author: McHaNey, J.

text:
    United States Fidelity & Guaranty Company v. Brandon.
    4-2675
    Opinion delivered October 17, 1932.

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

      Kenneth W. Coulter and Shields M. Goodwin, for appellee.
   McHaNey, J.

On November 7, 1930, while riding-in a car owned and operated by one Hanley, appellee suffered painful injuries in an automobile accident at Carlisle, Arkansas, caused by collision between Hanley’s car and another car driven by one Halloway. Appellant had issued in the State of Ohio a policy of automobile liability insurance to Hanley which provided among.other things the following: “II. (2) Bankruptcy or insolvency of the assured shall not relieve the company of any of its obligations hereunder. Any person or his legal representatives who shall obtain final judgment against the assured because of any such bodily injury or injury to or destruction of property and whose execution against the assured is returned unsatisfied because of such insolvency or bankruptcy, may proceed against the company under the terms of this policy to recover the amount of such judgment, either at law or in equity, but not exceeding the limit of this policy applicable thereto. Nothing in this policy shall give to any person or persons claiming damages against the assured any right of action against the company except as in this paragraph (2) provided.”

“V. (B) In the event of accident 'written notice shall be given by or on behalf of the assured to the company or any of its authorized agents as soon, as is reasonably possible thereafter, irrespective of- whether or not any injury or damage is apparent- at the time. Such notice should contain information respecting the time, place, and circumstances of the accident, with the name and address of the injured and any available witnesses. If such information is not reasonably obtainable, particulars sufficient to identify the assured shall constitute notice. The assured shall keep the company advised respecting further developments in the nature of claims or suits when and as they come to his knowledge. The assured shall cooperate with the company and, upon the company’s request, shall assist in effecting settlement, securing evidence, and the attendance of witnesses, hut the assured shall not voluntarily make any payment, assume any obligation or incur any expense other than for immediate surgical relief, except at his own cost.”

Thereafter suit was brought against Hanley by ap-pellee, and a judgment recovered in the sum of $1,500 against him. Execution was issued on said judgment and returned unsatisfied, and this suit followed to recover the amount of said judgment and cost from appellant. A trial resulted in a verdict and judgment against appellant for the amount sued for.

The principal contention made by appellant for a reversal of the judgment against it is the refusal of the court to direct a verdict in its favor at its request. The following facts and section Y (B) are relied upon to support this contention: The poliey was written in Ohio where Hanley was a resident. Shortly after the accident Hanley reported same to appellant at its Ohio agency in a lengthy telegram, giving the names of a number of witnesses to the accident, in addition to the names of the occupants of the other car, four colored persons. He did not report the name of a woman passenger riding in the car with him and appellee, nor did he disclose such fact to appellant’s investigator in Little Ro'k a few hours later when statements were taken from him and appellee, tending to exculpate him from any liability because of the accident. The statement submitted by Hanley to appellant’s investigator, together with a diagram of the position of the two cars, showed him to he on the left-hand or wrong side of the road. Later Hanley gave counsel for appellee a statement regarding the accident, but, as we view this later statement, it does not differ from that given appellant in any material degree, and we therefore do not set out these respective statements. When Hanley was sued in the former action, he promptly notified appellant, and it undertook the defense of his case and made some investigation in preparation for trial. Four days before the trial, May 15, 19-31, Hanley called at appellant’s office in Memphis and agreed to be present in Little Rock for the trial on the 19th, stating that he had to be in Jackson, Miss., to attend some kind of meeting in the interest of his employer, for whom he was a traveling salesman, and would leave there about 3 o’clock on the afternoon of the 18th and drive to Little Rock by the morning of the 19th. This he failed to do. On the morning of the 19th, when' the case was called for trial, counsel for appellant, who were also representing Hanley up to that time, stated to the court they were not ready for trial because of the absence of their client Hanley, and orally moved the court for a continuance. The motion was resisted by appellee, and the court overruled same. Ap-pellee announced ready for trial, whereupon counsel for Hanley, after having him called without response, asked leave to withdraw from the case, which was granted. A jury was impaneled and assessed appellee’s damages at the sum of $1,500. No written motion for a continuance was filed in compliance with the statute.

On these facts appellant contends that the court should have directed a verdict in its favor because of Hanley’s failure to cooperate with it in the defense of the suit as provided in section V (B) of the policy, the language being: “The assured shall cooperate with the company and, upon the company’s request, shall assist in * * * securing evidence,” etc. It is contended that his failure to attend the trial wherein he was the nominal defendant and to testify therein, and his failure to disclose the name of the woman who was riding with them at the time, constituted a failure to cooperate with appellant in violation of the express provision of the policy requiring him to cooperate. We cannot agree with appellant in this contention. It is true that it was the duty of the assured to cooperate with the defendant by lending aid and such information as he possessed in preparing the case for trial and to attend the trial and testify as to the true facts and circumstances concerning the accident. Without his presence and aid the insurance company was seriously handicapped. But there is nothing in this record to show the reason for Hanley’s absence from the trial. For aught we know, he may have been seriously ill or dead. We are therefore of the opinion that it was the duty of the insurance company in this action to go further than showing his mere absence from the trial in order to show lack of cooperation, and to show the reason for such absence. Appellant cites and relies upon numerous cases from other jurisdictions holding that it is the duty of the assured to attend the trial and to cooperate with the company in defending the action against him, but in practically all of them it is shown that the assured’s absence was premeditated and wilful. Such was the case in Schneider v. Autoist Mutual Ins. Co., 346 Ill. 347, 178 N. E. 466, where the assured refused to return to New York, where the original .judgment was obtained, to testify in the case, giving as a reason that he'had been arrested, thrown into jail without reason, and that he would not return under any circumstances. So also in Coleman v. New Amsterdam Casualty Co., 247 N. Y. 271, 160 N. E. 357, 72 A. L. R. 1443, where an employee of the defendant refused to testify unless the policy was. enlarged to cover any judgment that might be had against him, and so it was in nearly all of the cases cited by appellant that the absence of the defendant was wilful and deliberate. Here, however, the evidence fails to disclose any reason why Hanley was absent. Only four days before tbe trial be stated bis intention to be present at tbe trial and to cooperate. Prior to that time be bad cooperated by furnishing appellant a statement of bimself and appellee and giving it tbe names of a number of available witnesses. "We cannot therefore say as a matter of law that bis failure to attend tbe trial, in tbe absence of any proof or explanation as to why be so failed, establishes a breach of the contract in this regard. On tbe contrary, we think it a question for tbe jury, and that it was tbe duty of appellant in this trial to show that Hanley had no good reason to absent bimself from the trial.

As to Hanley’s failure to disclose tbe name of the .woman riding in tbe car with them, we are unwilling to say, as a matter of law, that this was sufficient to breach tbe contract. Tbe most we can say is that it was a circumstance to go to tbe jury for what it was worth as tending to show lack of cooperation. This failure, as well as his mere failure to attend tbe trial, constituted questions for tbe jury, and its finding is against appellant.

Tbe court gave an instruction on its own motion as follows: “Now, if you find in this case that William Hanley cooperated with tbe insurance company in the defense of the case against him, which has been heretofore tried, then your verdict should be for tbe plaintiff. If you find in that case that William Hanley did not cooperate with tbe insurance company, and, in other words, that be failed to cooperate with tbe insurance company, which be was bound to do under the terms of bis policv, then tbe insurance company bad a right not to defend that case, and your verdict should be for tbe defendant. In other words, there was a mutual obligation under tbe terms of this policy. Tbe policy provides tbe insurance company would pay tbe liability of William Hanley for any damage be may cause by bis negligence that was tbe obligation of the insurance company. William Hanley in tbe terms of tbe policy agreed to cooperate with tbe insurance company in tbe establishment of all claims against William Hanley for which the insurance company might he liable. Now, the question for yon to decide is, did William Hanley cooperate with the insurance company in the defense of that suit heretofore tried against him? If he did, then your verdict should he for the plaintiff in this case. If he did not, your verdict should he for the defendant in this case.”

Appellant argues that it is erroneous for the reason, as it says, that it fails to define what cooperation meant in the policy. We do not agree. It tells the jury Hanley’s agreement was to cooperate with the appellant “in the establishment of all claims against William Hanley for which the insurance company might he liable.” We do not think the jury could have misunderstood what the court meant by cooperating with appellant in the establishment of claims against him. The word “cooperate” is a simple word, and any one with sufficient intelligence to qualify as a juror in a civil action would .know that it simply means to operate with or work together.

All of the instructions requested by appellant and refused by the court were peremptory in nature as admitted by appellant and were properly refused. We do not set them out and comment on them separately, as no useful purpose could be served thereby. The only issue in the case was whether Hanley cooperated with appellant in the suit by appellee against him, and we have already seen this was a question for the jury which the court submitted under an instruction as plain and simple as could be given.

We find no error, and the judgment is accordingly affirmed.


source: Caselaw Access Project

license: Public Domain

text:
    Missouri Pacific Railroad Company v. McDade.
    4-2684
    Opinion delivered October 17, 1932.

      ft. E. Wiley and Richard M. Ryan, for appellant.

      John L. McClellan, for appellee.
   McHaNey, J.

Appellee recovered a judgment against appellant in the sum of $700 for an injury received by being struck in the eye by a hot cinder thrown or blown from one of appellant’s freight engines while appellee was a passenger sitting at an open window in one of appellant’s passenger trains. Appellant denied all allegations of negligence and that appellee was hit with a hot cinder thrown through the window of the passenger coach. It pleaded the contributory negligence of appel-lee in sitting at an open window in said coach, and that its engines both freight and passenger were equipped with the latest and best known appliances to prevent the throwing of cinders.

For a reversal of the judgment against it, appellant first says that the court should have directed a verdict in its favor at its request, and this challenges the sufficiency of the evidence to support the verdict. It is true that -witnesses on behalf of appellant testified that both engines were equipped with proper spark arresters and appliances of the latest and best known kind, and that said engines did not throw sparks and were skillfully operated. The engineer on the freight train testified that his engine was so equipped, and that it was standing still when the train on which appellee was riding passed the freight train at Donaldson. In this he was corroborated by bis fireman and similar testimony was given by the operators of the passenger train. A piece of screen wire was introduced in evidence of the kind used as spark arresters by appellant, and it was shown that the cinder introduced in evidence by appellee, as the cinder which struck him in the eye, was so large that it would not go through the piece of screening exhibited. While these witnesses so testified, and that the cinder exhibited could not have passed through the piece of wire netting exhibited, it does not necessarily follow that it was not thrown out or blown from the smoke stack of the locomotive as the spark arrester in it may have been defective, although of the same or a similar kind as that exhibited. Appel-lee testified positively that the cinder exhibited while very hot was thrown from the freight locomotive and struck him in the eye. If this is a fact, and the jury was the judge of this, it must have come from the smoke stack of the locomotive, and therefore must have come through the spark arrester. The fact that appellant’s witnesses testified that the locomotive was equipped with the best known spark arrester, was in good condition, and that the engine'was skillfully operated, is not conclusive of the issue. The rule in this court with reference to this matter is stated in the recent case of Missouri Pacific Rd. Co. v. Trotter, 184 Ark. 790, 43 S. W. (2d) 762, where it is said: “As a general rule, where an unimpeached witness testifies distinctly and positively to a fact and is not contradicted, and there are no circumstances shown from which an inference against the fact testified by the witness can be drawn, that testimony may not be arbitrarily rejected, and the fact will be taken as established. But there are exceptions to this rule: Where the witness is interested in the result of the suit, or where facts are shown which might bias his testimony, or from which an inference may be drawn unfavorable to his testimony or against the fact testified to by him, then such fact can not be said to be undisputed, and a case arises for determination by a jury. Skillern v. Baker, 82 Ark. 86, 100 S. W. 764, 118 Am. St. Rep. 52, 12 Ann. Cas. 243; Mutual Life Ins. Co. v. Raymond, 176 Ark. 879, 4 S. W. (2d) 536; Casteel v. Yantis-Harper, 183 Ark. 475, 36 S. W. (2d) 406.”

Here appellant’s evidence is contradicted, and there are circumstances shown from which an inference against the fact testified by the witnesses for appellant can be drawn. For instance, appellee testified the cinder was hot, and that it burnt his eye. A physician testified the eyeball was burned, another witness testified that on the next morning after the injury the eyeball was swollen and showed a little white spot and still another that the eye was blistered. "We have examined the evidence carefully and find it sufficient to take the case to the jury. The court therefore correctly declined to give appellant’s request for a directed verdict. Other errors are assigned and argued, hut principally on the ground that the court should have directed a verdict for appellant, all of which we have examined and find them without merit.

It is finally insisted that the verdict is excessive. The proof shows that appellee has lost about four-fifths of the vision of one eye. Since the evidence was sufficient to take the question of appellant’s liability to the jury, we do not think an allowance of $700 for such an injury is excessive. We find no error, and the judgment is affirmed.


author: Butler, J.

text:
    Brotherhood of Railroad Trainmen v. Long.
    4-2674
    Opinion delivered October 17, 1932.

      McMillan & McMillan, for appellant.

      McElhannon $ Callaway, for appellee.
   Butler, J.

From an action by the beneficiaries named in an insurance certificate based on an application signed by Romie Long and issued by the appellant, a fraternal benefit society, resulting in a verdict and judgment in favor of the beneficiaries, comes this appeal.

The defense to the action is grounded upon the allegation that in the medical examination embracing the questions and answers included in and a part of the application, a false answer was made to a question, and that this question and answer thereto constituted a warranty under the policy and that the answer, being'false, avoided the policy. The question propounded and the answer thereto are as follows: “ Q. Have you consulted a physician during the last five years'? A. No.”

In the body of the certificate, the application, constitution and by-laws of the appellant were referred to and were made a part of the contract of insurance. In the by-laws and in the application there is a stipulation to the effect that all statements and answers made in the application shall be (by the assured) adopted as his own, admitted to be material, full and complete, and in any case, if any untrue or incomplete answer shall be made in such application, then the certificate issued thereon and said contract shall be absolutely null and void. It was further stipulated in the application that any beneficiary’s certificate based thereon shall be held to be a contract made in the State of Ohio and subject to its laws. These stipulations, which were a part of the contract of insurance, constituted the answer to the question a warranty both under the laws of the State of Ohio and of this jurisdiction. Mutual Reserve Fund Life Ins. Assn. v. Farmer, 65 Ark. 581, 47 S. W. 850; Providence Life Assurance Society v. Reutlinger, 58 Ark. 528, 25 S. W. 835; Amer. Life & Accident Ass’n v. Walton, 133 Ark. 348, 202 S. W. 20; Ins. Co. v. Pyle, 44 Ohio St. 19, 4 N. E. 465, 58 Am. Rep. 781; Wills v. Nat. Life & Acc. Ins. Co., 28 Ohio App. 497, 162 N. E. 822.

The difficult question arising is, if the answer was false and the assured had in fact consulted a physician within the last five years, is the appellant estopped from setting this up as a defense? It is insisted that this is not a case in which estoppel or waiver applies, but that under the undisputed evidence a case is presented “where, with a full knowledge of all the facts as to the provision of the contract and as to the facts inquired about, Long gave an untrue answer to the question as to whether he had consulted a physician within the last five years”; that to these facts an application of the principle announced in Ins. Co. v. Reutlinger, supra, and in Mudge v. Supreme Court I. O. F., 149 Mich. 467, 112 N. W. 1130, 14 L. R. A. (N. S.) 279, 119 Am. St. Rep. 686, would render the contract void from its inception and make unavailing the plea of estoppel. As we understand the rule laid down in the Reutlinger case, it is merely to the effect that, if a false answer is knowingly made by the insured with the knowledge of the agent of the company, and the two collude to defraud the company by means of the false answer, the policy of insurance is void. In the Mudge case the inference to be drawn from the testimony was that the assured was as well informed of the nature of the question as was the agent. The question was, “Have you ever had the disease of insanity?” This question was answered in the negative, when in fact the insured had at one time been insane, and the examining physician was well aware of this fact. Therefore, both the insured and the physician knew that the answer was false, and thereby colluded to defraud the insurer.

In the case at bar we think a fair analysis of the testimony on the question of estoppel does not warrant the conclusion reached by the appellant, i. e., that the applicant had full knowledge of the facts inquired about and gave an untrue answer, but rather that the medical exanfiner placed his own interpretation on the question and gave what he conceived to be a correct answer. The appellant introduced several physicians who testified that they had examined the insured in a hospital in Little Rock in June, 1927. Appellee then called the physician who had made the examination of the insured at the time of his application and who wrote the answers in the application. It developed that this physician and •.the insured both lived in the town of G-urdon, and that the ‘medical examiner had been the physician of the insured for a period of time from five to ten years. This physician testified that the insured had never had any disease of a serious nature before the application for insurance was made; that he knew that the insured had gone to the Missouri Pacific Hospital in June, 1927, and that he had treated him two days before he went there for a slight indisposition, describing the ailment and its result as “a bilious attach and a bad cold — he had got kind o’ knocked out, as we call it.”

Long was a brakeman in the employ of the Missouri Pacific Railroad Company, and as such was entitled to free treatment in the hospital of the company whenever he was indisposed. Employees of the railroad company made frequent use of the hospital advantages as they were transported to and from their homes to the hospital and there cared for without any cost to them. For this reason they would go to the hospital, even though troubled with only minor ailments. The physician who took the application was, and had been, employed by the appellant company for the purpose of examining applicants for insurance for eight or ten years. The blank applications would be sent to him for use as occasion required. He testified that he made the examination of Long in November, 1927, and that he, himself, wrote the answers to the questions that were contained in the application. Referring to the blank spaces left for the insertion of the answers to questions he was asked “Did you fill those in,” and he answered, “Yes, sir — in answer to his question, or father my questions.” Witness was also asked the following question: “Just tell how you conducted the examination, doctor.” To this question the appellant objected, and, after some colloquy between counsel and the court, the objection was sustained and the witness was not permitted to answer. The witness was then asked, “Doctor, in the application you were asked if he had consulted a physician and the answer is, no. You wrote that answer down?” The witness answered, “Yes, sir.”

The physician further stated that at the time the" application was taken to the best of his knowledge the applicant had not consulted a physician for anything serious within five years; that he believed the statement as written down by him was true. We think it may be fairly deduced from this testimony and from the nature of the ailments of the applicant, for which he was treated by the physician before his visit to the hospital, that these were, as thought by the physician, only temporary in their nature, attendant merely with bodily discomfort and without any serious consequence such as would affect his general health or life expectancy; that this was known to the physician and also that the applicant had stayed about three or four days in the hospital some three or four months before the date of the application, and that he had gone there because of a bilious attack and a cold, and that with this knowledge the physician placed his own interpretation on the question and gave an answer based on that interpretation which he believed was true; that this was the answer of the physician himself and not that of the applicant. It will be remembered that the physician was asked to state how he conducted the examination of the applicant, and on objection of the appellant was not permitted to testify. This testimony should have been admitted, for it was not for the purpose of varying the answers, but to show specifically how and by whom the answers were in fact given, and, if not literally true, why a false answer was written. As the examining physician at that time was the witness of the appellee and the agent of the appellant at the time the application was made, it must be presumed that both knew the answer that would be given, and, since the appellant prevented this testimony by his objection, the inference is that it would have been unfavorable to it, Miller v. Jones, 32 Ark. 337.

In the state of the record we think the principles announced in the case of Kandar v. Indemnity Co., 30 Ohio Circuit Court Decisions of 1909, p. 260, apply. It is there said: “If the agent of the company placed a construction upon it, making the answer given an honest one, is the company bound by it so as to be thereafter estopped from asserting as a defense to an action on the policy that a false representation had been made in this regard? We are not without authorities upon questions somewhat analogous. We have found reference to a mass of litigation along the same lines in Clemans v. Supreme Assembly, 131 N. Y. 485, 30 N. E. 496, 16 L. R. A. 33. * * * If the insurer’s agent after being informed fully as to the facts incorrectly states them in the application, the insurer is estopped to take advantage of the error to avoid liability on the policy. * * * If the statements in the application relied upon as breaches of warranty are inserted by the agent of the insurer, without collusion or fraud on the part of the insured, the insurer is estopped to set up their error or falsity.”

This seems to be the rule laid down by onr own decisions. The case of Dwelling House Ins. Co. v. Brodie, 52 Ark. 11, 11 S. W. 1016, was an action based upon a policy of fire insurance, and one of the defenses was that one of the representations made by Brodie, which was by express agreement of the parties a warranty, was false. The question was, “Do all the stove pipes go directly into brick chimneys'?” and the answer was, “Yes,” while in truth the stove pipes did not go into brick chimneys, but ran directly through the roof. It was shown that the answers were not written by Brodie but by the agent of the insurance company and signed by Brodie. To the application was appended a statement to the effect that the applicant warranted each of the answers to the questions to be true. There was evidence that the agent personally inspected the property at the time of the application and knew the condition of the stove pipes. The court instructed the jury that the false statements vitiated the policy unless the agent of the company inspected the property and informed the applicant that the facts warranted the answer. In approving this instruction, the court quoted with approval from Ins. Co. v. Wilkinson, 13 Wall. 222, as follows: “They (the agents) not unfrequently mislead the insured by a false or erroneous statement of what the application should contain, or, taking the preparation of it into their own hands, procure his signature by an assurance that it is properly drawn, and will meet the requirements of the policy. The better opinion seems to be that, when this course is pursued, the description of the risk should, though nominally proceeding from the insured, be regarded as the act of the insurers. The modern decisions fully sustain this proposition, and they seem to us founded in reason and justice, and meet our entire approval.”

The following statement from the case of Bedwell v. Northwestern Ins. Co., 24 N. Y. 302, was likewise quoted and indorsed by the court in the Brodie case: “Indeed, it is not easy to perceive why an insurance company, by reason of the formal words or clauses (of a general and comprehensive nature) inserted in a policy, intended to meet broad classes of contingencies, should ever be allowed to avoid liability on the ground that facts, of which the company had full knowledge at the time of issuing the policy, were then not in accordance with the formal words of the contract, or some of its multifarious conditions. If such facts are to be held to be a breach of such a clause, they are a breach eo instanti of the making of the contracts, and are so known to be by the company as well as the insured, and to allow the company to take the premium without taking the risk, would be to encourage a fraud. ’ ’ Concluding, this court said: “We therefore conclude that the appellant was estopped from taking advantage of the falsity of the answer appended to the question, ‘Do all stove pipes go directly into brick chimneys?’ if, at the time the policy sued on was issued, it, personally, or through its agent, knew or had notice of, the facts which the question was intended to elicit.” The doctrine of that case has been reaffirmed in People’s Fire Ins. Co. v. Goyne, 79 Ark. 322, 96 S. W. 365, 16 L. R. A. (N. S.) 1180 9 Ann. Cas. 373, and followed in Franklin Life Ins. Co. v. Galligan, 71 Ark. 295, 73 S. W. 102, 100 Am. St. Rep. 73; Maloney v. Maryland Casualty Co., 113 Ark. 174, 167 S. W. 845; Hutchins v. Globe Ins. Co., 126 Ark. 360, 190 S. W. 446; Des Moines Life Ins. Co. v. Clay, 89 Ark. 230, 116 S. W. 232; American Nat. Ins. Co. v. Hale, 172 Ark. 958, 291 S. W, 82.

In Maloney v. Maryland Cas. Co., supra, the court held that, where the answers to questions in an application for insurance were written by the agent of the insurer without consulting the insured, the principal is charged with the knowledge of the agent, and is estopped, from denying what his own agent has assented to as true. Hutchins v. Globe Ins. Co., supra, was a suit on a life insurance policy where the defense was made that the insured had failed to state that he was afflicted with epilepsy at the time of his examination for insurance. There was some testimony that the examining physician for the insurance company had attended and treated the applicant for epilepsy and knew of his condition. In commenting upon this, the court said: “If, in fact, the doctor had this knowledge when he wrote down a false answer, his knowledge is imputed to the company, and it cannot now be heard to say there was a breach of the warranty. ’ ’

It must he admitted that the representation with reference to the consultation with a physician was a warranty, but the power of the agent of the company remains the same, although the application contains a warranty, and may estop its principal, where said agent is authorized to ask the question and write the answer and puts his own construction upon the facts of which he has knowledge, and deduces therefrom an erroneous answer which he writes down, and the applicant has the right to rely upon the superior knowledge of the medical examiner where he is acting in good faith and does not knowingly make false answers as to facts upon which the medical examiner may base his conclusions. Here the medical examiner was a physician who had been practicing his profession for a long time, and of course he knew that any one who entered a hospital would be examined by the physicians in attendance there to the same extent as if the insured had told him in detail his entire experience during his stay in the hospital. Indeed, there is no evidence to show that he did not, and it would be a grave mistake to suppose that the rule which would avoid the contract for a false warranty could he extended so as to hold the applicant responsible for the truth of an answer which was the result of a mistake in judgment or an error or blunder of the company’s agent especially charged by the company with the preparation of the application. We have attentively examined the Arkansas and Ohio cases cited by counsel. As we interpret them, we find nothing which conflicts with the view we have expressed.

It is not contended that there was any collusion between the examining physician and the applicant, and therefore the court under the evidence did not err in submitting the question of estoppel and the instructions given fairly presented that issue to the jury. The court did not err in its refusal to give the instructions requested by appellant because they ignored the question of estoppel and were equivalent to a peremptory instruction to find for the defendant.

One of the assignments of error raised in the motion for a new trial, assignment of error No. 17, was that the instructions presented issues not raised by the pleadings, and this is argued briefly by appellant in its brief, wherein it is contended there was no written plea of waiver or estoppel nor any request made that the pleadings be amended to conform to the proof, and that objections were made to the evidence tending to establish estoppel, and exceptions saved to the overruling of the objections. An examination of the testimony of the examining physician, which was the only testimony offered on the question of estoppel, shows that there was no objection made to. the evidence on the ground that it was not responsive to the. pleadings. The only exception saved Avas to the overruling of an objection to a question asked the doctor if the applicant had ever consulted him or any other physician with reference to any serious illness, and the objection was not on the ground that there was no plea of estoppel, but that “it sought to contradict the’ statement the man adopted as Ms own as the basis of the contract.” As the evidence warranted the submission of the question, it was not an abuse of the court’s discretion to treat the pleadings amended to conform to the proof and to submit the issue to the jury. Anglin v. Marr Canning Co., 152 Ark. 1, 237 S. W. 440.

The appellant offered to introduce the physicians in attendance at the hospital for the purpose of disclosing the result of their examination of the insured with respect to his physical condition and the diseases with which he was afflicted in June before taking out the policy. The appellant insists that under the decisions of the Ohio courts an interpretation has been placed upon clauses in insurance policies, similar to the one in question, which operated to constitute a waiver of the right to claim privileged communications under the statute. Wills v. Ins. Co., supra. While the contract before us is by agreement of the parties to be construed as an Ohio contract, the laws of that State have no application except as to the construction of the contract, and the competency of the testimony and its admissibility are to be determined by the law of the forum. 5 R. C. L., p. 1044; K. C. Sou. Ry. Co. v. Leslie, 112 Ark. 305, 167 S. W. 83. Our statute, § 4149, Crawford & Moses’ Digest, makes the information which a doctor or trained nurse obtains, acting in their professional capacities, which is necessary to enable them to prescribe as a physician or act as a trained nurse, privileged, and this statute was passed for the protection not only of themselves, but for their patients. A patient, however, may waive the privilege by' calling the physician to testify or by a clause in the contract on which suit is brought, and if the privilege is waived by a clause in the contract that waiver binds any one who claims thereunder. In the case at bar, however, the contract did not contain any such clause, and the court properly refused to admit the testimony of the physicians. Mutual Life Ins. Co. v. Owen, 111 Ark. 554, 164 S. W. 720; Wooten v. Wooten, 176 Ark. 1174, 5 S. W. (2d) 340.

It follows that the judgment of the trial court is correct, and it is therefore affirmed.


text:
    Hanson v. Louisiana Oil Refining Corporation.
    4-2687
    Opinion delivered October 17, 1932.

      E. A. Upton, for appellant.

      Blanchard, Goldstein, Walker <& O’Quin and Searcy & Searcy, for appellee.
   Butler, J.

The Blewster Service Station, a domestic corporation, was engaged in retailing gasoline and oils .in Texarkana, R. IT. Hanson being its president, T. M. Blewster its vice president, and Stella Hanson its treasurer. Desiring to establish a line of credit with the Louisiana Oil Refining Corporation, appellants in their individual capacities, executed a contract on March 21, 1928, in the form of a letter addressed to the Oil Refining Corporation requesting sale and delivery to the Blewster Service Station, on the usual terms, such merchandise as might from time to time be selected (including gasoline and oil, and agreeing that the signers would become personally responsible for the payment of the purchase price not to exceed $1,000, whether evidenced by open account or otherwise. Acting upon this contract, the Oil Corporation sold and delivered a quantity of gasoline and oil to the Blewster Service Station to the amount of $2,100.48. Some payments were made and certain discounts allowed reducing the amount of the indebtedness claimed by the Oil Corporation to the sum of $1,420.78, and, this amount remaining unpaid, the Oil Corporation instituted this action against the appellants setting out the personal obligation entered into by them, alleging the sales and deliveries, the balance due, and exhibiting with its complaint an itemized account showing the debit and credit items and the balance, which was sworn to by the proper officers of the Oil Corporation.

The appellants filed an answer which was subsequently withdrawn and another answer filed in lieu thereof, in which the execution of the agreement to pay the account of the Blewster Serviré Station up to the amount of $1,000 was admitted and also the items charged in the statement of the account, but denied that, after allowing all credits, the balance remaining unpaid was the sum of $1,420.78 and that the account showed all the credits to which the service station was entitled. They alleged that the credit items which should have been allowed and were not were two cents per gallon on gasoline and ten cents per gallon on oils allowed the purchaser as a trade discount; that, when said discounts were credited as they should be, nothing would remain due and unpaid on said account.

As a further defense to the action, appellants set up a certain contract executed on the third day of September, 1928, between the Blewster Service Station and the Oil 'Corporation which is as follows:

“LOUISIANA OIL REFINING- CORPORATION.

‘ ‘ Contract.

“State of Arkansas, County of Miller — ■

“This agreement to sell by and between Blewster Service Station Company, R. H. Hanson, president, and Louisiana Oil Refining Corporation, a Virginia corporation, authorized to and doing business in the State of Arkansas, with its principal office in the city of Shreveport, herein represented by.... whose authority is recognized and acknowledged, witnesseth:

“Blewster Service Station Company, R. H. Hanson, president, has agreed to . and does hereby agree to sell the Louisiana Oil Refining Corporation, which has agreed to and does hereby agree to the following described property, for the consideration and on the terms and conditions herein expressed:

“Description of Property. All that parcel of land on which is situated the Blewster Service Station being-more particularly described as follows:

“Examination of Title. This agreement is subject to examination of title by the attorneys for the Louisiana Oil Refining Corporation, whose opinion thereon shall be final.

“Consideration. Five thousand dollars ($5,000). All debts, rentals, bad checks, etc., owed to Louisiana Oil Refining Corporation to be deducted from purchase price and balance to be payable in three yearly payments of equal parts.

“Thus done and signed in duplicate in the presence of the undersigned and competent witnesses on this 3d day of September, 1928.

“BLEWSTER SERVICE STATION CO.,

“By R. H. Hanson, Pres.

“LOUISIANA OIL REPINING- CORPORATION,

“By W. Oden.

“Witnesses:

“H. B. Wren, Jr.

“Ford Land.”

It was alleged that the above contract superseded the contract upon which suit was brought and was a novation of the indebtedness sued on; that the Oil Corporation arbitrarily breached the contract of September 3, 1928, thereby preventing the consummation of sale. This answer was not sworn to.

The case was submitted to the jury upon conflicting testimony as to the amount of credits that should be allowed upon the account. There was a finding in favor of the Oil Corporation, and verdict was rendered in its favor in the sum of $750. Judgment was entered in accordance with the verdict, from which is this appeal.

The court instructed the jury that the burden was upon the appellants to show the payments for which •f-bev claimed credit, and, further, that, if they should fine* from a preponderance of the evidence that the service station was entitled to credits other than those shown in the statement of account, the appellants would be entitled to the benefit of the same, and, if these credits equaled or were greater than the amount of the debit items, the verdict should be rendered for the appellants, otherwise for the appellee (plaintiff) in whatever amount the just credits were less than the amount of the debit items.

It is insisted by the appellants that these instructions wrongfully imposed the burden of proof upon them to prove the items of credit, whereas it in fact devolved upon the appellee to establish both debit and credit items by a preponderance of evidence. The complaint with the verified itemized account made a prima facie case, and, since the correctness of the account was admitted, except for certain deductions by way of trade discounts claimed by the appellants, the burden was upon them to prove the right to such deductions, and the instructions complained of were proper declarations of the law. Ferguson Lbr. Co. v. Logan-Long Co., 181 Ark. 1146, 26 S. W. (2d) 569.

The court refused to grant an instruction requested by the appellants to the effect that an arbitrary refusal on the part of the Oil 'Corporation to perform its contract of September 3d without fault on the part of the service station, when it was able and willing to perform the same, would exonerate the appellants from liability, regardless of the status of the account sued on. The court did not err in this regard. The contract alleged to have been breached was not between the appellants and the appellee, -and for its breach no right of action would have accrued to them but to the service station. Nor was there any allegation or showing made that any damage would have resulted to the service station because of the alleged breach.

It is next insisted by the appellants that the contract of September 3, 1928, constituted a novation and superseded the credit contract, and that the court erred in refusing to so hold. The contract of September 3d, supra, is explicit in its terms and does not warrant the contention made. It is well settled that novation is the substitution by mutual consent of one debt for another, or a new debt for an old one, whereby the old debt is extinguished, and the intention to effect this must be positively declared. Cockrill v. Johnson, 28 Ark. 192; Brewer v. Winston, 46 Ark. 163; Elkins v. Henry Vogt Machine Co., 125 Ark. 6, 187 S. W. 663.

It is next insisted that the court erred in its rulings in holding competent certain testimony offered over objections. On the question of the trade discounts claimed, the district manager of the Oil Corporation testified that he had no authority to make such agreement. This testimony was admitted by the court as a circumstance tending to show whether in fact the district manager had made an agreement to allow discounts as claimed by the appellants. For this purpose such testimony was competent. For the same reason, the rules of the National Petroleum Institute showing the prices of the products were admissible, as was also the original contract between the Oil Corporation and the service station regulating the terms under which the latter might sell, as it was shown that the service station continued to sell under this contract after the Hansons became interested in the business and during the time the account sued on was made.

Again complaint is made that the appellee’s attorney exhibited to Hanson a carbon copy of a letter which the Oil Corporation claimed to have written and mailed to Hanson, which Hanson denied receiving, and permitting said attorney to read an excerpt from said carbon copy, and ask Hanson if he did not remember receiving the letter containing that statement. To this question the witness answered, “No.” The court instructed the jury that the carbon copy of the letter could not be considered as evidence, and it was not error to permit the question to be propounded.

The last assignment of error argued is that the verdict was contrary to the law and the evidence, in that the testimony on the part of the appellants tended to show that there was a balance, of only $21.85 due the oil corporation after the trade discounts claimed had been deducted, and that the testimony on the part of the appellee tended to show that not less than $1,000 was due. Appellants therefore argued that the verdict was unsupported in any view of the testimony. Accepting the evidence of the appellee as true, as the jury must have done, it is clear that it was entitled to a judgment in the sum of $1,000, but the appellants are in no position to complain, as the verdict was more favorable to them than was justified by the testimony. Washa v. Harris, 162 Ark. 186, 266 S. W. 944; Fulbright v. Phipps, 176 Ark. 356, 3 S. W. (2d) 49.

The judgment is affirmed.


author: Smith, J.

text:
    Ogden v. Pulaski County.
    4-2708
    Opinion delivered October 24, 1932.

      Brichhouse & Brichhouse, for appellant.

      Carl E. Bailey and Fred A. Bonham, for appellee.
   Smith, J.

Pulaski County entered into a contract for the construction of a county road with appellants, under which contract there was due the sum of $13,229.51. A claim therefor against the county was disallowed by the county court on August 31,1931, for the reason that there were no county funds available for its payment. The circuit court so found upon an appeal from the disallowance order by the county court, and the judgment of the circuit court, from which is this appeal, recites that the claim was disallowed for the reason that the condition of the county’s finances would not permit its payment, under amendment to the Constitution, No. 10, 184 Ark., page xxix.

The provisions of this amendment No. 10 have been construed so frequently and so recently that it must now be treated as definitely settled that it is not within the power of a county court to allow any claim against the county, however just and meritorious it may be, when, by such allowance, the total revenue for the current fiscal year, from all sources, will be exceeded. Pulaski County v. Board of Trustees, ante p. 61.

Tbe case of Burke v. Gulledge, 184 Ark. 366, 42 S. W. (2d) 397, arose under very similar facts. In that case allowances were made against Phillips County on account of tbe construction cost of certain rural roads, in payment of wbicb warrants were drawn on tbe “Special County Road Tax Fund.” At tbe time tbe allowances were made, tbe county’s expenditures bad exceeded its revenues for tbe then current year. Tbe “Special County Road Tax Fund,” against wbicb tbe warrants were drawn, was composed of revenues derived from several sources, tbe tbree-mill road tax being a part thereof, as was also tbe county’s proportionate part of tbe “State Turnback Money,” wbicb last-named fund was derived by tbe county under tbe appropriations made pursuant to act 63 of tbe Acts of 1931 (Acts 1931, page 171). It was held, in this Burke case, supra, that the allowance of“ a claim against a county was void when, by such allowance, tbe total revenues for tbe current fiscal year, from all sources, were exceeded, and tbe judgment of tbe circuit court directing tbe payment of such a claim against tbe county was reversed.

It was pointed out, however, in tbe Burke case, supra, that it bad been held in tbe case of Anderson v. American State Bank, 178 Ark. 652, 11 S. W. (2d) 444, that amendment No. 10 did not apply to funds paid over to tbe counties by tbe State pursuant to tbe act 63 of tbe Acts of 1931, as that fund was not county revenue within tbe meaning of tbe amendment. It was therefore held, in the Burke case, supra, that, while tbe demands there involved could not be allowed against tbe county and paid out of county funds, it might be allowed and paid out of tbe county turnback money derived under tbe act of 1931, as a gratuity from tbe State.

Tbe present appeal may be disposed of, however, by bolding, as we do bold, that tbe claim against tbe county was properly disallowed by reason of the inhibition of amendment No. 10, above recited.

The judgment of the court below must therefore be affirmed, and it is so ordered.


text:
    Missouri Pacific Railroad Company v. Brown.
    4-2678
    Opinion delivered October 24, 1932.

      Thomas B. Pryor and Daggett & Daggett, for appellant.

      Giles D earing, for appellee.
   Smith, J.

Three cases were consolidated and tried together, and from a verdict and judgment in favor of each plaintiff is this appeal.

Two of the plaintiffs were riding in a truck owned by the third plaintiff on the afternoon of July 4, 1931, at which time the truck was struck by an eastbound passenger train of the defendant, and the suits were brought to recover the damages thus inflicted. No complaint is made that the verdicts returned were excessive, hut it is insisted that certain errors were committed which call for the reversal of the judgments.

The first assignment of error is that the court erred in submitting to the .jury the question whether there was a failure on the part of the operatives of the train to keep a lookout and in refusing to instruct the jury that the lookout statute was not involved.

The collision between the truck and the train occurred at a crossing inside the limits of the city of Wynne, and the operatives admit that the train was running about twenty-five miles per hour. The witnesses for the plaintiffs place the speed at a higher rate. Certain box cars were standing on a track running parallel to the one on which the train entered the city. These box cars were standing about 150 feet from the crossing, and certain flat cars were nearer the crossing. Plaintiff Brown testified that the tracks were straight and ran east and west, and that the highway- ran north and south. There are two switch tracks on the south side of the main line, and one switch track on the north side of the main line. Plaintiff Seago, who was driving the truck, stopped it before crossing any of the tracks, which were all surface tracks and on a level with the highway. Plaintiff Brown further testified that box cars were standing both east and west of the crossing, and that there was “just a narrow space between for us to go through. ’ ’ Near the crossing was a signal light, but it was not working, and did not indicate the approach of the train. Will Jones, a pedestrian, crossed the tracks just as witness and Seago drove up to them, and no signal of any kind was given as they did so. The bell did not ring and the whistle was not sounded. The testimony of Seago, the driver of the truck, was to the same effect, and these witnesses were corroborated by a number of others.

The testimony on the part of the railroad company was to the effect that the crossing light was in working order when it was inspected shortly after the collision, and that the hell was rung and the whistle was sonnded as the train approached the crossing, and that the truck came upon the main-line track from behind the box cars so near the engine that the collision conld not be averted.

Under the facts stated, it was not error to admit testimony as to the speed of the train, nor was it error to instruct upon the duty of the railroad company to keep a lookout, and the duty also to ring the bell or sound the whistle as the train approached the crossing.

In the recent case of Missouri Pacific R. Co. v. Rogers, 184 Ark. 725, 43 S. W. (2d) 757, we held, in effect, that, where no warning was given of the approach of a train to a crossing, the speed at which the train is moving is of material consideration on the question of negligence; that the lookout answers one purpose, the warning another, and the control of the speed yet another. That the requirement as to the lookout is primarily to enable the trainmen to control the movement of the train when they discover danger, while the warning with whistle or bell is to give the traveler notice to keep out of danger, and the control of the speed is designed to make both the lookout and the warning more effective.

The plaintiffs testified, as did also certain bystanders who saw the collision, that the trainmen gave no notice of the train’s rapid approach by ringing the bell or blowing the whistle, as the law required, and as they would, no doubt, have done had a lookout been kept. These were at least questions for the jury, and there was no error in submitting them.

The court gave, over appellant’s objection, an instruction, numbered 4, reading as follows: “If you find from the evidence in this case that the defendant had placed signal lights at the crossing where this accident occurred for the purpose of warning the traveling public at said crossing of the approach of its trains, that fact would not relieve the plaintiffs of the duty to look and listen for the approach of trains at said crossing, but, if they were inoperative and not working at the time this plaintiff attempted to cross the said crossing, he might infer, from the fact that the said lights did not show that a train was coming, that no train was coming, and thereby be impliedly invited to cross said tracks.”

Testimony was offered by the defendant railroad company to the effect that the crossing light was burning, which would have indicated to one who looked and observed it that a train was approaching; while the evidence of the plaintiffs was to the effect that the light was not burning, at least that no red light showed, as was usual when a train was approaching and the light burning, and that therefore the light gave no warning.

Upon this issue, the instruction was not erroneous, as it appears to conform to the law as declared in the case of Bush v. Brewer, 136 Ark. 246, 206 S. W. 322. See also,Missouri Pacific R. R. Co. v. Havens, 164 Ark. 108, 261 S. W. 31; Missouri Pacific R. R. Co. v. Elvins, 176 Ark. 737, 4 S. W. (2d) 528.

The instruction did not absolve plaintiffs from the duty to look and listen because the light was there, although it was not burning, but declared the law to be that, having looked and listened, the plaintiffs had the right to infer that no train was approaching, as the light did not show that there was danger.

The court gave numerous instructions defining the duties of both the plaintiffs and the operatives of the train. Accurate definitions of contributory negligence were given at the request of appellant, after which the court gave, on its own motion and over appellant’s objection, an instruction reading as follows: “Contributory negligence on the part of the plaintiffs as mentioned in the preceding instructions means negligence that is equal to, or greater than, the negligence, if any, of the defendant company; and, if you find that the plaintiffs are guilty of contributory negligence, and that such negligence equals, or is greater than, the negligence, if any, of the defendant company, then your verdict in all thrée cases shall be for the defendant. The burden of proving such contributory negligence is on the defendant company. ’ ’

Read by itself, this instruction is not an accurate definition of contributory negligence, but it was not intended to be read by itself. When read in conjunction with the instructions to which it referred, it does not tell the jury that the contributory negligence of the plaintiffs could not be considered unless that negligence was equal to, or greater than, that of the defendant, but declared the law to be that, if the plaintiff’s negligence was equal to or greater than that of the railroad company, the cause of action was defeated, although the railroad company was itself guilty of negligence. In other words, the instruction appears to have been given, not to define contributory negligence, as that had been done in other instructions to which reference was made, but to declare the law id regard to the effect of contributory negligence. We conclude therefore that the instruction, while not accurately phrased, was not erroneous and prejudicial. Section 8575, Crawford & Moses’ Digest.

Upon the whole case we find no prejudicial error, and the judgment must therefore be affirmed, and it is so ordered.


author: Humphreys, J.

text:
    Taylor v. Arkansas Democrat Company.
    4-2659
    Opinion delivered October 24, 1932.

      Sam Borex, Nat Hughes and McNalley .& Sellers, for appellant.

      Carmichael >& Hendricks, for appellee.
   Humphreys, J.

The pleadings in this case are as follows: First, an intervention of appellee in the proceedings for the liquidation of the American Exchange Trust Company in the chancery court of Pulaski County, alleging its right to an offset, of $15,527.19, against a note for $20,000 it owed said hank on the day the bank ceased to do business; second, the answers of appellant banks denying the right of appellee to set off the bank’s indebtedness to it against said note to the extent of their alleged respective interests therein, and their cross-complaint alleging a preference over appellee and the general creditors in the funds to be derived from said note, and in the cash funds of said bank; and, third, the answer of the Bank Commissioner denying the right of set-off by appellee, except the difference between the participation certificates and the $20,000 note, and the right of appellant banks to the preference claimed by them.

The cause was submitted upon the issues joined by the pleadings and an agreed statement of facts, from which the court found and decreed that the appellee was entitled to a set-off in the sum claimed against its note, and appellant banks were entitled to a preference prb rata in the excess paid by appellee in the settlement of its note, from which is this appeal.

The agreed statement of facts is as follows:

“The parties to this action agree that the following is a complete statement of undisputed facts upon which the issues of law are based, and, as such, submit same to the court:

“The American Exchange Trust Company held the note of the Arkansas Democrat Company in the sum of $20,000, which note was due February 6, 1931.

“On November 10,1930, it sold to the First National Bank of Junction City, Arkansas, what was called a participating contract in the amount of $4,000, the form of which is as follows, to-wit:

“ ‘NO:. $..

“ ‘Certificate of Participation

“ ‘THE AMERICAN EXCHANGE TRUST COMPANY, Little Rock, Arkansas, has allotted to... .a-participation of. .dollars in a loan for.made to. secured by....dated....due . — ..with interest at..per annum.

“ ‘In allotting participation to its customers and others, in loans made by it and in the handling of the same, including substitutions or withdrawals of collat-erals, with or without reductions of the loans, the American Exchange Trust Company endeavors to exercise the same care that it exercises in the making and handling of loans for its own account, but it does not assume further responsibility. Such allotments and the handling of the loans, including substitutions and withdrawals of collateral, are for the account and risk of the participants.

“ ‘American Exchange Trust Company,

“ ‘Vice-Pres. “ ‘Asst. Secy.

‘ ‘ ‘ This certificate should be sent direct to the American Exchange Trust Company for collection a few days before maturity.’

“On November 14, 1930, it sold a similar contract to the People’s Bank of Mammoth Spring, Arkansas, for $2,500, and on the same day sold a similar contract for $5,000 to the Calhoun County Bank, of Harrell, Arkansas.

“The only evidénce of said transactions were the participating contracts. There was no indorsement on said note, which remains in the hands of the American Exchange Trnst Company, and was in its hands at the time it was taken over by the Bank Commissioner.

“At the time of said suspension the Arkansas Democrat Company had on deposit with the American Exchange Trnst Company the sum of $15,127.89, and said bank was indebted to the Arkansas Democrat Company in the sum of $399.30, making a total amount due the Arkansas Democrat Company of $15,527.19. If the Arkansas Democrat had been allowed to offset its account against the bank, it would still owe the bank $4,472.81 on February 6, 1931, the date said note became due. On said date, the Arkansas Democrat tendered to the bank commissioner said amount of $4,472.81 and demanded its note. The 'bank commissioner refused to accept said tender and payment, and refused to surrender said note, but credited said note with $8,500, which was the amount of said note, less the amount of the participating contracts it had sold, and set off said sum against the above-mentioned claim of the Arkansas Democrat Company.

“The banks buying the participating contracts had deposits with the American Exchange Trust Company, and, in making these investments, ordered it to charge the amounts invested to their respective accounts..

“There was more than $300,000 in cash in the American Exchange Trust Company when it was taken over by the Bank Commissioner.”

The undisputed facts reflect that the $20,000 note which appellee owed the American Exchange Trust Company had not been negotiated in the manner required by §§ 7796, 7797 and 7798 of Crawford & Moses’ Digest, and that it was held intact by said bank when the Commissioner took charge of the assets of the bank for liquidation. Appellant banks having failed to acquire an interest in the $20,000 note in accordance with the provisions aforesaid of the Negotiable Instruments Act, were and are in no position to challenge appellee’s right to offset the bank’s indebtedness to it against its indebtedness to said bank. There is nothing in the agreed statement of facts tending to show that appellee knew of, or consented to, an assignment of an. interest in the $20,000 note it owed the hank hy the execution of participation certificates therein to appellant banks; hence was not estopped to claim its right of set-off hy an assignment of a part of the note in manner contrary to the Negotiable Instruments Act. In order to have deprived appellee of its right of set-off, the note must have been negotiated in accordance with the provisions of the Negotiable Instruments Act, or else appellee must have assented to or acquiesced in the issuance of certificates of participation by said bank.

Appellant hanks, however, contend that, under and by virtue of the participation certificates in the $20,000 note that they acquired by purchase from the American Exchange Trust Company, they are entitled, in any event, to a preference pro rata in the amount owed by appellee upon its note after its claim against said bank has been deducted therefrom. The chancellor so found, and decrees upon the theory that the participation certificates created an express trust between appellant banks and the American Exchange Trust Company. Subdivision 5 of § 1 of act 107 of the Acts of 1927 provides for a preference in the assets of a defunct bank to beneficiaries of an express written trust. There are no words in the participation certificates evidencing an intention to create a trust. The res or subject-matter is not characterized as a trust fund, and the American Exchange Trust Company is not desig--nated therein as a trustee. This court announced in the case of Kansas City Life Insurance Co. v. Taylor, 184 Ark. 772, 43 S. W. (2d) 372, that (quoting syllabus one): “To create an express trust, there must be some act on the part of the creator expressive of an intention to create a trust and to make a designated party a trustee.”

The certificates are nothing more than evidences of indebtedness entitling appellant banks to participate in the funds of the bank as general creditors.

That part of the decree allowing appellee a set-off and declaring appellant banks general creditors is affirmed, but that part awarding appellant banks the difference between the face of the note and the set-off is reversed, and the cause is remanded with directions to the chancellor to enter a decree in accordance with this opinion.

Mr. Justice Kieby dissents.

Mr. Justice McHaney dissents as to modification.


author: Kirby, J.,

text:
    Gates v. Hughson.
    4-2686
    Opinion delivered October 24, 1932.

      Hal L. Norwood, Attorney General, Walter L. Pope, Assistant, David A. Gates and George Vaughan, for appellant.
   Kirby, J.,

(after stating the facts). The court has nothing to do with the policy of such legislation; its province being only to determine the controversies arising ont of its enforcement and violation according to a fair construction thereof. It has long been the practice, both in onr Federal and 'State governments, to impose excise taxes upon certain products or commodities by requiring the use of adhesive stamps or labels attached to each package of the commodity or products. The use of revenue stamps by the Federal government in connection with the sale of tobacco products dates back to 1868. Act July 20, 1868, c. 186, 15 U. S. Stat., at L. 125, U. S. R. S. (1878), § 3'251.

The Federal statute imposes penalties and forfeitures for removing manufactured tobacco from the factory, except in proper packages duly stamped to indicate the payment of the tax. Lilienthal's Tobacco v. U. S., 97 U. S. 237, 24 L. ed. 901; U. S. v. Quantity of Tobacco, Fed. Cases Nos. 16105 and 16106, (especially at p. 656 of 27 Fed. Cas.).

The absence of the required stamp on the package is prima facie evidence of nonpayment of the tax, the dealers and manufacturers being held liable for selling or offering for sale cigars, etc., not properly boxed and stamped. U. S. R. S. (187i3) § 3373; U. S. v. Edwards, 25 Fed. Cas. 15025.

The statute alleged to have been violated by appel-lee in the sale of unstamped tobacco products is virtually in the language of the Federal statute, and provides: “Section 16. # * The absence of the proper stamps from any container of any tobacco products shall be notice to all persons that the tax has not been paid and shall be prima facie evidence of the nonpayment of such tax.” Act 152 of 1929, approved March 20, 1929, p. 767.

Our said act 152 of 1929 provides in § 4 thereof for the levy of an excise or privilege tax on certain tobacco products, specified in § 2 thereof, designating the amount of the levy upon cigars and cigarettes and requiring payment through the stamp tax system as prescribed therein.

■Section 1 of said act 152 of 1929 provides: “The business of handling, receiving, selling or offering for sale and dealing in, through sale, barter or exchange, tobacco products, as defined in § 2 of this act, is hereby declared to be a privilege under the Constitution and laws of the State of Arkansas, and the purpose of this act is to impose certain licenses, fees and taxes on this business.

Sections 2 and 3 of said act 152 of 1929 define the terms used in the act and require the “retailer” of tobacco products to pay for a permit or license annually.

Section 6 of said act 152 of 1929 prescribes the restrictions for retail dealers in the conduct of their business: “ (1). They shall not place in their stock or sell or otherwise dispose of any tobacco products to which proper stamps denoting the tax due thereon have not been affixed.” This section (2) also prescribes the procedure that must be followed in the purchase of revenue stamps; and (3) the time and manner that said stamps must be affixed to the packages of tobacco products and for their cancellation.

The court read to the jury § 9 of the act, which provides the penalties for violations thereof, and, on its own motion, over plaintiff’s several and specific objections, and over his objection to the charge as an entirety, gave the jury the following six additional instructions:

Instruction No. A-2: “So, if you find in this case that the defendant failed to comply with this statute, that is to say, had in her possession and sold or offered for sale packages of tobacco, cigars and cigarettes, and not having the stamps affixed thereto, (and the court will explain to you later what is meant by not having stamps affixed), then you will find for the plaintiff.”

Instruction No. A-3: “If you find that she did not have packages of cigars, cigarettes and tobacco on which stamps were not affixed, then it would be your duty to find for the defendant.”

Instruction No. A-4. “Now, gentlemen, the question arises, what is meant by packages of tobacco, cigars and cigarettes not having stamps affixed? If yon find in this case that the packages of cigarettes once had stamps affixed and were sold, and in the process of sale the defendant removed the stamps from the cigarettes intentionally to he preserved by her, then that would not be a compliance with the law which requires that stamps be affixed. ’ ’

Instruction No. 5-A. “But if you find that the stamps were once affixed to the packages and these stamps, in the process of sale, or before, had been intentionally removed, or in any manner removed by the intention of the defendant, then she would be liable the same as though the stamps had never been affixed. In other words, it is a matter of intention. If the stamps were once put on the cigarettes, and she .removed the stamps intentionally to preserve them, then she would be liable the same as though the stamps had never been put on the cigarettes; but, if these stamps were affixed, as required by law, and were removed by accident or in handling’ the cigarettes without any intention to preserve the stamps, then that would be a compliance with the law, and the defendant would not be liable for that.”

Instruction No. A-60. “Now, gentlemen, if you find for the plaintiff, it will be your duty to find for the plaintiff for twenty-five dollars for each package of cigarettes and each box of cigars that you find which wer¿ held or sold without the stamps being affixed. If you find for the plaintiff, you will find for the plaintiff in the sum for as many packages of cigarettes and boxes of cigars as you find that the stamps were not affixed under the instructions the court has given you. If you find for the defendant, you will say, ‘¥e, the jury, find for the defendant’.”

The court refused to give appellant’s requested instructions Nos. 5 and 6 as follows:

“5. You are instructed that, even though you may find that some or all of the packages did at one time have the stamps affixed, if the stamps were removed before delivery to a purchaser without the stamps being affixed and accompanying the packages, yon will find for the plaintiff.”

“6. As to the one carton sold to Mr. Gay, as testified to by him and by Miss Hughson, in which she and he testified that she removed the stamps before delivery, you are instructed to find for the plaintiff in the sum of $25 for each package in the carton.”

It is urged that the court erred in refusing to give the requested instructions for appellant, and in giving the six instructions objected to for appellee, telling the jury it was really “a matter of intention,” that the law would not be violated unless the stamps, that had been affixed to the packages of tobacco and cigarettes, had been intentionally removed to be preserved and used again, etc. That, if the stamps had been affixed, as required by law, and were removed by accident or in handling the cigarettes, without any intention to preserve the stamps, it would amount to a compliance with the law, and there would be no liability on the part of the defendant.

The court erred in giving the said instructions, and also in refusing to give the two requested instructions 5 and 6 for appellant.

The language of the statute is plain, unambiguous, and its meaning clear, and the court erred in refusing the instructions as requested by appellant. Instruction No. 6 was in effect a direction to find for the plaintiff on the carton of cigarettes sold to Mr. Gay, who testified, as did also the clerk, that said stamps were removed from the carton before its delivery upon the sale. Both the parties to the sale testified that they had been removed, although from one witness’ testimony it appeared that they were removed for preservation and use again, and the other stated that said stamps had been taken off and thrown into the waste basket. It could have made no difference for what purpose they were removed, since it is undisputed that said stamps were removed from the package of cigarettes before its delivery upon the sale, thus constituting a violation of the act.

If the stamps are not affixed and kept on the packages of cigarettes and tobacco, and canceled in accordance with the requirements of the law, it amounts to a violation thereof, for which the penalty is denounced and recoverable.

The correctness of this construction is confirmed by the provisions in the law for a refund for the amount of taxes paid upon stamped products not sold or disposed of, etc. Section 13, act 152 of 1929.

The absence of the proper revenue stamp from any container of any tobacco products would create the natural and reasonable inference that the tax had not been paid and the stamps affixed thereto in accordance with the requirements of the act, and the statute also expressly makes such showing prima facie evidence of the nonpayment of the tax, necessarily casting the burden of proof upon the defendant.

The court erred in refusing to give the said requested instructions on the part of the plaintiff and appellant, and in giving, over his objections, the said erroneous instructions requested on behalf of defendant, and also in refusing to direct a verdict as to one carton of cigarettes sold in accordance with requested instruction No. 6.

For these errors the judgment must be reversed, and the cause will be remanded for a new trial. It is so ordered.


author: Mehaeey, J.,

text:
    Crill v. Trites.
    4-2688
    Opinion delivered October 24, 1932.

      O. W. Botts, for appellant.

      Ray 8. Gibson and J. W. Burnett, for appellee.
   Mehaeey, J.,

W. L. Trites is a farmer living at Gillette, Arkansas County. He owned real estate and personal property, most of which was incumbered. On December 28, 1926, Trites and his wife executed a deed to some property in the town of Gillette to their children, whose ages were 5, 7 and 9 years. On December 6, 1927, W. L. Trites filed his petition in bankruptcy. The appellant, H. E. Crill, was appointed receiver by the referee in bankruptcy, and was directed to- bring suit in the Arkansas Chancery Court to cancel said deed, as being made without consideration, and for the purpose on the part of Trites to hinder and delay his creditors in the collection of the debt. Suit was filed in the chancery court of Arkansas County by the appellant, and the complaint alleged that Trites and his wife had executed said deed on December 28, 1926, and that said children were 9, 7 and 5 years of age, respectively; that said deed was made without consideration and for the purpose, on the part of W. L. Trites, to place said property beyond the reach of his creditors, and thus hinder and delay them in the collection of their debts; that said W. L. Trites was at the time of the execution of the deed insolvent, and that the deed was executed to defraud his creditors, and he asked for a cancellation of the deed. Answer was filed •by appellees, in which they denied that the deed was executed for the purpose of hindering, defeating and defrauding the creditors of W. L. Trites; denied that W. L. Trites was insolvent at the time of the execution of said deed, and alleged that said deed was executed nearly a year before he filed his petition in bankruptcy. He further alleged that he had severe financial reverses in 1927, and that the association failed to make settlement in full for his rice, and that these reverses made it necessary for him to file his petition in bankruptcy. An amendment to the answer was afterwards-filed, in which was set forth in detail the value of the property Trites owned at the time of the execution of the deed, which was thought to be worth $15,000; that he owed his creditors at the time of the execution of the deed $8,000, and that he retained sufficient property to pay his creditors outside the property conveyed to his children; that the reverses of 1927 made it impossible for him to meet his obligations, and that this led to his filing his petition in bankruptcy. He owed, at the time he executed the deed, W. J. DeVore approximately $4,000. DeVore testified in substance that he had tried to collect from Trites and had endeavored to get Trites to give him security, which Trites refused to do; that the suit by DeVore against Trites was brought before the deed was executed to the children, but judgment was obtained after the date of the deed. He testified that at the time the deed was executed Trites was involved financially, and that these conditions finally led to his insolvency and bankruptcy. The debt of $4,000 to DeVore was secured by chattel mortgage, but none of the property was ever turned over to DeVore on the debt, and no part of the $4,000 had been paid. The debt to DeVore was originally $5,500, but had been reduced by payment to $4,000. He testified that Trites was insolvent, and he based his statement upon the fact that everything Trites had was mortgaged. He stated that Trites delayed the suit brought by DeVore against him as long as possible, and threatened bankruptcy if the suit were pushed. The petition in bankruptcy showed the total claims against Trites to be approximately $14,000.* That he had never received anything on his .judgment.

Tbe appellant, H. E. Crill, testified about bis appointment as a receiver and bringing tbe suit under directions of tbe referee in bankruptcy; tbat tbe secured claims in tbe petition for bankruptcy were more than $13,000, and tbat tbe value of tbe securities was placed at $9,875; tbat tbe total amount of bis indebtedness shown by bis petition in bankruptcy was $14,394.04. Tbat bis total assets listed was $5,357.25. Witness stated tbat all be bad ever received as receiver for tbe bankrupt was $265.54; tbat no personal property came into bis possession ; tbat Trites, in bis petition for bankruptcy, claimed bis exemptions of $500, and tbat tbis was allowed without contest.

Tbe undisputed evidence shows tbat, in tbe spring of 1927, Trites bad 8 bead of mules and a horse, all good stock, worth about $1,000, and tbat be bad all tbe farming implements and equipment tbat be needed as a rice farmer, and was well equipped to run a rice farm. Tbe undisputed evidence also showed tbat tbe flood of 1927 destroyed bis oat crop, tbat bis stock died, and tbat values went down, and tbat these things caused him to become insolvent and made it necessary to file bis petition in bankruptcy. Trites filed a list of tbe property which he owned, together with its value, tbe aggregate value being $15,764.45. Tbis property be owned at tbe time be executed tbe deed. There is no controversy about bis owning tbis property or about its value. 160 acres of land was listed as of the value of $6,400. Two or three other witnesses, in addition to Trites, testified tbat it was worth $6,400. He also introduced a list showing bis indebtedness at tbe time of tbe execution of the deed, which amounted to $5,955. The judgment of DeVore, added to tbis, would make tbe aggregate $9,955, showing tbat bis assets at tbe time tbe deed was made exceeded bis liabilities by $5,809. Tbe evidence of Trites was corroborated by disinterested witnesses who testified as to tbe property owned by him and its value, and tbat be was solvent. The appellant’s witnesses, DeVore and tbe receiver, testified tbat be was insolvent at the time tbe deed was executed. The evidence shows there was no concealment about the deed; it was placed on record shortly after it was executed, and it was executed nearly a year before the petition was filed in bankruptcy.

If the deed by Trites to his children was made with the intention to hinder, delay or defraud creditors or other persons of their lawful actions, damages, forfeitures, debts or demands, as against creditors and purchasers, such deed would he void. 'Crawford & Moses’ Digest, 4874-, 4878.

The questions here are, was Trites insolvent at the time the deed was made ? And was it made with a fraudulent intent? A voluntary transfer of property to near relatives is presumptively fraudulent as to existing creditors, and, if the debtor is insolvent at the time, it necessarily hinders, delays and defrauds his existing creditors, and such conveyances to near relatives by a debtor who at the time is embarrassed, are looked upon with suspicion and scrutinized with care. Fluke v. Sharum, 118 Ark. 229, 176 S. W. 684; Wilks v. Vaughan, 73 Ark. 174, 83 S. W. 913; Mente & Co., Inc., v. Westbrook, 181 Ark. 96, 24 S. W. (2d) 976.

The law as to fraudulent conveyances is well settled by the decisions- of this court. It would serve no purpose to review all the decisions here. All of our decisions are to the effect that courts should carefully scrutinize all cases of alleged fraud against creditors where transfers have been made to members of the debtor’s family. A gift of property to one’s child by one indebted at the time is presumptively fraudulent as to existing creditors, and, when it is shown that a gift of property was made by the father to child, that the father was largely indebted at the time, the burden of proof is on the father to show that his intentions were innocent, and that he had at the time ample means to pay all his debts. On the- other hand, however, if the evidence shows that one had ample means to pay all his debts, the conveyance to his child of property of small value, together with other facts tending to show good faith, would be sufficient to justify the conclusion that the transfer was not fraudulent. Mente & Co., Inc., v. Westbrook, supra.

The value of the property conveyed to the children in this instance was small, nobody fixing its value above $500. It is not only shown by the evidence that there was a disastrous flood in 1927, but this is a matter of common knowledge. The undisputed proof in this case shows that the appellee lost his stock, his oat crop and other property, and, but for these disasters and reverses, the value of his property would have been considerably more than his indebtedness. As to whether the conveyance in this case was fraudulent, and as to whether the debtor at the time had ample property out of which appellant could have made his money, are questions of fact, and the chancellor’s decisions or findings on questions of fact are conclusive here, unless contrary to the clear preponderance of the testimony. Mente & Co., Inc., v. Westbrook, supra; Pattison Orchard Co. v. S. W. Ark. Utilities Corp., 179 Ark. 1029, 18 S. W. (2d) 1028; Sternberg v. Blaine, 179 Ark. 448, 17 S. W. (2d) 286; Cain v. Mitchell, 179 Ark. 556, 17 S. W. (2d) 282; Jenkins v. Jenkins, 81 Ark. 68, 98 S. W. 685; Claypool v. Johnston, 91 Ark. 549, 121 S. W. 941.

We have carefully considered all the evidence in the case, and have reached the conclusion that the finding of the chancellor is not against the preponderance of the evidence, and the decree is therefore affirmed.


author: Mehaefy, J.

text:
    Jones v. Jones.
    4-2697
    Opinion delivered October 24, 1932.

      John J. DuLaney, for appellant.

      Jones ■& Jones, for appellee.
   Mehaefy, J.

Wm. Gr. Jordan, a soldier in the United States Army, received a certificate of insurance on his life for $10,000, issued by the United States through the Bureau of War Risk Insurance in 1917. His mother, Mrs. Margaret Jordan, was the sole 'beneficiary. He died on June 22,1919, and after his death the United States G-ov-ernment, under the terms of the policy, paid $57.50 per month to his mother, the beneficiary, until her death, on March 30,1920. The soldier, Wm. Gr. Jordan, died intestate, and his mother died intestate. When Jordan, the soldier, died, he left surviving him, his mother, one brother and two sisters, Charlie J., and Mrs. Mollie Waldo and Mrs. Hortense Starks. After the death of Mrs. Jordan, the beneficiary, the government paid $19.16 per month to each of the three nest of kin, Charlie Jordan, Mrs. Mollie Waldo and Mrs. Hortense Starks. This amount was paid to each of them until the death of Mrs. Mollie Waldo, one of the sisters, on June 7, 1931. The government still continues to pay $19.16 each to Charlie Jordan and Mrs. Hortense Starks and recognizes its obligation to continue such payments until each has received a one-third of the balance due on said policy of insurance. After the death of the beneficiary, the government awarded one-third interest in the balance due on said policy to each of the three heirs named above. Upon the death of Mrs. Waldo, her interest, which was represented during her lifetime by the monthly payments above mentioned, was commuted, its present value found to be $1,611. The government is willing to pay said sum to Lon T. Jones, of Ashdown, Arkansas, the administrator of the estate of said Wm. Gr. Jordan, deceased. Mrs.' Bertie Jones, the appellee and sole heir at law of her deceased mother, Mrs. Mollie Waldo, claims the full sum of $1,611, and filed her claim with the administrator. The administrator disallowed the claim, and then appellee filed tlie claim in probate court on March 1, 1932. The probate court found that Mrs. Bertie Jones was entitled to the entire sum of $1,611, less cost of administration. An appeal was taken by the administrator to the circuit court, where appellee was allowed the entire sum less cost of administration. The administrator, the appellant here, filed motion for new trial, which was overruled, and an appeal granted to this court.

The contention of appellant is that, when the $1,611 was paid to the administrator of the estate of Jordan, the deceased soldier, each of the heirs, the two sisters and brother, is entitled to one-third of the amount. The contention of appellee is that she is entitled to the full amount of $1,611.

Both parties filed briefs citing many authorities. We do not deem it necessary to review these authorities, because we are of opinion that the act of Congress, as amended and as construed by recent decisions of the Supreme Court of the United States, settles the question in favor of appellee.

While the certificate of insurance was issued in 1917, it provided that it should be subject in all respects to the provisions of the act of 1917 (40 Stat. 398) of any amendments thereto and of all regulations thereunder now in force or hereafter adopted, all of which, together with the application for the insurance and the terms and conditions published under authority of the act, shall constitute the contract.

The Supreme Court of the United States has expressly held not only that Congress had a right to amend the law, but had the right to make the later acts retroactive so as to take effect as of October 6, 1917. White v. U. S., 270 U. S. 175, 46 S. Ct. 274.

The act of December 24, 1919 (41 Stat. 376), provided: “That, if any person to whom such yearly, renewable term insurance has been awarded dies, or his rights are otherwise terminated after the death of the insured, but before all of the 240 monthly payments have been paid, then the monthly payments payable and applicable shall be payable to such person or persons within the permitted class of beneficiaries as would under the laws of the State of residence of insured be entitled to his personal property in case of his intestacy.”

In compliance with the law, the $57.50 was paid to the mother, who was the beneficiary, and at her death was paid to the two sisters and brother, one-third to each. They were the persons who, under the laws of the State of Arkansas, the residence of the insured, would be entitled to his personal property, and these payments to ihe sisters and brother continued until the death of Mrs. Waldo, one of the sisters, on June 7, 1931.

The act of Congress of 1925, (§ 14, 43 Stat. 1310, 38 USCA § 514) provides: “If no person within the permitted class be designated as beneficiary for yearly renewable term insurance by the insured, either in his lifetime or by his last will and testament, or if the designated beneficiary does not survive the insured or survives the insured and dies prior to receiving all of the 240 installments, or all such as are payable and applicable, there shall be paid to the estate of the insured the present value of the monthly installments thereafter payable, said value to be computed as of date of last payment under existing- awards; provided, that all awards of yearly renewable term insurance which are in course of payment on the date of the approval of this act shall continue until the death of the person receiving such payments, or until he forfeits the same under the provisions of this act. When any person to whom such insurance now awarded dies, or forfeits his rights to such insurance, then there shall be paid to the estate of the insured the present value of the remaining unpaid monthly installments of the insurance so awarded to such person.”

The Supreme Court recently said, in discussing this act: “All installments, whether accruing before or after the death of beneficiary named in certificate of insurance, as a result become assets of the estate of the insured upon the instant of his death, to be distributed to the heirs of the insured, in accordance with the intestacy laws of the State of his residence, snch heirs to he determined as of the date of his death and not as of the date of the death of the beneficiary.” Singleton v. Cheek, 284 U. S. 493, 52 S. Ct. 257.

Under the act and the decisions of the Supreme Court above referred to, we are of opinion that all installments after the death of the beneficiary 'become assets of the estate of the insured, to- be distributed to the heirs of the insured, in accordance with the intestacy laws of this State. The heirs of the insured at the time of his death were the two sisters and brother, and upon the death of the mother, the beneficiary, the entire amount provided for in the certificate became assets of the estate of the insured, to be distributed to these heirs, and, as we have said, these heirs were at that time the two sisters and brother, each of them being entitled to one-third of the amount upon the death of the beneficiary. If either of the distributees, under the law, thereafter died, the share of the one who died would descend to his or her heirs.

We find no error, and the judgment is affirmed.


author: MoHaNey, J.

text:
    Alman v. Coffman.
    4-2689
    Opinion delivered October 24, 1932.

      Owens & Ehrman, for appellant.

      Frauenthal, Sherrill S Johnson, for appellee.
   MoHaNey, J.

Appellant correctly states the case as follows: “This is a suit for specific performance of a contract to purchase a lot in the city of Little Rock. The appellee agreed to sell the lot to the appellant, and the appellant agreed to purchase upon being furnished with an abstract showing good and merchantable title in the appellee. The abstract which was submitted showed that the appellee was claiming title through the Arkansas Baptist College, which in turn secured the lot under the will of one Julia Little, deceased. The only point involved in the litigation is the correct construction to be given to that will. The chancellor held that the Arkansas Baptist College, and through it the appellee, had a good and merchantable title. He decreed a specific performance of the contract. The appellant excepted, and has brought this appeal.”

The will of Julia Little, deceased, was executed on the twelfth day of March, 1900, and the second, third and fourth paragraphs of the will are as follows: “ (2) After the payment of my said debts and funeral expenses, I give to Thomas Preston, the son of George and Carrie Preston, of Little Rock, Arkansas, an education in the Arkansas Baptist College, the same being situated in the city of Little Rock, Arkansas. (3) And for the education of the said Thomas Preston, I give and devise to the trustees of the Arkansas Baptist College all the rents and profits and such other personal property owned by me (after the payment of my just debts and funeral expenses) and so much of my real estate as when sold by leave of the court of probate will be sufficient, in addition to the said personal estate herein given, to educate the said Thomas Preston in the Arkansas Baptist College, provided that the said Thomas Preston is under the age of 21 years and shall conduct himself properly and consistent [with] discipline of the said Arkansas Baptist College. (4) After the education of the said Thomas Preston, or his default herein, all the rest and residue of my property, real, personal and mixed, wheresoever situated, which I now own or hereafter may acquire and of which I shall die seized or possessed, I give, devise and bequeath to the cause of education, to the Arkansas Baptist College, upon the condition that the said Arkansas Baptist College shall not cease to exist. But, in case the said Arkansas Baptist College shall cease to exist, then in that case all of my said estate above described shall become the property of Charlie, Thomas and Tennie, the heirs of George and Carrie Preston, of Little Rock, Arkansas, share and share alike, absolutely and in fee simple.”

It is contended by appellant that the language in the fourth paragraph, that “I give, devise and bequeath to the cause of education, to the Arkansas Baptist College, upon the condition that the said Arkansas Baptist College shall not cease to exist,” and making- further provision for the disposition of the property in the event said college should cease to exist, constitutes a conditional conveyance. In other words, appellant contends that the testator, Julia Little, intended by the language used that the college should have her property only so long as it continued to exist, and, when it ceased to exist, it was then to go to the individuals named. We cannot agree with appellant in this contention. On the contrary, we are of the opinion, construing the will as a whole, the language used clearly shows the intention of the testator is to give to Thomas Preston an education in the Arkansas Baptist College; and, second, after he had been educated or defaulted in same, to give all her property, including the property involved, in fee simple in the event the college was in existence at the date of her death. Thomas Preston defaulted in the matter of an education, and died in 1917, unmarried and without issue. Julia Little died in the year 1915. The college was in existence at the time of her death and still is, and it would be unreasonable to presume that she intended to tie up the fee to the property indefinitely. The law favors the early vesting of estates, and if a will by one susceptible construction would vest an estate, and by another construction the estate would be contingent, the former construction should be adopted. Wallace v. Wallace, 179 Ark. 30, 13 S. W. (2d) 810; Hurst v. Hildebrandt, 178 Ark. 337, 10 S. W. (2d) 491. But here we do not think the intention of the testator doubtful, and clearly that, it was her intention to convey her property to the Arkansas Baptist College, if it were still in existence at the time of her death.

The decree of the chancery court is therefore correct, and must he affirmed. It is so ordered.