author: Hart, J.,

text:
    St. Louis-San Francisco Railway Company v. Wardell-Whitton Road Improvement District.
    Opinion delivered March 19, 1923.
    1. Judgment — collateral attack. — A judgment may be attacked collaterally only where it is shown by the record that there was a want of jurisdiction, either of the subject-matter or of the person of the defendant.
    2. Highways — judgment op county court changing highway.— Where the county court, in changing a road so as to run longitudinally on the right-of-way of a railroad company for a short distance, followed the provisions of the special act of 1919 creating the Wardell-Whitton Road Improvement District No. 2 of Mississippi County, its judgment is not void on the ground that no jurisdiction was acquired over the railroad company.
    3. Highways — authority op county court to change highway.— Where the county court was authorized under the special act of 1919 creating the Wardell-Whitton Road Improvement District, to change an existing highway so as to place it longitudinally on a railroad right-of-way if necessary to do so, and such use would not deprive the railroad of the use thereof or materially affect it, it will be presumed that the Legislature knew where the old highway was and that in authorizing necessary changes it had in mind the existing location of the highway.
    4. Highways — location—remedy.—The remedy of a railroad company, aggrieved by the judgment of a county court in changing a highway so as to place it longitudinally on its right-of-way, is by appeal therefrom, and it cannot attack such judgment collaterally by injunction, as the court had jurisdiction of the subject-matter.
    Appeal from Mississippi Chancery Court, Osceola District; Archer Wheatley, Chancellor;
    affirmed.

      STATEMENT OF FACTS.
    This action was instituted in the chancery court by the St. Louis-San Francisco Railway Company against the commissioners of Wardell-'Whitton Road Improvement District No. 2 of Mississippi County, Ark., to restrain them from opening or constructing a highway upon the right-of-way of the railroad company.
    It appears from the record that the plaintiff is operating a line of road through Mississippi County, Ark. The Legislature of the State of Arkansas, by a special act, created Wardell-Whitton Road Improvement District No. 2 of Mississippi County, at a special session of the Legislature in 1919. Subsequently, pursuant to the provisions of the special act, ten petitioners filed a petition in the county court asking for an alteration in the line of the public road in two townships in said county. The county court appointed three viewers, and the public road was changed so as to run longitudinally on the right-of-way of the railroad company for a short distance. In making the change of the public highway the statute regulating the method of procedure in such cases was followed, and-this was in accordance with the provisions of the special act creating the special road improvement district in question. No appeal was taken from the judgment of the county court establishing the public highway parallel with the railroad right-of-way and on a part of said right-of-way. Other facts will be stated or referred to in the opinion.
    The chancellor dismissed the complaint of the plaintiff for want of equity, and the cause is here on appeal.

      W. F. Evans, W. J. Orr, Taylor & Gladish and Gautney & Gautney, for appellant.
    The description of the highway is indefinite -and uncertain, and either takes a strip 20 feet wide longitudinally off the west side of the railroad right-of-way through -section 36, or, -as we construe it, none of the right-of-way is taken except.for crossing -south of -section 36, where the highway continues s-outh and the railroad curves to the west. The report of 'the viewers shows this contention correct, and apparently the county count did not construe its order as taking 20 feet off the company’s right-of-way. Has the county court the power to lay out a highway upon the right-of-way of a railroad company? Sec. 7328, Kirhy’s Digest, as amended hy act 1911. Sloan v. Lawrence, 134 Ark. 127. The Legislature could do it, but its intention must be clearly manifested. 13 R. C. L., Highways, § 34. See also Si. Louis & San Francisco Rd. Go. v. Fayetteville, 75 Ark. 537. Usually it cannot be established longitudinally along a railroad right-of-way. 13 R. C. L., p. 44, sec. 35, citing Bridgeport v. Railroad, 36 Conn. 255; 4 Am. Rep. 63; Ft. Wayne v. Lahe Shore Ry., 32 N. E. 215, 18 R. L. A. 367. Especially Northern Central Ry. v. Mayor, Baltimore, 106 Atl. 159; Mobile <& O. Ry. v. Union City, 194 S. W. 573; Railroad v. Memphis, 148 S. W. 662; 2 Nichols on Eminent Domain, sec. 35iS, 361. County court has no express authority for taking land devoted to a public use. See Railroad v. Railroad, 102 Ark. 492; Railroad v. Fayetteville, 75 Ark. 534. The county court being without power to condemn lands of a railroad company except for crossings, its attempt to take its property otherwise is void and its judgment subject to collateral attack. Portland Ry. Light é Power Co. v. Portland, 181 Fed. 632.

      A. F. Barham, for appellee.
    No uncertainty about description of highway nor about its taking part of railroad right-of-way. The establishment of the road was a proceeding in rem, and the county court’s judgment is not subject to collateral attack unless it appears on its face the court was without jurisdiction.’ Crittenden Co. Lbr. Co. v. McDougal, Í01 Ark. 390; Hall v. Morris, 94 Ark. 519. Court had jurisdiction, and could'have established road in either of two ways. Sec. 3234; Lonolce Cd. v. Carl-Lee, 98 Aik. 346; § 5249, C. & M. Digest; Sloan v. Lawrence Co., 134 Ark. 121. Property not taken without due process of law. Dickerson v. Tn-County Drainage District, 134 Ark. 477. County court had power to take railroad right-of-way for a public use. 20 C. J. 601. Not shown that right-of-way not taken insufficient for railroad use. 20 C. J., 605-606; note to Zehner v. Miller, 24 L. E. A. (N. S.) 383. 10 E. C. L. 201, 202.
   Hart, J.,

(after stating the facts). The change in the road in question was made in conformity with the statutes relating to the establishment and alteration of public highways. No appeal was taken from the decision of the county court establishing the road as laid out by the viewers. Hence the present suit is a collateral attack on the judgment of the' county court in changing the public road.

It is well settled in this State that a judgment may only be attacked collaterally where, by the record, it is shown that there is a want of jurisdiction in the court rendering it, either of the subject-matter or of the person of the defendant. Crittenden Lbr. Co. v. McDougal, 101 Ark. 390, and Blanton v. Forrest City Mfg. Co., 138 Ark. 508.

The special act which created the special road district in question provided that the county court might make changes or alterations in the existing highway by following the method of procedure prescribed by the statute in such cases.

In Sloan v. Lawrence County, 134 Ark. 121, the act' of 1911 relating to the power of the county court to open new roads and to make such changes in old roads as it might deem necessary and proper was held valid, in so far as provides for the taking of private property by order of the county court for a public road, without notice to the interested landowner or a determination of the necessity therefor.

Again, in Dickerson v. Tri-County Drainage Dist., 138 Ark. 471, the court held that taking property for a drainage ditch falls within the State’s right of eminent domain, and the right may be exercised without notice to the property owner and without giving a hearing upon that question. Hence the contention that the judgment of the county court changing the public highway is void because no jurisdiction was acquired over the railroad company is not well taken.

It is next insisted that the judgment of the county court was void because the county court had no jurisdiction to change the existing highway so as to place a. part of it longitudinally upon the right-of-way of the railroad company. We do not think that this fact rendered the judgment of the county court void. The county court was not laying out an entirely new system of highways. The improvement district was organized for the purpose of improving an existing highway, and the county court, under the special act creating the improvement district, was authorized to change the existing highway if it should be found necessary and proper to do so. The special act provided that the method of procedure adopted by the general statute for laying out and altering public highways should be adopted in case a change in the public road should be asked. We must presume that the Legislature knew where the old highway was, and that it was in some places in the county close to and parallel with the right-of-way of the railroad company, and that when it authorized the county court to make the necessary changes in the existing highway it had in mind its location.

In testing the right to attack the judgment of the county court collaterally, the question is one of jurisdiction. If the county court had jurisdiction of the subject-matter, then the injunction will not lie in the present case. As we have just seen, the statute creating the road improvement district authorized the county court to change the existing public highway when it was found necessary to do so. Bearing in mind that the Legislature must be treated to have knowledge of its location with reference to the railroad’s right-of-way, the statute, by necessary implication, authorized the county court to change the highway so as to run along the right-of-way of the railroad company, if necessary to do so and if such use would not deprive the railroad of its use of the right-of-way, or materially affect such use.

Therefore the remedy of the railroad company, if aggrieved by the act of the county court, was to take an appeal from its judgment to the circuit court, and there, on a trial ele novo, to show the court that the laying out of a public highway longitudinally, even for a short distance, on its right-of-way would operate to deprive it of its right-of-way or to materially lessen its use for that purpose. See also Lonoke County v. Carl-Lee, 98 Ark. 345.

It follows that the chancery court was right in dismissing the plaintiff’s complaint for want of equity, and its decree will be affirmed.


source: Caselaw Access Project

license: Public Domain

text:
    Citizens’ National Bank v. Gannon.
    Opinion delivered March 19, 1923.
    1. Bailment — pledge by bailee — ratification.—Where jewelry was deposited with a defendant for safe-keeping, and he pledged it with his co-defendant as security for a loan to himself, the owner is not bound by a simple ratification, but confirmation must rest on some consideration or upon an estoppel.
    2. Compromise and settlement — validity.—Where a bailee of jewelry pledged it as security for a loan to him and. the bailor, becoming discouraged in her attempts to obtain its return, accepted a bill of sale from the bailee “subject to a loan” from the pledgee, the rights of the pledgee were recognized, and the confirmation of the pledge was supported by a good consideration ; the bill of' sale constituting a good compromise and settlement, of which the pledgee could take advantage.
    3. Compromise and settlement — claim without merit. — The settlement of a disputed claim furnishes a sufficient consideration to uphold the terms of a compromise, though the asserted claim is without merit and could not have been sustained in the courts.

      Appeal from Garland Circuit Court; Scott Wood, Judge;
    reversed.
    STATEMENT of Facts.
    This is an action in replevin by Eleanor O. Gannon against Citizens’ National Bank of Hot Springs, Ark., and Frank L. Beed to recover a platinum bracelet containing forty-five diamonds, worth $1,250, a platinum brooch containing twenty-one diamonds, worth $250, a fourteen-carat gold ring containing one diamond, worth $875, a platinum solitaire diamond ring wnrth $500, and a platinum three-diamond ring, worth $1,750, and all of the aggregate value of $4,625.
    The defendants admitted the ownership of the plaintiff in the property, but defended the suit on .the ground that the plaintiff had given the defendant, Beed, the right to deposit the jewelry with the defendant bank as security for a loan obtained by him from it for $2,600.
    Mrs. Eleanor O. Gannon was a witness for herself. According to her testimony, she is the owner of the jewelry involved in this suit. She is well acquainted with the defendant, Frank L. Beed, and in September, 1919, deposited the jewelry with him for safe-keeping, and he never returned it to her. She and her sister drove by Beed’s place of business in Little Bock, Ark., on their way to their country home, about forty miles distant. Mrs. Gannon had the jewelry on her person, and her sister thought that it would be dangerous for her to wear it on the trip. The plaintiff then gave the jewelry to Beed to keep in his safe until she returned. Three or four weeks afterwards she returned to Little Bock, and asked Beed for the jewelry. Beed told her that he had borrowed $2,000 and had deposited the jewelry as security for the loan. Beed did not tell her where he had borrowed the money. He told her that he had borrowed the money for thirty days and would take up the loan at the end of that time. He subsequently told her that he had renewed the loan for sixty days, and would pay it at the end of that time and give her back the jewelry. Reed obtained the $2,000 loan from the Worthen Bank at Little Rock, Ark., and that bank renewed the loan from time to time for eighteen months. During all of this time Reed never told Mrs. Gannon where he had obtained the money. At the end of eighteen months the Worthen Bank demanded payment of its loan. Reed then obtained a loan of $2,600 from the Citizens’ National Bank of Hot Springs, Ark., and paid the Worthen Bank. The jewelry was deposited with the Citizens’ National Bank as security for the loan obtained from it. Both the Worthen Bank and the Citizens’ National Bank thought that Reed was the owner of the jewlery, and loaned him the money upon the faith of it. In the spring of 1921 the plaintiff first learned that Reed had borrowed the money from the Worthen Bank. ' She also learned that he had transferred his loan to the Citizens’ National Bank at Hot Springs. In the spring of 1921, while the plaintiff was in California on a visit, she noticed that a part of her jewelry had been advertised for sale by a salesman of Reed. She returned to Little Rock and asked Reed about the matter, and then learned that the jewelry was deposited with the Citizens’ National Bank of Hot Springs as security of a loan obtained by Reed from it. After talking with Reed about the matter, Mrs. Gannon became discouraged, and consulted an attorney. Her attorney wrote a form of notice to the Citizens’ National Bank, to the effect that the jewelry was the property of Mrs. Gannon. Reed declined to sign the notice, and said that he would take the matter up with his attorney. Mrs. Gannon asked Reed to sign the notice so that the bank would know that the jewelry belonged to her. She wished it as evidence that the jewelry belonged to her. She had nothing at that time to show that she owned it.
    Subsequently Reed signed a bill of sale of the jewelry in favor of Mrs. Gannon. The attorney of Mrs. Gannon then sent a copy of the bill of sale to the Citizens’ National Bank of Hot Springs. This was to notify the bank of Mrs. Gannon’s title to the jewelry. Mrs. Gannon described in detail how she came to own it. It is- sufficient to say that a part of it had been given to her by her husband and that she bought part of it.
    Frank L. Need was a witness for the defendant. According to his testimony, he gave a part of the jewelry to Mrs. Gannon himself, and gave her the money with which she purchased the balance of it, except one piece. She delivered the jewelry to him for the express purpose of enabling hipa to obtain a loan on it. She understood all the time that he had deposited it with a bank as security for the loan.
    Mrs. Gannon was called- in rebuttal, and denied this to be true. The defendants also introduced in evidence the bill of sale of the jewelry to Mrs. Gannon, which was dated May 16, 1921. The bill of sale contains the following :
    “This conveyance is made subject to a loan of two thousand six hundred dollars ($2,600) upon the above described property and interest thereon, owing the Citizens’ National Bank of Hot -Springs, Arkansas, and upon payment thereof by either of the parties hereto, or-any other person, the said Citizens’ National Bank of Hot Springs, Arkansas, is hereby authorized and directed to deliver the above described property to the said Eleanor O. Gannon, grantee herein.
    “And I, Frank L. Need, grantor, hereby covenant with the said grantee that I will warrant and defend the title to the above described property against the lawful claims of any and all persons claiming under, by or through me only, excepting, however, the loan above referred to, for which said property is pledged.’’
    No part of the loan has been paid by Need, and he has become a bankrupt.
    The jury returned a verdict for the plaintiff, 'and the defendants have appealed.

      L. E. Sawyer, for appellant.
    Appellant is entitled to a reversal because appellee knew Reed had pledged the jewelry for an individual loan and acquiesced in the transaction. She also later ratified liis said act. The court also erred in not allowing appellant the opening and closing argument. Estoppel. Jetton v. Tobey, 62 Ark. 84; see also Anderson v. Cox, 42 Ark. 473; note to 25 L. R. A. (N. S.) 761-770; Bank of U. S. v. Lee, 13 Pet. 117-8, 21 C. J. 1176; Van Horn v. Overman, 75 Iowa 421. Silence acquiescence. 21 C. J. 1113, § 116, 1118, § 121, 21 C. J. 1150. 2 Herman on Estoppel and Res Adjudicata, 1061-3, 1065-6; Despard v. Despard, 53 "W. Ya. 463; Forbes v. Page Lbr. Go., 20 Idaho 354; Rothschild v. Title Gtoaranty d Trust Co., 204 N. Y. 458. Execution of the bill of sale was an express ratification of Reed’s acts in pledging the jewelry for his- loan. Appellant’s admission that appellee was the owner of the property, but for its special interest entitled it to open and conclude the argument.

      Schoggen & Shepherd, Martin, Wootton & Martin, for appellee.
    Appellee not estopped by silence, under circumstances of this case. Jetton v. Tobey, 62 Ark. 84. She is the owner of the property, and gave Reed no authority to sell. She only, gave him possession, and that without title would not enable him to convey a better title than he had. Note 25 L. R. A. (N. S.) 762. Cases and -authorities cited by appellant reviewed. Note to 25 L. R. A. (N. S.) 761, supports appellee’s contention. Silence alone is insufficient to work an estoppel. 10 R. C. L. 692, sec. 21. Id. 696-7. L arrest v. Benson, 233 S. W. 916. Court erred in submitting question under instructions 3 and 4. The recital in Reed’s bill of sale to appellee was not :a ratification by her of his act in nledging jewelry. Burden of proof was upon appellee. Secs. 4112, 4113, Crawford & Moses’ Digest, § 1231. Prescott d N. W. Ry. v. Brown, 74 Ark. 606; 86 S. W. 89; Mine LaMotte Co. v. Consolidated Coal Co., 85 Ark. 123, 107 S. W. 174. Sec. 8653, C. & M. Digest. Keller v. Sawyer, 104 Ark. 375; Gilley v. Accident Ins. Co., 96 N. Y. Supp. 282; Lodany v. Assard, 91 Conn. 316; 99 A 762. Plaintiff has right to open and close when it devolves upon him to prove any allegation of his complaint. Bertrand v. Taylor, 32 Ark. 471; Jolmson v. Nelson, 3 Neb. 260, 91 N. W. 52; Huffman v. Aldersen, 9 W. Va. 616; Prescott <& N. W. By. v. Brown, supra; Mine LaMotte Co. v. Consolidated Coal Co., supra, 23 R. C. L. 35, § 107; 1 Thompson on Trials, 231-2. See also Simmons v. Pearson, 61 S. "W. 259, 22 ICy. Law Rep. 1907. A general objection to the giving of all instructions will not avail if any given are correct. Ward v. Sturdivant, 86 Ark. 103; St. L. I. M. S S. By. v. Puckett, 88 Ark. 204; Boach v. Bector, 93 Ark. 521; St. L. I. M. é S. By. v. Carter, 93 Ark. 589.
   Hart, J.,

(after stating the facts). According to the testimony of Reed, Mrs. Gannon let him have the jewelry for the purpose of obtaining a loan on it. Mrs. Gannon denied this, and said that she deposited the jewelry with him for safe-keeping. She did not know that he had obtained a loan on the jewelry until after he had done so. Hence, according to the undisputed evidence, Reed did not act or assume to act as the agent of Mrs. Gannon in obtaining the loan. In such cases the owner may subsequently confirm the sale or pledge of the property, but this he cannot do by a simple ratification. His confirmation must rest upon some consideration upholding the confirmation, or upon an estoppel.

In Lafargue v. Markley, 55 Ark. 423, where a husband sold his wife’s horse, in her absence and without her consent, and executed a bill of sale therefor, this court affirmed a judgment for the recovery of the horse by the wife on the ground that there was no evidence in the case tending to show either an estoppel against her or a consideration for the confirmation of the sale of her horse by her husband. In discussing the question- the court said: ‘ ‘ There was no evidence that he was or assumed to act as her agent, There was no question of agency, and consequently there was nothing to ratify. She could have confirmed the sale, but this could not have been done by a simple ratification. A confirmation, to have been binding upon her, must have rested upon some consideration upholding it, or upon an estoppel.” (Citing authorities).

Here the facts are essentially different. The undisputed evidence shows that Reed executed a bill of sale to Mrs. Gannon to the jewelry in question on the 16th day of May, 1921. Mrs. Gannon, with full knowledge that he had deposited the jewelry with the Citizens’ National Bank as security for a loan of $2,600, accepted the bill of sale and sent a copy of it to the bank. According to her own testimony, she had become discouraged about the matter, after waiting so long for Reed to redeem his pledge of the jewelry, and wanted something to show that she had title to it. He had had the jewelry pledged for a loan for eighteen months, and Mrs. Gannon knew that fact.

The recital in the bill of sale by Reed to her that it was made subject to a loan of $2,600 from-the Citizens’ National Bank, and with directions to the bank to deliver the jewelry to Mrs. Gannon, upon the payment of the loan by either Mrs. Gannon or Reed, was a sufficient consideration for the execution of the bill of sale. This was the fixing of a definite basis of their rights in the property, and amounted to a compromise or a settlement between Mrs. Gannon and Reed.

This court is committed to the doctrine that the compromise of a disputed claim furnishes a sufficient consideration to uphold the terms of a compromise, though the asserted claim is without merit and could not have been sustained in the courts. First National Bank of Mena v. Allen, 141 Ark. 328, and cases cited; Bankers’ & Planters’ Mutual Insurance Assn. v. Archie, 145 Ark. 481, and Fair v. Beal-Burrow Dry Goods Co., 148 Ark. 340. The reason for the rule is that parties unable to agree about matters in dispute may go into court and have their rights adjudicated, or they have the right to settle their differences between themselves in any way they choose.

The bill of sale in this case recognized the rights of the bank to hold the jewelry as security for the loan made to Reed by it, and directed that the jewelry be delivered to Mrs. Gannon upon payment of the loan either by herself or by Reed. This, as we have already seen, was in effect a settlement between Mrs. Gannon and Reed of their differences in the matter, and this was in itself a sufficient consideration for the bill of sale. The testimony in this respect is undisputed. We have no concern as to which party was right. It is sufficient that it settles their differences.

It follows that the court erred in not directing a verdict in favor of the bank, and for that error the judgment must be reversed.

Inasmuch as the case has been fully developed, no good purpose could be served by remanding it for a new trial, and the case will be dismissed here.


text:
    Backes v. Reidmiller.
    Opinion delivered March 19, 1923.
    1. Executors and administrators — lands as assets. — Lands are assets in the hands of an administrator for the payment of the debts of an intestate only where the personal property of the estate is insufficient to pay the debts.
    2. Executors and administrators — application for sale of land to pay DEBTS' — limitation.—While there is no statute limiting the lien of debts against a decedent’s realty, application for sale of such realty to pay his debts must be made within a reasonable time, which is generaly fixed by analogy to the statute of limitations for bringing an action to recover real estate.
    3. Executors and administrators — application to sell land— laches. — Where all of the personal property of an estate, after paying the costs of administration, was turned over to decedent’s • widow, lands of the estate immediately became subject to the payment of the debts of the estate, and a delay of ten years thereafter without excuse before applying for sale of such real estate was unreasonable, and will operate as a bar to such sale.
    Appeal from Comvay Chancery Court; W. E. Atkinson, Chancellor;
    reversed.
    STATEMENT OF FACTS.
    On August 9, 1918, Joseph Reidmiller brought this suit in equity against Mrs. Martha Baches and Annie Freyaldenhoven to subject 240 acres of land belonging to the estate of Michael Baches, deceased, to the payment of his claim as a creditor of said estate.
    On November 5, 1902, Michael Baches executed his promissory note to Joseph Reidmiller for the sum of $300, due one year after date, with interest at the rate of 6 per cent, per annum from date until paid.
    On April 1, 1905, Michael Baches executed his promissory note to Joseph Reidmiller for $100, due November 14, 1906, with interest at 6 per cent, from date until paid. In 1907 Michael Baches died intestate, leaving surviv-. ing him his widow, Mrs. Michael Baches, and Annie Freyaldenhoven, his daughter and sole heir at law. Soon after his death J. S. Moose was appointed administrator of his estate. On January 13, 1908, the $300 note above described was duly probated against his estate and allowed by the probate court, and ordered paid. On the same day the $100 note was also duly probated and ordered paid by the probate court.
    In 1908 the widow brought suit against the administrator and the daughter and sole heir at law of said Michael Baches, and ashed that $400, being the proceeds from the sale of the personal property belonging to said estate, be paid over to her, and said amount was paid over to her pursuant to the decree of said chancery court.
    In 1913 J. S. Moose, as such administrator, filed an account current in which he accounted for all the personal property belonging to said estate and obtained credit for the disbursement thereof to the widow, and for costs of administration. The account was duly confirmed by the court, but no order was made discharging the administrator. The administrator, however, proceeded on the theory that he had already settled the estate, and abandoned the further administration thereof. Soon afterwards he left the State of Arkansas and resided in the State of California for two years before returning to this State.
    There are 240 acres of land belonging to the estate of Michael Backes, deceased, and the widow and daughter are in possession of it. Michael Backes kept the interest paid on the $300 note up to the date of his death.
    The court found that there was a balance due on the principal and interest on the two promissory notes ' of $760, and declared the same to be a lien against the lands of the estate of Michael Backes, deceased. It was also decreed that the land should be sold by a special commissioner to satisfy the lien.
    The defendants have duly prosecuted an appeal to this court.

      Edward Gordon, for appellant.
    The lands of the estate could have been subjected, through the chancery court, to the payment of a valid claim had the administration been closed, the administrator discharged, and the heirs taken possession, but such is not the case. The administrator not having been discharged, the probate court only had jurisdiction. Const. 1836; § 34, art. 7, Const. 1874; Crawford & Moses’ Digest, § 2256; Biscoe v. Butt, Admr., 5 Ark. 305; Trimble v. Jones, 40 Ark. 393; State v. Both, 47 Ark. 222; Meredith v. Scullin, 51 Ark. 366. Flash v. Gresham, 36 Ark. 529; Hawkins v. Layne, 48 Ark. 544. Probate court can compel discovery of assets of estate. Moss v. Sanders, 15 Ark. 381; Welsh v. Lloyd,, 5 Ark. 367. Cán determine whether creditors have lost rights by laches when. Brogan v. Brogan, 63 Ark. 405. See also on question of jurisdiction of probate court, Ark. Valley Trust Go. v. Young, 128 Ark. 42. Has exclusive original jurisdiction of estates of deceased persons, and chancery court cannot take cognizance on grounds of ordinary equity jurisdiction, 31 Ark. 63. Claim is barred by 10-year statute of limitations. Section 6959, Crawford & Moses’ Digest.

      Strait & Strait, for appellee.
    The correctness of appellee’s claim is not disputed, nor that same was duly probated. There are no personal effects in hands of administrator, who has filed final report, and the heir appellant is in possession of the real estate. Suit was brought within less than five years after final settlement. Cause of action not barred. Fort v. Blogg, 38 Ark. 174; Breining v. Lippincott, 125 Ark. 77; Jackson v. MicFfabb, 39 Ark. 116; Lester v. Bemis Lbr. Go., 71 Ark. 379. Equity has jurisdiction to charge real property in possession of the heir with payment of probated indebtedness. Hall v. Breiver, 40 Ark. 433, Hill v. Ewing, 31 Ark. 234; Hitch v. Skaggs, 53 Ark. 291; Burton v. Anderson, 56 Ark. 474; Jones v. Franklin, 30 Ark. 631; Hendricks v. Keene, 32 Ark. 714; Hall v. Cole, 71 Ark. 601; Cole v. Hall, 85 Ark. 144. Even if administration not closed. Hall v. Brewer, 40 Ark. 433.
   Hart, J.,

(after stating the facts). Lands are only assets in the hands of an administrator for the payment of the debts' of the intestate where the personal 'property of the estate is'insufficient to pay the debts. Doke v. Benton County Lumber Co., 114 Ark. 3. There is no statute in this State limiting the lien of a decedent’s debts against his realty. But it has been uniformly held that an application for the sale of a decedent’s realty to pay his debts must be made within a reasonable time, and such time has been generally fixed by analogy with the statute of limitation for bringing an action to recover real estate. The reason upon which the limitation is placed is that the heirs are entitled to the possession of the real estate in order that they may improve and enjoy it as early as a just regard for the rights of creditors will permit,

In Roth v. Holland, 56 Ark. 633, in discussing the question the court said: “But delay .on part of creditors alike postpones the unconditional enjoyment of the heir and deters him from improving oi selling his inheritance, whether it relates to the procuring of letters or of an order of sale; and if it is sufficient to bar the power to sell in one case, for exactly the same reason it should be in the other. Delay in taking out letters, and delay in applying to sell after they are taken out, alike keep alive uncertainty in the tenure of the heir, and are alike due to the nonaction of the creditor. Nor, although letters are issued upon application of the administrator, it is within the power of creditors to compel administration after thirty days from the debtor's death, and, if it is delayed, it is as much due to them as is the delay in applying for leave to sell. Our conclusion-therefore is that the right to sell is lost by delay in administering, whenever a like delay after administering, in procedings to sell, would forfeit it. Unknown Heirs of Langworthy v. Baker, 23 Ill. 491; Richard v. Williams, 7 Wheat. 116. See also, Brogan v. Brogan, 63 Ark. 405, and Brown v. Nelms, 86 Ark. 368, and cases cited.

It appears from the record that letters of administration were granted upon the estate of Michael Backes, deceased, soon after his death in 1907. The present action to subject the land belonging to his estate to the payment of his debts was not begun until August 9, 1918. The personal property of the estate was turned-over to the widow in 1908. The administrator filed an account purporting to settle all the funds belonging to the estate in his hands in. 1913. While he was not formally discharged as administrator, he abandoned the administration of the estate from that time, and soon afterwards left the State for a period of two years. After his return ho took no further stems in the administration of the estate.

As we have just seen, the proceeds of the personal property of the estate, except a small part'used in paying the costs of administration, were turned over to the widow in 1908. The lands then became subject to the payment of the debts of the estate, and no excuse whatever is given for the long delay in applying for the sale of the real estate to pay the debts. Therefore we hold that the delay was unreasonable, and, no excuse having been made for it, the lapse of ten years from the time it became known that the land would be needed for the payment of debts until the present suit was brought will operate as a bar to a sale thereof.

In this view of the case it does not make any difference whether the application should have been made to the probate court or whether chancery was the proper forum, because the administrator had abandoned the administration of the estate before he was discharged by the probate court.

From the views we have expressed it results that the chancellor erred in granting the application of the plaintiff to sell the real estate of the decedent for the payment of his debt, and for that error the decree must be reversed. Inasmuch as the case has been fully developed, the cause will be remanded to the chancery court, with directions to dismiss the complaint of the plaintiff for ,want of equity.


author: Smith, J.

text:
    Arnold v. Mansfield Lumber Company.
    Opinion delivered March 19, 1923.
    Sales — estimate of prices for building material subject to change. — Where defendant submitted an itemized bill of the material required to build a house to plaintiff, who noted prices opposite each item, and 8 days later defendant ordered a substantial portion of the bill, and from time to time ordered the balance of the material, evidence held to sustain a finding that there was no contract to furnish the material at any fixed price, and no obligation to furnish it except at prices current at the time of delivery; the estimate being in legal effect a, price list subject to change.

      Appeal from Sebastian Chancery Count, Pont Smith District; J. V. Bourland, Chancellor;
    modified.

      T. S. Osborne, for appellant.
    Appellant contracted for the lumber at specified prices, and the evidence shows she was charged much more, and judgment should be reduced accordingly.

      Daily & Woods, for appellee.
    Appellee only furnished a preliminary estimate in first instance, appellant bought other and different kinds, grades and quantities of materials, was not overcharged on any items, and received proper credit for all materials returned.
   Smith, J.

This is a suit on an account for the material to build a house on a lot owned by appellant in the city of Port Smith, and there is involved here only the correctness of the account sued on. When the cause came on for trial, appellant, the defendant below, admitted that all the material set out in the exhibit to the complaint had been sold and delivered to her, and had gone into her building, and that plaintiff was entitled to a lien on the house and lot for whatever amount was due, and that the only questions at issue were certain alleged overcharges on specified articles furnished and the failure to give credit for articles returned.

The important question in determining the amount for which plaintiff should have judgment is the price of the material, as there is -no dispute about the quantity.

Only two witnesses testified, one being the husband of the appellant, who Nas her agent' in the transaction; the other was Mr. Reeves, the general manager of the plaintiff company.

Reeves testified as follows: He personally sold and checked out the bill of lumber sold Mrs. Arnold, and the itemized statement thereof attached to the complaint is true and correct. The exhibit B, introduced by Mr. Arnold, was also true and correct, the latter being a statement of account furnished Mr. Arnold in August after the material had been sold and delivered in the preced ing June and. July. Mr. Beeves also testified that an exhibit A, introduced by Arnold, was a correct preliminary estimate of the cost of the material Mrs. Arnold would require, which witness furnished Arnold oh June 9th. The material was not bought at that time, and there was a difference in the quality and quantity of material. The estimate was never referred to again, and the sales were not made thereunder. Mrs. Arnold bought two or three times as much stuff as was stated in the estimate. These estimates are furnished on request, and are not contracts. He admitted a door and window had been returned, for which credit should be allowed for $14.90. There was a controversy over 35 pieces of flooring, which witness testified were returned and credited at the price charged, and the same quantity of. a better flooring later furnished at a higher price.

Mr. Arnold testified that his contractor had furnished him an itemized bill of the material that would be required to build the house, and on June 9th he submitted the bill to Mr. Beeves, who placed the price opposite each item, and on June 17th he ordered a substantial portion of the bill covered by the estimate. At the same time he also ordered 25 concrete blocks which were not in the estimate, the price of which was $5. He thereafter ordered a few extras not in the estimate, but the bill was otherwise substantially that covered by the estimate, there being only about $5 difference between the estimated price and the price charged on the articles included in the estimate. At the time witness gave the first order he paid $50 on the bill, and, while nothing was said about the prices covered by the estimate, he assumed the material was being sold in. accordance therewith. A number of items were furnished throughout the month of July, and, when the bill was finally rendered in August, a-higher price was charged for many o.f the articles than that shown on the estimate.

The first question for decision is whether Mrs. Arnold had the right to expect the material to be charged for according to the estimate. Beeves testified that similar estimates were furnished every day, and many of them to persons who never bought any of the items priced, and that the articles delivered to Mrs. Arnold were charged at the prices. current on the day of the delivery, and that nothing was said about the estimate when the material was furnished.

The majority are of the opinion that, under the facts stated, there was no contract to furnish the material at any fixed price, and no obligation to furnish it except at the prices current at the time of the delivery, for the reason that the estimate was, in legal effect, a price list, and in force only at the time made and subject to change to conform to the fluctuations in the market price.

’ It is the opinion of Justice Humphreys and the writer that the estimate furnished should be regarded as an offer to contract, furnished for the purpose of enabling Mr. Arnold to determine whether he would buy all or any of the material covered by the estimate, and an offer which remained open for acceptance for a rea: sonable time, and that eight days was a reasonable time within which to accept an offer to furnish material to build a house. Inasmuch as the order was filled by the man who made the estimate, and all of the material ordered was substantially that covered by the estimate, we think Arnold had the right to assume, in the absence of notice to the contrary, that the material covered by the estimate was being furnished at the prices stated in the estimate.

The court below fixed the current prices on all the items in accordance with the testimony of Beeves, and the view' of the majority approves that finding. There are, however, two errors in the account, even when stated on that basis.

The undisputed testimony shows that a bungalow door, priced at $15, and a door frame, priced at $5, were returned. Credit therefor should have been given for $20, but tlie credit allowed was only $14.90. Sixty-four pieces of flooring were furnished and charged for at 4 cents, and of these 35 pieces, amounting to 163 feet, were returned and credited at 3 cents. Mr. Beeves testified that the 35 pieces of flooring returned were credited at the exact price charged, but such is not the case. The account should therefore be credited with the overcharge of a cent per foot, amounting to $1.63. Later other flooring was charged for at -5 cents per foot, but, under the views of the majority, this was not improper. Mr. Beeves testified 5 cents was the market price of the flooring at the time the last of it was furnished; the explanation was also made by Beeves that the last flooring was of a better quality. A few other items are in dispute, but in each case explanation was offered that the prices had advanced above the estimated prices, or that a. better grade of material was furnished, and the lumber company has, under’the view of the majority, the right to have the items covered by the estimate charged at the prices current when they were furnished; but the account as thus fixed by the court belovv must be credited with the items of $5.10 and $1.63, and, as thus modified, the decree of the court below is affirmed.


text:
    DeCamp v. Graupner.
    Opinion delivered March 19, 1923.
    1, Principal and agent — evidence of agency. — An agent may testify as to his agency and the extent of his authority.
    2. Evidence — pleading—A vendor’s answer in a vendee’s suit to rescind a contract of sale of land for fraudulent representations by the former’s agent, in which the vendor admitted that her husband was her authorized agent, held competent to prove such agency.
    3.. Principal and agent — liability for agent’s fraud. — One is liable for his agent’s fraud, and misrepresentations within the apparent scope of his employment, whether he .authorized or knew of them or not.
    4. Principal and agent — delegation of authority. — Where personal trust or confidence is reposed in an agent, and especially when the exercise and application of the power is made subject to his judgment or discretion, the authority is purely personal and cannot be delegated to another, unless there is a special power of substitution, either express or necessarily implied; but an agent may generally employ others to assist him in the purely ministerial and unimportant details of his duty, or wherever there is a necessity therefor or the employment of subagents is usual and customary.
    5. Principal and agent — ratification of unauthorized act.— Where one without authority made false representations inducing another to buy land, and subsequently became the owner’s agent before the sale was made, the owner was not liable unless she had knowledge of such representations when she executed the deed; knowledge being essential to ratification.
    Appeal from Pulaski Circuit Court, Second Division; Guy Fulh, Judge;
    reversed.

      Sam M. Wassell, for appellant.
    The court erred in excluding the testimony and directing a verdict. St. Louis S. W. Ry. v. Britton, 107 Ark. 158; 154 S. W. 219; 145 S. W. 48; 103 Ark. 199. The agent may testify in regard to his agency and the extent of his authority. Sandford v. Handy, 23 Wend. 260. See Udell v. Atherton, 7 H. A. N. 171 Jur. (N. S.) 777, 3 L. J. Exch. 337, 4 L. T. Rep. (N. S.) 797. Foot note in Goddard Cases on Agency, 774, 2 Howard 311; 91 S. W. 484; 61 Mo. App. 401; 174 Mo. App. 555, 24 L. R. A. (N. S.) 511; 81 S. E. 426; 155 S. W. 979; 71 Atl. 223; Meehem on Agency, sec. 285, note 81; 198 S. W. 272; Words and Phrases, “Estoppel in Pais,” 366; 16 Cyc. 679; Royers v. Galloway College, 64 Ark. 627; 39 L. R. A. 636; 1 R. C. L. 468; 79 S. W. 1013. Implied and apparent authority. Roach v. Rector, 123 S. W. 339; 93 Ark. 521; St. L. I. M. <& S. Ry. v. Jones, 96 Ark. 558,132 S. W. 636; U. S. Bedding Co. v. Andre, 105 Ark. Ill; 150 S. W. 413; Kelley v. Carter, 55 Ark. 116; 17 S. W. 707; 196 S. W. 818. Extent of agent’s testimony. Ayer Land Ins. Co. v. Young, 90 Ark. 104, 117 S. W.' 1080; 135 S. W. 332. Separate answer of appellee was admissible in evidence, 14 A. L. R. 22, and allegations of complaint not denied admitted. 46 Ark. 132,-91 Ark. 30; 120 H W. 393, 46 Ark. 132.
    No brief for appellee.
   Smith, J.

On March 4, 1920, appellant purchased from appellee a house and lot for $5,700, making a cash payment of $700, and executing a number of notes for $100 each, payable one each month, and, in addition, assumed the payment of an outstanding mortgage. He made the payments due in May and June, but declined to make the July payment, contending that a fraud had been practiced upon him.- He brought suit in the chancery court, asking for a rescission, but, as appellee had sold the notes, appellant surrendered the premises and brought suit for damages for the alleged fraud.

Appellant testified that Mrs. Gill, tho saleswoman, showed the house to him and his wife at night, and made a number of representations in regard to it which induced him to ¡buy, but which were in fact false. In the course of this testimony he stated what Mrs. Gill had said about the house, and objection was made to this testimony on the ground that Mrs. Gill’s agency had not been shown. Mrs. 'Gill was then called, and her testimony was objected to on the same ground, and she was told to stand aside, and appellee’s husband was called, and he was asked about his own agency, with the obvious purpose of proving Mrs. Gill’s agency to show the property to prospective purchasers. An objection was made to the first question asked this witness, and the court ruled that “you cannot establish a subagency, or the delegation of authority, by the testimony of either the agent or the delegated agent.”

Appellant then offered in evidence the answer appellee had filed in the suit for the rescission of the contract, in which she admitted that her husband was her authorized agent in negotiating and selling the property, but an objection to this admission was made and sustained.

This exhausted appellant’s proof, and the court thereupon directed a verdict in appellee’s favor, from which is this appeal.

The court erred in its ruling excluding testimony. The existence of an agency cannot be shown by proving the acts and declarations of the agent, but the agent may himself testify in regard to his agency and the extent of his authority. The court should therefore have allowed appellant to examine both appellee’s husband and Mrs. Gill concerning their agency.

The court should also have admitted in evidence the answer in the rescission suit as an admission tending to prove her husband’s agency. Valley Planting Co. v. Wise, 93 Ark. 1.

Appellant also insists that, inasmuch as Mrs. Gill sold the property to him, appellee, by executing the deed, ratified all the alleged false representations made by her in the course of the negotiations leading up to the sale. This may or may not be true, but, inasmuch as the court did not admit the testimony showing the existence of Mrs. Gill’s agency, or the extent of her authority, we can only lay down a few general principles of the law of agency for the guidance of the court on the retrial of the cause, which must be ordered.

One is liable for the fraud and misrepresentation of his agent within the scope of the agent’s employment, and this is true whether the principal authorized or had knowledge thereof or not. See article on Principal and Agent in 21 R. C. L., p. 850, and cases cited in the footnotes. In section 38 of the same article, p. 860, it is said: “It is a general rule that, in all cases of delegated authority, where personal trust or confidence is reposed in the agent, and especially where the exercise and application of the power is made subject to his judgment or discretion, the authority is purely personal, and cannot be delegated to another, unless there is a special power of substitution, either express or necessarily implied. * * * He may, however, as a general thing, employ others to assist him in the purely .ministerial and unimportant details- of his duty. And their acts, when done in his name and recognized by him, either specially or according to his usual mode of dealing with them, are regarded as his acts, and as such binding on his principal. Furthermore, authority to employ subagents or assistants -may be inferred in the absence of an express authorization, wherever there is a necessity therefor or the employment 'of subagents is usual and customary.” The annotated cases cited in the note to the text quoted collect many cases which support the text. See also Roach v. Rector, 93 Ark. 521.

The question of ratification may not enter into the case after it has been fully developed. If the testimony shows that Mrs. Gill was appellee’s agent, and if, acting within the scope of her employment, she made false and’ fraudulent representations in regard to the property, then appellee is responsible therefor, but the responsibility arises out of the general principles of agency stated above, and not by way of ratification. On the other hand, if Mrs. Gill was not appellee’s agent when she made the false representations inducing the sale, if she made them, but became appellee’s agent before the sale was made, then appellee would not be liable therefor, unless she had knowledge thereof when she executed the deed, for knowledge is essential to ratification.

But we proceed no further with this discussion, as we do not know what details will develop when appellant is permitted to examine appellee’s husband and Mrs, Gill in regard to their agency.

For the errors in refusing to permit the examination of these witnesses, and in excluding the answer filed in the rescission suit, the judgment is reversed and the cause will be remanded for a new trial.


author: Humphreys, J.

text:
    Bank of Dyer v. Cole.
    Opinion delivered March 19, 1923.
    1. Mortgages — description of land. — As government lands are described as being in section, township and range, a mortgage which describes the lands conveyed as being in Crawford County, Arkansas, and as being a certain subdivision of 35-10-30, being used in reference to the government surveys, undoubtedly means section 35 in "township 10 north, range 30 west.
    2. Mortgages — identification of indebtedness secured. — The only requirement in the description of an indebtedness' secured by mortgage being that it be sufficient to put interested parties on inquiry, a note was sufficiently identified in a mortgage where the debt was described as evidenced by a promissory note of even date for $600 with interest from date at the rate of 10 per cent, per annum.
    3. Evidence — unstamped note. — An unstamped promissory note dated October 17, 1917, was admissible in evidence; the act of Congress of October 3, 1917, not requiring notes to be stamped till December 1, 1917.
    Appeal from Crawford Chancery Court; J. V. Bourland, Chancellor;
    affirmed.

      James B. McDonough, for appellant.
    Description of land mortgaged to appellee Cole is void for uncertainty. Fuller v. Fellows, 30 Ark. 657; Hotoell v. Rye, 35 Ark. 470; Peters v. Priest, 134 Ark. 161. There w!as no effort to introduce testimony to show description in Cole mortgage could be corrected, and, it being imperfect, appellant’s mortgage constituted a •superior lien. Adams v. Edgerton, 48 Ark. 419; C. & M. Dig., § 1381 and cases. Deeds held void for insufficient description of lands. Jack v. Chaffée, 34 Ark. 530; Howell v. Bye, 35 Ark. 470; Adams v. Edgerton, 48 Ark. 419; Cooper v. Lee, 59 Ark. 460. Appellant’s mortgage contains a correct description of the lands and is a first lien on the 120 acres. Hamilton v. Ogre, 10 Kan. A. 241; Hartigan v. Hoffman, 47 Pac. (Wash.) 217; Miller v. Beardsley, 175 Mich. 414, 141 N. W. 566. Note of appellant not sufficiently described in mortgage. Bowen v. Ratcliff, 140 Ind. 393. Was inadmissible, not being stamped as required by U. S. Revenue Act. Sec. 9, act of Congress 1914; 38 IT. S. Statutes, sec. 755, schedule A; Act 1898, 30 U. S. Statutes at Large, sec. 465. Law was in effect on Oct. 17, 1917. Note to sec. 6318 hh 1919 Supp. to IT. S. Compiled Statutes.

      Starbird & Starbird, for appellee Cole.
    Description of land in mortgage' sufficient. Cooper v. Lee, 59 Ark. 463. Little Bock By. C'o. v. Evins, 76 Ark. 261; Bucker v. Ark. L. <& T. Co., 128 Ark. 180. Note also sufficiently described. 27' Cyc. 1095. Curtis v. Flinn, 46 Ark. 70; Wood v. Cole, 122 Ark. 460; Blackburn v. Thompson, 127 Ark. 450. No stamp was required to be put on note made Oct. 17, 1917. Other laws repealed, and act of 1917 does not require notes stamped made before Dec. 1, 1917. Act Oct. 3, 1917, .sec. 800. 40 IT. S. Statutes, 319. Decree should be affirmed.
   Humphreys, J.

The questions presented for determination on this appeal grow out of a contest between appellant and appellee, J. H. Cole, as to the priority of mortgages held by each on the lands of J. F. Davidson.

On the 17th day of October, 1917, J. F. Davidson and his wife, B. Davidson, executed a mortgage on the following described real estate in Crawford County, Arkansas, to-wit: W½ NW, 35-10-30, 80 acres; W½ NW SW, 35-10-30, 20 acres; W½ SW SW, 35-10-30, 20 acres, to J. H. Cole to secure a note dated October 17, 1917, for $6,000, which was immediately recorded, and upon which $4,967.63 was due May 5, 1922, the day judgment was rendered in this case.

On the 5th day of May, 1921, the Davidsons executed a mortgage to appellant to secure , two notes, one for $885.85 and the other for $3,600, upon the following described real estate in Crawford County, Arkansas, to-wit: W½ NW¼, W½ NW¼ SW¼, and W½ SW¼ SW¼, all in section 35, township 10 north, range 30 west. The mortgage was recorded May 27, 1921. On the 5th day of May, 1922, the day judgment was rendered in this case, $4,734.02 was due upon the mortgage.

In the mortgage executed, by the Davidsons to J. H. Cole the $6,000 note was described as follows: “Whereas, the said J. F. Davidson and B. Davidson are justly indebted unto the said J. II. Cole in the sum of six thousand and no/100 dollars, evidenced by a promissory note of even date for six thousand dollars, with interest from date at the rate of ten per -cent, per annum, if interest be not paid at interest paying time to become principal and bear the same rate of interest.” The note was not stamped with an internal revenue stamp, and appellant objected to its introduction in evidence for that reason, which objection was overruled by the court.

The trial court rendered a judgment against J. F. Davidson in favor of appellant and appellee, J. H. Cole, for t'he respective amounts due them, and decreed a foreclosure of the lands to pay same, but declared the mortgage lien of J. H. Cole prior and paramount to that of appellant.

Appellant contends that the court erred in giving preference to the lien of said appellee for three reasons. First, that the description of the lands in the Cole mortgage Was indefinite; second, that t'he $6,000 note was not sufficiently described in the mortgage; third, that the note was not admissible in evidence because it had not been stamped -with an internal revenue stamp.

The objection made to the description of the lands was that the words “section” before 35, “township” before 10, and “range” before 30, must be inferred in order to definitely describe the lands. We do not think the certainty of the description was dependent upon mere inference. The lands were described as being in Crawford County, Arkansas. The calls in the first part of each description referred unmistakably to United States Grovernment surveys. In government surveys lands are described as being in -sections, townships and ranges in the order mentioned. It is a necessary implication therefore that the figures 35-10-30, used in connection with government surveys, mean section 35, township 10, range 30. The base line is south and the meridian line east of Crawford County, so the lands are situated necessarily in township 10 north, range 30 west. We do not think a surveyor would have any trouble in locating the lands from the description in the mortgage.

The $6,000 note was sufficiently identified in the mortgage. The date and amount were given, together with the interest it bore. The only requirement is that the description be sufficient to put interested parties upon inquiry, which, when followed up, will inform them of the extent of the incumbrance. Word v. Cole, 122 Ark. 457; Blackburn v. Thompson, 127 Ark. 438.

The note was admissible in evidence without being stamped. The act of Congress of October 3, 1917, did not require notes to be stamped until the first day of December of that year. 40 U. S. Stat. 319. The Stamp Act of Congress of 1914 was repealed by an.act of Congress of October 3, 1916, and the clause in the Stamp Act of. 1898, making unstamped notes inadmissible in evidence, had long since been repealed by implication.

No error appearing, the decree is affirmed.


text:
    Coleman v. Owens.
    Opinion delivered March 19, 1923.
    1. Appeal and error — conclusiveness of court’s finding.—The court’s finding that a broker did not warrant the financial condition of a proposed purchaser of stock, being supported by substantial evidence, is conclusive.
    2. Sales — contract held a sale, not an option. — Where each party to a contract of sale of a stock of merchandise at so much on the dollar, the total price to be determined by invoice, deposited in a bank, money to be forfeited to the other in case he should back out, the transaction constituted a sale, and not an option to buy; the forfeit being in the nature of earnest money to bind the contract.
    Appeal from Benton Circuit Court; W. A. Dickson, Judge ;•
    affirmed.

      Sullins & Ivie, for appellant.
    .Undisputed testimony shows that appellee was authorized only to sell to or procure a purchaser able to pay for stock of merchandise and that he failed to do so. Case not controlled by Moore v. Irwin, 89 Ark. 289, since appellee expressly warranted financial ability of purchaser. Express warranty defined. ' Cornish v. Friedman, 94 Ark. 282. Even if no express warranty of financial ability of purchaser appellees did not effect a sale at all. Reeder v. Epps, 112 Ark. 566. White v. Fresh, 106 Fed. 290. No more than as option or agreement to sell. McWilliams v. Philadelphia Co., 159 Pa. 142, 28 Atl. 220; Brickeller v. Atlas Assurance Co., 101 Pac. 16; Swift v. Envin, 148 S. "W. 267; Indiana $ Arle. Lbr. Mfg. Co. v. Pharr, 82 Ark. 573; 9 C. J. 603, sec. 90; 4 E. C. L. 315, sec. 35; note 43 L. E. A. (N. S.) 91; Hansom v. Blanchard, 117 Me. 501, 105 Atl. 291, 3 A. L. E. 545; case should be decided as was Howell v. B-ennett, 145 S. W. 535.

      Duty & Duty and John W. Nance, for appellee.
    The court’s finding as conclusive as verdict of jdry. Boqua v. Brady, 90 Ark. 512; Midland Valley Ry. v. Monroe Bolt Co., 91 Ark. 108; Warren v. Nix, 97 Ark. 374. No testimony to warrant conclusion that purchaser not able to consummate contract, even had there been an express warranty, and there was none. The sale was effected. Fagon v. Fallmer, 5 Ark. 161; Chamblee v. McKenzie, 31 Ark. 155; Gans v. Holland, 37 Ark. 483; Shall v. Harrington, 54 Ark. 305; Lynch v. Daggett, 62 Ark. 592; Priest v. Hodges; 90 Ark. 131; Biggers v. Johnson, 106 Ark. 89; Emerson v. Stevens Grocery 'Co., 95 Ark. 426; Hale v. Matterson, 107 Ark. 230.
    The evidence supports the court’s finding, .and it will not be disturbed. Williams v. Ry., 103 Ark. 401; Hutchinson v. Gorman, 71 Ark. 305. 'Case is controlled by decision in Moore v. Irwin, 89 Ark. 289. The executory contract of purchase having been entered into, it was the business of the vendor to get the purchase money or enforce contract of sale. Moore v. Irwin, 89 Ark. 289; Pinkerton v. Hudson, 87 Ark. 506; 19 Cyc. “Factors & Brokers,” 207.
   Humphreys, J.

This is an appeal from the Benton Circuit Court, challenging the right of appellee' to recover commissions for negotiating a sale of the stock of merchandise owned by appellant to one Hughes. The material issues presented by the pleadings in the trial court and upon which the case turned were, first, whether appellee expressly warranted the financial ability of the proposed purchaser, Hughes; second, whether the contract entered into between appellant and Hughes was for the sale and purchase of said stock or merely an option for the sale thereof. The cause was submitted to the court, sitting as a jury, upon the issues joined and the testimony adduced, which resulted in a verdict that appellee did not warrant the financial condition of the purchaser produced by him, and that appellant accepted said purchaser and entered into a valid contract with him for the sale of said stock of merchandise. Based upon the findings, a judgment was rendered in favor of appellee for a commission in the sum of $237.50.

Appellant’s first insistence for reversal is that the undisputed evidence shows that appellee warranted the financial condition of the proposed purchaser, Hughes, to pay cash for the stock of merchandise on a basis of $1.05 on the dollar, according to the invoice price thereof; that when the invoice was about -completed, showing the total value of the stock to be about $8,500, said purchaser was unable financially to pay for same. Appellant testified that his contract with appellee provided that he should produce a purchaser able and willing to buy the entire stock of merchandise, and that, when he produced Hughes, appellee informed him that Hughes was A No. 1, and had a “barrel of money.” Appellee denied making the statement attributed to him. but, on the contrary, said that when he had found Hughes he and appellant went to Mr. Nowlin, cashier of the American National Bank, and inquired of him concerning the financial ability of Mr. Hughes, and were informed by the cashier that Hughes was A No. 1, whereupon appellant entered into a written contract with Hughes for the sale of the stock at $1.05 on the dollar, the total amount to be determined by the invoice. These conflicting statements made the issue of whether appellee warranted the financial condition of Hughes a disputed question of fact, and the finding of the court against appellant is conclusive. The finding is supported by evidence of a substantial character.

Appellant’s next and last insistence for reversal is that the undisputed evidence shows that the contract was an option to buy, and not a sale of the stock of merchandise; that the purchaser refused to take the stock after the invoice was about completed, and for that reason appellee should not receive a commission' under his contract to sell the stock of merchandise. The record reflects that appellee agreed to sell the stock, or at least to produce a purchaser acceptable to appellant, for which services he was to receive the usual real estate commission of 5 per cent, on the first $1,000 and 2% per cent, on each additional $1,000 shown by an invoice; that appellee produced Hughes, with whom appellant .contracted in writing for the sale-of the stock. The written contract was lost. According to the oral evidence, establishing the contents thereof, it provided for a sale and purchase of the stock for $1.05 on the dollar, the total price to be determined by invoice. The contract was deposited in the American National Bank, at which time appellant and purchaser each deposited $1,000 therewith, to be forfeited to the other in case he should back out. When the invoice was nearing completion, Hughes declined to pay the balance and take the stock. Appellant accepted the $1,000 forfeit which Hughes had deposited in the bank, and made no effort to enforce the contract. He afterwards refused to pay appellee any commission, for the alleged reason that a sale had not been effected. We think that the evidence shows that a written contract had been entered into between the parties which could have been specifically enforced. Appellant arg'ues that the fact that each had placed a forfeiture in the bank stamps the transaction as an option to buy and not to sell. A forfeit presupposes a contract of sale. If not breached, the forfeit money is applied on the consideration for the sale, and if breached is treated as liquidated damages. An option is the payment of a certain amount for the privilege of buying something within a given time. It is quite clear that “forfeit,” as used by the parties to this transaction, was employed in the sense of earnest money to bind the contract for the sale and purchase of the stock, and which should go as liquidated damages to the one without fault in the case the contract was breached. The construction placed upon the contract by the trial court was correct.

The judgment is affirmed.


text:
    Griffin v. Little Red River Levee District.
    Opinion delivered March 19, 1923.
    Drains — levees—limit of tax levy. — Though bonds issued by a drainage district and also those issued by a levee district on their face incorporated as part of their terms the resolution authorizing them, wherein the amount to be levied each year was limited, nevertheless it is within the power of the board of directors of the drainage district and of the board of commissioner's of the levee district to increase the levy if necessary, since that power is reserved to them by Crawford & Moses’ Digest, §§ 3620 and 6826, as the rates fixed in the resolution must be regarded as tentative only.
    Appeal from- White Chancery Court; John E. Martineau, Chancellor;
    affirmed.

      Culbert L. Pearce, Brundidge & Neeley, for appellant.

      The reference in the levee and drainage bonds to the resolutions authorizing their issuance makes them a part thereof as though they were set out therein, and the negotiability of the bonds are limited thereby. The resolution sets out the exact per centum levied and to be collected each year from 1917 to 1941, and states: ‘ ‘ This in lieu of all previous levies.” After the bonds were sold the commissioners of the district twice raised the rate of taxation, which we contend they were without authority to do, notwithstanding the increased rates were within the total assessed benefits to the lands enhanced in the respective districts. 3 R. C. L. 844, § 20; lb. 1076, § 281; 19 R. O. L. 989, § 286; 3 R. C. L. 870, § 54 and cases cited. 19 R. C. L. 1009, § 302; lb. 1014, § 306. 28 Cyc. 1610-1624, Municipal Bonds; 8 O. J. 196-202, Bills & 'Notes; 9 C. J. 47-49, Bonds. McClellan v. Norfolk Southern Ry., 18 N. E. 277. 1 L. R. A. 299; McClure v. Oxford, 94 U. S. 429, 24 L. ed. 129; National Salt Co. v. Ingraham, 122 Fed. 41. Notes to Klots Throwing Co. v. Manufacturers’ Commercial Company, 179 Fed. 813; 30 L. R. A. 41. Myrick v. Purcell, 95 Minn, 113; Ann. Cases, 148; Richardsonv. Thomas, 28 Ark. 387; Rector v. Strauss, 134 Ark. 374. Interest can be required paid on all unpaid portions of assessed benefits. Oliver v. Whittaker, 122 Ark. 291; Jones v. Fletcher, 132 Ark. 328.

      Stephen Moore of Nashville, Tenn.; Maurice A. Wear, of Cassville, Mo., for appellees, Little Red River Dist. 2 and directors.
    The board of directors of the district had authority to increase the rate of taxation. Sec. 6826 Crawford & Moses’ Dig., but not in excess of assessed benefits for any purpose. Rule expressed in Oliver v. Whittaker, 122 Ark. 291; Jones v. Fletcher, 132 Ark. 328, not applicable to levee districts.

      Lamb & Frierson, appellees for Mississippi Trust Company.
    The commissioners of the district had authority to raise the rate of taxation to any extent short of exceeding the amount of benefits assessed against the lands., § 3617 C. & M. Dig.; Ib. 3620. Had authority also to raise rates on levee bonds. Sees. 6826, 6830 C. & M. Dig.; Hoehler v. Worthen, 243 S. W. 822. See Minden-Fdison Light Company v. Minden, 142 N. W. (Neb.) 673. Ralls County Court v. U. S., 105 U. S. 733, 26 L. ed. 1220, 11 Rose’s Notes 872; City of Little Rock v. Board of Improvement, 42 Ark. 152. The rights of bondholders are controlled by the law, not by resolution of the board. Carville v. Road Dist. 2, Craighead Co., 152 Ark. 487, 238. S. W. 777; Hoehler v. Worthen, supra. The one limitation upon amount that can be taxed as a special assessment for a local improvement is that it shall not exceed the .amount of betterments. Cribbs v. Benedict, 64 Ark. 565. Hopgood v. Seattle, 125 Pac. 965.

      Rose, Hemingway, Cantrell & Loughborough, for appellees.
    Loan® are not made unless there is a margin of security. Improvement districts can not borrow the full amount of the assessed benefits. The assessed benefits mark the limit of possible taxation. Kirst v. Imp. Dist. 20, 86 Ark. 2; McDonnell v. Imp. Dist. 97 Ark. 243; Withroiu v. Nashville, 145 Ark. 342. Whether anticipated benefits are realized or not furnishes no escape from payment of assessments thereafter. Salmon v. Long Prairie Dist., 100 Ark. 366; Board .of Directors v. Dunbar, 107 Ark. 290. Assessments of benefits in levee districts also bear interest. Sec. 3643, Crawford & Moses’ Digest. Rtossell v. Board of Improvement, 110 Ark. 20; Yombg v. Red Fork Levee Dist., 124 Ark. 63; Guaranty Loan & Trust Co. v. Helena Improvement Dist., 148 Ark. 56.

      Buzbee, Pugh & Harrison, for appellee Holt, receiver, Judsonia Drainage District.
    County court had authority to increase rate of taxation or levy of percentage of assessed benefits.' Sec. 3620, Crawford & Moses’ Digest; sec. 1, act 136, Acts 1911; Act May 27, 1909. Laws under which bonds issued and providing for payment also read into bonds.' 19 R. C. L. 1009, No. 302. McClure v. Oxford, 94 1J. S. 429. See also Waite v. Santa Cruz, 184 U. S. 302. Resolution of board of directors does not limit provisions of § 3620, Crawford & Moses’ Digest.

      J. C. Counts, of Oswego, Kansas, and G. D. Henderson, amici curiae.

    We contend notes or per centum of 'assessed benefits to be collected annually as fixed by resolutions of the board of commissioners and board of directors are not subject to be increased. Sec. 3620, Crawford & Moses’ Digest, does not authorize it when properly construed. It provides for making additional levies for completing improvements or paying bonds when' tax first levied proves insriffieient. We find no provision in the law authorizing an increase of the rate of levy because collections inadequate. The bondholders should be required to put in operation and rely upon the machinery provided by law for enforcing collection of the as'sesismenf, and not that provided for making the assessment. Argument applies with equal force to § 6826, Crawford & Moses’ Digest, also. The board could only act by resolution, and the resolutions being legislative in scope, have effect of laws. Abbott, Municipal Corporations, § 514; Mason v. City of Shawnee, 77 111. 533; Abbott on “Public Securities,” 300-2; sec. 40 lb. 304. Resolutions part of contract. 5 Cye. 750. Abbott on Public Securities, 575, 509. The resolutions nowhere provide for an acceleration of the rate of taxation, and the holders took the bonds with knowledge of the resolutions and the rate of taxation therein fixed.
   Humphreys, J.

This suit was instituted in the White Chancery Court by .appellants, who are taxpayers in “Little Red River Levee District Number Two,” and in “Judsonia Drainage District,” against the directors of said levee district and the commissioners of said’ drainage district, to enjoin them from raising the rates of taxation above the rate originally specified in resolutions adopted by the boards of the respective districts, and referred to in the face of the bonds issued by said boards for the construction of improvements in each district. Each district was organized under the general laws authorizing the creation of levee and drainage districts.

The board of directors of the levee district issued three installments of bonds, totaling $145,000, and the board of commissioners of the drainage district issued two installments of bonds, totaling $120,000. Reference was made in the face of the bonds to resolutions adopted by each board prior to the issue thereof, in which rates, or per centum, of the assessed benefits to be collected annually for the purpose of paying the bonds were fixed. The resolutions provided a rate in the levee district not to exceed 4.3 per centum of the assessed benefits annually from 1920 to 1935, and 2.2 per centum annually from 1936 to 1941, and a rate in the drainage district not to exceed 3.3 per centum of the assessed benefits annually from 1920 to 1923, and 3.6 per centum from 1924 to 1936, inclusive. The Mercantile Trust Company of St. Louis, Missouri, was named as trustee in the bonds, and deeds of trust were executed to it pledging the entire assessment of benefits against the lands in the respective districts to the payment of the respective obligations. Thereafter the bonds were placed upon the market and sold by the trustee to various purchasers. In 1920 the board of directors of the levee district raised the rate from 4.3 to 4.8 per centum, and in 1921 from 4.3 to 5'per centum. In 1920 and 1921 the board of commissioners of the drainage district raised the rate from •3.3 to 4.1 per centum. This acceleration in rates became necessary in order to meet the payments due upon the bonds, as the revenues derived from the original levies provided in the resolutions were insufficient to do so. The increased rates were within the total assessed’ benefits to the lands embraced in the respective districts. The facts thus detailed are a summary of the allegations contained in the bill of appellants. To this bill separate demurrers were filed by the directors of the levee district and Mercantile Trust Company,.as trustee for the bondholders, and W. S. Holt, receiver for said drainage district under appointment of the United States District Court for tlie Eastern District of Arkansas, who was made a party defendant on motion. The demurrers to the complaint were sustained by the trial court, over the objection and exception of appellants, who refused to plead further. Thereupon the court dismissed appellants ’ bill for want of equity, from which is this appeal.

The contention of appellants is that the rates, or per centum, of the assessed benefits to be collected annually, as fixed by resolutions of the respective boards, were not subject to increase. The reason assigned for the contention is that the resolutions fixing the rates of levy for the years during the period for which the bonds were to run became a part of the bonds by reference, and should be read in connection with the bonds as one instrument, and that the persons purchasing the bonds were chargeable with notice of the contents of the resolutions and were bound by them. The bonds were issued and the resolutions adopted under the laws of the State of Arkansas authorizing them. They must necessarily conform to the laws, and the laws authorizing . them must be read into them as a part thereof. The general law authorizing the creation of levee districts and the issuance of bonds to pay for the improvements therein confers full power on the board of directors of the levee district “to levy a tax upon the betterment estimated to accrue to said lands by reason of said work, sufficient to pay the cost thereof, which said tax mav be paid as a whole or in such annual installments as the board of directors may decide.” Section 6826, Crawford & Moses’ Digest. The only limitation prescribed in the section aforesaid is to bring the levy within the estimated betterment to accrue to the lands within the district. The general law authorizing the creation of drainage districts, and the issuance of bonds to pay for the construction of improvements therein, contains the following provision incorporated in Crawford & Moses’ Digest 'as section 3620:

“If the tax first levied shall prove insufficient to complete the improvement, or to pay the bonds, both the principal and interest, issued by the board of commissioners on account of such improvement, as hereinafter provided, as the same shall become due and payable, the board shall, from time to time, report the amount of deficiency to the county court, and the county court shall thereupon make such levy or levies on the property previously assessed for a sum or sums sufficient to complete the improvement and to pay such bonds and interest, which shall be collected in the same manner as the first levy; provided, that the total levy or levies shall in no case exceed the value of the benefits assessed on such property; and the performance of such duties may be enforced by mandamus at the instance of any person or board interested.”

When the laws authorizing the issuance of the bonds and adoption of the resolutions are read into the bonds, the rates fixed in the resolutions must be regarded and construed as tentative levies only, subject to increase, if necessary to meet payments due upon bonds, provided that the increased levies come within the total assessed benefits against each tract of land within the district. If the rates, or levies, fixed in the resolutions should be treated other than estimates, then the resolutions would conflict with the power vested in the boards under sections 3620 and 6826 of Crawford & Moses’ Digest, authorizing the board of directors of the levee district, and thé county court, at the request of the board of commissioners of the drainage district, to increase the rates originally levied.

The decree is affirmed.

Mr. Justice Hart dissented.


author: McCulloch, C. J.

text:
    Home Mutual Benefit Association v. Rownd.
    Opinion delivered March 26, 1923.
    1. ' Insurance — mutual benefit insurance — liability.—The liability of a mutual benefit association is restricted to the amount specified in the by-laws.
    2. Insurance — mutual benefit insurance — evidence.—In an action on a benefit certificate issued by a mutual benefit association, the by-laws of which were subsequently amended merely by substituting a new name and changing the place of business, the court, acting on the erroneous assumption that there were two distinct corporations, improperly excluded testimony as to the contents of a by-law of the association under its original name restricting its liability.
    Appeal from Sevier Circuit Court; James S..Steel, Judge;
    modified.

      Longstreth & Bohlinger, for appellant.
    Court erred in instructing a verdict for full amount of policy, as no more could be recovered than the circle assessment yielded under the terms of the contract and by-laws of the association. 25 Cyc. 742. Woods v. Farmers’ Life Ass’n, 121 Iowa 44; Wood/men of the World v. Hall, 104 Ark. 538.

      Abe Collins, for appellee.
    Bill of exceptions not filed in time. Sec. 1321 C. & M. Digest. London v. Hutchins, 80 Ark. 415. No error in excluding testimony, and verdict properly directed. Sec. 6077, C. & M. Digest, has no application to this case.

      Longstreth & Bohlinger, in reply.
    Case controlled by Home Mutual Benefit Association v. Roioland, 155 Ark. 450.
   McCulloch, C. J.

Appellee instituted this action against appellant, under the name of Home Mutual Benefit Association, to recover on a benefit certificate issued to appellee’s husband, and payable to her on the latter’s death.

Appellant is a fraternal society, organized under the laws of this State in the year 1914, with its principal office at Fayetteville, and it does business on the assessment plan, the members being divided into groups, or circles, according to age, and when a death occurs an assessment is levied on the members of the circle to which the deceased belonged. The by-laws provide that the society “ shall not be liable for the full face value of the certificate unless full and prompt payment of all assessments shall have been made by all the members of the group to which the deceased member belonged, and in no event shall said certificate have a greater value than the amount paid in by the whole, membership of said group on the last-assessment preceding the death of the insured, after deducting the cost of collecting -said assessment. ’ ’

Appellant filed its answer in its true name, Home Mutual Life Association, and raised no question as to being sued in the wrong name. In some parts of the record the appellant is referred to as the Home Mutual Benefit Association, and in some places it is referred to as the Home Mutual Life Association.

It appears from the proof that, since the organization of appellant society and since the issuance of the benefit certificate to appellee’s husband, the by-laws were amended so as to change the name of appellant from Home Mutual Benefit Association to Home Mutual Life Association, and changing the domicile and principal office from Fayetteville to Little Rock.

Appellant, in its answer, pleaded as a defense an alleged misrepresentation 'by Rownd, the member, with respect to his age, and.also pleaded that, in accordance with the by-laws, appellee could only recover the amount of one assessment upon the members in the group of which Mr. Rownd was a member.

In the trial of the case, after the evidence had been adduced, the court peremptorily instructed the jury to return a verdict in favor of appellee for the amount stated in the policy, without regard to the amount which was raised by the collection of the last assessment prior to the death of appellee’s husband.

The evidence in the case is undisputed that the last assessment preceding the death of W. W. Rownd raised the sum of $382.05, and, according to the by-laws, liability was restricted to this amount. The case is ruled on this subject by our decision in the recent case of Home Mutual Benefit Association v. Rowland, 155 Ark. 450.

The trial court erroneously assumed that it had been showfn by the testimony that appellant, Home Mutual Life Association, 'was a corporation distinct from the Home Mutual Benefit Association, and was the successor of the latter under consolidation proceedings whereby appellant, Home Mutual Life Association, assumed all liabilities of the other corporation. The fact is, however, as shown indisputably by the record, that there are not two distinct corporations involved, 'but that there was a mere change in the by-laws of the Home Mutual Benefit Association so as to substitute a new name and to change the place of business. The court, acting upon the erroneous assumption, refused to let a witness testify as to the contents of the by-laws of the Home Mutual Benefit Association. The court ruled that the witness could not testify on the subject, and that the bylaws could only be proved by the introduction of a properly certified copy.' That ruling would undoubtedly have been correct if there had been another corporation, but appellant introduced the by-laws of the association, properly certified, and the witness should have been permitted to state that there were no other by-laws except those, and that the only change that had been made was with respect to the change of the name and location.

The judgment will therefore be reversed, and judgment will be entered here in favor of appellee for $382.05 as of the date of the judgment 'below. It is so ordered.


text:
    West v. E. V. Cook Mercantile Company.
    Opinion delivered March 19, 1923.
    1. Landlord and tenant — landlord’s liability for crop received in excess of rent. — Where a tenant of land turns over to his landlord cotton in part of which his subtenants have interests which are mortgaged, and gives the landlord a bill of sale on the cotton in satisfaction of the rent due, without the consent of the subtenants or their mortgagees, the landlord was liable to the subtenants and their mortgagees for the proceeds of the cotton in excess of the rent due him, though at the time of the transfer . to him the cotton was not worth the rent, and it was necessary for him to hold it some, time before he was able to sell, it for an amount in excess of the rent. • _
    2. Appeal and error — findings of chancellor. — Findings of a chancellor not clearly against the preponderance of the evidence will be affirmed.
    Appeal from Pope Chancery Court; W. E. Atkinson, Chancellor;
    affirmed.

      U. L. Meade and John M. Parker, for appellant.
    Appellant had the right to buy the cotton when he did purchase it at the agreed market price, and because he held same till the price advanced and realized from its sale $2,200 more than the amount of the rent of his farm he was not liable either to his tenants, their mortgagees or furnishers of supplies for the overplus. No fraud is allleged in the purchase of the 84 bales by West from Savage, which must be both charged and proved to vitiate sale. Jackson v. Reeve, 44 Ark. 496. Never presumed. Ferguson v. Little Rock Trust Go., 99 Ark. 45; Huff v. Roane, 22 Ark. 184. Hankins made no tender of rent. Bloom v. McGee, 38 Ark. 329. Should have done so and brought replevin for cotton. Buck v. Lee, 36 Ark. 525; Lemay v. Johnson, 35 Ark. 231; Roth Go. v. WilliaAns, 45 Ark. 477; Noe v. Layton, 69 Ark. 551; Jacobson v. Atkins, 103 Ark. 91. Demurrer should have been sustained and action dismissed as to certain parties.

      Hays, Wood & Hays and J. T. Bullock, for appellees.
    Appellant undertakes to present a different case here that was tried by chancellor. The cases were based 'alone on conversion. Appellant had no legal right to purchase crops grown on his lands in disregard of junior lien holders of whose rights he had notice by the recorded mortgages. Peoples v. Hayley-Beime & Co., 89 Ark. 215; Robinson v. Cnoce, 29 Ark. 275.' West had wrong conception of a landlord’s rights, claiming he would hold each tenant’s cotton until entire rent was paid. Storthz v. Smith, 109 Ark. 552. The evidence abundantly supports the judgment, which should be affirmed.
    U. L. Meade, John M. Parker, in reply.
    Reargue testimony controverting appellee’s position ; cases cited not applicable, there being no surplus over rent due when cotton purchased. Appellant claims the cotton because he purchased it from Savage, who raised it, and received it in payment .of the rents, and from tenants consenting to and authorizing the sale. Proof shows cotton sold to pay debt due purchaser and at market price. Gilverson Glorisoina Co. v. Gurnes, 56 Ark. 414; Anderson Go. v. Bowles, 44 Ark. 108; Meyer v. Bloom, 37 Ark. 43. Mortgagee of tenant has no greater right than tenant and entitled only to what remains after rent paid. Bmirlancl v. McKnight.Bros., 79 Ark. 427i
   Smith, J.

B. F. West owned a farm of 550 acres in Pope County, which he rented to J. A. Savage for the year 1920 for $5,500. Savage subrented 140 acres of the land to J. M. May for $1,400. To obtain supplies and assistance to make a crop, May gave a mortgage on his crop and certain livestock and other personal property which he owned, to the E. V. Cook Mercantile Co. Advances secured by this mortgage, amounting, with interest, to $289, were made to May. Savage subrented 172 acres of the land to T. J. Hankins for $1,700. Han-kins cultivated the land and made a crop, but after doing so sold his interest therein to W. I), and O. J. Whitlock, and took a mortgage back to secure the purchase money. The sum claimed bv Hankins under his mortgage was $614.25.

Savage received from the subtenants 84 bales of cotton, all of which he turned over to West first, under a-writing signed by Savage, dated April 21, 1921, authorizing West to sell the cotton when he thought best. West did not sell under this authority, and on July 2, 1921, Savage executed to West a bill of sale for the 84 bales of cotton in satisfaction of his rent, except that as to two of the bales West was to account to one Oscar Wilson for one-fourth of each of the two bales. At the date of this bill of sale the market price of the cotton was so low that, had it been sold at the prevailing price, the proceeds would not have paid the rent due West, who claims he should not be charged with a higher price for the cotton, although he admits that, after holding for some months, he sold it for $7,451.74.

The Cook Mercantile Co., as mortgagee of May’s interest, sued West to recover the value of May’s crop in excess of the rent due by May, and Hankins brought a similar suit as to the Whitlocks’ crop. The cases were consolidated and tried together, and there was a decree for each of the plaintiffs, and the cases are here as one appeal.

The -controlling question in the case is whether West should be required to account for the cotton at the market price prevailing on July 2, 1921, or at the price he received for it.

There is testimony to the effect that West did not claim to have bought the cotton from Savage,- but was holding it for the benefit of the tenants, until the price of the cotton went up. This was denied by both West •and Savage, and may not have been true, but we find -it unnecessary to decide that question, for the reason hereinafter stated.

It was contended on behalf of Hankins that he offered to pay West the rent dUe on the land he had rented from Savage, but that West declined to receive the rent. There was some conversation between West and Han-kins on this subject, but we do not think {he testimony shows any tender of this rent.

It does appear, however, that Hankins did not consent to the sale of the cotton by Savage to West. There is conflict in the testimony on this question, but such is the fact, as we interpret the testimony. It is also true that May’s cotton was sold by Savage without May’s consent.

The rent was past due when Savage executed the bill of sale. West had the right, therefore, to demand that his rent be paid, or that the cotton be sold and its proceeds applied to his rent. But West did hot sell the cotton at that time, or have it sold. His contention is that he bought it from Savage.

If Savage had been the owner of the cotton, this sale would have been the end of the matter. But he was not the owner. He'was West’s tenant, and his subtenants had an interest in the cotton which he turned over to West, and which he could not dispose of in this manner.

If, in the usual course of business, West had sold the cotton, he would be chargeable only with its proceeds; but he was chargeable with its proceeds when it was sold, and the purpose of this suit is to charge him with the proceeds of the sale. West admits that he received $7,451.74 for the cotton, and, after allowing him credit for interest, insurance, hauling, and storage, the cotton netted him $6,252.07, which is $1,199.72 in excess of his rent with all charges included for holding and handling the cotton.

The average price of the 84 bales which West sold was $88.71 per bale, and if he is charged with the cotton at that price there was a sum due both May and the Whitlocks sufficient to discharge their respective mortgages.

The briefs discuss numerous items of account be tween Savage and the subtenants, consisting chiefly of a controversy about the quantity and value of hay and corn received by Savage. We do not review these figures in detail, for, with credits to which the subtenants are unquestionably entitled, the Whitlock and May cotton turned over to Savage, and by him delivered to West, brought enough, if accounted for at $88.71 per bale, to pay the rent and the mortgages; and, as there is no controversy about the amount due the mortgagees who have sued for the conversion, West must be held liable to them as having converted the cotton. Peoples v. Hayley-Beine & Co., 89 Ark. 252.

The court below so found, and that finding does not appear to he clearly against the preponderance of the evidence, and the decree is affirmed.