author: Butler, J.,

text:
    Finch v. Watson Investment Company.
    Opinion delivered October 5, 1931.

      Knott S Spencer and Caraway, Baker S Gcmtney, for appellants.

      Busbee, Piogh Harrison, N. F. Lamb and Frierson <& Frierson, for appellees.
   Butler, J.,

(after stating the facts). The duty of the assignees and receivers was to take charge of the property conveyed to them, and they were obligated to faithfully account for all of such property and to make such disposition of it or the proceeds therefrom as the court might direct. The obligation of the surety on the bond was only that its principal should so do. There is no breach of the bond alleged in the complaint, the only allegation relating to the assignees and their surety being that a bond was executed by them upon their appointment as receivers, and that the court ordered them to turn over all of the assets of Taylor, real and personal, to the Watson Investment Company, and that they acted in obedience to said order. The mere fact that the proceedings of Taylor by which he sought to settle with his creditors might have been void could not impose any personal liability on the assignees or their surety where they fully accounted for all assets coming into their hands and paid such over under the direction of the court. This was a complete compliance on their part with their duties, and relieved them from liability under the terms of the bond, and the demurrer as to them was properly sustained.

The main question, however, is: Were the deeds, first to the assignees and then to Watson Investment Company, by which the property of Taylor was conveyed, and the decree of the court made and entered February 28, 1930, void and should they be set aside because in violation of the National Bankruptcy Act?

“It is well settled by a -multitude of incontestable authority that the passage of the National Bankruptcy Law 'by Congress renders it the supreme law of the land, binding alike upon State and Federal tribunals. All State insolvency laws in force at the time must yield to it, and can no longer-operate upon persons or cases within the purview of the Federal statute. The latter -does not, indeed, repeal or destroy the State laws on the same subject, but it supersedes them and suspends their operation for the time being.” Black on Bankruptcy, 4th-ed., § 14.

Were the proceedings in the case at bar under the insolvency laws of the State within the meaning of the Federal Bankruptcy Act as construed and applied in the case of International Shoe Co. v. Pinkus, 278 U. S. 261, 49 S. Ct. 108?

Chapter 93 of Crawford & Moses’ Digest contains the State law on that subject, and it was a proceeding under that statute which was held void as in violation of the National Bankruptcy Act in International Shoe Co. v. Pinkus, supra. It is the contention of the appellants that this is a like proceeding. In this contention we think the appellants err. By the first section of chap. 93, supra, (% 5885), in order to begin proceedings it is necessary for the insolvent debtor to file in the chancery court a complaint in which one or more creditors shall be made defendants, asking- to be declared insolvent and for the appointment of a receiver to take charge of the property and to distribute the same among the creditors. The transcript in this case does- not contain any such complaint.

By the 4th section of chap. 93 (§ 5888), it is made the duty of the receiver, under the order of the court or the judge, to convert the assets coming into his hands in money and upon final hearing to distribute it among the creditors, not pro rata, but preferring first the salaries of employees earned within three months and all laborers’ wages; and preferring second and directing payment pro rata among those creditors who should file in court a stipulation for the use of the debtor to the effect that, in consideration of the preference to be thus obtained, the debtor should be acquitted of all further liability in person to such creditors. After making the above payments, the remainder of the funds, if any, are to be distributed equally among the other creditors. In none of the exhibits filed by the plaintiffs with their complaints is there any order for distribution as provided by said section, nor is there any such in the order of the court of February 28, 1930, which is sought to be set aside. It is apparent, therefore, that the procedure was not under chap. 93, as claimed by the appellants.

In the bond executed by the assignees the recital is made, “Whereas, said J.P. Taylor has, by his deed of assignment dated November 1, 1929, conveyed all of his property to the above bound Aline Murray and F. N. Burke for the benefit of all of his creditors, under and by virtue of the laws of this State relating to assignments for the benefit of creditors.” The deed of assignment was not made an exhibit with the complaint, but it is apparent from the bond above referred to, which was made an exhibit, that such deed was the first step iu the proceeding. Where any person shall desire to make an assignment of his property for the benefit of his creditors, by § 486, chap. 9, Crawford & Moses’ Dig., it is made the duty of the assignee named in the deed of assignment to take immediate possession of the property and within ten days thereafter to file with the clerk of the court having equity jurisdiction an inventory of the property, together with a bond with good security, which bond shall be conditioned that the assignee shall faithfully execute the trust confided to him under the provisions of said deed and the order of the chancery court or judge thereof in vacation.

There was no inventory exhibited with the complaint, so that we are unable to know whether or not such inventory was made and filed, but, the deed of assignment having been made and the bond filed, it would appear as if Taylor was attempting to proceed under chap. 9, of Crawford & Moses’ Dig., entitled, “Assignment for benefit of creditors,” as contended by the appellees, and from the recitals in the order made this also seems to have been the opinion of the chancellor. As we have seen, § 486, of chap. 9, the first section of that chapter presupposes the mailing of a deed of assignment, makes provision after the deed has been made for the filing of inventory and the giving of bond. By § 487, the assignee is made liable upon his bond for any loss that may occur by reason of his negligence or mismanagement after the property comes into his possession, or for failure to obey the orders of the chancery court in relation thereto, or to carry out the provisions of the assignment. Section 488 provides that the assignment may be contested by any creditor for.fraud. Section 489 provides for limitation as to contest of the assignment. Section 490 provides for the sale or disposition of the property upon a showing made by any one interested that it is necessary, and provision is further made for the time, terms and place of sale and the manner thereof to be determined by the court. Other sections provide for the employment of counsel, for the filing of accounts by the assignee, and for the approval and examination of the accounts by the court.

It is contended by the appellants that as all the requirements of chap. 9, supra, were not complied with, the inference arises that the proceedings were not had under and by virtue of said chapter; and further, that, if they were so had, such chapter was repealed by the enactment of the insolvency law, now chap. 93 of the Digest, and appellants suggest that “a Philadelphia lawyer should be pardoned if, after reading the record presented to the chancery court in the so-called assignment proceeding, he had erred in determining whether assignees were attempting to proceed under chap. 9 or chap. 93.” We confess that the record as presented is somewhat confusing, but from the recitals in the bond and the order of the court of February 28, 1930, it is- clear that the proceeding's were not such as provided by the insolvency act, but more nearly approach the provisions of chap. 9, supra, as contended by the appellees. The right to convey one’s property in any manner one might see fit, including the right to make voluntary assignments for the equal benefit of creditors, is one inherent in the ownership of property and. which existed prior to the enactment of our statute, which merely regulated the previously existing right and surrounded its exercise with safeguards for the benefit of creditors. Boese v. Ring, 108 U. S. 379, 2 S. Ct. 765; In re Ternowski, 191 Wis. 279, 210 S. W. 836, 49 L. R. A. 686; Stellwagen v. Clum, 245 U. S. 605, 38 S. Ct. 215.

In this case it seems that there was first a deed of assignment for the benefit of creditors made by Taylor to the named assignees who proceeded to discharge that trust under the provisions of chap. 9, supra; but soon after the deed of assignment was executed and the bond filed the creditors of Taylor and Watson made a proposition which was acceptable to the debtor. All of his known debts were listed, and these debts Watson, for himself and his associates, agreed to satisfy in consideration of the transfer by Taylor to them of certain lands named and personal property in the hands of the assignees, except one small ■ tract of land and certain insurance policies which Taylor was allowed to retain. Taylor accepted this proposition, and his acceptance put an end to the proceedings. The assignees and receivers were ordered to deliver to Watson Investment Company, a corporation formed for the purpose of administering the estate of Taylor and the estate of other insolvents, and were discharged from further duty and relieved from liability on account of their trust, and Taylor conveyed his property by proper instruments to the Watson Investment Company for the considerations aforesaid. The effect of all this was the same as if, without ever having made any assignment for the benefit of creditors, Taylor should have made the trade with Watson by which Watson agreed to pay Taylor’s debts, and Taylor in consideration therefor agreed to transfer his property to Watson, which trade was concluded by ascertaining from all available sources a list of the creditors and the amounts owing to each, the assumption of these debts by Watson, and the transfer of property by Taylor to Watson. This, we think, is the effect of the proceeding’s as finally consummated. Whatever the proceedings in the court, they were abandoned because the debtors and creditors devised a plan mutually satisfactory and more suited to their desires than the disposition of the matter through the agency of the court and of the assignees, and this proceeding can only be attacked for fraud which would hinder, delay or prevent the creditors from collecting their debts.

Every transaction for conveyance of property may be vitiated for fraud, since good faith is the basis of all contracts. Herman v. McSpaulding, 174 Ark. 184, 295 S. W. 353. But a general allegation to that effect is not sufficient. The complaint must allege facts upon which the conclusion is based. Baxter County Bank v. Copeland, 114 Ark. 316, 169 S. W. 1180. It is true the insolvency of the debtor is alleged, but this of itself is not sufficient to allege or establish fraud (Melton v. State, 177 Ark. 1194, 10 S. W. [2d] 500), although it may, when coupled with other circumstances, create a prima facie presumption of fraud. As this is a proceeding in equity, the general allegation in the body of the complaint, although of itself not sufficient, may be supplied by the exhibits, as these may be looked to to supply the specific facts upon which the general allegation of fraud is predicated, and, when they are the foundation of the action, will control the averments in the complaint, and are presumed to have been considered by the chancellor. Cox v. Smith, 99 Ark. 218, 138 S. W. 978; Moore v. Exelby, 170 Ark. 908, 281 S. W. 671. The most that is alleged is that Taylor was insolvent at the-time of the transfer, and “said deed of conveyance for said real estate and said contract for the delivery of personal property was made with the purpose and intent to hinder, delay and defraud the creditors of said John P. Taylor and was and is void.” Here, it will be seen, is only a general allegation, not of facts, but of a legal conclusion, and an examination of the exhibits to which we may look fails to supply any facts upon which the general allegation may be based.

There is, therefore, no badge of fraud connected with the transaction warranting the interference of a court of equity unless the assignment itself might be so considered. While it might have been an act of bankruptcy, had the debtor belonged to any class coming within the provisions of the bankruptcy act, it by no means follows that it evidenced any bad faith, but rather that it was an act which might well be said to have been prompted by a sense of duty on the part of the debtor and a desire to treat all his creditors fairly and impartially. This is the effect of the holding in Mayer v. Helman, 91 U. S. 496. In Reed v. McIntyre, 98 U. S. 507, in effect it is held that where it appears that a debtor’s assignment is made in good faith, the assignment is not to be impeached as fraudulent simply because it had the effect to prevent one creditor by means of execution levied from securing priority. The court, in that case, quoted with approval from the case of Pickstock v. Lyster, 3 Maule & Selwyn 371, where, speaking of the assignment, it was said that it was “to be referred to as an act of duty rather than of fraud, when no purpose of fraud is proved. The act arises out of a discharge of the moral duties attached to his character of debtor to make the fund available for the whole body of creditors. # * * It seems to me that this confession, so far from being fraudulent, was the most honest act the party could do. He felt that he had not sufficient to satisfy all of his debts and he proposed to distribute his property in liquidation of them.”o

In the case of International Shoe Co. v. Pinkus, 278 U. S. 261, 49 S. Ct. 108, the assignment was held to have been made for the purpose of hindering and delaying the creditor in the collection of his debt, but the facts there are quite different from those of the case at bar. In that case a creditor had proceeded to reduce his account against the debtor to judgment, and immediately thereupon the debtor filed a proceeding under the State insolvency statute (chap. 93, of the Digest), which necessarily had the effect found by the court; but here the debtor, a farmer, before any proceedings were begun by the creditors, realizing his involved condition made a general assignment for all of them, which, as was said in Pickstock v. Lyster, supra, “was the most honest act he could do.”

The act of 1897, chap. 93, supra, is an insolvency law, and is so recognized by a number of our decisions, (Hickman v. Parlin-Orendorff Co., 88 Ark. 519, 115 S. W. 371; Baxter County Bank v. Copeland, supra; Morgan v. State, 154 Ark. 273, 242 S. W. 384), and, so far as it is in conflict with the National Bankruptcy Act, was superseded thereby, Baxter County Bank v. Copeland, supra. And as it classified creditors, preferred those of a certain class, and gave preference to all others fully discharging the bankrupt in consideration of a pro rata distribution among them, operated within the field occupied by the bankruptcy act. International Shoe Co. v. Pinkus, supra.

But, as we have seen, it appears that the proceedings in the instant case were begun by an assignment to a trustee for the benefit of creditors and was sought to be conducted under chap. 9, of the Digest, supra, and had the debtor’s estate been fully administered under ihe provisions of that chapter, we are of the opinion that those provisions, being essentially different from those of the insolvency act of 1897, were not repealed by the passage of that act as contended by the appellant. Nor is it an insolvency act within the meaning of International Shoe Co. v. Pinkus, supra. This act provides for no classification of creditors nor preference to one class of such over another; nor does it provide for the discharge of the debtor from any claim or class of claims. It simply regulates the exercise of a common-law right, to-wit, the fight of assignment for the equal benefit of all creditors, and, by certain salutary provisions, safeguards the administration by the trustee for the interest of the creditors. The manifest purpose of the assignment and the statute regulating such is to provide for a fair and equal distribution of the assets of the debtor among his creditors and the case of International Shoe Co. v. Pinkus, supra, and such other cases, holding’ a State insolvency act superseded by the National Bankruptcy Act, have no application.

In Stellwagen v. Clum, 245 U. S. 605, quoting from page 616, 38 S. Ct. 218, it is said: “In the argument of counsel of the defendant in error, the position is taken that the bankrupt act suspends the operation of the act of Ohio regulating the mode of administering assignments for the benefit of creditors, treating the latter as an insolvent law of the State. The answer is, that the -statute of Ohio is not an insolvent law in any proper sense of the term. It does not compel, or in terms even authorize, assignments; it assumes that such instruments were conveyances previously known, and only prescribes a mode by which the trust created shall be enforced. It provides for the security of the creditors by exacting a bond from the trustees for the discharge of their duties; it requires them to file statements showing what they have done with the property; and affords in various ways the means of compelling them to carry out the purposes of the conveyance. There is nothing in the act resembling an insolvent law. It does not discharge the insolvent from arrest or imprisonment; it leaves his after-acquired property liable to his creditors precisely as though no assignment had been made. The provisions for enforcing a trust are substantially such as a court of chancery would apply in the absence of any statutory provision.” To the same effect are the cases of Mayer v. Helman, supra; Boese v. King, 108 U. S. 379, 2 S. Ct. 765; Pogue v. Rowe, 236 Ill. 157, 86 N. E. 207; In re Gutwillig, 92 Fed. 337; Davis v. Bohle, 92 Fed. 325; In re Farrell, 176 Fed. 63; Green v. Rice, 32 Fed. 504, 186 Pac. 249. Chapter 9 is similar in all respects to the Ohio statute referred to and construed in Stellwagen v. Clum, supra.

The statement is made by the appellants that the debtor Taylor was a farmer and engaged principally in farming, and upon that statement appellee insists that, even though Taylor had been proceeding under the State insolvent law, chap. 93, supra, as to him and those of his class, the act is not superseded by the National Bankruptcy Law, and that the chancery court might have proceeded to administer his estate under the provisions of the insolvency act, and its orders would have been valid. We pass this point as a decision of it is unnecessary in the instant case, for it follows from what we have said that the appellant must fail in this case; first, because the proceeding as finally consummated was a mere transfer by the debtor to another of his property with the express undertaking on the part of the grantee to pay the debts of the grantor, and that this transfer was not made to hinder, delay or defraud the appellant, and was not a proceeding under any statute, but the exercise of a right given him by common law. Second, that the order of the chancery court complained of did not attempt to prefer any creditor over the appellant, and in fact did no more than give its approval to the bargain made between Taylor and Watson and to discharge the assignee from any further duty after surrendering to Watson what property they might have held under the deed of assignment and to relieve them and their surety of liability on their bond. Third, that the proceedings, vis., the deed of assignment, the filing of the bond in the chancery court, and the order of the court made, was not a proceeding under the State insolvency act, and was not in conflict with or superseded by the National Bankruptcy Act.

The decree of the court below must therefore be, and it is, affirmed.


source: Caselaw Access Project

author: Btjtler, J.

license: Public Domain

text:
    Coca-Cola Bottling Company v. Bennett.
    Opinion delivered October 5, 1931.

      Buzbee, Ptujh .& Harrison, for appellant.

      Pace Davis and R. W. Robins, for appellee. .
   Btjtler, J.

Mrs. Laura Bennett purchased a bottle of Coca-Cola from one Ward, Who had bought the Coca-Cola he vended from the appellant company. The bottle of Coca-Cola purchased by the appellee was opened by Ward in the presence of the customer. The opener used, in removing the cap from the bottle, was fastened on the edge of the “lard table” in Ward’s grocery store and was “just a nail opener.” The bottle was closed by a metal cap and was opened by inserting the cap under the nail opener and pressing down, thus removing the cap.

Mrs. Benuett testified that she was watching’ Ward when the bottle was opened. She had been chewing a flavored chewing gum just before she drank the Coca-Cola and stated that the Coca-Cola tasted peculiar, but that she thought it might have been on account of the gum she had been chewing; that she ' did not examine the bottle. She drank nearly all the contents when she felt some foreign substance in her throat and ejected it from her mouth'to- the sidewalk when it was discovered to be a 'large worm badly decayed, which mashed as it hit the sidewalk. It had a large head and two little horns. This worm was seen in the Coca-Cola that Mrs. Bennett spit up by the grocer and his wife, both of whom were present at the time. Mrs. Bennett became sick and sent for a doctor who testified that she was quite ill when he reached her and was vomiting and suffering from pains in the abdomen. He administered to- her a hypodermic and saw her twice a day for a week or ten days and once a day for about three weeks. The doctor further testified that she' occasionally has cramping spells and her present condition is caused by gastritis or colitis and that a partially decomposed worm could cause this condition; that so far as he knew she was a healthy woman before this time.

Mrs. Bennett brought suit against the appellant company for damages and recovered a verdict of $500 in the court below. The appellant company, at the conclusion of the testimony moved for a peremptory instruction which was refused, which refusal is the error assigned for the reversal of the case.

The contention of the appellant is that as a matter of law the prima facie case established by the appellee when she testified that she became sick as a result of drinking a part of a bottle of Coca-Cola which contained a partially decomposed worm was overcome by testimony on the part of the appellant tending to show that the company had used ordinary care in cleansing and refilling the bottle. We are of the opinion that the evidence warranted the jury in the conclusion that the worm was in the bottle of Coca-Cola at the time it was purchased by Mrs. Bennett and that this' case is ruled by the case of Coca-Cola Bottling Co. v. McBride, 180 Ark. 193, 20 S. W. (2d) 862. In that case, as in this, the testimony tending to show that there was a foreign substance in the bottle of Coca-Cola and the appellant company made proof that the bottle was filled with the most modern machinery which washed and cleansed the bottle with a strong alkaline solution heated to about 110 degrees. This solution was contained in four different compartments through which the bottles were passed, rinsing and turning them for about twenty minutes so as to thoroughly clean and remove all impurities. The appellant insists, however, that the instant case is differentiated from the MoBride case in that, in addition to proving the plan and system of cleansing and refilling the bottles, there was testimony in the case at bar not offered in the McBride case to the effect that three inspectors personally inspected the empty bottles before filling them and each of these inspectors, after testifying that they had examined the empty bottles and that each was clean and free from foreign substance, stated in answer to questions that it would not be possible for a worm to get into any of the bottles. Appellant argues that it was more likely for the worm to have gotten into the bottle when the cap was removed than that it was there when the bottle was filled.

The jury however had the right to weigh the testimony of the witnesses who testified as to the inspection in the light of the attendant circumstances, which were that the bottles passed before four 75 watt electric lights which were very bright; that they passed on a belt in front of the inspectors at the rate of 104 bottles per minute. There were three inspectors, Dunham, Henderson and Duvall. One hundred and four bottles passed by Dunham each minute and from there they divided, part passing by Duvall and part by Henderson. Each one of these inspectors testified that he inspected fifty-two bottles per minute and they worked ten hours a day under the bright lights. All of these inspectors testified that no foreign substance was in any of the bottles passing before them, but the jury might have believed from this testimony that their inspection must have been perfunctory considering the number of bottles passing before their eyes each minute and the long hours the inspectors worked; that their confidence in the efficacy of the machinery to properly cleanse the bottles was so great that they deemed a close inspection unnecessary and that they were negligent in the performance of their duty.

It seems to us that the testimony of the inspectors, •considering the nature of the inspection made and the number of bottles per minute passing before them, adds but little weight to the testimony which describes the process of cleansing and refilling the bottles. Certainly, that question was one for the jury as we have stated.

Case affirmed.


author: Hart, C. J.,

text:
    Tyler v. Citizens’ Bank.
    Opinion delivered October 12, 1931.

      Albert G. Sexton and Reed •& Beard, for appellant.

      George E. Morris and Chas. A. Walls, for appellees.
   Hart, C. J.,

(after stating the facts). The record shows that the complaint in this case was filed and summons issued on February 7, 1931. The Citizens’ Bank & Trust Company suspended business and closed its doors on the 29th day of December, 1930; and five days thereafter, the State Bank Commissioner, under the statute, took charge of said bank as an insolvent banking corporation and proceeded to liquidate its affairs. On the 14th day of January, 1931, the Bank Commissioner issued a charter or articles of incorporation to the Citizens ’ Bank whereby all the assets of the insolvent bank were transferred to it under an agreement that the new bank was to assume all the debts of the insolvent bank.

The complaint further alleged, and this is admitted by the -demurrer to be true, that the old insolvent bank could not pay its depositors dollar for dollar, and that the Bank Commissioner, with full knowledge thereof, permitted certain subscribers for stock in the new bank to pay for the same by checking out or drawing their deposits from the insolvent bank for the face value thereof.

It is conceded by counsel for appellees that the allegations of the complaint, which are admitted by the demurrer -to be true, brings this case within the principles of law decided in Krumpen v. Taylor, 183 Ark. 1046, 40 S. W. (2d) 775. There, in considering our Constitution prohibiting the issue of stock by private corporations except for money or property actually received, and our statutes regulating banks, it was held that a new bank could not be legally organized to take over the assets of an insolvent bank by allowing the capital stock subscribed to be paid in checks on the old insolvent bank for the face value of the deposits.

It was also contended in that case that the existence of a corporation could be questioned only at the instance of a suit by the State. We pointed out in that case that the legality of the new corporation was not an issue to be decided. The question before the court was whether or not the sale of the assets of an insolvent bank to a newly organized bank, which had been erroneously or illegally organized, should be ratified or approved by the chancery court. *We are asked to overrule the decision in that case but decline to do so.

The record in the present case is an apt illustration of the reason and justice of that decision. No attack is made by the appellants in this case on the organization of the new bank, in so far as it is transacting a general banking business is concerned. This court only decides questions of law which are raised by the pleadings. The issue in this case, as it was in the Krumpen case, is that it is improvident for the chancery court to confirm and ratify a sale of the assets of an insolvent bank to a bank which was erroneously or illegally organized. One of the reasons given is that the State might question the legality of the new bank at any time it might see fit through its proper officers, and, if the court should decide that the new bank had been illegally or erroneously organized, this would leave the rights of the creditors to be adjusted and administered by persons not legally authorized to do so. The depositors are oftentimes widely scattered, and they would be in an unfortunate situation if their property was legally bound by an irregular transaction.

In the present case, under the allegations of the complaint, the depositors in the old bank are not entitled to receive dollar for dollar on the face of their deposits because the old bank is insolvent. If the Bank Commissioner could allow a new bank to be organized by allowing the stock to be paid by checks on an insolvent bank where the depositors could not be paid the face value of their deposits, this would, in effect, allow the bank which had been illegally organized to administer the affairs of an insolvent bank, and thus jeopardize the rights of the depositors and other creditors. If the Bank Commissioner should allow subscribers to stock in the new bank to pay for the same by checks on their deposits in the old, insolvent bank at the fáce value of the deposits, this would give such depositors a preference over other depositors who did not subscribe for stock in the new bank, and over general creditors of the insolvent bank, and would thus violate our banking statutes which do' not allow preferences except in certain specified instances.

It is not claimed that this case falls within one of the exceptions with reference to preferences. The action of the Bank Commissioner was not an attempt at reorganization of the insolvent bank in compliance with the terms of § 677 of our statutes regulating banks, and the amendment thereto by the Legislature of 1923, Acts of 1923, p. 515; and Castle’s Supplement to Crawford & Moses ’ Digest, § 677. According to the allegations of the complaint, the act of the Commissioner was to grant a charter to a new bank, and no attempt whatever was made to re-organize the old insolvent bank under the statute.

Appellants were depositors in the old insolvent bank; and, whether their deposit was a general or a special one, they had a right to protect it and prevent a preference to other depositors which was not allowed under the statute. They were not parties to the application for the sale of the assets of the insolvent bank to the- newly organized bank and are not estopped by that proceeding. They, as depositors of the bank, were creditors of it, and, having taken no part in the attempted sale of the assets of the insolvent bank to the newly organized one which was never legally accomplished, can in no sense be bound by what was done in that proceeding. Davis v. Scott, 129 Ark. 226, 195 S. W. 383.

It is also insisted that appellants were not entitled to maintain their action because they did not commence it within ten days as prescribed by § 724 of Crawford & Moses’ Digest. This section applies to stockholders, and was enacted for the purpose of allowing them to have the afflairs of the bank taken out of the hands of the Bank Commissioner where the bank has been erroneously turned over to him for liquidation as an insolvent bank, and it has no application to a proceeding of this sort. Under the Acts of 1925, the chancery court of Lonoke County was in session at all times. Sanders v. McClintock, 175 Ark. 633, 300 S. W. 408. The record shows that the order of the chancery court was made on the 14th day of January, 1931, which was only a few days after the Bank Commissioner had taken charge of the insolvent bank for the purpose of liquidation. This complaint was filed at the same term of court at which the order of sale was attempted to be made, and there is nothing’ in the record tending- to show that appellants were guilty of any acts which would estop them from having an attempted sale set aside as being an improvident one for the reasons above stated. It follows that the court erred in sustaining a demurrer to the complaint on this branch of the case.

Appellants also seek in this action to recover the amount of their deposit as a trust fund to which they claim they are entitled as a preference over the other depositors and creditors of the insolvent bank. We do not deem it necessary to enter into a discriminating discussion as to the difference between a general and a special deposit or one which the banlr had no authority to mingle with its general funds. According to all our decisions bearing on the question, the evidence adduced in favor of appellees makes the deposit a general and not a special one. Taylor v. Corning Bank & Trust Co., 183 Ark. 757, 38 S. W. (2d) 557; Little Rock Branch of Federal Reserve Bank v. Taylor, 183 Ark. 632, 38 S. W. (2d) 323; and Taylor v. Dierks Lumber & Coal Co., 183 Ark. 937, 39 S. W. (2d) 724.

According to the testimony of the president of the insolvent bank, the insurance draft was deposited in the bank by J. E. Tyler upon the condition that no checks were to be drawn upon it until the draft had been collected. This condition was entered into because the bank did not wish the draft to be checked against until it had been actually collected and the proceeds were in the hands of the bank. After the draft had been collected, Tyler drew several checks upon the fund, the largest of which was something over $1,500, and these checks were paid by the bank. On the other hand according to Tyler, he had deposited the draft with the bank as a trust fund upon the agreement that the bank would pay certain specified debts due by Tyler and then deliver the balance to him in money. This was done because Tyler had purchased a tract of land, and the vendor refused to take anything in payment thereof but money. The chancellor found this issue of fact against appellants, and it cannot be said that his finding is against the preponderance of the evidence. On the other hand, the testimony of the president of the bank is to some extent corroborated. The record shows that several checks, one of which was for over $1,500 were drawn by Tyler and paid by the bank after it had collected the insurance draft. If the deposit was to be a special one and constituted a trust fund, the original agreement would have been all that was necessary, and the bank would have been bound to pay the debts provided for in the agreement and to pay the balance to Tyler. The fact that checks were drawn in the usual manner payable to the debtors of Tyler and honored by the bank, tends to show that the deposit was a general one and that the cheeks were drawn in the usual course of business. It seems that a deposit slip was not given to Tyler at the time of the deposit of the insurance draft because there was a condition attached to the deposit that Tyler should not cheek upon the account until the insurance money had been collected by the bank. This was to protect the bank in case the insurance company would not honor the draft without the policies being attached to it or for any other reason.

The result of our views is that the decree adjudging the deposit to be a general and not a special one was correct, and the decree in that respect will be affirmed; but the court erred in dismissing the complaint for want of equity because tbe chancellor erred in holding that the sale of the assets of the insolvent bank to the newly organized bank was not improvident for the reason that some of the subscribers for stock in the newly organized bank were allowed to pay for same by checks on the insolvent bank at the face value of their deposits when the Bank Commissioner knew that they were not worth their face value. Therefore, the decree will be reversed on this branch of the case, and the case will be remanded with directions to the chancery court to overrule the demurrer and for further proceedings in accordance with the principles of equity and not inconsistent with this opinion.


author: Hart, C.. J.

text:
    McGraw v. State.
    Opinion delivered October 12, 1931.

      Fred A. Snodgress, for appellant.

      Hal L. Norwood, Attorney General, and Pat Mehaffy, Assistant, for appellee.
   Hart, C.. J.

Jerry MoGraw prosecutes this appeal to reverse a judgment of conviction against him for murder in the first degree upon a verdict fixing his punishment at'life imprisonment in the State penitentiary.

The first assignment of error is that the evidence is not legally sufficient to sustain the verdict.

According to the testimony of Clark Fulton, he lived at Jacksonville, Pulaski County, Arkansas, about 175. yards from the home of Jerry MoGraw. Between six-thirty and seven o’clock one morning, his children cried out that Jerry’s house was on fire. He at once started towards the house and saw Jerry before he got there. He went to the kitchen door, and there was no fire in the kitchen; but the ‘living room next to it had been consumed when he got there. The door from the kitchen to the living room was shut. He then said, “Let’s pull this window open and see where the woman is.” They pushed a window of the front room open, and the flames came out. Jerry did not ask them to help him get his wife out, and they did not hear her cry for help.

According to the testimony of Clayton Carradine, who lived back of the home of the defendant, he first saw smoke coming out of the defendant’s house, and called to him two or three times. When he got to the defendant’s house, he didn’t have on any shoes or hat. He did not at that time say anything about his wife being in the house. They found both the front and back doors of the front room locked. The back door led into the kitchen. He did not hear Jerry’s wife making any cries for help. He lived about thirty yards from the defendant’s house, and the front room where the body of .Jerry’s wife was found, was all on fire when he got there. Jerry was ont at the back of the house, and his hair was singed. He was fixing to go over there when he saw Jerry come out of the house. When he got there, no one could have gone in the front room of the house.

According to the testimony of Bertha Neely, she lived across a vacant lot from the defendant’s house and heard the defendant and his wife come home early in the morning before daylight before the fire. She heard them talking, but couldn’t understand what Jerry had to say. She recognized their voices, and heard Jerry’s wife say, “You did, you did; you know damn well you did.”

According to the testimony of T. W. Littlejohn, he went to Jerry’s house while it was burning, and was among the first to get there. He never at any time heard Jerry make any cry for help to get his wife out of the burning house. A few days later he passed there and examined the locks on the front and back doors, and both doors were locked.

Other witnesses testified about examining the doors and finding them locked after the fire.

According to the testimony of S. E. Thompson, those who found the body put some water on the fire around it. The body was lying across the foot of the bed on the left side with the head of the body to the west. The bed was sitting with its head to the south. The overhead joists of the room had fallen. It seems that one joist missed the foot of the bed, and the other fell somewhere about the middle of the bed, almost right across it. In throwing water over the overhead joists before they burned to ashes, it charred them and left a black place. The skull of the defendant’s wife was washed off and showed that it had been cracked in over the right eye. It seemed as if the skull was mashed in there. The lower limbs were burned to the knees. The biggest part of the clothing1 had been burned up.

According to the testimony of Balph Graham, he examined the head of the defendant’s wife, and there was a cracked place with five or six spangles running out from the cracked place like you would crack an egg. Witness showed on his own head about where the hole or cracked place was, and said that it was about the size of a half-dollar.

Jerry McGraw was a witness for himself. According to his testimony, his house burned down about seven o’clock in the morning* of the 25th day of March, 1931. His clothes and about $80 in money were burned up. He did not set fire to the house. He and his wife returned from a card party at a neighbor’s house about two o’clock in the morning*. He had been living with his wife thirteen years, and did not quarrel with her on the morning* in question. He did not have any insurance on his wife’s life nor upon his household goods which were burned up. His arm was burned while he was runing out of the house. He tried to get his wife out of the house but some burning paper fell on them, and his wife jerked loose from him and ran back in the front room. Witness had gotten up early in the morning and had built a fire in the heater in the front room, and had gone back to bed. The roof of the front room was falling in when he woke up again. He denied shooting in the wall close to his wife’s head on an occasion about eighty days before the fire. On cross-examination, he was asked if he had not done this in the presence of Bertha Neely, and at the same time told his wife that he ought to kill her, and answered that he had not. On cross-examination, he admitted that he had killed the stepfather of his wife, and had been sentenced to eight years in the penitentiary for murder in the second degree on account of it. He denied having had any argument with his wife on the morning* that the house was burned. He admitted that the front door was locked which was their usual custom at night, but denied that there was any lock on the door between the front room and the ldtchen. His wife was asleep when he woke up and discovered the fire. After his wife jerked loose from him and ran back into the front room, he went out of the back door.

Another witness testified that he examined the defendant right after the fire, and saw where some of his hair had been burned off, and that he had a little scar1 on his neck.

Bertha Neely, in rebuttal, testified that just before Christmas preceding the burning of the house, she was at the home of the defendant and saw him shoot a hole through the wall of the house right by his wife’s head, and that he said that he ought to shoot her brains out. She denied that she was intoxicated at the time, but said that the defendant and his wife were both intoxicated.

We have made a rather full abstract of the testimony because the conviction was had and a life sentence imposed upon circumstantial evidence; and counsel for the defendant earnestly insist that a verdict of murder in the first degree is not supported by the evidence.

To warrant a conviction of murder in the first degree, the jury must be satisfied beyond a reasonable doubt that the killing was willful, deliberate, malicious, and premeditated. McAdams v. State, 25 Ark. 405; and Weldon v. State, 168 Ark. 534, 270 S. W. 968.

The proof, however, need not be express or positive. It may be deduced from all the facts and circumstances attending the killing; and if the jury can reasonably infer from all the evidence the existence of the elements of murder in the first degree, as above set forth, it will be sufficient. Miller v. State, 94 Ark. 538, 128 S. W. 353; Davidson v. State, 108 Ark. 191, 158 S. W. 1103; Owens v. State, 120 Ark. 563, 179 S. W. 1014; Tillman v. State, 112 Ark. 236, 166 S. W. 582; and Sneed v. State, 159 Ark. 65, 255 S. W. 895.

The body of Jerry McGraw’s wife was found lying across the foot of the bed in their home. The front room in which the body was found, had been practically destroyed by fire. The roof had fallen in and one of the joists had fallen across the middle of the bed, and one joist had just missed the foot of the bed. Neither of them appeared to have touched the body of the deceased. Her feet and lower limbs had been burned off; and after her head was washed, it was found that her skull had been mashed in over the right eye. One of the witnesses said that it was cracked like an egg, and another said that it seemed like it was smashed in. There was a hole about the size of a half-dollar in her skull. The jury might have inferred from these circumstances that the skull of the wife of the defendant had been cracked by some blunt instrument in the hands of some one. The jury might have thought that if it. had been done by the fallen joists, they would have remained on the body; or the jury might have thought that the fall of the joist would not have cracked in the skull in the manner described by the witnesses.

It is true that the defendant denied setting fire to his house or that he killed his wife. The jury, however, were justified in disbelieving his story. According to his own testimony, he tried to lead his wife out of the house after he discovered the fire. He led her in the kitchen, and when some burning paper from the roof fell on them, she jerked away and went back into the front room. He immediately went out at the kitchen door. Several of the witnesses saw him come out of the kitchen door, and all say that he did not make any outcry or give any warning that his wife was still in the house. It does not appear that his senses were paralyzed. Indeed, according to his own testimony, he was in the possession of all of his faculties. While he denied that the door leading from the front room into the kitchen was locked, other witnesses testified that it was locked. None of the witnesses heard the defendant’s wife make any outcry. One of them lived in the house right across a vacant lot. Another lived only thirty yards away. One of the witnesses testified that she heard them arguing before day on the morning in question, and heard the wife say to her husband, “You did, you did, you know damn well you did.” The jury might have found from this that the parties were quarreling just a short time before the fire was discovered. According to the defendant’s own testimony, after he built the fire in the living room in the heater, he went back to bed, and his wife got up to get breakfast. When he woke up again and discovered the fire, he said that his wife was in bed with him. In a short time after this, her body -was found with the lower limbs all burned up and with her skull cracked in over the right eye. As above stated, the circumstances might have led the jury to believe that the skull of defendant’s wife had been cracked in by some one, and that that person was the defendant. We are of the opinion that the facts and circumstances shown in evidence warranted the jury in finding the defendant guilty of murder in the first degree. It may be that from motives of mercy, because there was no positive proof, the jury, fixed the punishment of the defendant at life imprisonment instead of death. See Houston v. State, 165 Ark. 294, 264 S. W. 869; and Hannah v. State, 183 Ark. 810, 38 S. W. (2d) 1090.

The next assignment of error is that the court erred in admitting the testimony of 'Bertha Neely to the effect that some time about Christmas during the preceding year, the defendant shot a hole in the wall near his wife’s head, and said that he ought to shoot her brains out. This testimony was admissible for the purpose of throwing light upon the defendant’s motive and also was a link in the chain of evidence along with the other facts and circumstances connecting the defendant with the commission of the crime. The threats made by him just about Christmas of the preceding year were made only about three months prior to the homicide and were not too remote to be admissible in evidence. Phillips v. State, 62 Ark. 119, 34 S. W. 539; McElroy v. State, 100 Ark. 301, 140 S. W. 8; Lewis v. State, 155 Ark. 205, 244 S. W. 458; Combs v. State, 163 Ark. 550, 260 S. W. 736; and Crowe v. State, 178 Ark. 1121, 13 S. W. (2d) 706.

The next assignment of error is that the court erred in permitting the prosecuting attorney to ask the defendant on cross-examination concerning his conviction for the killing' of his wife’s stepfather. There was no error in this. It is well settled that the defendant may be questioned, when he becomes a witness in his own behalf, as to specific acts to test his credibility. He admitted on cross-examination that he had been convicted of murder in the second degree, charged to have been committed by killing his wife’s stepfather. The court told the jury that the evidence was admitted for the purpose of testing his credibility as a witness, and for no other purpose. Turner v. State, 153 Ark. 40, 239 S. W. 373; and Bullen v. State, 156 Ark. 154, 245 S. W. 493.

Finally it is insisted that the court erred in allowing the prosecuting attorney to tell the jury that in his opinion the defendant was guilty of murder in the first degree, and should suffer the death penalty. The record shows that the prosecuting attorney told the jury that this was his own opinion under the evidence adduced in the case, and was a mere expression of the attorney’s opinion as to the guilt of the defendant, under the evidence, and was not improper. Dixon v. State, 162 Ark. 584, 258 S. W. 401; Cunningham v. State, 133 Ark. 154, 202 S. W. 27; and McClaskey v. State, 168 Ark. 339, 270 S. W. 498.

We find no reversible error in the record, and the judgment will be affirmed.


author: Smith, J.

text:
    Beard v. Wilcockson.
    Opinion delivered October 12, 1931.

      Jeff Bratton, for appellant.

      Jason L. Light, for appellee.
   Smith, J.

On June 25, 1929, the bookkeeper and agent of W. J. Beard made a return to the tax assessor of Greene County of the personal property owned by Beard. The usual blank was employed in making the assessment, and the various articles of property owned by Beard were set down and assessed, but Beard’s agent wrote opposite each article assessed the present market value, and not 50 per cent, thereof, as is the custom and the law. The blank employed had a column headed “Assessed value as Fixed by Assessor” and another column headed “Equalized Assessed Value.” No valuations were written in either of these columns, and Beard’s assessment list, as filed with the county clerk and as extended upon the tax book by that officer, was made upon the basis of 100 per cent., and not upon the basis of 50 per cent, of the value as required by law.

Upon filing a complaint containing these allegations, Beard prayed that the assessment be reformed and reduced. The taxes assessed amounted to $713.22, and a tender of one-half of that amount was made, and it was prayed that the collector be enjoined from attempting to collect any sum in excess of the amount tendered. A demurrer to the complaint was filed and sustained, and this appeal is from that decree.

The right of the taxpayer to maintain this suit is predicated upon § 5786, Crawford & Moses’ Digest, which provides that: “the chancellor may grant injunctions and restraining orders in all cases of illegal or unauthorized taxes and assessments by county, city or other local tribunals, boards or officers.”

But the taxes here sought to be enjoined are neither illegal nor unauthorized. They may be excessive, but this fact alone does not authorize interference with the collection thereof by a court of equity. The excess results from a mistake made by the taxpayer’s own agent, but the result thereof would be the same had the error been made by the assessor himself, as the taxes are neither illegal nor unauthorized, but are only excessive.

It was said in the case of Clay County v. Brown Lumber Co., 90 Ark. 413, 119 S. W. 251, that the property owner who thinks his valuations as assessed are excessive must pursue the remedy provided by law to obtain a reduction.

Appellant insists that the law has provided no remedy whereby he might have obtained relief, and that he is therefore entitled to invoke the aid of the chancery court. But in this he is mistaken. The assessment here attacked was made pursuant to act 172 of the Acts of 1929 (vol. 2 Acts 1929, p. 841). Section 10 of this act requires the assessor, upon the application of the property owner, to furnish an appropriate blank, which, after being filled out by the property owner, is returned to the assessor. Section 12 of act 172 provides that the valuations as returned by the property owner shall not be conclusive on the assessor, but that officer may make such assessment of the property as he may deem just and equitable, provided the assessor, if he raises the valuation, shall deliver to the property owner a duplicate copy of such adjusted assessment, or shall notify the property owner of his action by first-class mail.

Here the assessor made no change in values, but accepted those returned by the agent of the property owner.

Act 172 created an equalization board, and defined the duties of its members, and required the board to convene on the third Monday in August, after the members thereof had taken the required oath “That he will fearlessly, impartially and faithfully equalize the assessed value of all property assessed and subject to taxation.” Paragraph 1 of § 27 of act 172 provides that the board of equalization “shall raise or lower the valuation of any property to such figure as in the opinion of the board will bring about a complete equalization. ’ ’

Here the assessor accepted the valuation as returned by the property owner, as did also the board o'f equalization, and no request was made that either the assessor or the board change the valuation which the property owner had himself made.

The property owner therefore had a full and complete remedy at law to correct the mistake which he himself had made, and the chancery court therefore properly refused to interfere to enjoin the collection of the taxes complained of. The decree is correct, and is therefore affirmed.


text:
    Vilas v. Vilas.
    Opinion delivered October 12, 1931.

      Fred A. Isgrig, Leo P. McLaughlin and Frank Pace, for appellant.

      Martin, Wootton é Martin, for appellee.
   Smith, J.

On February 5, 1930, Mrs. Susan Wharton Vilas obtained, in the Garland Chancery Court, a divorce from her husband, L. A. Vilas. The court found in that case that the parties had agreed ‘ ‘ as to the rights of the plaintiff in and to the property of the defendant,” and that, pursuant to this agreement, the defendant had created a trust fund of $100,000 for the plaintiff’s benefit.

The court was asked to award the custody of the children — three in number and all minors — to the plaintiff, but this was not done. Upon the subject of the custody of the children, the decree recites that “the care and custody of said minor children of plaintiff and defendant is left to the agreement of the parents, and, they failing at any time to agree upon the care and custody of said children, the same shall be subject to the future determination of this court by appropriate order,” and that “the court doth retain jurisdiction of this cause for the purpose of making such other and further orders as may be necessary from time to time with reference to the custody, maintenance, support and education of the infant children of the plaintiff and defendant.”

By the 29th of September, 1930, the defendant, Mr. Vilas, had obtained possession of all three children and was about to sail with them on a trip to Europe, when Mrs. Vilas filed a petition in the Garland Chancery Court praying that the permanent. custody of the children be awarded to her, and that the defendant be restrained from carrying the children out of the jurisdiction of the court. This petition was heard before the court on oral testimony. The trial began on October 30, 1930, and was concluded November 8, 1930.

A decree was rendered in which the custody of all the children was awarded to the father, but it was provided that “the plaintiff be permitted to visit said children at all convenient times, wherever they may be at such times residing; and that said minor children be permitted, if they desire, to visit plaintiff at the expense of the defendant, for a period of thirty days during- the summer vacation period, and during one-half of the Christmas holiday vacation period, and if said minor children do not desire to visit the plaintiff during such periods, she, the plaintiff, be permitted to visit them at some suitable place, and that the defendant provide suitable quarters outside of his. home for the plaintiff to visit said minor children during such periods, and that the defendant use all reasonable means to facilitate plaintiff’s visiting said minor children.”

The court was requested to modify these directions to require the father to send the children on the visits there provided for to their mother, whether the children wished to go or not, but the court declined to impose the requirement that the father compel the children, over their protest, to make these visits.

In an oral opinion delivered before the rendition 'of this decree the chancellor stated that his conclusion in regard to the custody of the children was largely controlled by the wishes of the children themselves. At the time of the trial in the court below, Ariel, the oldest child, a daughter, was 16 years.old; Jack, the second child, a son, was 14 years old, and Susan, the youngest, a daughter, was 12 years of age.

These children were all examined and cross-examined at great length before the chancellor. The examination of these children appears to have required . about three days, and a large part of the voluminous record before us covers their examination and cross-examination. The testimony of the youngest child covers 186 pages of the record, of which 157 are devoted to her cross-examination.

This testimony makes the fact perfectly clear that all the children have not only a decided partiality for their father, but have also acquired an antipathy for their mother. Mrs. Vilas says that Mr. Vilas is responsible for this unnatural feeling, and this is no doubt true. Indeed, we are convinced that each parent attempted to prejudice the children against the other parent, aud that this has been the fixed purpose of each since the rendition of the divorce decree, which did not award the custody of the children to either parent. Much of the examination and of the cross-examination of the children was devoted to the development of the activities of the parents in this respect.

The rupture between Ariel, the oldest child, and her mother appears to have occurred before there was an estrangement on the part of the other children. Mrs. Vilas testified that the attitude of Ariel was induced by her insistence that Ariel go to school and be obedient to the authority of herself and of Mr. Vilas. On the other hand, the maid, who was herself a grandmother and who had been employed in the Vilas home for the seven years immediately preceding the separation, testified that Mrs. Vilas had said before the divorce that she did not care what Ariel did so that she did not have a baby. The witness was asked on her cross-examination when and where this remark was made and in whose presence, and she answered that it was made to her by Mrs. Vilas in the kitchen of Mrs. ’Vilas’ home and that the cook was present. The cook was not called as a witness.

Mrs. Vilas denied categorically that she had made any such statement, or that she entertained any such feeling towards her daughter. But, whether she made the remark or not, it is evident that Ariel has convinced herself that her mother is indifferent to her, and the breach between Ariel and her mother appears to be complete and irreconcilable.

Mrs. Vilas was asked what she would do with the children if their custody was awarded to her, and she answered that she very much desired the care and custody of Jack and Sue, but that Ariel was an uncertain quantity, and was unwilling- to mind, and was very antagonistic, and we are impressed that, while she would accept the custody of Ariel, this would be done only as an inducement to have the custody of the other children awarded to her.

Ariel testified that she was 16 years old on the 15th of July, 1930,- and she will therefore in July of next year, be 18 years of age, a woman of full age for all purpossess under the laws of this State. Section 4986, Crawford & Moses’ Digest. Jack, the son, testified that he was 14 years old on September 26, 1930, and he is therefore now more than 15 years old. Sue, the youngest child, was 12 years old on August 11,1930, and she is therefore now more than 13.

The examination and cross-examination of Jack, the son, does not disclose the same bitter feeling manifested by Ariel towards her mother, but he repeatedly stated, in effect, in answer to many questions, that he had but little affection for his mother and preferred to live with his father, and that “my legal custody I want to be with my father. ’ ’

The testimony of Sue was substantially to the same effect.

All three of the children had been in the custody of Mr. Vilas for a few months immediately preceding the trial from which this appeal comes, and it is certain that in this interval he had been assiduous in his attentions to the children, and that it was a part of his purpose to estrange them from their mother. Indeed, it is the insistence of Mrs. Vilas that this estrangement has been accomplished by the persistent overindulgence of the children by Mr. Vilas, and that it was the attempt of Mr. Vilas to take the children to Europe which precipitated the present proceeding.

Much testimony was offered by Mrs. Vilas to the effect that Mr. Vilas had an ungovernable temper, and that he had afforded her ample grounds for divorce on that account. The most pronounced act of this kind consisted, in shooting out some of the lights in his home, but this appears to have been done after the separation had become final, and this incident occurred on the last night which Mr. Vilas spent in the home where he had lived with his wife and children for a number of years preceding the final separation.

As to Mr. Vilas’ conduct since the divorce, the court found the fact to be that “he (Vilas) has furnished a home for the children, and kept them together, and seems to have been sober and industrious and loving and kind to them, and kept them all together.” The court below did not find — nor do we find — that Mrs. Vilas is not a proper person to have the custody of her children. On the contrary, testimony was offered by a number of Mrs. Vilas’ friends — persons of the highest social position— that her reputation was excellent.

But we have the 'duty of deciding, under the tragic facts disclosed by the record before us, which parent should have the custody of these children, and our duty in this respect has been defined by act 257 of the General Acts of 1921 (General Acts 1921, page 317). Section 3 of this act reads as follows: “Where the husband and wife are living apart, there may be an adjudication of the court as to their power, rights and duties with respect to the persons and property of their unmarried minor children. In such cases there shall be no preference between the husband and wife, but the welfare of the child must be considered first in determining the custody of such child, or the control of its property. Pending such adjudication the court may award the custody of the child and the control of its property to the father, or the mother as may be to the best interest of all concerned, regarding the interest of the child as of the first importance.”

In the case of Patterson v. Cooper, 163 Ark. 364, 258 S. W. 988, there was involved a contest over the custody of a fourteen-year-old girl between the father and the mother of the child, and we there said: “At any rate, the wishes of the children were consulted, and, while their preference is no;t of controlling importance, it is a circumstance which cannot be ignored, and, as the younger child is now fourteen years old, she has reached an age which would entitle her to select her own guardian, if she had neither father nor mother, subject to the approval of the probate court. . Section 4987, Crawford & Moses’ Digest.

This § 4987 does not, of course, give the children here involved the right to choose a guardian, because they have both a father and a mother, and the statute applies only where the child has neither father nor mother, but we recognized in the Patterson case, supra, that this statute declares the policy of the law to consult the wishes of children who have reached the age of discretion in deciding which parent shall have their custody.

It was said in the case of Lipsey v. Battle, 80 Ark. 287, 97 S. W. 49, in which case the opinion was rendered long prior to the passage of the act of 1921, above referred to, that “courts not only respect the rights and feelings of the parent, but also when the child is of sufficient age they give consideration to its wishes. The child in this case is nearly thirteen years of age. She expressed a decided preference to dwell with her mother. ■So far as this evidence shows, this mother and child are sincerely attached to each other, and this feeling should not be disregarded, nor the ties of affection sundered, unless the welfare of the child clearly demands that she be separated from her mother. We see nothing in the evidence that requires it.” Other cases to the same effect are: Jackson v. Clay, 89 Ark. 501, 117 S. W. 546; Longinotti v. Longinotti, 169 Ark. 1001, 277 S. W. 41; Jackson v. Jackson, 151 Ark. 9, 235 S. W. 47.

At § 745 of Schouler on Marriage, Divorce, Separation and Domestic Relations (6th ed.), it is said: “It is sometimes a question, in proceedings relative to the custody of minors, how far the child’s own wishes should be consulted. Where the object is simply that of custody, the rule, though not arbitrary, rests manifestly upon a principle elsewhere often applied; namely, that after a child has attained to years of discretion he may have, in case of controversy, a voice in the selection of his own custodian. The practice is to give the child the right to elect where he will go, if he be of proper age, and the issue is a doubtful one. If he be not of that age, and want of discretion would only expose him, to dangers, the court must make an order 'for placing him in custody of the suitable person; nor will the choice of the child in any case control the court’s discretion, and the affection of the child fox’ others will not suffice to deprive the parents of custody if fit.”

Here the daughter, Ariel, and the son, Jack, have both passed the ag’e of fourteen. Indeed, Ariel will soon have attained the age when she will not be subject to the order of the court. Now, it is probably true, as Mrs. Vilas insists, that the children have been influenced in the conclusions they have reached, and in the choice they have expressed, by the conduct of their father, but this is the condition with which we 'must deal. There is no question about their preference for their father and their hostility to their mother, whatever the cause thereof may have been, and we cannot ignore this preference.

As to the youngest child we have much greater doubt. She is now only thirteen years old, and if her custody alone were involved we would award her custody to her mother, upoxx the theory and with the hope that if she were given to her mother the association would restore the child’s affection for her mother. Ordinarily, a child of this age needs the mother’s love and care more than the love and protection of the father. But the testimony of this .child makes the fact very plain that she has been influexxced in her choice, not only by her father, but by her sister and her brother as well. She referred to their choice and stated that she preferred to be with her brother and sister in their father’s care.

To award the youngest child to the mother would mean her separation from her brother and her sister, and, in view of their hostile attitude towards the mother, the alienation of the affection of these children for each other would probably result from their separation. We have therefore concluded to affirm the decree of the chancellor to allow all the children to remain together and in the custody of their father. The right of visitation accorded the mother by the decree of the court below is, of course, unaffected by this decision.

The court assessed the costs of this proceeding against Mr. Vilas and allowed plaintiff an attorney’s fee of $2,000, and we are asked to increase this fee to $10,000. Mr. Vilas is shown to be a man of large means. His income prior to 1930 from his investments alone was, according to his own admissions, between twenty-five and thirty thousand dollars per annum, but this income has since been greatly reduced. The showing was made that the expenses of the litigation which had been paid by the attorneys have exceeded the fee allowed by the court, and the majority have concluded that an additional fee of a thousand dollars should be allowed, and that the costs of this appeal should also be assessed against the defendant.

It is the opinion of the writer and Justices Kirby and McHaney that, inasmuch as a final decree of divorce was granted prior to the institution of the present proceeding, the court had no power to require Mr. Vilas to pay the fee of his wife’s attorneys in this case, and they interpret the case of Nelson v. Nelson, 146 Ark. 362, 225 S. W. 619, as so holding.

The Nelson case was called to the attention of the chancellor, but he distinguished the instant case on the ground that the decree of divorce left the custody of the children an open issue, and that jurisdiction of the question of their custody had been specially retained, and this fact, as stated by him, “made it necessary for the court, in continuation of the original case, to decide at this time upon the custody of the children, and I look upon this case as being simply a completion of the former suit.”

The majority of the court are of the opinion that the distinction made by the chancellor is a valid one, and that the present proceeding is, in effect and in fact, a mere continuation of the former suit, and that the court has now jurisdiction to fix a fee to compensate the services rendered by the attorneys since the rendition of the original decree. It is their opinion that this fee is authorized by § 3506, Crawford & Moses’ Digest, which reads as follows: “During the pendency of an action for divorce or alimony, the court may allow the wife maintenance and a reasonable fee for her attorneys, and enforce the payment of the same by orders and executions and proceeding's as in cases of contempt.”

This view of the majority is supported hy the opinion of the Supreme Court of Minnesota in the case of Spratt v. Spratt, 151 Minn. 458, 187 N. W. 227. The opinion in that case recognized the fact that there was a division in the authorities, a number of which were there cited, but the conclusion was there announced that the chancellor had the power to make an allowance to the wife for her counsel fees in a proceeding for a modification of the judgment respecting the custody of the children, although a decree for divorce had been previously granted-

Accepting this view, the majority are of the opinion that an additional fee of a thousand dollars should be allowed, in view of the labor and expense incurred in the prosecution of this proceeding, and the decree of the court below is therefore modified to increase the allowance of attorney’s fees by a thousand dollars. In all other respects the decree is affirmed.

Justices Humphreys and Mehaffy are of the opinion that the entire decree should be reversed, and that the custody of all three of the children should be awarded to Mrs. Vilas.

The Chief Justice is of the opinion that the decree should be modified to award to Mrs. Vilas the custody of Sue, the youngest child, but not that of the two older children.


author: Humphreys, J.

text:
    Schaffner v. McCullough.
    Opinion delivered October 12, 1931.

      Metcalf, Metcalf & Apperson and C. M. Buck, for appellant.

      James G. Goston and J. T, Goston, for appellee.
   Humphreys, J.

Appellee sued Morris Block and appellant in the circuit court of Mississippi County, Osceola District, to recover damages for personal injuries received by him through their concurrent acts of negligence.

After the institution of the suit. Block paid appellee $5,000 under a covenant not to sue him; whereupon appellee dismissed his suit against Block and proceeded against appellant alone. The negligence alleged against appellant was that he negligently parked his truck and trailer diagonally across the concrete road leading from Manila to Blytheville after night without a tail light, causing an approaching car negligently driven by Morris Block to knock a truck in front thereof against appellee and break his leg and otherwise injure him.

Appellant filed an answer denying the negligence charged against him and pleading contributory negligence by appellee as an affirmative defense to the action.

The cause was submitted upon the pleadings, testi-. mony, and instructions of the court, which resulted in a verdict and judgment ag’ainst appellant, from which is this appeal.

Appellant, appellee, and J. T. Holcomb were drivers of trucks and trailers for different owners engaged in transporting lumber from Manila to' Blytheville- During the afternoon of September 19, 1928, the truck being driven by appellant was injured in a wreck so that he could not proceed with his load of lumber to Blythe-ville. After J. T. Holcomb delivered lfis load, he came back and got appellant’s load, and delivered it. He then returned to assist appellant in taking his disabled truck back to Manila. Appellee, in company with Joe Hornberger, came along and loaned appellant a log chain to fasten his truck on the trailer attached to the truck driven by J. T. Holcomb, so that Holcomb could pull appellant’s truck and trailer into Manila. Appellant got in Holcomb’s truck with Mm, and they started with the understanding that appellee would follow along to see that the back truck and trailer followed along as they should. Hornberger discovered that appellant’s truck had slipped down and was scraping the tires of the trailer to which it was attached. They drove along opposite to Holcomb and told him of the injury being done to the tires of the trailer. So he stopped after parking both trucks and trailers as he and appellant thought, off the pavement. The evidence is in dispute as to whether the back truck and trailer were parked on the shoulder of the road or diagonally across the slab or pavement without leaving room for traffic to pass. There was no light on the back end of the rear trailer. After passing appellant and Holcomb, appellee drove his truck and trailer around in front of them and parked. He and Joe Hornberger went back and Hornberger was directed by appellant to go to the rear and strike matches which were given him by appellee to warn approaching oars. Appellant then asked appellee if he had a heavy pole, and, being informed that he did, requested him to get it. Just as he turned to go after it, Block ran into the rear trailer and knocked the trucks and trailers forward. In the movement forward, the front truck struck and injured appellee. The injury occurred about 7:30 p. m. Appellee testified that when he walked back he noticed that both trucks and trailers were parked one-half on the pavement and one-half off, and he knew they should be parked off the pavement, but that he did not tell appellant or advise him to move them off the slab. He also testified that he gave Joe Hornberger some matches and told him to go to the rear and strike them to warn approaching vehicles.

Appellee’s action and recovery was based upon the negligent manner in which appellant’s truck and trailer were parked on the pavement and his failure to light the rear end thereof in accordance with the requirements of the traffic statute. Even though appellant was negligent in these respects, yet the undisputed testimony reveals that appellee knew the conditions and undertook to render a service with his eyes open to the danger of performing same.

Appellant requested a peremptory instruction to which he was entitled under the doctrine of contributory negligence.

The judgment is therefore reversed, and the cause is dismissed.


text:
    Brown v. Vaughan.
    Opinion delivered October 12, 1931.

      W. A. Leach, for appellant.

      8. Brundidge, for appellee.
   Humphreys, J.

This is an appeal from a decree of the chancery court of Prairie County adjudging an execution sale of certain personal property belonging to appellee to be void on the ground that the levy on part of the- property was illegal since same was sold in bulk.

On November 15, 1929, appellant obtained a judgment in said court against appellee for $17,818.08, and a decree of foreclosure of lands described in a mortgage executed bj^ appellee to' him to secure the indebtedness. In addition to the order of sale of the lands, the court also ordered the sheriff that in levying a general execution which appellant had caused to be issued on said judgment with directions to levy same upon certain personal property of the appellee, including his law library, to constitute said appellee the custodian thereof and to sell said library in his office. The sheriff proceeded to the law office of appellee, seized certain property belonging to appellee, listed same, and left it in his custody pursuant to the order of the -court. The return of the execution was to the effect that he sold the property described in the list attached to the execution to appellant at the place designated for the sum of $750.

Appellee filed a motion to vacate the sale on the ground, among others, that the sheriff included in the sale in bulk more property than he levied upon and left in the custody of appellee

Appellant filed a response denying that more property was sold than was levied upon and also' controverting the other grounds set up in the motion.

The court heard testimony adduced by the parties responsive to the issues joined with the result stated above.

The undisputed facts in the record revealed that the sheriff proceeded with the execution to the office of appellee and listed certain property upon which he levied and left same in the custody of appellee; that, after returning to his own office, his attention was called by appellant’s attorney to the fact that he had failed to include in the list one set of American Law Reports, Crawford & Moses’ Digest, and one set of Words & Phrases complete, which appellee owned; whereupon, he added the books mentioned to the list without going back and seeing them and later' advertised and sold all the books upon the list in bulk to appellant for $750.

It is contended by appellant that this is a collateral attack upon the execution sale, and that the written return of the sheriff upon the execution to the effect that he levied upon all the property listed is conclusive and cannot be questioned by oral testimony showing how the levy and list was made. Learned counsel for appellant is in error as to the character of this attack. It is a direct attack upon the levy of the execution issued on the judgment rendered in the cause and the sale of the property thereunder. This being true, the manner and character of the levy was susceptible of proof by oral testimony.

According- to the oral testimony, undisputed, the property specifically mentioned above was not seized by the sheriff. He never reduced the particular books mentioned to possession. He failed to assume dominion over them at the time he made the first list of books ■ when in appellee’s office. It was necessary to do this in order to make a legal levy. 23 C. J. Executions, § 224.

According to the undisputed oral evidence, the whole property, that legally levied upon and that illegally levied upon, was sold in bulk, so that it is impossible to determine how much the property legally levied upon sold for. The procedure necessarily rendered the sale void. Vaughan v. Screeton, 183 Ark. 816, 39 S. W. (2d) 299.

No error appearing, the decree is affirmed.


author: Kirby, J.,

text:
    Burke v. Gullege.
    Opinion delivered October 12, 1931.

      Moore, Daggett Jb Burke, for appellant.

      Jo M. Walker, for appellees.
   Kirby, J.,

(after stating the facts). The contention that this court is without jurisdiction to review the judgment appealed from, because the county treasurer against whom the original mandamus was sought and finally ordered did not appeal, is without merit. The county treasurer responded to- the petition alleging- that she was only a nominal party, and asked that the county judge and the county be made parties in order that the interests of the taxpayers and the county could be protected, and an order was made making them parties for the purpose of defending the suit upon their appearing and asking that it be done. The suit then proceeded as though the county judge and county were the only parties defendant and without regard to whether the judgment pronounced was against them as such, or an order directing the treasurer to pay the warrant, it was but a judgment in fact against the county and from which the county judge could appeal as was done. Section 2293, Crawford & Moses’ Digest; Ouachita County v. Rolland, 60 Ark. 516, 31 S. W. 144.

It was the duty of the judge of the county court to defend, since the interest of the taxpayers was affected by the litigation, the treasurer having refused to defend against it, and he could either have done so for the treasurer in his name or by becoming* a party thereto as was done herein.

The undisputed testimony shows that the warrants issued were in excess of the county revenues of the year in which they were issued and upon a fund which was composed of revenues of the county derived from various sources, as well as from the turnback from the State Highway Fund. Such 'being* the case the warrants were void within the prohibition of the Constitutional Amendment No. 13, as has been repeatedly held by this court. Nelson v. Walker, 170 Ark. 170, 279 S. W. 11, McGregor v. Miller, 173 Ark. 459, 293 S. W. 30; Luter v. Pulaski County Hospital Assn., 182 Ark. 1099, 34 S. W. (2d) 770. In the last cited case many cases on this question were reviewed, and the court there held that the amendment should be construed as it reads — literally.

In Anderson v. American State Bank, 178 Ark. 652, 11 S. W. (2d) 444, it was held, however, that a warrant could be issued under a contract tó be paid out of the Highway Fund derived from the State revenues if it required all of such funds on hand to make the first payment with the deferred payments to be made in the following years out of such fund, the creditor taking a chance of getting the money due him out of the fund after it came into the county treasury. These warrants having been issued to be paid out of the “Special County Road Fund,” which was .composed largely of county revenues, were void, and the court erred in not so holding. Since, however, under the law the county was entitled to certain income from the State Highway Fund to be returned to it under said act of the Legislature (act 63 of 1931), the county court was authorized to make the contract for the payment of these supplies out of such fund, as it did in fact do herein, and the creditor or holder of warrants held void as issued against the revenues of the county contrary to the provisions of the said amendment No. 13 to the Constitution was entitled to payment of his said claim out of such fund when returned to the county treasury, and the right to such payment is not affected by the holding- of the warrants, wrongfully issued as already indicated, invalid.

The warrants being void as issued for an amount in excess of the revenues of the county for the fiscal year, the court erred in holding otherwise, and in directing a mandamus to compel their payment. The judgment is reversed accordingly, and the cause dismissed.


author: Kirby, J.

text:
    Northern Ohio Company v. Williams.
    Opinion delivered October 12, 1931.

      Walter N. Killough, for appellant.

      J. O. Washom, for appellee.
   Kirby, J.

Appellant prosecutes this appeal from a judgment against it for professional services of a physician to the sharecroppers on its farm.

Appellee, a physician, stated he attended the tenants on the farm of appellant at the direction of the farm superintendent or foreman and charged the account for his services directly against appellant company, the owner of the farm. That the calls came over the superintendent’s ’phone, from him or his wife; and during high water the superintendent furnished a motorboat, when there was necessity for its use, to enable him to attend the sick persons, and also a saddle horse was furnished him so he could ride to the houses of the patients on the back of the farm.

The superintendent or manager of the farm admitted this to be true, but said he had the only ’phone on the plantation and rendered the service for the benefit of the sick sharecroppers on the place and not because of any authority to employ a physician for the company, which he said he did not have. He admitted, however, that he had been furnished two or three accounts of the charges against the ■ company for professional services to the sharecroppers on the place, and thought he had sent one of the accounts to each of two of the officers of the appellant company, one to its president which they denied receiving. He also stated that, after the bill was received, he talked with an officer of the company Mr. Cothern, about medical attention to the sharecroppers, and the officer inquired what physician they wanted, and, being told, said he supposed that they would have to furnish the services. He also stated that he inquired what should be done about the accounts of Dr. Williams for services rendered, and the officer replied: “We will have to O. K. it.”

The court instructed the jury which returned a verdict for about one-half the amount sued for.

It is insisted that the agent was without authority to make the contract for professional services of appellee and bind the corporation to the payment thereof, and that the evidence is insufficient to show ratification of the act.

The court properly instructed the jury as to the apparent and implied authority of the agent, and the testimony was sufficient to warrant the verdict, upon-either the ground of apparent or implied authority of the agent or superintendent of the farm, who was in charge of the commissary furnishing supplies to the tenants to make the contract, or ratification of his conduct in procuring the services of a physician after such service was performed. Standard Pipe Line Co. v. Haynie Construction Co., 174 Ark. 332, 295 S. W. 49.

We find no prejudicial error in the record, and the judgment is affirmed.