was similar to these now under review, and the action was against the company and the three individuals who signed its bond filed with the Insurance Commissioner of the State in accordance with the statute. In that case we said: “The appellant is a life insurance company-conducted on the mutual or assessment plan.” According to'the aboye and many other cases of our court, insurance companies conducting a business of life insurance on the mutual or assessment plan are treated precisely as any ether life insurance company, so far as the construction of its contracts is concerned. If the appellant has violated its contracts in these cases, it is liable in damages, under the terms of the contracts, to the parties in interest at the time such violation of contracts occurred.”

This brings us to the issue as to whether or not the appellant violated the contract of insurance. These contracts provided that, when the assured became a member or policyholder of the association, he should pay an initial assessment, which thereafter should increase and be payable at the rate of one cent per month during’ the membership until the 78th month from the date of the policy, when the maximum assessment would be reached. The policyholders in the association had been members more than 78 months and were paying their assessments or premiums according to the maximum rates, which, in one case, was $1.32, in another $1.25, and in,another $1.11. On March 1, 1925, the appellant, by letter, notified the policyholders that its board of directors had decided that it was necessary, in order to comply with the law, to raise the assessment of policyholders, and that it therefore proceeded to raise the assessment of one of these policyholders from $1.32 to $6, and the other policyholders were likewise raised to an amount which exceeded the maximum rates fixed by the policies. The policyholders refused to pay this increased sum, and these actions resulted by the policyholders and beneficiaries against the appellant for a violation of the insurance contracts. The testimony of the appellant’s secretary shows that the appellant attempted to justify this raise in the assessments on the ground that the Legislature had conferred upon assessment benefit associations the power to increase the assessment of their members by act No. 139 of the Acts of 1925 and by authority of § 5 of the by-laws of the association. Act No. 139, supra, confers upon assessment benefit associations the power to provide for the calling for extra, increased, or additional assessments, or the readjustment of rates and benefits when the assessments and contributions from its members proved to be inadequate to meet all claims and expenses. Section 5 of the by-laws provides, in part, as follows: “The revenue of this association shall >be derived from a policy or incidental fee, the amount of which shall be fixed by the board of directors, and may be raised or lowered at any time as necessity may require. This fee shall be paid when' the application is made for membership, and shall be used in defraying expenses incurred in the completion of a company in this association.”

A mere glance at this section shows that it has no reference whatever to the assessments or premiums which the members had to pay in order to keep alive the policies of insurance. There is no provision inthepolicy or in the by-laws of the association which binds the policyholder to any by-laws of the association that might thereafter be adopted or any rules or regulations that it might become necessary for the association to adopt thereafter in order to conform to any future laws enacted for the government of mutual assessment 'benefit associations. Therefore it is manifest that the appellant had no authority, under the contract and by-laws of the association in existence at the time the policies in controversy were issued, and the laws governing assessment associations at that time, to increase the premium rates beyond those specified in the contracts of insurance. In doing so the appellant violated its contract.

But learned counsel for the appellant contends that, under the terms of the policy, neither the policyholders nor the beneficiaries can maintain this action. They groundtheir argument upon the following provisions contained in the.certificates or policies: “In the event of the death of the beneficiary prior to the death of the ■within named member, the benefits accruing by virtue of this policy shall he paid to the legal representative of the ■within named member.” Counsel assert that this provision means that “in no event shall a member be paid anything, and therefore the member cannot sue, and there can be no way to ascertain that the beneficiary named in the certificate will outlive the member.” The above provision was only intended to define the rights of policyholders in the event of the death of beneficiaries prior to the death of members in policies that were in force at the timé of the death of the beneficiary, and in policies that remained in force until thq death of the member. This provision has no reference whatever to the rig’hts accruing to policyholders or beneficiaries in policies that had been violated and thus repudiated by the association prior to the death of the beneficiary and the death of the policyholder. ' .

In 14 R. C. L., at page 1014, § 193, it is said :•

“There is authority to the effect that, where a life insurance company has wrongfully declared a forfeiture of a policy issued by it, the insured cannot maintain an action at law to recover damages for breach of the contract, as the policy is still in force, and the insured has no right to sue for damages before the arrival of the time for performance by the insurer, his only remedy being a suit in equity to compel the insurer to recognize the contract. The better rule, however, seems to be that an action will lie for damages for the wrongful repudiation of an insurance contract, • the cause of action residing in the beneficiary where he has a vested interest in the policy, but, where he has no vested interest, he cannot sue for a repudiation. * * * The damages recoverable for the wrongful repudiation of a life policy have been held by some courts to be the amount of premiums paid, while others add interest to that amount. The doctrine that the premium paid is the measure of damages is repudiated by other courts. One view is that, on a wrongful repudiation, the insured may do one of three things: .(1), he may elect to consider the policy at an end, and recover its just value; (2), he may sue in equity to have the policy declared in force; (3), he may tender the premiums and treat the policy as in force, and recover the amount payable on it at maturity. That the beneficiary may recover the just value of the policy seems to be a proper view, and the just value ordinarily may be ascertained by reference to the mortality tables.” Cases are cited in note as supporting the varying views expressed in the text.

In note to Merrick v. Ins. Co., 124 Wis. 221, 102 N. W. 593, 109 A. S. R. 931, it is said: “The remedies which may be pursued against a life insurance company, when it wrongfully repudiates its contract of insurance, are disclosed in Metropolitan Life Ins. Co. v. McCormick, 19 Ind. App. 49, and several other cases.”

The case is one of first impression in our State, and, from the contrariety of view expressed by the various courts, we are at liberty to adopt what seems to us to be the best rule. The provision in the policy last above quoted, making the benefits under the policies, in case of death of the beneficiary prior to the death of the assured, payable to the legal representatives of the assured, shows conclusively that the beneficiaries in policies containing such a provision do not have a vested interest which is absolute and unrestricted. The assured could change the beneficiary, and might do so. The beneficiary might die before the assured. There is a provision in the by-laws to the effect that no assessment for death benefits shall be made upon any member or policyholder of this association for the benefit of the beneficiaries of any member and policyholder who is not, at the time of his death, a member and policyholder in good standing with the particular company to whiclf the assessed member belongs. There are other provisions in the by-laws making it the duty of the officers of the association to fill up any vacancies that may occur in any company of the association from new members and policyholders before another company shall be started or completed. It was the duty of the appellant’s managing board to maintain the membership in each company to the maximum number of one thousand. “This was manifestly for the purpose of enabling the association, under the terms of its contract, to pay, in the event of the death of the assured, the maximum sum of $1,000 specified therein wheii the premiums had reached their maximum rate.

But the testimony shows that the companies were not kept up to the maximum number, and, even where the maximum number is maintained, the entire membership in such company, when assessments are called, may not respond with their payments. Therefore the amount to be paid under the terms of the uol'icy, in the event of the death of the assured, cannot be definitely ascertained until there has been an assessment of the members of the circle- or company to which the policyholder belonged and the payment by the members of such assessment has been made. In the case of the repudiation of such policies by the association before the death of the assured, the amount of its then present value would be still more indefinite and uncertain. Indeed, it would be impossible to determine with any accuracy the then cash value of such policies to the beneficiaries.

A consideration of all these contingencies has brought us to the conclusion that the beneficiaries in policies like those under review have no cause of action. The Supreme Court of Wisconsin, in Slocum v. N. W. Nat. Life Ins. Co., which was a mutual relief association, 14 L. R. A. (N. S.) 1110, 115 N. W. 796, concerning the right of beneficiaries to maintain such actions, used the following language: “The uncertainty of the beneficiary’s interests, growing out of the contingencies incident to the power of the insured tophus deal with the policyprenders the rights and interests of the beneficiaries too hypothetical to be made the ground for damages for a breach of the contract. It is a mere expectancy of an unascertamable value, and hence cannot be made the basis of a claim for damages. ’1

But the court in that case also said: . “Under the law of this State, the rights of the insured in such a contract are valuable property rights, and for a deprivation thereof the insured is entitled to recover the damages as for other wrongful deprivations of valuable property rights.” As we have already observed, there is nothing in these contracts of insurance to differentiate' them in principle from contracts of insurance in old-line insurance companies, so far as liability for violation of the contracts is concerned. Insurance contracts come under the general doctrine applicable to all executory contracts, as declared by' the Supreme Court of the .United States through Mr. Justice Bradley in Lovell v. St. Louis Mutual Life Ins. Co., 111 U. S. 264, as follows: “When one party to an executory contract prevents the performance of it, or puts it out of his own power to perform it, the other party may regard it as terminated, and demand whatever damages he has sustained thereby.” See Merrick v. Ins. Co., supra, at page 932, on this point, and cases there cited. Morton v. Supreme Council of Loyal League, 100 Mo. App. 76, 73 S. W. 259; Commonwealth v. Weatherbee, 105 Mass. 149; Supreme Council A. L. J. v. Daix, 130 Fed. 101.

The. case of Mutual Reserve Fund L. Assn. v. Ferrenback, 144 Fed. 342, 7 L. R. A. 1163, is one most thoroughly considered and exhaustively treated in the opinion. In that case the Circuit Court of Appeals, speaking through Judge Hook, holds that the assured had the right to maintain the action, and lays down two rules for the measure of damages, approving one of them, and cites many authorities. See in the opinion and foot-notes to case. We do not decide which of these rules for the measure of damages is proper under the peculiar facts of this record, because the amounts of the- respective judgments have not been challenged by appellants. No issue has been raised or argued by counsel for appellants as to the rule for the measure of damages in such cases. Counsel for appellants have only insisted that the actions are premature, and that there is no liability on the bond.

It follows therefore that those of the appellees who were the policyholders had the right to maintain these actions, and that the actions were not premature, since the appellant had violated and repudiated its contract with the appellees.

2. We come next to the contention that the appellants, W. T. Roberts, John P. Roberts and Chas. X. Williams, are not liable as bondsmen of the association. In this contention the appellants are correct. The bond is only a fidelity bond, given under § 6016 of Crawford & Moses’ Digest, and was “conditioned for the prompt payment-of-all assessments to the parties or beneficiaries entitled thereto, and that the makers of such bond shall he liable thereon for any violation of the conditions thereof for any loss which may accrue to the policyholders or beneficiaries of such company.”

This court, in Ingle v. Batesville Grocery Co., 89 Ark. 378, held that the sureties on such bond are bound merely to see that the insurance company pays over all assessments to the parties or beneficiaries entitled thereto. Learned counsel for appellees ask that we reconsider and overrule that case. We decline to do so, for the reason that it was a thoroughly considered ease, and we believe that the opinion of Mr. Special Justice Blackwood, .speaking for the. majority of the court, states the -correct doctrine applicable to such bonds. We therefore adhere to that decision.

The judgments are therefore affirmed except as against the appellants, W. T. Roberts, John P. Roberts and Chas. X. Williams, as bondsmen of the association. The judgments against them as such bondsmen are reversed and dismissed.

OPINION ON REHEARING.

Wood, J.

In the original opinion we said: “We do not decide which of these rules for the measure of damages is proper under the peculiar facts of this record, because the amounts of the respective judgments have not been challenged by the appellants. No issue has been raised or argued by counsel for appellants as to the rule for the measure of damages in such cases. Counsel for appellants have only insisted that the actions are premature, and that there is no liability on the bond.”

Counsel for appellants insist, on rehearing, that the issue as to the amount of recovery was necessarily raised, by their allegations in the motion to dismiss the complaints, and also in their answer to the effect that they were not indebted to the appellees in any amount. We have concluded, on reconsideration, that we erred in holding that the issue as to the rule for the measure of damages was not raised. The contention .of appellant, that the actions were premature and therefore that there was nothing due on the policies, necessarily raises the issue as to whether or not there can be -a recovery on the policies in these actions, and, if so, what the amount of that recovery should be. It occurs to us therefore, upon a reconsideration of our original opinion, that it is proper to declare the rule for the measure of damages in such cases. As pointed out in the original opinion, because of the impossibility of determining with any accuracy the present cash value of the policies based uppn the mortality tables, the only correct rule for the measure of damages growing out of a breach of such contract of insurance, where the assured elects to treat the contract as rescinded, is that announced in Supreme Council A. L. H. v. Black, 123 Fed. 650-653, as follows: “According to the clear weight of authority, if an insurance company wrongfully cancels a policy or otherwise wrongfully renounces the contract, the insured may, at his election, treat the contract as rescinded, and recover back all the premiums he has paid. ’ ’ It should be added that the insured in such cases is entitled to recovery of the premiums, with interest thereon at the legal rate, from the day of each payment until the date of the repudiation of the contract by the association refusing to accept the premiums which were actually due under the contract. Authorities to support this view are cited in the above case and in the case of Mutual Reserve Fund Life Association v. Ferrenbach, 144 Fed. 342, at page 344. See also 1 Bacon on Life and Accident Insurance, vol. 1, page 746, § 361.

The rationale of the rule finds expression in Union Central Life Ins. Co. v. Pottker, 33 Ohio St. Rep. 459, 31 Am. Rep. 555, as follows, quoting syllabus: “If, in such case, the company wrongfully declares the policy forfeited, and refuses to“accept the premium when duly tendered, and to give the insured the customary renewal receipt evidencing the continued life of the policy, the assured is, in equity, entitled to demand a rescission of the contract and a return of the premiums paid thereon, with interest from the times of payment.”

While the cases at bar are cases at law for damages, treating the contracts as rescinded, that can make no difference as to the above being the correct rule for the measure of damages growing out of breach of contract on the part of the association by refusing to accept premiums legally due thereunder and thus repudiating the contracts and treating the same as forfeited.

There is nothing in the record to show what rule was adopted by the trial court in ascertaining the measure of damages, and-appellants do not bring into the record any testimony tending to prove that the amount of the judgments rendered by the trial court were excessive under the rule above announced. Indeed, the appellants, in their motions for a new trial, do not assign as error that the judgments of the court were excessive. The appellants did not, in the lower court, nor did they argue in their original brief, that the judgments of the trial court were excessive in amounts. They have, for the first time, in,their briefs on motion for rehearing, argued that the court erred in the amount of the .judgments, but they do not point out and demonstrate from the record wherein the judgments are excessive under the correct rule for measuring damages in such cases as above declared. Therefore the appellants do not show wherein the court erred in fixing the amounts of the several judgments.

For the reasons expressed in the original opinion we hold that the appellees had a cause of action against the appellants and that the actions were not prematurely instituted. The motion for rehearing is therefore denied.


author: Smith, J.

text:
    Jeter v. Everette.
    Opinion delivered March 7, 1927.
    1. Justice op the peace — objection to statement — waiver.— Where defendant made no motion in the court of a justice of the peace to make the account filed more definite and certain, hut appeared and the cause was heard on the merits, he could not complain, on appeal to the circuit court, that the written statement was too indefinite.
    2. Damages — elements.—In an action for damages to an automobile in a collision, items for a telephone call and for washing and greasing the car are not recoverable when not shown to be necessary expenses in restoring the car to the condition in which it was before the collision.
    Appeal from Craighead Circuit Court, Jonesboro District; G. E. Keck, Judge;
    modified.

      Basil Baker, for appellant.

      Hawthorne, Hawthorne & Wheatley, for appellee.
   Smith, J.

Appellee filed the following account in the court of J. D. Reeves, a justice of the peace:

“Jonesboro, Ark., 1-9, 1925.

“Lon Everette,

“In account with E. 0. Hogue Battery Co.

1 rear fender.. 6.25

Telephone call..55

Labor.'. 7.00

Washing car. 1.50

Trans, grease . 1.00

$31.30

For damage done on Essex Coach

Upon filing this account the justi.ce of the peace made the following entry upon his docket: “The plaintiff filed before me a cause of action against the defendant for $31.30 as follows, to-wit: Repair on automobile as damages,-” and issued a summons to appellant Will Jeter to appear and make answer in a cause of action filed against him. Jeter appeared, and prayed a change of venue,' which was granted, and, upon trial, judgment was rendered in appellee’s favor for the amount of the account.

Appellant duly prosecuted an appeal to the circuit court, where a more formal complaint was filed, but which left blank the amount of damages alleged to have been sustained. Appellant filed a motion to dismiss the complaint filed in the circuit court, and that motion was sustained, and the cause went to trial upon the transcript filed on the appeal from the justice court. There was a verdict and judgment for the amount of the account, from which is this appeal.

It is earnestly insisted that no sufficient statement of the cause of action was filed with the justice of the peace to confer jurisdiction upon that court, and that the circuit court acquired no jurisdiction on the appeal.

No motion to make the account filed with the justice more definite and certain was filed. .A change of venue was asked and granted, -and the cause was heard by the justice on its merits. This being true, the case of Austin v. Hemphill, 170 Ark. 945, 282 S. W. 1, applies, and the circuit court properly refused to dismiss the cause of action. In the case cited it was said:

“The court had jurisdiction of the subject-matter of the action, and the parties, by entering their appearance to the proceedings, gave the court jurisdiction over their persons. The facts recited in the judgment entry show that they were not misled in preparing their defense. * * # Actions may be commenced either by summons or by the voluntary appearance of the parties. Here the parties appeared in court and contested the claim of the plaintiff, and the circuit court properly overruled their motion to dismiss the appeal. The alleged defect in the issuance of the summons before filing the account or a short written statement of facts was waived by going to trial and judgment without at any stage of the cause bringing the matter to the attention of the justice. ’ ’ '

See also Fitch v. Walls, 169 Ark. 745, 276 S. W. 578.

It appears from the testimony offered at the trial from which this appeal comes that the account filed with the justice covered the cost of repairs to appellee’s automobile sustained in a collision with appellant’s automobile.

The cause was submitted to the jury under instructions to which no objections were made. These instructions required the jury to find, before returning a verdict for the plaintiff, that appellant’s car was being driven at a speed so great as to constitute negligence and that this negligence was the proximate cause of the injury. The testimony presented this issue, and was sufficient to support the finding of the jury that appellant was negligent in this respect.

As has been said, the jury returned a verdict for the full amount of the account sued on, and it is pointed out that the account ipcluded the following items:

Telephone call.$0.55

Washing car. 1.50

Transmission grease. 1.00

The appellee testified that he paid the battery company which repaired the car the amount of the bill, $31.30, and that it was necessary to repair the wheel and fender, but there was no testimony whatever tending to show that the telephone call, or washing the car, or greasing it, were necessary expenses in restoring the car to the condition it Avas in before the collision. For the lack of testimony to support the recovery of these items the judgment must be modified to exclude them, but, as no other error appears, the judgment as thus modified mil be affirmed.


text:
    Gates v. Plummer.
    Opinion delivered March 7, 1927.
    1. Highways — injury to pedestrian — jury questions. — In an action for injury to an eleven-year-old boy struck by defendant’s automobile while crossing the road, evidence held to take the questions of negligence and contributory negligence to the jury.
    2. Highways — contributory neligence op infant. — In determining the contributory negligence of a boy, eleven years old, who was struck by an automobile while crossing "the road, he can be held to exercise the care and prudence of a hoy of that age, and cannot be expected to exercise the same care as an adult should exercise under the same circumstances.
    3. Trial — instruction—construction as a whole. — In an action for injury to an eleven-year-old boy struck by defendant’s automobile as he crossed the road, an instruction ' to find for the plaintiff if he was injured while exercising ordinary care for his own safety, by reason of defendant’s negligence, was not erroneous in not requiring the verdict to be based on the testimony, in view of the charge as a whole, and the fact that the jury were sworn to render a verdict according to the law and evidence.
    4. Damages — ^personal injuries — when not excessive. — Where a boy sustained a compound fracture of the leg and a nervous shock followed by pneumonia, as a result of which he ceased to be normal, a verdict for $3,000 damages was not excessive.
    Appeal from Pulaski Circuit Court, Second Division; Richard M. Maim, Judge;
    affirmed.

      T. D. Wynne, for appellant.

      Sam T. <£> Tom Poe, for appellee.
   Smith, J.

This suit was brought to' recover damages to compensate an injury sustained by Dale Plummer, a boy eleven years old, as the result of being struck by an automobile driven by appellant Gates, the defendant bejow. The injury occurred on the Galloway Pike, east of Little Nock, about ten o’clock on the morning of February .10, 1925. It was a cold day, and a strong wind was, blowing. The road where the boy was struck runs east and west, and was perfectly straight for a mile. Appellee’s father and some other men were at work on a house on the north side of the road. On the south side of the road, opposite the house, two. automobiles were parked in close proximity to each other. The boy had been sent from the house where the men were at work to get an oil-can out of one of the cars. He got the can, and was standing on the running-board of the automobile when appellant approached in his car. Appellant admitted that he was driving thirty miles an hour, but the jury may have found that he was driving much faster, as one of the men working at the house testified that his attention was attracted to the car by its high speed.

Appellant admitted seeing the boy on the running-hoard. of the ear, hut he testified that he thought the boy was in a safe place, and he did not reduce his speed. He did blow his horn twice — the first time when he was about 150 yards from the parked cars and the second time when about half that distance. The boy testified that, when he got the oil-can for which he had been sent, he started walking across the road. He did not think any cars were coming. He took a “peep” in each direction as he started across the road, and did not see the approaching car. The boy had crossed the center line of the highway and was on the north side of the 'road when he was struck, and the testimony shows there was space enough between the parked cars and the boy for appellant to have passed between the cars and the boy had his car been under control. Appellant testified that he turned to the left in an attempt to pass in front of the boy, and thus avoid striking him. Appellant admitted that he did not reduce his speed after seeing the boy, but he testified that he did not have time to do so after discovering the boy’s peril.

The testimony shows that the car dragged the boy about 75 or 80 feet after striking him before he was untangled from it, and the car ran twice that distance after striking the boy béfore it stopped. Appellant explained that fact by saying that he was so surprised and disconcerted by striking the boy that he did not immediately apply his brakes.

An automobile mechanic, who qualified as an expert, testified that appellant’s car, running 30 miles an hour, could have been stopped within 60 or 65 feet; that, at 25 miles per hour, it could have been stopped within from 51 to 53 feet; at 35 miles per hour, within from 115 to 120 feet, and at 40 miles per hour it would probably require 200 feet to stop the car.

It is first insisted that the court erred in submitting the case to the jury, for the reason that the undisputed testimony shows either that the injury resulted from an unavoidable accident or would not have happened but for the boy’s contributory negligence.

While the case is a close one, we have concluded that, with the inferences reasonably deducible from the testimony, the'case was properly one for the jury botlron the question of the negligence of appellant and the contributory negligence of the boy. The jury no doubt found that appellant was negligent in running his car at a higher speed than an ordinarily careful and prudent man would have done under the circumstances stated. We are also of the opinion that the court did not err in refusing to declare, as a matter of law, that the boy was guilty of contributory negligence, and that this question was properly submitted to the jury.

An exception was saved to the instruction which submitted the question of contributory negligence to the jury, as well as to the other instructions given in the case. This instruction appears to have been drawn to conform to the law as declared by this court in the case of St. L. I. M. & So. Ry. Co. v. Sparks, 81 Ark. 187, 99 S. W. 73. In that case a boy ten years old was injured by being struck by a moving railroad car while walking across the railroad track, and it was insisted that the trial court should have told the jury as a matter of law that,the child was guilty of contributory negligence The trial court had submitted that question to the jury, and it was held that this was not' error. In so holding Mr. Justice Riddick said that “a child is not required to exercise the same capacity for self-preservation and the same prudence that an adult should exercise under like circumstances.” He further said: “You can reasonably expect of a boy between nine and ten years of age only that degree of care and prudence that a boy of that age or of his degree of intelligence should exercise. What would be ordinary care for such a boy might be culpable negligence in an adult.” The doctrine of that case has been several times since reaffirmed. Garrison v. St. L. I. M. & So. Ry. Co., 92 Ark. 437, 123 S. W. 657; St. L. S. W. Ry. Co. v. Adams, 98 Ark. 222, 135 S. W. 214; Nashville Lumber Co. v. Busbee, 100 Ark. 76, 139 S. W. 301, 38 L. R. A. N. S. 754; Kansas City Sou. Ry. Co. v. Teater, 124 Ark. 1, 186 S. W. 204.

The court gave, over appellant’s objection, an instruction mfmbered 1, which reads as follows:

“If you find in this case that the defendant was negligent as alleged in the complaint, and by reason thereof plaintiff, while in the exercise of ordinary case for his own safety, was injured, then you will find for the plaintiff.”

It is argued that this instruction did not require the jury to base the verdict upon the testimony offered at the trial. This objection is answered by the case of St. L. I. M. & So. Ry. Co. v. Hydrick, 109 Ark. 231, 160 S. W. 196, in which case a similar instruction had been given. It was. there said:

“While it is always better form, and the better practice, for the court to tell the jury that its findings on every issue of fact in the case must be based upon the evidence, yet, where it is plain from the charge of the court, taken as a whole, that the jury were told that their findings must be based upon the evidence, the jury could not be misled nor feel authorized to make a finding that was not based upon the evidence because some separate or particular instruction omitted this precaution. The-jury were sworn, in the first instance, to try the case and a true verdict render according to the law and the evidence. That being true, it is not likely that any man of sufficient intelligence to be a competent juror would feel authorized to wander beyond the evidence to find matters upon which to predicate his findings in the case. The conscientious juror would necessarily feel restrained by his oath to base his findings upon the evidence.”

Objections were saved to certain other instructions because they did not require the jury to find that appellant’s negligence was the proximate cause of the injury before returning a verdict against appellant. The instructions might well have been modified as requested, but no prejudicial error was committed in refusing to do so under the facts of this case, for the reason that it is an undisputed fact that the boy was injured by being struck by appellant’s car, and there was therefore no question as to the proximate cause of the injury. There was a question whether appellant was guilty of negligence, and also whether the boy was guilty of contributory negligence, but these questions were submitted, to the jury under instructions which have been frequently approved by this court, and, for this reason, no useful purpose would be served in again discussing them. In this connection it may be said that the court gave all the instructions requested by appellant — six in number — except the first instruction requested by him, this being a peremptory instruction to find for the defendant. The instructions given at appellant’s request fully presented his theory of the case.

It is finally insisted that the verdict, which was for $3,000, was excessive. On this subject the testimony was as follows: The boy was unconscious for more than half an hour after he was struck. He sustained a Potts or compound fracture of the right leg. Both bones of the right leg were broken just above the ankle, and the jagged edges of one of the bones protruded through the muscle, flesh and skin of the right leg. The boy was confined in the hospital for a. period of six weeks, and wore a cast on his right leg for three weeks after leaving the hospital, and was required to use crutches for two weeks after the cast was removed. It is true the attending physician testified that the union of the bones was perfect and that the leg would be as strong as ever. But Dr. C. O. Kirk, who qualified as a nerve specialist, testified that the boy sustained a profound nervous shock, and had a raging fever, followed by pneumonia, as attending complications. Dr. Kirk further testified that the boy had ceased to be a normal child, as he had suffered a psychic shock which had changed his character, and that it 'was speculative as to how long that condition would continue. Under tlio circumstances we are unable to say that the verdict is excessive.

Finding no prejudicial error, the judgment is affirmed.


text:
    Wilkerson v. Powell.
    Opinion delivered March 7, 1927.
    1. Husband and wife — deed from husband to wife. — A deed from husband to wife conveys the equitable title to her, and the legal title retained by the husband as trustee merged, on the husband’s death, with the equitable title, giving the wife full legal title with power of testamentary disposition.
    2. Husband and wife — conveyance to wife. — A husband making a conveyance of land to his wife retains legal title as trustee, having no other interest except a life estate as tenant by the curtesy in case of his survival.
    3. Husband and wife — deed from husband to wife. — effect of death.-^-A deed from husband to wife vests in her the equitable title, into which the legal title merges on the death of either of the spouses.
    4. Wills — testamentary power of wife under conveyance from husband. — A wife who received a conveyance from her husband •had a right to devise her estate therein during her husband’s lifetime, as either her death or her husband’s would terminate his trust in the property.
    Appeal from Saline Chancery Court; M. H. Ilolli-mon, special Chancellor;
    affirmed.

      Mehafy & Mehaffy, for appellant.

      W. H, Evans and Brouse & McDaniel, for appellee.
   Smith, J.

Appellants filed a complaint in which they alleged that J. A. Wilkerson owned a certain tract of land, which he conveyed to his wife, Mrs. S. E. Wilkerson, their mother. That both J. A. Wilkerson and his wife were dead. It was not alleged which died first, although both died before 1920. That Mrs. Wilkerson died testate, and by her will devised the land to certain of her children, to the exclusion of appellant. All the plaintiffs and defendants are children of both J. A. Wilkerson and Mrs. S. E. Wilkerson.

It is argued that, upon the death of Mrs. Wilkerson, the equitable title which she took under the deed from her husband merged into the legal title which remained in him after his conveyance to her, and that she therefore had no title which could be devised. In other words, the argument is made that Mrs. Wilkerson acquired by the deed to her from her husband only an equitable life estate. A demurrer to this complaint was sustained, and the cause was dismissed, and this appeal is from that decree.

We think the demurrer was properly sustained. Counsel are mistaken as to the interest which Mrs. Wilkerson acquired through the deed to her from her husband.

In the case of Ogden v. Ogden, 60 Ark. 70, 28 S. W. 796, it was said that, while by the common law a husband could not make a grant of property to his wife, such conveyances were now held valid in the absence of fraud, and that the effect of such a deed is to convey an'equitable estate to the wife, while the husband retains the legal title as trustee.

But the estate thus acquired by the wife is not an estate for life. In the case of Ogden.v. Ogden, supra, the grantee wife was survived .by her husband, the grantor, and it was held that, upon the death of the wife, the husband became entitled to an estate in the land conveyed for the residue of his life as tenant by curtesy, and that this was true although her estate was only an equitable one. It was there held that the children inherited the equitable estate, of their mother, subject to the life estate of their father — the life estate of the father being, of course, the tenancy by curtesy. In this Ogden case the children could not have inherited the land from their mother had she acquired only a life estate under the deed to her from her husband.

A ease similar on the facts to the instant case is that of Stark v. Kirchgraber, 186 Mo. 633, 85 S. W. 868, 105 A. S. R. 629. It was there said: “Sandy Jarrett, the husband of Huida Jarrett, occupied the position in respect to this land as trustee of hi® wife, 'by construction of the law, simply because he was her husband, and when the marriage relation was at an end the trust relation ceased, and this use was executed by operation of law. - In Robert v. Moseley, 51 Mo. 282, this court said: ‘Where a trustee is appointed to hold the estate of a married woman, to protect it from the husband, and the marriage relation comes to an end, his estate at once becomes executed in the person who is to take it, the wife, if living, or, if she is dead, her heirs at law. ’ ” •

The opinion further quoted from the earlier case of Pitts v. Sheriff, 108 Mo. 116, 18 S. W. 1072, as follows: “The rule is well settled, both in England and in this country, that, when an estate is devised to trustees for a particular purpose, the legal estate rests in them as long as the execution of the trust requires it, and no longer. Steacy v. Rice, 27 Pa. St. 75, 67 Am. Dec. 447; Ross v. Parker, 1 Barn. & C. 360; Mark v. Mark, 9 Watts, 410. Here the husband was by construction of law trustee of his wife, simply because he was her husband. When the marriage ceased, the trust ceased, and the use was executed. ’ ’

After thus quoting from the Pitts case the court proceeded to say: “ It is clear from the principles announced in this case (and it has never been departed from) that, upon the death of Huida Jarrett, wife of ‘Sandy,’ the marriage relation was at an end, and it is equally apparent that, upon her death, the trusteeship of her husband ceased, and that the estate held in trust by the husband, upon the dissolution of the marriage relation, at once became executed in the persons who were to take it, who, in this case, were the children of Huida Jarrett, deceased.”

So here the husband, while a trustee, had no other interest in the land. Had he survived his wife, he would, under the authority of the case of Ogden v. Ogden, supra, have had a life estate as tenant by curtesy. But he’would have had no other interest in the land.

Upon the death o# the husband the trust ceased and the use was executed, and the legal title of the husband merged into the equitable title of the wife. So also would the trust have ceased had the wife died first, as the death of either spouse would have terminated the trust. Cockrill v. Woodson, 70 Fed. 752; Miller v. Quick, 158 Mo. 495, 59 S. W. 955.

Mrs. Wilkerson therefore had the right to devise her equitable estate, although her husband was living, because the will would not take effect until her death, and her death terminated the trust.

No reason is shown in the complaint why Mrs. Wilkerson might not have devised the land to certain of her children, to the exclusion of the others. The question presented for our decision is her right to devise the land at all, and, as we think she had this right, the demurrer to the complaint was properly sustained, and the decree is therefore affirmed.

Mehaeey, J., disqualified, and not participating.


author: HumphREys, J.

text:
    Hurst v. Davies.
    Opinion delivered March 7, 1927.
    Judgment — default—proof of cause of action. — It was error to render judgment for plaintiff , on an open account not sworn to, without proof of its correctness, though defendant refused to go to trial where his case was called.
    Appeal from Washington Circuit Court; W. A. Dickson, Judge;
    modified.

      W. N. Ivie, for appellant.
   HumphREys, J.

Appellee, instituted suit against appellant in the circuit court of Washington County for an alleged balance of $227.90 due on a note, and an alleged balance of $338.33 due on an open account. Neither the complaint nor the account was sworn to.

On the 26th day of October following, being the first day of the October term of said court, appellant was given until November 2, 1925, to file an answer, on which date he filed a duly verified answer, admitting that he owed the alleged balance upon the note, and the balance of $84.22 upon the open account, but denying specifically that he was indebted for items charged on 'the open account up to January 26, 1925, totaling $215.11, and alleging that he was entitled to a total credit of $80 on the undenied part of the account for attorney’s fees for representing appellee in three cases.

On the 13th day of November, 1925, the case was called for trial, whereupon appellant announced that he could not go to trial on account of the absence of his attorney, who had been excused by the court, and because his papers were locked up where he could not get them. The court refused to postpone the case until a later date, either at the regular or adjourned term of the court, and rendered judgment, over appellant’s objection and exception, on the presentation of the note and without hearing any evidence on the disputed items of the account and credit claimed thereon.

On the 8th day of December, 1925, which was an adjourned date of the October term of court, appellant filed a motion to set the judgment aside on the ground that it was prematurely rendered. The court overruled the motion, whereupon an appeal was duly prosecuted to this court from the judgment.

The trial, court committed reversible error in rendering judgment upon the open account without any proof being introduced of its correctness, even though appellant refused to go to trial when the case was called. The answer, however, admitted the alleged indebtedness on the note and a balance of $84.22 on the account. If appellee will enter a remittitur within 15 days so as to reduce the judgment to the amount of the admitted indebtedness, the judgment will be modified and affirmed as modified; otherwise it will be reversed, and the cause remanded for a new trial.