author: Mehaffy, J.

text:
    Furst & Thomas v. Hartzell.
    Opinion delivered February 21, 1927.
    1. Sales — construction op contract. — It is the province of the court to determine whether a contract is one of purchase and sale or one of agency if the contract is unambiguous.
    2. Sales — construction op contract. — Where a contract for the disposal of plaintiff’s goods to consumers named defendant as “salesman” and provided for free advice and suggestions to him as to the best method of selling the goods, for payment by him according to cash sales, and for return of unsold goods on termination of the contract, held that, whether it constituted a contract of agency or of purchase and sale is for the jury.
    Appeal from Arkansas Circuit Court, Northern District; George W. Glarh, Judge;
    affirmed.

      A. G. Meehan, for appellant.

      W. A. Leach, for appellee.
   Mehaffy, J.

The appellant, plaintiffs below, filed in the Arkansas Circuit Court the following complaint: That on or about the 8th day of July, 1921, the plaintiffs and the defendant, William E, Chadiek, entered into a contract by tbe terms of which the plaintiffs agreed to sell and deliver, subject to the conditions contained in said contract, to the defendant, William E. Chadick, plaintiffs’ product in reasonable quantities as ordered by the defendant. The relationship of vendor and vendee, according to the terms of this contract, were to continue for so long as the contract remained in force.

By the terms of said contract the said William E. Chadick agreed to pay Furst & Thomas for all goods sold to him by them the usual wholesale price thereof, and further agreed to pay all unpaid balances due from him to them at the time of the execution of said contract, the terms and conditions of said payments being more definitely set out in the duplicate copy of said contract, which is hereto attached and made a part hereof. The said contract above referred to was subject to acceptance by the plaintiffs, Furst & Thomas, and the same was duly accepted by them on the 2d day of August, 1921.

Shortly after the execution of the said contract the plaintiffs began shipping to the defendant, William E. Chadick, under instructions and orders from the said William E. Chadick, and in accordance with the contract above referred to, merchandise and products of the kind contemplated at the time of the execution of said contract. That the said William E. Chadick continued to purchase merchandise and products from the plaintiffs from that time until the 24th day of December, 1923. On or about the time the purchases aforesaid began to be made by the defendant, William E. Chadick, he, the said defendant, began to make remittances to the said Furst & Thomas, and continued to do so up until the 3rd day of January, 1924, but that no further payments have been made upon said account since that date. The unpaid balance of indebtedness for goods, wares, merchandise, as above set out, due from the defendant, William E. Chadick, to the plaintiff is the sum of $1,376.76.

As a part .of the said contract the defendants, A. A. Hartzell, Charles F. Kuehen and J. A. Owen, executed a joint and several guaranty in favor of Furst & Thomas for the purpose of guaranteeing the faithful performance of the contract above referred.to by the codefendant, William E. Chadiclc, and to guarantee payment by him of the purchase price of all goods furnished to him on credit, as provided in said contract. The said guaranty also extended’ to any balance on his account for goods previously purchased by him and remaining unpaid at the date of the acceptance of the contract herein referred to.

As a further condition of said guaranty, the three defendants, A. A. Hartzell, Charles F. Kuehen and J. A. Owen, agreed that, three months from and after the termination of the agreement above referred to and the nonpayment of his account by William E. Chadiek, the guaranty of said account by said three defendants shall become absolute as to the amount clue from him, and the said three defendants agreed to pay any indebtedness of the said William E. Chadiek due the plaintiffs, Furst & Thomas, without any proceedings having to be taken against the said William E. Chadiek. That a period of time in excess of three months has expired since the termination of said contract. A copy of the contract aforesaid and the bond aforesaid is hereto attached, marked Exhibit A and made a part hereof.

A certified statement of account is hereto attached and marked Exhibit B. That an itemized statement of account is hereto attached and marked Exhibit C.

Attached to complaint as Exhibit A was the following contract:

“This contract, made and entered into at Freeport, Illinois, this 6th day of July, 1921, by and between Frank E. Furst and Fred Gr. Thomas, copartners, doing business under the name of Furst & Thomas, of Freeport, Illinois, and Wm. E. Chadiclc of Stuttgart, Arkansas, hereinafter called the salesman, witnesseth:
“That, upon acceptance of, this contract, Furst & Thomas agree to thereafter, unless prevented by strikes, fires, accidents, or other causes beyond their control, sell and deliver to the said salesman, on hoard cars at Free-port, Illinois, or, at their option, at their nearest branch warehouse, at their current wholesale prices, their products in reasonable quantities as ordered by him, so long as this contract is in force and his account is in satisfactory condition. Furst & Thomas also agree to give the salesman free advice and suggestions through bulletins, booklets and letters as to the best methods of selling to consumers the goods purchased by him under this contract, but it is expressly agreed that nothing contained in such advice and suggestions shall be binding upon the salesman nor shall be construed as in any way altering or modifying the terms of this contract.
“The salesman agrees to pay Furst & Thomas the regular wholesale price for all goods sold to him by them, including any balance on his account for goods previously purchased by him and remaining unpaid at date of acceptance of this contract, in the following manner, to-wit: On the installment plan, by paying to said Furst & Thomas in cash, each week, a sum equal to not less than one-half his total cash sales and collections from such goods during said week; provided, that the salesman may be required, at the option of Furst & Thomas, to pay not less than the wholesale price of certain products designated by them and sold by him for cash or collected for during said week; provided that, by paying his account in full on or before the tenth day of each month, said salesman shall receive a discount of 3 per cent., if he remits cash in full with each order, he shall receive a discount of 5 per cent, from their current wholesale prices.
“As a matter of good faith and to show what the receipts of his business are from week to week, he agrees to send to Furst & Thomas each week a correct and fully itemized record of his business on forms provided for that purpose by them. Either party shall have the right to terminate this contract by giving written notice to the other party; provided that, if the sale or purchase of goods under this contract be permanently discontinued for any reason, it is thereby terminated, and, upon its termination from any cause by either party, the salesman agrees to settle within three months the balance due said Furst & Thomas on account; provided that the salesman shall have the privilege of returning promptly, after termination of contract, to Furst & Thomas, at Freeport, Illinois, by prepaid freight, his stock of unsold goods, and for- all goods so returned by the salesman in ■original, unopened bottles and packages, Furst & Thomas agree to allow credit at the price originally charged after deducting the cost of checking, handling and putting such goods back into stock, and if, on final accounting, any balance is due the salesman, to pay the same promptly.
“This contract is subject to acceptance by Furst & Thomas at their home office in Freeport, Illinois, and, when so accepted, shall immediately be in force and effect.
“Accepted at Freeport, Illinois. 8-2-1921. Furst & Thomas.
“Salesman sign here in ink. William Chadick.”

The defendant, Wm. E. Chadick, filed separate answer, which was as follows':

“Defendant admits that-he signed the- contract mentioned and described in plaintiff’s complaint and admits that the copy of said contract annexed to plaintiff’s complaint as Exhibit A thereto is a correct copy thereof. Defendant denies that any relation existing between this defendant and the plaintiffs, by reason of said contract, was that of vendor and vendee. Defendant denies that he was to pay for all goods delivered to him by the plaintiffs, but states that he was to pay for only such goods as were delivered to him and by him sold and delivered to the purchasers. Defendant denies that any of the goods delivered to him were purchased by him, but states that all -goods so delivered to him were consigned to him to be sold, and that all goods so delivered to him, remaining unsold at the termination of the contract, were to be by him returned to the plaintiffs. That all goods delivered to defendant by the plaintiffs were manufactured by and were the property of Furst-McNess Company; that Furst & Thomas, in delivering said goods to the defendant, were acting merely as agents for and on behalf of said Furst-McNess Company, and that all deliveries so made by Furst & Thomas to this defendant were in truth and in fact made by said Furst-McNess Company. That Furst-McNess- Company is a corporation, organized and existing under and by virtue of the laws of the State of Illinois, with its principal place of business in Freeport, Illinois. That said Furst-McNess Company has failed to file with the Secretary of State for the State of Arkansas a copy of its charter,’ and has failed to file a statement of its assets and liabilities, and has failed to designate its general office in the State of Arkansas, as is required by § 1826 of C. & M. Digest. That said Furst-McNess Company has failed to file the resolution of its board of directors and has failed to designate an agent for service in this State, as is required by § 1827 of C. & M. Digest. That said Furst-McNess Company has wholly failed to comply with the laws of the State of Arkansas permitting* foreign corporations to do business in Arkansas, and was not and is not authorized to do business in Arkansas.
“That Frank E. Furst, one of the plaintiffs herein, was, at all times herein mentioned, and is now, the president of Furst-McNess Company and a large stockholder therein; that Fred G. Thomas, one of the plaintiffs herein, was, at all times herein mentioned and now is, vice president of Furst-McNess 'Company and a large stockholder therein. That the firm of Furst & Thomas was organized at the same time Furst-McNess Company was founded, and was organized for the sole purpose of distributing the products manufactured by Furst-McNess Company. That Furst & Thomas are the agents of Furst-McNess Company, and, in making the contract with this defendant and in delivering the goods to this defendant, acted for and on behalf of said Furst-McNess Company, and the contract when made was, in truth and in fact, a contract between this defendant and said Furst-McNess Company, and that this defendant, in the handling and selling of the products delivered by Furst & Thomas, was acting as the agent of said Furst-McNess Company. That all sales of the goods so delivered to him as aforesaid were had and made by this defendant in the State of Arkansas, as the agent of Furst-McNess Company in the State of Arkansas, in violation of the statute in such cases made and provided.
Defendant denies that he is indebted to plaintiffs in the sum of $1,376.76, or in any other sum and amount, and, having fully answered, he asks that the complaint as to him be dismissed and that he have judgment for his costs.”

The other defendants also filed separate answers, but it is not necessary to set them out. The appellant-does not abstract any of the evidence, but sets out the instructions of the court, both those given and refused, and also motion for a new trial and judgment. Appellants do not abstract the testimony, for the reason that it does not ask any reversal of the judgment by any reference to the testimony, but relies solely on the law, and states that, whether or not the contract sued upon is subject to the terms of what we know as the ‘‘Wingo act” (Acts 1907, p. 744) relating to nonresident corporations, is determinative of the question to be raised here.

Appellants admit that, if the contract set-forth above is a contract of agency by Furst & Thomas or the company manufacturing the products referred to in the contract, then their contention must fail. But they say, on the other hand, if it is a contract of purchase and sale, then it refers to interstate commerce, and appellant would be entitled to recover. That is, they could if it is a contract of purchase and -sale, and not ambiguous, then it was the duty of the trial court to instruct for the appellant, without submitting any questions of fact to the jury. It therefore becomes unnecessary to determine or decide any questions except whether the contract sued on is a contract of purchase and sale or a contract of agency, or whether it is so ambiguous as to permit evidence to determine the effect of the contract, whether it is one of purchase and sale or one of agency.

The first part of the contract, when considered alone, would be construed as a contract of purchase and sale. The question, then, is whether the other parts of the contract render it ambiguous. This court has several times decided the question involving contracts somewhat similar to the one here involved, and it may be conceded that, if the contract is unambiguous, it is the province of the court to construe it and declare its purport.

In the case to which attention is called by appellant, in 115 Ark. 166, 171 S. W. 136, the contract there dealt with provided for the appointment of Clark as a traveling salesman for its products iu the territory described, and no other, and agreed to furnish its products at place of shipment to said traveling salesman at such times and in such reasonable quantities as he might order, to be charged to him, in accordance with the company’s price list current, etc. The medical company promised to take back all goods left in possession of the traveling salesman at the time he quit work. These are substantially the same provisions as in the contract involved here. In the case mentioned they also had an obligation of sureties, as they have in this case. The court, among other things, stated in the case referred to:

“In construing a contract we may consider the construction which the parties themselves have placed upon it and the action they have taken in executing its provisions. These rules of construction, however, are not available where the terms of the contract are unambiguous. Where the terms of the contract are unambiguous, it is the province of the court to construe the contract and to declare its purport; and appellee insists that that duty here devolved upon the trial court, and that that court correctly construed the contract as one of sale, and not as a mere appointment of an agent. * * * It is clear that, if the contract between the parties constitutes a sale of the commodities there mentioned, there can be no doubt that the court correctly directed a verdict in favor of appellee. But the evidence upon that question is not so undisputed that it may be said as a matter of law that the contract constituted a sale of goods, and not an agency.” Clark v. J. R. Watkins Medical Co., 115 Ark. 166, 171 S. W. 136.

The court reversed and remanded the above case, with directions to submit the questions of agency to the jury, with directions to render a verdict for the appellee if they find the relationship between litigants was that of vendor and. vendee, rather than that of principal and agent. The court in the above case reviewed the authorities and held that the contract in that case was such as to be a question of fact for the jury as to whether the litigants were vendor and vendee, or whether the contract created an agency.

The contract of J. it. Watkins Medical Company was ag’ain before this court, and it was there held that the evidence was legally sufficient to support the finding that the business out of which this litigation arose was appellant’s and that appellee was but his agent. J. R. Watkins Co. v. Williams, 124 Ark. 539, 187 S. W. 653.

In the case of W. T. Rawleigh, Medical Company v. Holcomb, 126 Ark. 597, 191 S. W. 215, the court called attention to the fact that, while there were points of similarity between that case and the J. R. Watkins Medical Company case, it did not find the uncertainty, in the relationship of the parties which was developed in the proof in the other case. The agreement in the case of the Rawleigh Medical Company v. Holcomb is somewhat different from the contract in the present suit. The agreement mentioned the medical company as party of the first part, and Holcomb as party of the second part, and not as salesman, and there was nothing in that contract to indicate that he was a mere salesman, and instead of letting him return the goods, in that case, the company agreed to repurchase, at wholesale prices, the goods that the second party had on hand, if they were in as good salable condition as when originally sold to him, provided that the second party, on repurchase, pay the company’s actual expenses of receiving, inspecting and overlooking all such goods. It is also provided in that contract that that instrument constituted the sole and entire agreement. W. T. Hawleigh Co. v. Holcomb, 126 Ark. 597, 191 S. W. 215.

The contract in the case now before the court expressly states that it is a contract between Furst & Thomas and Wm. E. Chadick, called the salesman. Then they agreed to give the salesman free advice and suggestions through bulletins, booklets and letters as to the best method of selling to consumers the goods purchásed by him under this contract. It states that the salesman agreed to pay, etc.

Another thing about this contract is that he does not agree to pay Furst & Thomas, except according to cash sales and collections. It appears from the contract that he receives and sells them, and, after the goods have been sold, he is then to make payment, and, upon the termination of the contract, the salesman is given the privilege of returning promptly his stock of unsold goods.

We think therefore it was clearly a question of fact for the jury to determine whether the contract was one of agency or one of purchase and sale. There seems to be a very clear distinction between this contract and the contracts the court has held were free from ambiguity. It is such a contract and of such doubtful meaning that the court cannot say as a matter of law that it is not a contract of agency. We think the question is thoroughly settled by the former decisions of this court, and the circuit court did not err in submitting the question to the jury, and, this-being the only contention of the appellant here, the judgment is affirmed.


source: Caselaw Access Project

author: Mehaeey, J.

license: Public Domain

text:
    Texas Company v. Snow.
    Opinion delivered February 21, 1927.
    1. Evidence — varying writing by parol. — The general rule is that parol testimony is inadmissible to vary or contradict the terms of a written agreement or contract.
    2. Evidence — parol evidence to vary deed. — While parol evidence is admissible for the purpose of showing that the true consideration is different from that expressed in a deed, it is not admissible to show that a deed warranting against all claims was not intended to warrant against a specific claim.
    3. Covenants — knowledge of incumbrance. — Knowledge or notice, however full, of • an incumbrance or of a paramount title does not impair the right of recovery upon covenants of warranty, as they are taken for protection and indemnity against known and unknown incumbrances or defects of title.
    4. Estoppel — conduct.—Evidence held to sustain a finding that plaintiff was estopped by its conduct from recovering for breach of a covenant of warranty.
    Appeal from Union Chancery Court, Second Division; GeorgeM. LeCroy, Chancellor;
    affirmed.

      Mahony, Yocum & Gaye, for appellant.

      T. J. Gaughan, J. T. Gifford, J. E. Gaughan and Elbert Godwin, for appellee.
   Mehaeey, J.

The Texas Company brought suit in the Ouachita Circuit Court against D. Y. Snow and others, to recover for a breach of a covenant of warranty in a warranty deed conveying 80 acres of land. The plaintiff alleged that, in February, 1923, it purchased from the defendants the north one-half of the northwest quarter of section 30, township 15 south, range 16 west, for the price of $10,000, which it paid the defendants. It is alleged that the defendants executed and delivered a warranty deed whereby they warranted the title to said property, and agreed to defend title against claims of all persons. Plaintiff alleged that, at the time of the delivery of the deed, the defendants were not the owners of the land, but that it was owned by others, who had since obtained judgment and decree for the recovery of said land. Plaintiff prayed judgment for the $10,000, with interest. It afterwards filed an amendment to its complaint, claiming the sum of $2,250, expended as attorney’s fees, and $250 as costs.

Defendants filed answer and cross-complaints and motion to transfer to equity. The cause was transferred to equity. The defendants, in their answer, admitted executing and delivering’ the deed described in plaintiff’s complaint, and admitted the judgment obtained for the recovery of the land after the execution of the deed, but they denied that plaintiff was entitled to recover the $10,000. They alleged that, prior to the negotiations referred to by the plaintiffs and defendant, suit had been filed in the Ouachita Chancery Court by Adam and Mary Ann Reaves, claiming that they were the owners of the land, and that the plaintiff in this suit was well aware, and had full knowledge of the claim of said Adam Reaves and wife, and agreed to purchase unconditionally and without a covenant of warranty, and subject to the pending litigation; that the plaintiff made an agreement to purchase the lease from the defendant unconditionally and without a covenant of warranty, subject to said pending litigation and subject to an exception or reservation of one-eighth of all oil, gas and other minerals in, under and upon said land, and, in addition, agreed to take charge of said litigation, as agent for said defendants and for itself, for the sum and price of $10,000; that these defendants agreed to accept that sum, and executed a deed of conveyance unconditionally, and without a covenant of warranty, excepting- and reserving one-eighth of oil, gas and minerals, and to turn over to plaintiff, as their agent, the control and management of said litigation. They alleged that the plaintiff took actual possession of the land on oral agreement, on or about the 15th day of December, 1922, erected tanks, structures, etc., on said land, and employed counsel to represent it and these defendants in said pending litigations, and that all this occurred more than a month before the deed was executed. They alleged that, in the sale of the lands, the same attorney represented both the defendant and the plaintiff, Gordon, in passing upon the sufficiency of the title, and that said attorney made a requirement that, in addition to the conveyance to be executed by Gordon, the executor, the same should be executed by all the heirs and legal representatives of the said George R. Ritchie; that the deed of conveyance was prepared by an attorney, and, by mutual mistake of all parties, a warranty deed in form was prepared and executed by the defendant, and that the covenant of warranty in the deed was without consideration, and void. They further stated that, as a part of the consideration, the Texas Company agreed to take charge, as agent of defendants and for itself, of the control and management of the litigation, and that defendants, in keeping with this agreement, turned over the control and management to plaintiff as their agent, and that plaintiff employed attorneys and immediately took charge and control of said litigation. Defendants further stated that, after the plaintiff took charge, Adam Reaves and his wife made an offer to release and relinquish all their rights, title, claim or interest to the plaintiff for $4,000; that plaintiff did not inform these defendants of the offer, and that said litigation could have been compromised and settled by the defendants had it not been for the grossly negligent conduct of plaintiff, and that, by reason of the fiduciary relations existing between the defendants and plaintiff, plaintiff was under legal obligations to report said offer to them, and that plaintiff was grossly negligent in refusing and failing to do so; that, if plaintiff had informed defendants, they would have accepted compromise of $4,000 and thereby saved the one-half royalty on gas, oil and minerals, and that this was worth $30,000, and asked judgment for $30,000 against the plaintiff.

Plaintiff filed an answer to cross-complaint, denying the allegations of said cross-complaint. The appellees contend that there was a mutual mistake by reason of which a warranty deed was given, warranting against all claims, when all parties understood, at the time the agreement was made, that Adain Reaves and his wife were claiming that a deed they had previously executed was, in fact, a mortgage, and had already filed suit to redeem. About this fact there does not seem to be any conflict in the testimony. The deed was executed about the 3d day of February, 1923, and on the 1st day of December,' 1922, Adam Reaves and his wife had filed suit in the Ouachita Chancery Court, alleging that they were the owners of the land in controversy in this suit, and that the deed executed by them was, in fact, a mortgage, and praying for a decree authorizing them to redeem. The fact that the Reaves suit was filed, seeking to redeem this land, before negotiations began, or during the negotiations, between appellant and appellees, with reference to the sale of this land, and that all parties knew about it, seems to be undisputed. The negotiations between appellant and appellees began some time in December, after the Reaves suit was filed, and the Reaves suit was discussed, and it appears that Cordon stated in his testimony that Mr. Redditt, who represented the Texas Company, knew that the Reaves suit was filed, and that it was pending at the time the trade was closed. Cordon told him at the time that he did not suppose they could deliver the deed, because this suit had been filed, and stated in his testimony that Mr. Redditt asked him about the nature of the suit, and he outlined it to him, and that later Redditt came back, and they had several conversations, and, about the fourth talk that they had about the first of December, Mr. Redditt came with his final statement of what the Texas Company would do. He stated that they would buy the 80 acres with the suit pending, subject to the suit, and they would take care of the lawsuit themselves.

Mr. Redditt himself testified that he knew the Reaves case was pending before the deal was finally consummated, but he did not think that Reaves had a chance to win. He stated that he learned of the suit some time in December; that he already knew about it when he talked to Cordon. He also stated that Cordon told him that they were not -going to spend any money trying a lawsuit, and that Redditt told him that they would fight the lawsuit. It also appears from the testimonjr that a proposition to settle the Reaves matter was made to the Texas Company, and that it could have settled it for $1,000. It made a counter-proposition of $1,000, but these propositions were never communicated to the appellees, although the Texas Company claimed to be attending to the Reaves matter as agent for the appellees.

It would serve no useful purpose to set out the testimony in full or at length, for the undisputed testimony establishes the fact that the Texas Company had knowledge of the claim of Reaves, and that the suit was pending before the deal was closed. The representative of the Texas Company admits stating that they would attend to the lawsuit, or fight the lawsuit, but the testimony is conflicting as to whether they purchased the land subject to the lawsuit, the appellee contending’ that it was so understood, and Mr. Redditt denying that the Texas Company purchased it with that understanding. It is well settled by decisions of this court, as a general rule, that parol testimony is not admissible to vary or contradict the terms of a written contract or agreement, and this court has said, -with reference to the admissibility of parol testimony contradicting a deed:

“ ‘Whenever in a deed the consideration, or an admission of its receipt, is stated merely as a fact, that part of the deed is received as a receipt would be, and the statement is subject to be varied, modified and explained; but, if the stated consideration is in the nature of a contract, that is, if by it a right is vested, created or extinguished, the terms of the contract thereby evidenced may not be varied by parol proof, but the writing is its sole exponent.’ ”
“We find the rule and its exception very concisely and properly stated in the case of Hendrick v. Crowley, supra, as follows: ‘ There is no doubt 'but that parol evidence is admissible for the purpose of contradicting or showing that the true consideration is other and different from that expressed in the written instrument. But this is not the rule, but an exception to the rule, that the legal effect of a written instrument cannot be varied or defeated in whole or in part by parol evidence. The exception can never he allowed to override the rule, for that would be to dispense with the rule entirely and preserve the exception. The exception always loses its governing force when it comes in conflict with the rule which it qualifies, and must yield to its higher claim. Hence the consideration cannot be contradicted or shown to be different from that expressed when thereby the legal operation of the instrument to pass the entire interest according to the purpose therein designated would be defeated.’ ” Wallace v. Meeks, 99 Ark. 350, 138 S. W. 638.

The above is a statement of the rule that is found in many decisions of this court, so that it would appear that parol evidence is not admissible to show that a warranty deed warranting against all claims was not intended to warrant against a specific claim; but the court in the case last mentioned also stated:

“No effort was made to prove a mutual mistake in conveying the timber tracts separately as would justify the court in decreeing reformation. Nor is there any proof of fraud in procuring separate deeds, instead of a single deed expressing the entire consideration. The proof merely shows that this was done for convenience, and not through any mistake. The proof does not bring the case within the principle announced by this court in Lawrence County Bank v. Arndt, 69 Ark. 410, 65 S. W. 1052, where relief was given in equity against a mistake of law on account of reliance by the parties on one side on the representation and superior knowledge of the other.party to the contract.”

In addition to the contention of appellees that the warranty deed was given by mistake, they also contend that appellant is estopped by its declaration and conduct. This court has defined estoppel as follows:

“Equitable estoppel (estoppel in pais) is the effect of the voluntary conduct of a party whereby he is absolutely precluded, both at law and in equity, from asserting rights which might perhaps have otherwise existed, either of property, of contract, or of remedy, as against another person, who has, in good faith, relied upon such conduct, and has been led thereby to change his position for the worse, and who, on his part, acquires some corresponding right, either of property, of contract, or of remedy. The conduct must be done with the intention, or at least with the expectation, that it will be acted upon by the other party, or under such circumstances that it is both natural and probable that it will be so acted upon. ’ ’ Thompson v. Wilhite, 131 Ark. 77, 198 S. W. 271.

As we have said, the testimony conclusively was that the appellant knew of the Reaves claim and suit before it closed the deal with appellees. It not only knew about the suit, but, according to the undisputed testimony, agreed to attend to the suit itself, and the appellees told Mr. Redditt that they would not fight the lawsuit. The Texas Company knew that it could settle the Reaves claim for $4,000, but did not communicate this proposition to the appellees. Then again, the appellant purchased the Reaves interest without mentioning it to'any of the appellees.

The chancellor may have found that the conduct of the appellant estopped it from claiming any right because of the Reaves claim. It is true, as contended by appellant, that knowledge, or notice, however full, of an incumbrance, or of a paramount title, does not impair the right of recovery upon covenants of warranty. The covenants are taken for the protection and indemnity against known and unknown incumbrances or defects of title. The appellees, however, go further in this case, and not only contend that the appellant knew of the defect or incumbrance, but show such conduct on the part of the appellant as appears inconsistent with their claim for damages for breach of warranty because of the Reaves claim.

The testimony is conflicting, and we cannot say that the finding of the chancellor was against the preponderance of evidence, and the decree is therefore affirmed.


author: Hart, C. J.,

text:
    Sneed v. Sneed.
    Opinion delivered February 28, 1927.
    1. Abatement and revival — death of party. — On. the death of a party pending an appeal, where no general administrator has been appointed, it is proper to revive the case in the name of a special administrator.
    2. Divorce — conveyance in fraud of alimony rights. — A wife securing a judgment for alimony in a divorce suit becomes a creditor, and a conveyance made in fraud of her rights as such may be set aside or the property subjected to the lien of her judgment, provided the rights of purchasers without notice and for valid consideration have not intervened.
    3. Divorce — conveyance in fraud of alimony rights. — An assignment by a divorced husband of a $1,000 legacy to his second wife when he owed his former wife for 10 years’ back alimony held fraudulent as to his first wife, though the second wife paid $1,000 for the legacy.
    4. Garnishment — remedy to impound fund. — Equitable garnishment is the proper remedy for a divorced wife, to whom the husband owes alimony, to impound a fund constituting a legacy due the husband.
    Appeal from Garland Chancery Court; W. R. Duffie, Chancellor;
    affirmed.
    STATEMENT OE EACTS..
    Elizabeth Sneed brought this suit in equity to obtain judgment against her former husband, Dr. A. L. Sneed, for $4,800 for unpaid alimony, and asked that the- same be declared a lien upon the funds in the bands of Al A. Reynolds as executor of the estate of Maeda C. Reynolds, deceased.
    The defendant, Reynolds, answered that he had in his possession as executor of the estate of Maeda 0. Reynolds, deceased, the sum of $1,000, which she had bequeathed to Dr. A. L. Sneed. He stated that an equitable garnishment had been served upon him, and asked that the court should direct him to pay said sum of money to the person entitled to receive it. Julia L. Snead, the present wife of Dr. A. L. Sneed, was allowed to intervene and claim the legacy of $1,000, which she claimed had been assigned to her by her husband .for a valuable consideration.

      According to the evidence for the plaintiff, Elizabeth Sneed, the chancery court of Garland County, Arkansas, in September, 1912, had awarded her the custody of the two minor children of herself and Dr. A. L. Sneed, and had also adjudged that he should pay her alimony in the sum of $40 per month. Dr. Sneed paid this sum regularly until October, 1914, when he became a nonresident of the State of Arkansas. After the plaintiff and Dr. Sneed had been divorced, he married Julia L. Sneed, and she is his present wife. At the time the present suit was filed, Dr. Sneed owed the plaintiff the sum of $4,800 in alimony. After he quit paying alimony, in 1914, the attorney for the plaintiff made every effort to collect the monthly sum awarded her, but was unable to do so. Dr.’Sneed was insolvent. Even his office fixtures, instruments and books were in his second wife’s name, and could not be reached under execution. Maeda CvReynolds died on April 10, 1923, and left a legacy of $1,000 to Dr. A. L. Sneed. Al A. Reynolds became the executor of her estate, and a writ of equitable garnishment was served upon him while the legacy was still in his hands as executor.
    Virginia Sneed, daughter of Elizabeth Sneed and Dr. A. L. Sneed, was a witness for the plaintiff. According to her testimony, Julia L. Sneed knew that an order had been made by the chancery court for her father to pay $40 a month to her mother as alimony. Julia L. Sneed objected to the order on the ground that, if paid, it would deprive her of that amount of the earnings of her husband.
    According to the testimony of Julia L. Sneed, she paid $1,000 in cash to her husband for the assignment of the $1,000 legacy to her. In purchasing the legacy and taking the assignment thereof, it was not her intention to defeat the claim of the plaintiff for alimony.
    The chancellor found the issues in favor of the plaintiff, and a decree was entered of record in accordance with his findings. To reverse that decree Julia L. Sneed has duly prosecuted an appeal to this court.

      James E. Ho gibe, for appellant.

      Lee Miles, for appellee.
   Hart, C. J.,

(after stating the facts). After the transcript was lodged in this court, Julia L. Sneed died intestate, and a motion was made by counsel for appellees to dismiss the appeal and to prevent a revival of case in the name of a special administrator appointed for that purpose. The ground of the motion was that Julia L. Sneed was a nonresident of the State, and that her heirs did not desire to prosecute the appeal. Her attorney objected to the dismissal of the case on the ground that he had, under contract with Julia L. Sneed, a one-half interest in the $1,000 legacy which had been transferred to Julia L. Sneed by Dr. A. L. Sneed, in the event of the reversal of the decree and- a finding by the court that she was entitled to the legacy. Under this state of facts, it was proper to make an order to revive the case in the name of a special administrator appointed for that purpose, and it was ordered that the case be revived in the name of H. J. Burney as such special administrator. In such case, where there is no general administrator, it is proper that revivor shall be in the name of a special administrator appointed by the court in which the action is pending. Anglin v. Cravens, 76 Ark. 122, 88 S. W. 833.

This brings us to discussion of the case on its merits. The Irav is that a wife who secures a judgment for alimony in a suit against her husband for a divorce is a creditor, and a conveyance made in fraud of her rights as such may be set aside or the property subjected to the lien of the judgment, provided that the rights of purchasers vdthout notice and for a valid consideration have not intervened. Masterson v. Ogden, 78 Wash. 644, 139 Pac. 654, Ann. Cas. 1914D, 885; Barber v. Barber, 21 How. (U. S.) 582; Fahey v. Fahey, 43 Col. 354, 96 Pac. 251, 127 Am. St. Hep. 118, 18 L. R. A. (N. S.) 1147; and Austin v. Austin, 143 Ark. 222, 220 S. W. 46.

In the case at bar the facts are that Elizabeth Sneed and Dr. A. L. Sneed were divorced in September, 1912, and she was awarded alimony in the sum of $40 per month and given the custody of their two minor children. Dr. Sneed paid the alimony until October, 1914. At that time he left the State, and has not paid any alimony since. Unpaid alimony in the sum of $4,800 had accumulated at the time he became entitled to the $1,000 legacy. According to the testimony of Julia L. Sneed, who was at that time his wife, he assigned this legacy of $1,000 to her and she paid him $1,000. It is true that she testified that this was not done foi the purpose of defeating claim of Elizabeth Sneed for alimony. The circumstances surrounding the transaction are against her claim. She knew that Dr. Sneed owed his former wife alimony in the sum of $4,800, and knew that he was insolvent, and had even placed his office fixtures and books in her name. At least, she is presumed to have known this, for the daughter of Dr. Sneed testified to these facts, and she did not attempt to deny them. • She contented herself with stating’ that the assignment was not made to her for the purpose of defeating the plaintiff’s claim for alimony. The undisputed testimony shows that the attorney for the •plaintiff, for several years, had been making every effort to collect the alimony and had been unable to do so-because he could not find any property in the name of Dr. A.- L. Sneed. If the assignment of the leg’acy was not made for the purpose of defeating the plaintiff in the collection of her claim for alimony, it had just as well not have been made. It is 'a significant fact that Julia L. Sneed claims to have paid-her husband $1,000 for the $1,000 leg’acy left him. No attempt is made to explain what was done with the $1,000 or for what purpose the assignment was made. Under these circumstances we are of the opinion" that the assignment was fraudulent and void as to the plaintiff as a creditor of Dr. A. L. Sneed.

An equitable garnishment was the proper remedy to impound the fund, pending a decision of the question to whom it belonged. Riggin v. Hilliard, 56 Ark. 476, 20 S. W. 42, 35 Am. St. 113.

It follows that the decree must be affirmed.


author: Wood, J.

text:
    Frazier v. Nicks.
    Opinion delivered February 28, 1927.
    1. Landlord and. tenant — right to stipulated rent. — A landlord is not required to accept less rent than that stipulated because of unforeseen and unpropitious crop conditions which rendered the lease for the year unproductive and unprofitable to the tenant.
    2. Landlord and tenant-^-lease convertible into sale. — A contract of lease may provide that it may he converted into a sale at termination of the lease if the lessee complies with the contract provisions as to payments.
    Appeal from Pulaski Chancery Court; John E.Ma/rtineau, Chancellor;
    affirmed.

      Mehaffy'S Mehaffy, for appellant.

      A. L. Rotenberry and June P. Wooten, for appellee.
   Wood, J.

This is an action by Nicks against Hatter and Frazier on a note in the sum of $9,450, executed by Hatter on March 1, 1923, to J. H. Frazier, Sr., and indorsed by J. H. Frazier. It is alleged that the note was given as collateral security to secure a note of $6,000 due on January 1, 1924; that demand was made for payment and refused, and the note was duly protested. The answer denied the material allegations of the complaint. The defendant alleged that Isabel Frazier entered into a contract with Nicks on the first of February, 1923, to purchase certain lands in Jefferson -County, Arkansas, and that the contract was evidenced by an instrument which was attached to the complaint; that the plaintiff violated the contract by renting the property to other persons. It was alleged that they had paid the plaintiff more than the rental value of the place for the year they occupied the same, and that nothing was due by them on the instrument upon which the action was founded. The contract of February 1, 1923, is as follows:

“For and in consideration of the sum of six thousand dollars, due and payable on the first day of January, 1924, evidenced by the promissory note of Isabel H. Frazier of this date for the said sum due and payable, with interest from date, at the rate of eight per cent, per annum, and for the consideration of the debts, covenants and agreements hereinafter contained, D. W. Nicks hereby lets, l.eases and demises for and during the period commencing January 1 and ending December 31, 1923, unto the said Isabel H. Frazier, lands in Jefferson County, Arkansas, described as follows: (Here follows description of lands).
“It is expressly understood and agreed that Isabel H. Frazier will commit no waste upon the said premises, and that she will, at the expiration of this lease, deliver possession of said premises to the said D. W. Nicks in as good condition as the same were in when received by her, ordinary wear and tear incident to her úse excepted, without legal notice to quit and vacate, as provided by law, which is hereby waived.
“All improvements placed upon the said lands shall be at the expense of Isabel H. Frazier, and no liens shall be fixed thereon without the consent of D. W. Nicks first given in writing. All improvements placed upon said lands shall immediately become a part of the realty, and shall not be removed by the said Isabel H. Frazier; and all repairs made upon the premises shall be at the expense of .Isabel H. Frazier.
“And for the consideration aforesaid, and the assumption and payment by Isabel H. Frazier of the indebtedness of D. W. Nicks, amounting to $32,320, with interest at the rates recited in the note, which is secured by deeds of trust and vendor’s liens covering said lands, the payment by Isabel H. Frazier of all taxes and legal assessments which are or may become due, and the payment of all insurance premiums which are or may become due, the said D. W. Nicks and Mary R. Nicks agree to execute a warranty deed conveying said lands to Isabel H. Frazier.
“It is understood that Isabel H. Frazier is to make all such payments as they become due, whether before or after December 31, 1923. It is also understood that the indebtedness of D. W. Nicks mentioned herein as amounting to $32,320, includes all his indebtedness secured by-liens of any kind on said lands.
“It is distinctly understood and agreed that the relation of landlord and tenant shall not be disturbed by any of the covenants or agreements herein contained, and that the same shall not in any way change, modify and nullify the relationship of landlord and tenant existing between the parties hereto at the time of the execution of this agreement.
“Witness our hands and seals, this first day of February, 1923.
(Signed) “Isabel H. Frazier,
“D. W. Nicks,
‘ ‘ Mary R. Nicks. ’ ’

Contemporaneous with the above contract, I. H. Frazier and Isabel H. Frazier executed an instrument in which they promised to pay Nicks, on January 1, 1924, $6,000, and pledged him as collateral security therefor the note of $9,450 above mentioned, and granted to Nicks the right to sell the same upon the failure of Frazier and wife to pay the note for $6,000 due January 1,1924.

The collateral note on which the note was founded has written on its face the following recital: “This note is put up as security for $6,000.”

We deem it unnecessary to set out the testimony in detail. Suffice it to say the testimony of Nicks tends to prove that the contract was executed by Isabel H. Frazier and her husband, I. H. Frazier, and that I. H. Frazier, the son of J. R. Frazier, stated to witness that he was willing to put up the note in suit as security on a rental proposition with the privilege of buying the place. • I. H. Frazier asked witness how it would suit to make this rental with the privilege of buying, and witness told him that it would suit all right. I. H. Frazier was to pay the taxes and insurance and meet all payments as they fell due, and the contract was made to that effect. The testimony of witness was further to the effect that Isabel Frazier and I. H. Frazier went into possession of the property, that they held it for the year 1923, were not able to make the first payment wlien it came due, and abandoned the proposition and surrendered possession to witness. The note in suit was given as security for the rent. That was thoroughly understood by all the parties. The rental value of the place for the year it was occupied by I. H. Frazier and his wife was $3,200. The witness could not have rented the place for $6,000, but could have rented it for about $3,500. The year that Frazier and wife worked it was a very bad year. After that year the witness rented the property for $3,200 and reserved the storehouse. If the contract had been for rental value alone it would have been about $3,500. I. H. Frazier paid the sum of $919.64 to witness for taxes and insurance for the year he occupied the place. Frazier also paid witness some accounts which witness had advanced for supplies to labor and for working and making the crop the year that Frazier occupied the place, which amounted to about $1,100. Frazier went ahead and used this labor, and would have had to make these payments in order to keep the labor, and he got the benefit of it. The payment was for money and provisions which witness had advanced to his laborers on the place and which the Fraziers would have had to pay in order to keep them.

There was testimony tending to corroborate the testimony of Nicks in regard'to the Fraziers not being able to make the payments and finance the place, and that they had to give it up on that account, and, after the place was surrendered by them, Nicks rented the place the next year, 1924, to one Graham. ' There was testimony tending to show that the note in controversy was duly protested for nonpayment.-

John R. Frazier and Earl Frazier and Mrs. I. H. Frazier testified on behalf of the appellants, and their testimony tended to prove that the note in controversy was given as a collateral note for the purchase of the place; that the note would not have been put up as collateral as a guaranty of rent on the plantation; that the rent of the plantation in ordinary years would be between $2,800 and $3,200, but that for the year 1923 it was not worth anything like that. The testimony of I. H. Frazier in effect contradicted the testimony of Nicks tending to prove that the Fraziers surrendered the place and abandoned their contract to purchase the same. On the contrary, the Fraziers ’ testimony tended to show that he had made arrangements to finance the crop for the year 1924, and so informed Nicks in December, 1923, but Nicks had rented the place to one Graham, and witness therefore had to move. Witness conceded that he and his wife could not make the payments due for the year 1923.

The above are substantially the facts upon which the court rendered a decree in favor of the appellee against the appellants in the sum of $2,000, from which decree is this appeal.

The decree of the court on the issues of fact involved was not clearly against the preponderance of the evidence. The. testimony tended to show that the rent of the place during ordinary years was between $2,800 and $3,200; that appellee could have rented the place for the year 1923 for at least $3,200. This amount was conceded by the Fraziers to be the fair rental value for ordinary years. That was the correct standard. The appellee, as the landlord, was not required to accept a rental less than that because of unforeseen and unpropitious crop conditions which rendered the year 1923 unproductive and unprofitable to the tenants on the place.

The court, by its decree, reduced the rental to the sum of $2,000. This was a less sum than the court might have justly found by fair preponderance of the evidence. While there is a decided conflict in the oral testimony as to whether the note in controversy was given as collateral to secure the amount due under the contract of February 1, 1923, as above set forth, we are convinced that it was given as a collateral to secure any amount that might be due January 1, 1924, under that contract. The written contract speaks for itself. It is a contract of lease which, at the termination thereof, if the lessee complied with the provisions of the contract with reference to the payments, was to be converted into one for the purchase of the property and the lessor was to make the lessee a warranty deed conveying the same.

In Ish v. Morgan, 48 Ark. 413-415, 3 S. W. 440, we said: “The agreement between the parties about the possession must determine the relation between them, and, though it consists of two separate and distinct stipulations, they are to be read together as one contract, and that contract is competent evidence to establish or rebut the relationship of landlord and tenant. If the contract shows that the defendant was in under an agreement to purchase, the idea of a tenancy was rebutted. * * * But if, on the other hand, the meaning of it is that he is to pay rent, or a compensation for the use of the land, then he was a tenant.”

In Thomas v. Johnson, 78 Ark. 574, 95 S. W. 468, we said: ‘ ‘ The parties to an agreement for the sale of land may also contract with the right, at the election of either party in the future, upon the performance or nonperformance of certain conditions, to treat the transaction either as a purchase and sale contract or a lease.” See also Block v. Smith, 61 Ark. 266, 32 S. W. 1070; Levy v. McDonnell, 92 Ark. 324, 122 S. W. 1002, 135 Am. St. 183. We have recognized this doctrine in several cases in regard to executory contracts for the sale of land. We see no reason why the doctrine should not operate conversely where the parties have, by their contract, agreed that the relation should be that of landlord and tenant, with a provision that, at the end of tenancy, all the provisions of the contract having been performed, the contract shall then become one of sale and purchase, requiring the lessor to make an absolute deed to the property. Such, we believe, was the effect of the contract under review. The .judgment is therefore correct, and it is affirmed.

Mehaeey, J., disqualified,


author: Smith, J.

text:
    Greene County v. Paragould.
    Opinion delivered February 28, 1927.
    1. Bridges — authority of county to build. — A county may expend its road funds in constructing a bridge over a ditch constituting the boundary of a city, though half of the bridge will be inside of the city limits.
    2. Bridges — authority of city to build. — A city had power to hind itself to pay half of the cost of a bridge which constituted its boundary line notwithstanding that half of the bridge would be without the city limits.
    Appeal from Greene Circuit Court, First Division; G. E. Keck, Judge;
    reversed.

      John D. Hoskins, for appellant.

      Jeff Bratton, for appellee.
   Smith, J.

This cause was tried in the court below upon an agreed statement of facts, in which it was recited that the ditch constructed by the Eight-Mile Drainage District is the east boundary line of the city of Paragould at the point where the drainage ditch intersects Junction Street in that city, and the extension of this street from that point is a county road of the first class. In the year 1923 it became necessary to construct a new bridge over said ditch at the point where Junction Street intersects it, and a controversy arose between the city of Paragould and the county of Greene as to whether the city was liable for any part of the cost of building and constructing said bridge, inasmuch as only one-half thereof would be within the corporate limits.

With the consent of the city council, the mayor of the city entered into an agreement with the county judge, which is as follows: “Whereas, it has become necessary to rebuild what is known as Junction Street bridge, same being a first-class bridge across Eight-Mile Ditch, located at the terminus of Junction Street across said Eight-Mile Ditch, said ditch being the corporation line along the eastern limit of the city of Paragould, and the matter of the cost of construction of such bridge being in dispute, and the city contending that it is not liable for any part of the costs of construction of said bridge, the county contending that the city is liable for one-half of the cost of constructing said bridge, but the construction of said bridge being a matter of urgent public necessity, it is therefore hereby agreed by and between the county and the city that the county and the city will jointly, each sharing one-half of the cost thereof, immediately construct said bridge, with the express and distinct understanding that the city will claim reimbursement for all moneys expended by it in the construction of said bridge, and that the city, in paying one-half of the cost of constructing said bridge, does not in any way waive or thereby estop the city from claiming, and, if legally entitled thereto, from being reimbursed for all moneys thereby expended.

“It is understood that the city will duly file its claim with the county court of Greene County, Arkansas, for allowance and reimbursement of all moneys expended by it in constructing said bridge.”

The bridge was built, and, pursuant to this agreement, the city paid $871.37, which was one-half the cost of construction, whereupon the city filed a claim with the county court for reimbursement. The claim was disallowed, and an appeal was prosecuted to the circuit court, where judgment was rendered in favor of the city and the claim ordered allowed by the county court, and this appeal is from that judgment.

It is conceded that, had the county elected so to do, it might have paid the entire cost of the construction of the bridge. Greenberg Iron Co. v. Dixon, 127 Ark. 470. But the county did not elect so to do. Obviously it was the purpose of the county judge to require the city to pay one-half the cost of the bridge if the city had the power so to do, and we think the city had that power.

Section 7563, G. &» M. Digest, reads as follows: “Each city of the first and second class and incorporated towns in this State shall have the power to build, construct and keep in repair any bridge within the corporate limits thereof at the exclusive expense of any such municipal corporation.”

It is true, only one-half of this bridge lies within the corporate limits of the city, but it is true also that the city paid only one-half of the total cost, which amounts to the city paying for the portion of the bridge within the corporate limits.

Presumptively an agreement had been reached as to the character of the bridge and the plans therefor and the cost thereof; at least no question is raised to the contrary, and, upon the execution of these plans, a completed structure — a bridge — afforded means of ingress and egress into and out of the city, one-half of which was in the city.

In insisting that the city bear one-half of the cost of the bridge, the county judge was not imposing on the city an obligation which was ultra vires. Section 7563, C. & M. Digest, supra.

The bridge in question supplies the missing link which connects Junction Street in the city of Paragould with the road which was involved in the case of Mack v. Paragould & Hopkins Bridge Road Imp. Dist., 168 Ark. 867. In that case there was involved the question of building a bridge across the St. Francis River, and the plans for the proposed improvement called for the construction of a bridge to the center of the river — the boundary of the district — where connection was made with a similar improvement, thus making a completed bridge across the river. We there said: “It does not appear from the record before us that the proposed improvement is open to the objections which proved fatal to the proposed improvement in the cases of Mullins v. Little Rock, 113 Ark. 590, and Mullins v. Commissioners Bridge Imp. Dist. No. 2, 114 Ark. 324. Each of those cases involved the construction of a bridge across the Arkansas River at the city of Little Rook. In the first of those cases the proposed improvement was defeated because, as was held by this court, there was no provision in the law for a local improvement district to aid a county in the construction of a bridge connecting two cities, as was proposed in that case. In the second of those appeals, which involved the samé improvement, it was held that there could not be two separate sets of commissioners to build a single improvement.”

We ar.e of the opinion that there is nothing in either of the Mullins cases militating’ ag’ainst the right of the city to pay the cost of the bridge in the city limits because a part of the bridge was without the city limits. The contract between the city and the county contemplated a single structure, which has'been built, and we perceive no reason why the city might not bind itself to pay one-half of the cost thereof, inasmuch as half the bridge was within the city limits.

The city should not therefore have recovered the, sum which it had agreed to pay and has paid, as it had the power so to agree, and the judgment of the court below will therefore be reversed and the cause of action dismissed.


author: Humphreys, J.

text:
    Herweigh v. Hall.
    Opinion delivered February 28, 1927.
    1. Payment — application of payments. — The general rule relating to the application of payments is that the debtor at the time of making payment has the primary right to direct the application; if he fails to make the application, the creditor may make it; should he fail to make it, the law applies the payment to the oldest items of the account that are payable at the date of the payment.
    2. Payment — application of payments. — The general rule,as to the application of payments does not apply where a third party has a paramount interest entitling him to direct the application of payments.
    3. Payments — application.—Where a landlord, who became co-maker with his tenant of notes executed to the payee for rent and supplies, he may direct that the proceeds of the tenant’s cotton' sold to the payee by the tenant be applied to the oldest items in the account secured by such notes, whether due or not.

      Appeal from Greene Circuit Court, First Division; G. E. Keck, Judge;
    reversed.

      John D. Hoskins, for appellant.

      Jeff Bratton, for appellee.
   Humphreys, J.

This suit was instituted before a justice of the peace in Greene County by appellee against appellant and Abe Moore to recover an alleged balance of $168.60, with 10 per cent, interest per annum from July 16, 3925, until paid, on two notes of $100 each, executed by Abe Moore and his landlord, the appellant herein, to secure supplies to be furnished by appellee to Abe Moore during the crop season of 1920.

Appellant interposed the defense that the payments made by the sale of the cotton raised by Moore on his farm should have been credited on the notes instead of upon the unsecured account for supplies purchased 'by Moore from appellee in excess of the notes.

Appellee herein obtained judgment for the amount claimed in the magistrate’s court against appellant and his tenant, Moore, from which an appeal was prosecuted to the First Division of the Circuit Court of Greene County, where the case was tried de novo, with the same result, from which is this appeal.

The undisputed testimony reflects that Ahe Moore, a tenant on the farm of L. Herweigh, made arrangements with Ira Hall, a merchant at Delaplaine, to furnish him with supplies during the crop season to the amount of $200, by agreeing to give-him two notes in the sum of $100 each, bearing interest at the rate of 10 percent, per annum from date until paid; that, after purchasing the bill in the sum of $.................., which was charged in Hall’s books on open account against Abe Moore, he executed his promissory note to Hall for $100, dated April 12, 1920, due eight months after date, and another note for the same amount dated June 8, 1920, 'due six months after date, both of which were signed by L. B. Herweigh; that Moore bought supplies from time to time, which were charged on the account on the dates same were purchased, until the account amounted to $200, at which time Hall extended additional credit to Moore without security, and continued to charge such supplies as he purchased, on the open account; that, in October, 1920, Moore sold Hall the cotton which he had raised on the farm, the price therefor being credited, as delivered, on the open account; that the account appearing in Hall’s ledger, so far as it deals with the credits, is as follows:

Date Oct. 9, 1920.
Mr. Abe Moore
Amount forwarded ..........................................$282.80'
Credit cash .............................................................................. 70.00
$212.80
Date Oct. 15, 1920.
Mr. Abe Moore
Amount forwarded .....................$221.10
By Cash ...................................... ............................79.36
$141.74
Date Oct. 22, 1920.
Mr. Abe Moore
Amount forwarded ......................$154.05
Cash ................................................. ...................... 70.00
' $ 84.05
Date Mch. 21,1921.
Mr. Abe Moore
Amount forwarded ......................$167.43
Cash ................................................. ...................... 8.00
Paid.................................................... .......................75
$176.18

One bale cotton to apply on account.

The above statement does not show a $23 payment which was credited on the first note as of date April 10, 1921. It does show a $70 payment that was also credited on the first note of date October 27, 1920. The testimony reflects, without dispute, that the total amount of the account was $420.96, with total payments of $242.36, leaving a balance dne of $168.60, the amount for which suit was brought. The notes had been assigned to the bank, and were not in possession of Hall when the payments were made by Moore.

The testimony is conflicting relative to directions concerning the application of the payments.

Hall testified that, when Moore ‘brought the first bale of cotton, he told him to credit it on the account; that, on the same day, Herweigh came to him and asked how Moore had directed that the proceeds of the cotton be applied, and, upon being informed that Moore had told him to apply it on the account, he said to credit it on the notes; that, when Moore came back, he informed him that Herweigh said to credit the proceeds of the cotton on the notes, and Moore replied that he wanted it credited on the account.

W. W. Clayton, Hall’s clerk, testified that Moore directed the other cotton he brought in to be credited on the account.

Abe Moore testified that he told Hall to credit the proceeds of the cotton on the notes.

“The rule relating to application of payments is that the debtor, at the time of making payment, has the primary right to direct the application; if he fails to make such application, the creditor has the right to make it; should he fail to make it, then the law makes it by applying the payment to the oldest items of the account that are payable at the date of payment.” Briggs v. Steele, 91 Ark. 458, 121 S. W. 754; Cross v. Johnson, 30 Ark. 396; Johnson v. Anderson, 30 Ark. 755; Price v. Dowdy, 34 Ark. 285; Hughes v. Johnson, 38 Ark. 294; Kline v. Ragland, 47 Ark. 111, 14 S. W. 474; Lazarus v. Friedheim, 51 Ark. 371, 11 S. W. 518; Dunnington v. Kirk, 57 Ark. 598, 22 S. W. 430; Fort v. Black, 50 Ark. 256, 7 S. W. 121; Goldsmith v. Levine, 70 Ark. 516, 69 S. W. 308.

In cases of debts due and debts not due, or items due and not due, in the same account, the law applies payments to the due debts or items before applying same to. the undue debts or items, where no directions are given by the debtor. In ease items in an account are -covered by a note securing them, they become due at the maturity of the note, and not before. The law therefore, without directions from a debtor, would apply payments to the oldest items due, and not the oldest items charged. 30 Cyc. 1243; Frasier v. Lanahan, 71 Md. 131, 17 A. 940; Wolford v. Andrews, 29 Minn. 250, 29 N. W. 367; McMillan v. Grayson, 83 Mo. App. 425; Briggs v. Steele, supra.

None of the rules announced in the cases referred to have any application to the.instant case. The rules announced in those cases relate strictly to rights to make application of payments between the debtor and the creditor. The rules do not govern or control the rights of intervening parties. In the instant case the appellant had a landlord’s lien on all of the cotton produced on his farm by Moore for the rents and supplies which he had secured by signing the notes. By virtue of this paramount lien and right, it was his privilege to direct where the proceeds of the cotton should be applied. The undisputed testimony shows that he directed that it be applied to items in the account secured by the notes. Hall, the merchant, should have followed his directions and applied the payment to the oldest items charged on the account, irrespective of whether due or not.

On account of the error indicated the judment is reversed, and the cause is dismissed.

Mr. Justice Kirby dissenting.


author: Kirby, J.,

text:
    St. Matthews Church v. White.
    Opinion delivered February 28, 1927.
    1. Mechanics’ liens — lien against church. — Under Crawford & Moses’ Dig-., §§ 6915-6917, giving- a lien for laborers and material-men for work done and materials furnished against churches and charitable institutions where no bond is furnished by tlie contractor, a mechanic desiring to file a lien against a church, after giving ten days’ notice, must either bring suit within ninety days after the work was done or must within the same period file his account with the circuit clerk.
    2. Mechanics’ lien — parties.—In a suit by a mechanic to enforce, his lien for labor, done on a building, the contractor for whom he worked is a necessary party.
    3. Mechanics’ lien — enforcement—limitation.—A suit to enforce a mechanics’.lien which was filed with the circuit clerk must be brought within fifteen months after the work was done.
    Appeal from Johnson Circuit Court; J. T. Bulloch, Judge;
    reversed.
    STATEMENT OE EACTS.
    Appellee brought suit against the appellant church and its trustees to fix and enforce a lien against the church building in Coal Hill for labor performed by him for Charles Ziegler, contractor, in reconditioning and repairing same. He filed an itemized verified account against the church only with the circuit clerk of Johnson County, on March 28, 1925, on which he stated, “that between the 27th day of November, 1924, and January, 1925, he was employed as a laborer and did labor between said dates on St. Mathews Church, at Coal Hill, Arkansas,” describing the lot on which church was located, for which he claimed there was dtie him for labor $218.14, and for which he claimed a lien on the lot on which the church was -situated. No notice was given to the trustees of the filing of this account, nor any statement contained in it showing for whom the work was done. He filed suit, on which summons was issued against appellants, the church and its trustees, on April 15, 1925.
    Appellants filed a special demurrer on May 6, 1925, reserving the right to stand on their motion to quash the service of the summons without entering their appearance except for the purpose of the demurrer, alleging that plaintiff failed to show in his complaint that he had filed a proper account with the circuit clerk, claiming and fixing the lien upon the property, within ninety days from the date the labor was performed; also to show for whom the service was rendered and by whom he was employed, and that ten days’ notice had been given before the filing of the lien, or that he' made a contract with either of the appellants.
    The demurrer was overruled, hut, on May 7, amendment to the complaint was filed, stating that appellee was employed by Charles Ziegler to do the work on the St. Mathews Church, as plasterer, but he had not sufficient information to state whether Ziegler was the original contractor or was acting as agent or superintendent for the trustees of said church; stated further that, if Ziegler was an original contractor, trustees had not required him to enter into bond, as required by law, conditioned to pay all indebtedness incurred for labor or material furnished in the construction of said church.
    On May 7 defendants first filed a general demurrer to the amended complaint, alleging also that it had failed to make the contractor a party defendant, and, upon it being overruled, on the same day filed a motion asking the court to require the plaintiff to make the contractor a party defendant, and demurred to the complaint because he had not been made a party. All of which were overruled.
    On December *3, 1925, the defendants filed a motion to dismiss the case, alleging that more than fifteen months had already elapsed since the work was done, and' that the original contractor had never been made a party to the suit, as the law required. Upon the hearing the testimony showed that Charles Ziegler had ■ been employed as a contractor to recondition and repair the church, furnishing all labor and material necessary therefor, at the price of $821, and that none of the trustees had employed the appellee to do any work upon the church or been notified, at the time he filed his account with the clerk of the circuit court, that he had done such work, for which he claimed a lien on the building. He testified as to the amount and value of the work done, admitted that he had at first claimed only $144.25, and the court instructed the jury to return a verdict for the plaintiff for $158.14, and rendered judgment therefor, declaring it a lien against the church, from which judgment this appeal is prosecuted.

      White & White, for appellant.

      Jesse Reynolds, for appellee.
   Kirby, J.,

(after stating the facts). It is conceded that no notice was given of the filing of the account and claim for a lien, as required by § 6917, Crawford & Moses’ Digest, and also that Charles Ziegler, the original contractor, was not made a party to the suit, but insisted that there was no necessity for complying with any of the provisions of the mechanics’ and laborers’ lien law, since the building against which the lien was sought to be enforced was a church, except §§ 6915 and 6916, giving a lien for laborers and materialmen against churches and charitable institutions when no bond is required filed by the contractor for payment of labor ' done and materials furnished.

This contention is without merit. The said sections of the statute (act of June 2, 1911) were evidently made to provide protection for laborers and materialmen for work done and materials' furnished upon buildings and improvements of religions and charitable organizations and institutions, which the court had held were not subject^to the provisions of said mechanics’ and laborers’ lien law.

In Pfeiffer Stone Co. v. Brogdon, 125 Ark. 426, 188 S. W. 1187, the case in which it was sought to enforce a lien against a church where no notice of the filing of the account with the circuit clerk had been given, the court held that the filing of the suit to enforce the lien within the ninety days’ time given for fixing it dispensed with the giving of any such notice as had been held in the enforcement of such liens under the general law. This suit not having been commenced within ninety days after the work was done for which a lien is claimed, would not operate to relieve a lien claimant against the necessity for filing his account with the circuit clerk within the ninety days after the work was performed, and after giving the ten days’ notice required by law.

It was not the intention of the statute to give a lien for work done for contractors on such buildings and improvements in ease no bond was required filed for the payment of such claims that could be enforced at any time thereafter, but, obviously and necessarily, the new act was intended to become-a part of such general law, and, certainly, to the extent of perfecting and enforcing the lien in accordance with the provisions thereof. The contractor was a necessary and indispensable party, as held in Simpson v. J. W. Black Limber Co., 114 Ark. 464, 172 S. W. 883.

Even if it could be considered that there was doubt about the bringing of the suit within ninety days of the date the last labor was performed, which dispensed with necessity for giving the notice and filing the account with the circuit clerk, the law requires that an action to enforce such lien shall be commenced within fifteen months, and the contractor is a necessary and indispensable party to such suit. His not having been made a party within said time, and the fact that the suit was sooner brought against the owner,' could not relieve against the limitation.

The judgment is accordingly reversed, and the cause dismissed.


text:
    Brown Shoe Company v. Stone.
    Opinion delivered February 28, 1927.
    1. Assignments for benefit of creditors — release.—In an action by a creditor to recover a balance of the account after the debtor had made an assignment for the benefit of creditors, a verdict for defendant held sustained by evidence that plaintiff had accepted a pro rata dividend in full settlement.
    2. Customs and usages — when binding. — A local custom by which creditors, after assignment of a debtor for their benefit, took a pro rata share of the assets in satisfaction of their claims, of which custom plaintiff had knowledge, held sufficiently proved.
    3. Appeal and error — invited error. — Appellant cannot complain of the introduction of testimony as to a custom brought out by appellee, when appellant brought out testimony as to such custom more fully than appellee did.

      4. Assignment for benefit of creditors — release.—Where a creditor, knowing that an assignment will not be carried through unless it agrees to it, and with that knowledge accepts a check sent in full payment, it will be bound by its own act, and cannot thereafter maintain a suit for any balance against the assignor.
    Appeal from Sebastian Circuit Court, Port Smith District; John E, Tatum, Judge;
    affirmed.

      Clinton R. Barry, for appellant.

      Warner, Hardin & Warner, for appellee.
   Mehaffy, J.

R. E. Williams and J. H. Stone were in business in Port Smith, Arkansas, and on the eighth day of March, 1924, made a deed of assigment to H. C. Bass, reciting that the parties of the first part were indebted in divers sums of money, which they were unable to pay in full to their different creditors, a list of which was given; and the deed further stated that they decided to make a fair distribution of their property and assets among all their creditors, in proportion to their respective claims. The said deed recited that it was in trust for the benefit of creditors of the estate of the parties of the first part. Among the creditors in the list attached was the Brown Shoe Company in St. Louis, to whom, according to the list, Williams & Stone were indebted in the sum of $1,004.87.

H. C. Bass took charge of the assets of Williams & Stone, and wrote the creditors, on the 24th day of March, 1924, the following letter, which was mailed to the Brown Shoe Company, as well as to the other creditors:

“March 13, 1924.
“To the Creditors of Williams & Stone,
Port Smith, Arkansas.
“Gentlemen: Subsequent to a meeting of creditors, held in this city last Friday, March 7, Williams & Stone, located at 420 Towson Avenue, Port Smith, Arkansas, have made an assignment to the writer for the benefit of all creditors, share and share alike, subject, of course, to the approval of said creditors.
“The following firms were represented at the creditors’ meeting: Beal-Burrow Dry Goods Company, Berry Dry Goods Company, J. Foster & Company, Arkansas Valley Bank. It developed that the liabilities of Williams & Stone were considerably in excess of the cash value of their assets and. that their volume of business was not sufficient to cover overhead expenses, therefore it was the unanimous opinion of the creditors present that it would be to the best interest of all parties concerned to liquidate this business, and the writer was asked to act as trustee to avoid bankruptcy proceedings.
“The books of this concern showed their liabilities and creditors to be as follows:
Beal-Burrow D. G. Co............Little Bock, Ark.......$2,733.34
Brown.Shoe Co..............................St. Louis, Mo............. 1;004.87
Berry D. G. Co...............................Ft. Smith, Ark....... 652.42
J. Foster & Co..............................Ft. Smith, Ark....... 1,941.23
Arkansas Valley Bank..............Ft. Smith, Ark.......... 2,000.00
Ft. Smith Garment Co............Ft. Smith, Ark.......... 125.50
Wolverine Shoe Co.....................Bockford, Mich.......... 306.50
The Davis Hat Co.........................Dallas, Texas............... 121.30
Safe Cabinet Co...........................Marietta, Ohio............ 22.10
Sunbraid Hat Co............................St. Louis, Mo............. 23.30
One month’s rent........................... 50.00
“Total ..............................$8,980.86
“Inventory shows the following assets:
Cash.............................................................................................$ 46.80
Dry goods and notions.......................................... 3,190.69
Shoes ..........................................................,............................ 2,759.10
Groceries .............................................................................. 480.53
Fixtures ................................................. 902.11
“Total...........................................................................$7,379.23
“Acting on the assumption that all creditors not represented at the meeting will concur in the assignment, it will be the purpose of the trustee to sell the stock of merchandise and fixtures at public auction at 10 a. m. Monday, March 24, at the Williams & Stone store.
“It will be noticed that this concern has no notes and accounts receivable, having done a strictly cash business, and the condition of their affairs is due to the fact that very little capital was put into this business; to be exact, only $1,170; however, at the time the indebtedness was incurred it was the belief and opinion of Williams & Stone that they would be able to secure sufficient outside capital to conduct their business, but their plans did not carry through, aiid, since their volume of business has not taken care of their overhead, the small initial investment has been consumed.
“Hoping that you will concur in the assignment and forward verified statement of your account by return mail, I am,
“Tours very truly,
“H. C. Bass, Trustee.”

After the Brown Shoe Company received the letter they sent to Bass-, the trustee, their account, amounting to $1,004.87. Thereafter, on the 24th day of April, 1924, H. C. Bass wrote to the Brown Shoe Company, inclosing a check to them 'for $482.34, in which he stated that this amount represented the first and final dividend of 48 per cent, of their account against Williams & Stone. This statement was then followed in the letter by a complete statement of the receipts and disbursements. On the 13.th day of September, 1924, the Brown Shoe Company filed suit against Williams & Stone for $522.49. No service was had on Williams and the suit proceeded against Stone. Defendant Stone filéd an answer denying the indebtedness, and denying that the account matured prior to April 8, 1924, dénying their statement of account was correct, and denying that Williams admitted it to be true; and, for further answer, Stone alleged that a meeting of all the creditors of the concern was called and held, and that at said meeting the partners proposed to deliver over all the assets in liquidation and settlement of the outstanding debts, including the plaintiff’s. They alleged that the proposition was accepted by the creditors and the agreement fully consummated, and all other assets of the business were turned over to the trustee, who was selected by the creditors, and that the creditors accepted the amount in full, final, and complete settlement of all the obligations, including the debt of plaintiff. They alleged that plaintiff was a party to the agreement entered into, acquiesced in and accepted the agreement and settlement thereunder, and that their creditors were paid, each, including the plaintiff, its pro rata part.

The letter from the trustee to the appellant stated that Williams & Stone had made an assignment to the writer for the benefit of all the creditors, share and share alike, subject, of course, to the approval of all creditors. The appellant then had notice that there was an assignment for the benefit of all creditors, but it was subject to the approval of all creditors. Then the letter, inclosing the appellant a check for $482.34, stated that it represented the first and final dividend. The letter of March 13, 1924, above referred to, also stated that the liabilities of Williams & Stone were considerably in excess of their cash assets, and that it was the opinion of the creditors that it would be to the interest of all parties concerned to liquidate their business, and the writer was asked to act as trustee to avoid bankruptcy proceeding's. This letter also contained the following statement: “Acting on the assumption that all creditors not represented at the meeting will concur in the assignment, it will be the purpose of the trustee to sell the stock of merchandise and fixtures at public auction at 10 a. m. Monday, March 24, at the Williams & Stone store.” The letter closed with the statement: “Hoping that you will concur.in the assignment and forward verified statement of your account by return mail, I am,” etc.

The appellant therefore knew that an assignment for the benefit of all creditors was made, was subject to the approval of all creditors, and knew when the stock was to be sold, and knew that, if it approved it, it was requested to send its verified statement of account by return mail.

The trustee who wrote those letters testified that he had received the account of the Brown Shoe Company through the mail. This witness further testified that the creditors represented felt that it was the best thing that could be done for the creditors to save expense and to save bankruptcy cost. Witness also testified that, when he wrote the letter to the Brown Shoe Company, appellant, he received a verified statement of account; in other words, it filed its claim with him.

The testimony shows that, when creditors took charge of a debtor’s property, it was the custom in that territory that the pro-rata share of the property received by each creditor should be in satisfaction of the creditor’s claim, and that this was the understanding in this case. The testimony also shows that the appellant, Brown Shoe Company, had been doing- business in that trade territory for many years. It was advised by the trustee that an assignment had been made for the benefit of all the creditors, but that it was on condition that it met the approval of all the creditors, and it was expressly stated to the appellant in the letter that the creditors had done this to avoid bankruptcy, that is, this is the substance of what was stated in the letter, and, after being told that the debtors had assigned all their property for the 'benefit of all the creditors, but it was on condition of the approval of all the creditors, they sent their verified account as requested, and participated in the proceeds of the sale.

The proof is sufficient to show not only the custom, but that the appellant knew of the custom, having been in that territory for many years. Appellant argues but two questions. It first contends that the court erred in admitting certain testimony, and it is argued that the testimony with reference to the agreement of the creditors, and the testimony as to the custom, was improper. The appellant, however, brought out the testimony about the custom much more fully than the appellee, and also showed that the Brown Shoe Company had been doing-business in that territory for many years,

In. the view that we take of this case we do not think that the testimony was prejudicial. The appellant contends that the court erred in refusing to direct the jury to find for the plaintiff. It may be conceded that, if a debtor makes an assignment for the benefit of his creditors, with a provision in the deed that creditors must agree to accept their pro rata share in full settlement of their claim, the deed of assignment is void, and, if this condition was not in the deed, but was made at the .time and carried into effect, it would be void. The Circuit Court of Appeals of the 8th Circuit announced the rule to be as follows: “And a deliberate agreement, in or out of the deed, made at the time and carried into effect, to violate the statute, is a fraud upon the statute, and a fraud upon the legal rights of creditors, which the law will redress by removing the fraudulent barrier to the assertion of their legal rights against their debtors. ’ ’ Simmons Hardware Co. v. Rhodes, 7 Fed. Rep. (2d) 352.

Another case decided by this court and relied on by appellant stated:

“A deed of assignment, by an insolvent debtor, which provides that the preferred creditors are not to enjoy its benefits unless they accept of its provisions in full satisfaction of their debts, and that, if any of them refuse to accept, they shall be excluded, and the pro rata share to which they would have been entitled, had they accepted, shall be paid to another specified creditor, and which makes no provision as to the disposition of any surplus that may remain in the event all the preferred creditors shall refuse to accept, after paying the debt of the residuary creditor, is fraudulent and void on its face.” Collier v. Davis, 47 Ark. 367, 1 S. W. 684, 58 Am. Rep. 758.

The court puts this on the ground that the debtor has no right to do this because it hinders and delays the creditors in their remedies and endangers the ultimate collection of their debts. It is said that it puts the proposition beyond the reach of judgments and executions into the hands of an assignee chosen, not by themselves, but by tbe debtor. This court said, in one of tbe cases relied on by appellant, after announcing the rule above set forth: “This,” say the authors of Ruling Case Law, “is on the ground that an insolvent debtor has no right to dictate terms which shall make him independent of his legal obligations, and that it is contrary to justice and against public policy to allow debtors to coerce their creditors into releasing their debts.” Nelson v. Harper, 122 Ark. 39, 182 S. W. 519.

The rule is well established in this State that a debtor cannot make an assignment with the condition that all persons who accept their pro rata part shall thereby extinguish their debt, but we have here a very different case from any of those relied on by appellant. The debtor in this case did not seek to coerce any of his creditors. It was the creditors themselves who met and agreed to take charge of all of the debtor’s assets; the debtor had no voice in it, as it appears from the evidence; he simply executed the deed to the trustee selected by the creditors, with the provision agreed to by the creditors. They entered into this agreement, they say, to avoid bankruptcy, and, in notifying the creditors, the trustee expressly stated that there had been a meeting of creditors held, and, subsequent to that meeting, the deed of assignment had been made to the trustee for the benefit of all the creditors, share and share alike, and subject, of course, to their approval. He also stated in the letter that he was asked to act as trustee to avoid bankruptcy proceedings. He was representing the creditors, and not the debtor. This letter was received by the appellant, and, in response to that letter, it sent its verified account. Since the appellant knew that a deed of assignment was made for the benefit of all the creditors, knew that it was done at a meeting of the creditors for the purpose of avoiding bankruptcy, and knew that it was not to be carried out unless all the creditors agreed, it agreed to the arrangement by sending its verified account as requested, with the knowledge of all these facts.

It is well established in this State that, where a creditor accepts a check which states on its face that it is in full payment, the creditor is bound thereby, and cannot thereafter sue for any balance. And if a creditor, knowing the facts, knowing that the assignment will not be carried through unless it agrees to it, knows that the check is sent in full satisfaction of its account, and receives and cashes the check with the knowledge of all the facts that were in the possession of appellant in this case, it is bound by its own act, and cannot thereafter maintain suit for any balance. At any rate, the court could not say as a matter of law that it was not bound, and this is the only contention in this case.

It has been said by this court, speaking of deeds of assignment: “Such deeds of assignment have been upheld by the decisions of this court holding that the debtor, in making assignment of his property for the benefit of creditors, may exact .releases from creditors as a condition of preference under the deed, where he dedicates all of his property, not exempt by law, to the payment of all his creditors, not necessarily to the payment of all in equal proportions.” King v. Hargadine M’Kittrick Dry Goods Co., 60 Ark. 1, 28 S. W. 514.

Again this court has said: “An insolvent debtor can reserve no use or benefit to himself out of the property assigned. He may stipulate for a release, but he must dedicate all of his property, not exempt by law, to the payment of all his creditors; not necessarily to the payment of all in equal proportions, for he may prefer such as will execute releases. But the deed must provide for the distribution of any surplus that may remain in the hands of the trustee, after the payment of the preference creditors, amongst the other creditors, whether they assent or not.” McReynolds v. Dedman, 47 Ark. 13, 1 S. W. 552.

No objection is urged to any instructions given by the court and no objections to the court’s refusing to give instructions, except the' one instruction for a directed verdict. The evidence is sufficient to support the verdict, and the judgment is therefore affirmed.