author: Wood, J.

text:
    Stroud v. Henderson.
    Opinion delivered June 7, 1926.
    1. Appeal and error — weight of testimony. — It is not the province of the Supreme Court to pass on the weight of testimony or on disputed issues of fact.
    2. Appeal and error — province of jury. — Where there is legally sufficient testimony to sustain a verdict, the Supreme Court will not invade the province of the jurors, who are triers of the faets.
    3. Fraud — reliance on representation — evidence.-—The facts that one suing for false representations in the sale of stock was a stockholder at the time of purchase of the stock and that he renewed a note to a bank for the purchase money were relevant on the issue whether or not he relied, or had a right to- rely, on the alleged false representations.
    4. Fraud — waiver and estoppel. — The fact that a purchaser of stock suing for alleged false representations renewed a note at the bank for money borrowed to pay for the stock is not available as a defense by way of estoppel or waiver.
    5. Appeal and error — question not raised below. — Where defendant did hot demur to the complaint, nor move to make it more specific, nor object to plaintiff’s testimony, he cannot, on appeal, object to a variance between the allegations of the complaint and the proof.
    6. Fraud in sale of stock — evidence.—In an action by the purchaser of stock against the seller, who was officer and director of the corporation, evidence of the financial condition of the corporation, at the time of the purchase of the stock and as to its value was relevant upon the issue whether the seller made false representations as to the solvency of the corporation and the value of its stock.
    7. Appeal and error — instruction—harmless error. — In an action by a purchaser of corporate stock for false representations, failure of an instruction to submit as to whether plaintiff had a right to rely upon defendant’s alleged representations was not prejudicial, where it was shown that defendant, at the time of making the representations, was an officer and director of the corporation, since plaintiff had a right to rely upon the representations, if made by defendant.
    Appeal from Benton Circuit Court; W. A. Dickson, Judge;
    affirmed.

      W. N. Ivie, for appellant.

      John W. Nance, for appellee.
   Wood, J.

This action was instituted in the Benton Circuit Court by J. M. Henderson against H. L. Stroud. Henderson alleged in substance that Stroud, on or about December 1,1920, sold him stock in the O. K. Truck Company, hereafter called O. K. Company, for which he paid Stroud the sum of $5,575.50; that in conducting the negotiations Stroud represented that he was a director and officer of the O. K. Company, that the company was solvent and doing a large volume of business, and that the purchase of the stock by Henderson would be a good investment; that these representations made by Stroud were false and fraudulent; that Stroud knew that said statements were false; that the representations were made for he purpose of cheating and defrauding the defendant, and had that effect. Henderson prayed for judgment against Stroud in the sum of $5-,575.50, with interest from December 31,1920; until paid.

In his answer Stroud denied all the material allegations of the complaint, and made his answer a cross-complaint against Henderson, and set up that judgment had been rendered against him and Henderson in favor of the bank for the balance due on a note bearing interest at the rate of eight per cent., which judgment he had paid. He asked that he have judgment against Henderson for the amount which he had paid to satisfy the judgment of the bank in the sum of $4,074.80, with interest'.

Henderson testified substantially as follows: He had been acquainted with Stroud for some fifteen years. Stroud had a wholesale grocery store in Rogers, and used to be in the banking business. He was also engaged in the O. K. Company plow works and other Oklahoma enterprises. Witness also owned some stock in the. O. K. Company. Witness purchased some stock in this company in 1919. He didn’t remember whether 'Stroud was connected with the company at that time or not. The certificates of stock then purchased were signed by C. E. Harris, president, and H. L. Stroud, secretary. The par value of a share of stock was $10. In January, 1920, witness purchased from H. L. Stroud 413 shares of stock for which he paid $13.50 per share. Stroud represented at the time of witness’ purchase that the stock was worth $15 per share. At the time Stroud was an officer of the O. K. Company. He had been secretary, or treasurer, or director, or receiver, or had some inside office in the company, where he had been “strictly on to the running of the business.” Witness did not have any money, and paid for the stock in the following’ manner: During the negotiations, in a conversation with Stroud, Stroud pointed over to his wholesale grocery business and told witness what a success he had made of his business around there, and said that he would help witness out, after witness had paid what he could on it through the earnings of the company. Witness thought in that way he could soon get the stock paid for. Witness later found out that 'Stroud had previously made arrangements for some kind of a loan. Witness gave his check for $75.50 — all the money he had at the time — to Stroud as part payment on the stock. Stroud at the same time stated to witness that he would indorse the witness’ note for the balance of the purchase money, and he did indorse witness’ note to the American National Bank for the sum of $5,500. Witness made some payments on the note and renewed the same at the bank. A little later on witness heard unfavorable reports concerning the solvency of the O. K. Company, and spoke of it to Mr. Stroud. Stroud reassured the witness that everything was all right with the O. K. Company, and told witness to go ahead and finish paying his.note at the bank. After being thus reassured, witness paid $1,000 more on the note to the bank, making in all the sum of $1,575.50 with the accrued interest. The stock purchased by witness had been placed in the bank as a collateral security on the note. Afterwards witness learned that the O. K. Company was not worth anything, and was not what it had been represented to him by Stroud, who had dumped the stock on him, and witness quit paying. The O. K. Company went into the hands of a. receiver. This was not long after witness purchased the stock from Stroud. Witness wrote a letter to Stroud after witness had purchased the stock, stating that he had written a party with reference to the sale of his 413 shares of O. K. Company stock, and asking Stroud whether it could be transferred right away if witness sold the same. To this letter Stroud answered: “You can have stock transferred any time. I have been over at the plant since I saw you, and it looks very good. I expect they will declare a twenty per cent, dividend. That is the way they talked. That will not be decided until June 14. I have lots of faith in the • business properly managed. Get all the proxies you can — we will need them. I expect to be in Rogers about June 1.” Witness stated that he never received any dividends on his stock, and no one else did. The O. K. Company declared twenty per cent, dividends in stock. They never sent out any money. Issued certificates of stock and increased the liability of the company, but never paid any cash dividends. Witness had tried-to sell his stock before the company went into the hands of the receiver, but could not do so. Witness didn’t know what was the actual value of the stock at the time he bought the same. It didn’t prove to be of any ■worth to witness, but was a clear loss. Witness first purchased stock in the O. K. Company in December, 1919, and witness purchased stock from Stroud in January, 1920. Witness’ testimony on cross-examination showed that he and Stroud were afterwards sued by the bank for the balance due on the note executed to the bank for the purchase money which witness had borrowed from the bank to pay Stroud on the stock. There was a lengthy cross-examination of the witness, which we deem it unnecessary to set forth. Witness was later recalled, and, on direct examination, testified that Stroud represented to him at the time fie purchased the stock that it was worth fifty cents above par, and witness at that time believed that -Stroud was telling the truth as to the value of the stock, and relied on his statements, and bought the same. The witness stated that, before he purchased the stock from Stroud, he had purchased other stock in the company, and had paid at the rate of $15 per share, purchasing 225 shares. He also testified that he had attended a meeting of the stockholders of the O. K. Company at Muskogee, Oklahoma, in June, 1920, after the purchase of his stock. At that time they were making very favorable reports-of the condition of the company. Everything was looking prosperous. Stroud was either boss or assistant boss, and whatever information witness obtained came through him or the officers of the company. Witness, being a mere minority stockholder,' didn’t have any way of getting* inside. Witness didn’t examine the books of the company. He took the word of the officers, including that of Stroud, as to the condition of the company.

. There was other testimony on behalf of the plaintiff which tended to prove that, as late as June, 1920, the O. K. Company was recommended as being in a good financial condition. One of the witnesses stated that there was no question about it at that time, but after it went into the hands of a receiver and the witness made an investigation of the company’s affairs from the beginning, witness concluded that the company had never been solvent. Witness never thought that the stock was ever worth as much as fifty cents on the dollar. Witness made the investigation quite a loDg time after the company had gone into the hands of a receiver.

The testimony of Stroud was to the effect that he said nothing to Henderson as to the value of the stock he was selling or as to the financial condition of the O. K. Company or the value of any of its property. He testified to the effect that he told Henderson, who was anxious for stock in the O. K. Company, that witness knew of a block of stock of tbe company which was held by a certain bank in Mnskogee that conld be purchased at $1.35, or $13.50 per share, and that Henderson insisted that Stroud sell him some of his stock, and that he (Stroud) could later buy the block of stock held by the Muskogee bank to replace the stock he sold. Stroud testified that he later purchased the stock from the bank in Muskogee for which he paid the sum of $4,500 at the rate of 25c or 35c over the par value.

Both the testimony on behalf of the appellee and the appellant is exceedingly voluminous, and we deem it unnecessary to further set it out. The court instructed the jury defining the issues raised by the pleadings of the respective parties, and told the jury that the burden of proof was on Henderson to show by a preponderance of the evidence his right to recover against Stroud and the extent thereof, and that the burden was upon Stroud to show by a preponderance of the evidence his right to recover and the extent thereof against Henderson. The court further instructed the .jury in substance that, if they found from a preponderance of the evidence that Henderson purchased from Stroud stock in the O. K. Company, and that Stroud represented that the stock at that time was worth $13.50 per share, and that Henderson relied upon such representation, believing it to be true, and that the representation was material, and induced Henderson to purchase the stock at that price, and if the jury found that the said representation-was false, or that Stroud, not knowing it to be true, made such representation with the fraudulent intent to have Henderson believe and act upon it, and that Henderson was thereby injured, then they should find in favor of Henderson. If they failed to so find, their verdict should be in favor of Stroud. The court further, in effect, told the jury that, if they found for Henderson, the measure of his damages would be the difference between the value of the stock at the time of the sale and purchase and the price paid therefor; that, if the O. K. Company was solvent at the time of the alleged purchase and sale and its stock worth $13.50 per share, then their verdict should be in favor of Stroud on Henderson’s complaint, although the O. K. Company afterwards failed.

The court further instructed the jury as follows: “No. 7. It is admitted that judgment was rendered against Henderson and Stroud in this court on the note executed by them to .American National Bank for the stock in question for $4,466.94, and that the judgment has been paid by Stroud. (Unless you find for Henderson on his cause of action for alleged deceit in the sale of the stock as explained in these instructions) then you should find for 'Stroud on his counter or cross suit for the amount Stroud paid to the bank, with interest.” Stroud registered a general objection to all the instructions except No. 7, set out above, and to that he specifically objected to the clause included in the parentheses. The jury returned separate verdicts as follows: “We, the jury, find for Henderson in the sum of $1,575.50 on the suit against Stroud; and we, the jury, find for Henderson on the suit of Stroud against Henderson.”

After the jury had been discharged, Stroud objected to the return of the separate verdicts. Judgment was entered in favor of Henderson againstjStroud in the sum of $1,575.50 and for costs, from which is this appeal.

The-appellant contends that there is no testimony to support the verdict. It will be observed that the complaint as above -set forth alleged that the appellant approached the appellee to sell him stock in the O. K. Company, and represented that he was a director and officer in the company; that the company was solvent, doing a large volume of business, and that the purchase of the stock would be a good investment; that the representations thus made were false; that the appellant knew they were false and made them for the purpose of cheating and defrauding the appellee; that the appellee believed them to be true, and relied upon the same, and had a right to do so, and purchased the stock from the appellant. The uncontroverted testimony shows that the par value of the stock was $10 per share. The appellee testified in substance that the appellant represented to him at the time of the sale and purchase of the stock that it was worth $15 per share, and that he would sell it for $13.50 per share; that, while they were negotiating and before the sale was consummated, the appellant pointed to his wholesale business house across the street, referred to the success he had made out. of his business at Rogers, and offered to assist the appellee in the payment for his stock through the earnings of the company; that the appellee thereupon paid the appellant the sum of $75.50 as a cash payment on the stock, and borrowed the balance from the American National Bank and executed his note therefor, which the appellant indorsed. It was shown that, at the time of these negotiations, the appellant was secretary and a director of the company, and that the appellee knew this fact. Appellee further testified that he relied on the statements of the appellant and believed that he was telling the truth; and, further, that he made payments on, and renewed, his note at the bank for the balance of the purchase money from time to time until he ascertained that the corporation was defunct. His testimony was to the effect that, after he heard “the thing was getting shaky,” he went to the appellant about it, whereupon the appellant reassured him, and the appellee then went and made another payment, but didn’t make any more after the corporation went to pieces. The appellee made payments to the amount of $1,575.50 on the principal with interest, upon being reassured by the appellant that the company was all right and on being urged by him to go ahead and finish paying the note at the bank. A letter was introduced from the appellant in which he stated that, since seeing the appellee, he had been over to the plant, and that it looked good; that he expected from what they stated they would declare a twenty per cent, dividend. There was other testimony to the effect that, some time after the sale and purchase of the stock by the appellee from the appellant, one of the stockholders, who had purchased stock about the time the appellee purchased his stock, was made a director, and at that time the appellant was also a director and secretary and treasurer of the company. This witness, upon investigation, ascertained that the stock was worthless, and a short time after it went into the hands of a receiver.

On the other hand, the testimony of the appellant tended strongly to prove that he made no false representations to the appellee; that the appellee approached the appellant anxious to purchase stock in the company, and that both the appellant and appelleé were stockholders in the company; that he made no representations as to the financial condition of the company or the value of its stock; that the appellee knew as much about that as did the appellant, and that the appellant sold the appellee a block of appellant’s stock at the market price of the stock at that time, and that the appellant himself, after selling this stock to the appellee, purchased $25,000 worth of the O. K. Company stock for which he paid in cash at the rate of $1.25 or $1.35 on the dollar.

Now, it is not the province of this court to pass upon the weight of the testimony and the disputed issues of fact. Where there is legally sufficient testimony to sustain the verdict, it is the unvarying rule of this court not to invade the province of juries, who are triers of fact. Without pursuing the subject further, we are convinced that it was an issue for the jury as to whether the appellant made false representations in regard to the value of the stock, which he knew to be false, for the purpose of inducing the appellee to purchase the same. The position appellant occupied with the O. K. Company placed him in a situation where he knew, or could and should have known, of its financial affairs. And because of this official relation to the company, if he made false representations as to the value of its stock for the purpose of selling his own stock to the appellee, which representations he knew to be false, upon which the purchaser relied and had the right to rely, he would be liable to such purchaser. The testimony brings the case well within the doctrine announced by this court in the recent case of Myers v. Martin, 168 Ark. 1028, where we said, speaking of a contention similar to that of the appellant in the case at bar: “The appellant was in position that he had peculiar knowledge of the condition of the bank, and appellee had the right to rely on the representations; therefore appellant cannot be heard to say that appellee should have made further investigation to ascertain the truth, instead of relying upon his statements. "We are not dealing with the weight of the evidence, but merely with its legal sufficiency. The weight of the evidence was a matter within the province of the jury and the trial court.” See also Bell v. Fritts, 161 Ark. 371.

The appellant contends that, on the undisputed facts, the appellee is estopped as a matter of law by his renewal of the notes given to the bank for money loaned the appellee to pay for the stock. Appellant cites and relies upon Sebastian County Bank v. Gann, 121 Ark. 115, and cases there cited. But the facts of those cases clearly differentiate them from the facts of the case at bar, and the doctrine there announced has no application here.

This is an action by the appellee against the appellant for false representations. Therefore the fact that the appellee made payments on and renewed his notes to the bank from time to time for money which the bank loaned him to pay for the stock purchased of appellant certainly does not tend to prove that the appellant had waived his alleged cause of action against the appellee for false representations. Such payments and renewals cannot avail appellant as a defense to the action under the doctrine of estoppel. The fact that the appellee was a stockholder at the time he purchased the stock in controversy from the appellant, and the fact that he renewed the notes to the bank for the purchase money, was relevant testimony on the issue as to whether or not the appellee relied, and had a right to rely, upon the alleged false representations on which he bottomed his alleged action against the appellant. But certainly the payments and renewals to the bank which appellee owed cannot avail the appellant as a defense to this action under the doctrine of waiver or estoppel. These renewals and payments to the bank did not injure appellant.

This brings us to the question as to whether the court erred in its instructions to the jury.

The complaint alleged that the appellant “represented to the defendant (appellee) that he was a director and officer in said company, and that said company was solvent and doing a large volume of business, and represented the same as a good investment.” Learned counsel for the appellant argue that there is a fatal variance between the above allegations of the complaint and the proof, inasmuch as the appellee “did not testify that Stroud made either of these representations in fact or in substance.” Counsel further contend therefore that the court erred for that reason in not directing the jury, at the close of the testimony, to return a verdict in favor of the appellant. We do not concur in these views of counsel for appellant. Counsel did not demur to the complaint, nor was there any motion to make the same more specific, nor any objection in the court below to the testimony of the appellee, who testified that appellant said the stock was worth $15 a share, and that he could let the appellee have the same for $13.50 per share. The appellant is therefore not in an attitude to complain here that there was a variance between the allegations in the complaint and the proof. Moreover, the above testimony and other testimony adduced by the appellant, tending to show the financial condition of the O. K. Company at the time of the purchase of the stock, was- relevant to the issue as to whether or not the alleged representations were false. If, indeed, the stock of the company at the time of the purchase was not worth $15 per share, nor $13.50 per share, but was worthless, then this testimony was relevant to the issue as to solvency of the company and as to whether or not the alleged representations were false and fraudulent and made for the purpose of inducing the appellee to purchase the stock. The court in its instructions confined the issue to the precise testimony of the appellee to the effect that the appellant represented the stock was worth $13.50 per share, and told the jury that, if such representations were made, and if same were false and relied on ¡by the appellee, and were made with the fraudulent -intent of having the appellee act upon them, and appellee did act upon them, then the appellant was liable. No specific objection was made to this instruction. While the instruction does not submit to the jury the issue as to whether or not the appellee had the right to rely upon such alleged representations, it occurs to us that the failure to submit this issue is not prejudicial for the reason that the uncontroverted proof is that Stroud at the time was the secretary and treasurer and a director of the company. Therefore, if appellant made such representations, it would follow as a matter of law, under the doctrine of Myers v. Martin, supra, that the appellee would have the right to rely thereon; and if he did rely thereon, and-if they were false and fraudulent, and injured the appellee, appellant would be liable in damages for such injury. We find no conflict íd the instructions, and no error in the instructions submitting the issues of fact to the jury; nor was there any inconsistency or defect in the separate verdicts returned by the jury. Since there was legally sufficient evidence to support the verdict in favor of the appellee, the same is conclusive here. Upon the whole case we are convinced that no reversible error is presented by the record, and the judgment must therefore be affirmed.


source: Caselaw Access Project

author: Hart, J.,

license: Public Domain

text:
    Wm. R. Moore Dry Goods Company v. Mann.
    Opinion delivered June 7, 1926.
    1. Malicious prosecution — nature op action. — To justify an action for malicious prosecution, both want of probable cause and malice must be shown.
    2. Malicious prosecution — probable cause — advice op counsel.— The rule that it is conclusive evidence of probable cause and a good defense to an action for malicious prosecution that, in instituting the prosecution, defendant acted upon the advice of counsel learned in the law, after placing before him all the facts in defendant’s possession, held applicable to an action for maliciously bringing a civil suit, as well as to an action for instituting a criminal prosecution.
    3. Malicious prosecution — probable cause. — Generally, the want of probable cause in an action for malicious prosecution is -a mixed question of law and fact to be submitted to the jury; but, in the absence of a dispute as to the facts, the court should declare their legal effect, without the intervention of a jury.
    4. Malicious prosecution — province op'court. — Where there was no testimony in an action for malicious prosecution to prove malice or want of probable cause, it was error to refuse a peremptory instruction for defendant.
    Appeal from Crittenden Circuit Court; G. E. Keck, Judge;
    reversed.
    STATEMENT BY THE COURT.
    This is an action by appellee against appellant to recover damages for having maliciously and without probable cause instituted an action in the Crittenden Chancery Court to have set aside as fraudulent a deed executed to appellee to certain lands in Crittenden County, Arkansas.
    The appellant answered and admitted that it instituted a suit against appellee to set aside as fraudulent a deed to the lands described in the complaint in that action, but denied that it was brought with malice and without probable cause.
    The record shows that on the 12th day of July, 1922, the Wm. R. Moore Dry Goods Company, the appellant herein, brought a suit in equity against R. T. II. Chambers and appellee, Marie Chambers Mann, to cancel and set aside a deed to certain lands executed by R. T. H. Chambers to Marie Chambers Mann as being executed in fraud of their rights as a creditor of the former.
    The complaint alleges that R. T. H. Chambers was indebted to the Wm. R. Moore Dry Goods Company in the sum of $678.53 for merchandise. A judgment for said amount rendered in the chancery court of Shelby County, Tenn., was exhibited with the complaint.
    On the same day Wm. R. Moore Dry Goods Company filed a lis pendens notice in the Crittenden Chancery Court. The complaint of the Wm. E. Moore Dry Goods Company in that action was dismissed for want of equity.
    On April 4, 1921, Eobert Mann and his wife, Marie Chambers Mann, executed a deed to said lands to E. T. H. Chambers for a consideration which is recited in the deed. These were the same lands that are described in the lis pendens notice, and the deed was filed for record June 25, 1921.
    On June 22, 1921, E. T. H. Chambers executed to Marie Chambers Mann a deed to the same lands for the same consideration as that recited in the deed from Eobert Maim and wife to Chambers. This deed was duly filed for record on January 18, 1922.
    On July 5, 1922, E. C. Connor made a contract with Eobert Mann, as agent for his wife, Marie Chambers Mann, to purchase the lands in question. After the filing of the lis pendens notice in the chancery suit above referred to, Connor declined to purchase the lands, and appellee lost the sale of the lands. According to the testimony of E. C. Connor, he was able to pay for the lands, and failed to complete his purchase for the sole reason that the Us pendens notice had been filed.
    The chancery suit of appellant against Chambers and appellee was brought upon the advice of counsel. The testimony on this branch of the case will be stated and discussed in the opinion.
    The jury returned a verdict for the appellee, and appellant has duly prosecuted an appeal to this court.

      Canada '& Williams and R. V. Wheeler, for appellant.

      Rudolph Isom and T. II. C of away, for appellee.
   Hart, J.,

(after stating the facts). It is earnestly-insisted by counsel for appellant that the evidence is not legally sufficient to support the verdict.

At the outset it may be stated that, to justify an action for malicious prosecution, both want of probable cause and malice must be shown. Keebey v. Stifft, 145 Ark. 8, and cases cited.

It is well' settled in this State that proof that the defendant in an action for malicious prosecution acted upon the advice of counsel learned in the law, or upon the advice of the public prosecutor, given after a full and fair statement of all the known facts, will be a complete defense to an action for malicious prosecution, because it is conclusive evidence of the existence of probable cause. Kansas & Texas Coal Co. v. Galloway, 71 Ark. 351; L. R. Price Mercantile Co. v. Cuilla, 100 Ark. 316; Laster v. Bragg, 107 Ark. 74; Price v. Morris, 122 Ark. 382; and Redman v. Hudson, 124 Ark. 26.

There has been some confusion in this State as to whether the rule with regard to the advice of* counsel as a defense to an action for instituting a criminal prosecution is applicable to an action for maliciously bringing a civil suit.

In the early case of Lemay v. Williams, 32 Ark. 166, it was held that, if a party makes a full statement of the facts to his counsel and acts under his advice in the prosecution of an attachment against the property of his. debtor, this would bé strong, but not conclusive, evidence of the want of malice.

In the subsequent case of Kansas & Texas Coal Co. v. Galloway, 71 Ark. 351, the holding in this case was overruled. It is true that the Galloway case was a suit for damages for malicious prosecution in instituting a proceeding for a criminal contempt; but no stress seems to have been laid upon this fact, and the holding in the Lemay v. Williams case was overruled.

It also appears from the later case of Harr v. Ward, 73 Ark. 437, that the same .rale applies with, regard to the advice of counsel as a defense to suits for malicious prosecution, whether based upon the institution' of criminal prosecutions or civil actions, and that the,.rule is that, where one fairly and fully communicates to his counsel all the facts within his knowledg’e- and uses reasonable diligence to ascertain the truth, and acts in good faith upon advice received from counsel,, this will constitute an absolute defense to an action for malicious prosecution.

In Stewart v. Sonneborn, 98 U. S. 187, in discussing the question, the court said: “It is abundantly settled that no suit can be maintained against an unsuccessful plaintiff or prosecutor, unless it is shown affirmatively that he was actuated in his conduct by malice, or some improper or sinister motive. Malice is essential to the maintenance of any such action, and not merely (as. the circuit court thought) .to the recovery of exemplary damages. Notwithstanding what has been said; in some decisions of a distinction between actions for criminal prosecutions and civil suits, both classes at the present day require substantially the same essentials,.- Certainly an action for instituting a civil suit requires not, less for its maintenance than an action for a malicious prosecution for a criminal proceeding.”

Indeed, there is more. reason for the rule in suits for malicious prosecution based upon civil actions than in those predicated upon criminal prosecutions.. Under our system of laws, the .advice of the prosecuting attorney might be sought before an arrest was made, but where a civil action was to‘ be. commenced the party originating it must act upon his own advice, or upon the advice of private counsel. When a person resorts to .the advice of reputable counsel learned in the law and makes a full and fair disclosure of the. facts in his possession, and in good faith acts upon the advice of counsel, this ought to; protect him from a suit, for damages for malicious prosecution. The reason is that the party acting has done all that he could he expected to do to enable him to act safely. If this course of conduct, did not protect him, no one 'would feel safe in seeking redress for his civil wrongs in the courts.

Generally, “want of probable ' cause” is a mixed question of law and fact, and should be submitted to the jury under proper instructioiis; but, where there is no dispute about the facts, it is the duty of the court to apply the law to them and declare their legal effect without the intervention of a jury.

There is no dispute about the facts in this case, and nothing from which a jury might legally infer that appellant was actuated by malice, express or implied, or that there was want of probable cause in bringing the chancery suit to set aside the deed from Chambers to Mrs. Mann. Appellant had obtained judgment against Chambers for $678.53 for merchandise sold by it' to him. Chambers had a tract of land of several hundred acres near Cotton Plant, Woodruff County, Arkansas; but an investigation by appellant showed that this was incumbered for about all that it was worth. Chambers had about 500 acres of land there, and it was incumbered for something between $25,000 and $50,000. Chambers also had a contract for construction work at Helena, and a large payroll. Appellant sent its claim to a firm of attorneys at Helena, and the claim was returned with a report that he was hopelessly insolvent. Later on Chambers was adjudged a bankrupt.

On May 2, 1922, appellant wrote Berry & Wheeler, a firm of reputable attorneys at Marion, in Crittenden County, Ark., to collect their account against Chambers. They informed appellant that Chambers owned about 600 acres of land in Crittenden County, Ark., and that he was trying to’ dispose of it. His residence was given' as Memphis, Tenn., and the attorneys were asked to attach the real estate, on the ground that Chambers was a nonresident. The letter concludes as follows:

“This account represents goods shipped this debtor in 1920. We are given no consideration whatever, we consider it a dangerous account, and we ask therefore that you will immediately look up the records on the real estate and attach the same. The writer will appreciate highly your writing us immediately, whether or not you will he able to subject this real estate to our debts.” On May 5,1922, Berry & Wheeler replied as follows:
“On April 4, 1921, he received a deed from Robert Mann and wife, Marie C. Mann, for 580 acres of land. Then on June 22, 1921 (three days before the deed to him was filed for record), he deeded this property to Marie Chambers Mann, which deed was not filed for record until January 18, 1922. The two deeds show exactly the same consideration. It appears suspicious to us that this occurred in this way, but we have no knowledge of any other facts constituting fraud. If Chambers has no other property, it would probably be advisable to institute suit in chancery to set aside the deed to Mrs. Mann for fraud, and advise that the suit, if one is to be started, be brought at once.”

Again, on May 18, 1922, Berry & Wheeler wrote to appellant, stating that it would be hard to get any other evidence of fraud except such as might be elicited on cross-examination of the interested parties. Appellant was advised that attorneys could not assure it of any success in the handling of the suit, but advised the bringing of the suit if it turned out that Chambers had no other property out of which to make the debt. Appellant was advised that there was no possibility of damages against it for bringing the suit.

Subsequently Berry & Wheeler brought suit in the chancery court against appellee and Chambers to set aside the deed from the latter to the former. The suit was not successful, because appellant was not able to secure any other evidence of fraud than that above stated.

It is not contended that appellant was actuated by express malice in bringing the suit in chancery to set aside the deed, and we do not think implied malice can be legally inferred from the circumstances recited. Appellant stated all the facts within its knowledge to a firm of reputable attorneys, and acted upon their advice in bringing the suit. It is true that they were not able to obtain sufficient testimony to warrant the chancellor in setting aside the deed as having been executed in fraud of the rights of appellant as a creditor of Chambers. Chambers and, Mrs. Mann were brother and sister, and this fact, coupled with the fact that the deed in question was withheld from the record for about six months, and that Chambers, although a man of large affairs, was failing and refusing-to pay a debt of between $600 and $700, show that there was no want of probable cause, and that appellant acted in good faith in bringing the suit in chancery to set aside the deed from Chambers to Mrs. Mann. An investigation had shown that there was no other property subject to the judgment of appellant, and its purpose seems to have been to collect its debts in the only way available to it.

It is shown in this case that Chambers had an automobile in Memphis at this time, but it is not shown that appellant knew of this fact. In any event, the automobile was only worth about $600, and this would not have satisfied the debt and costs of appellant against Chambers. It is not shown that appellant had any ill feeling whatever against Chambers, or that it was actuated by any other motive than that of collecting its debt in the manner advised by a firm of reputable attorneys.

If every man who brings- a suit against another upon the advice of reputable attorneys, after having acted upon all the available information given them, is responsible in damages for the consequence of this action, if he fails in his suit, then no one would dare resort to the courts to redress his wrongs, and the result would be to encourage fraud and concealment of their affairs by debtors. The successful prosecution of civil actions may fail from many causes independent of the right or wrong of the matter. Hence, in order to maintain- a suit for damages for malicious prosecution, it is neeessary for the plaintiff to prove malice, express or implied, and the defendant may justify hy showing that' he has acted upon the advice of counsel in good faith after making a full and fair disclosure to him of all the facts in the premises. ’ -

This court’has held that it is not .error to give a peremptory instruction for the defendant in an action for malicious prosecution where there was no testimony tending to prove malice or want of probable cause. Price v. Morris, 122 Ark. 382; Scott v. Pennington, 151 Ark. 26; and Keebey v. Stifft, 145 Ark. 8.

The request of the defendant for a peremptory instruction should have been granted; and, for the error in refusing to give it, the judgment is reversed, and, inasmuch as the facts seem to have been fully developed, the cause of action will be dismissed here.


author: Hart, J.

text:
    Washington v. State.
    Opinion delivered June 7, 1926.
    1. Bastards — concealment of death. — The gist of the offense of concealing the death of a bastard child, in violation of Crawford & Moses’ Dig., §.. 2365, is the. concealment of the death, and not the causing of it.
    2. Bastards — evidence of concealment of death. — In a prosecution under Crawford & Moses’ Dig., § 2365, for concealing the death of defendant’s bastard child, evidence that defendant had appeared pregnant and defendant’s confession out of court that her baby was born dead, but she did not know what became of it, were insufficient to sustain a conviction; there being no evidence to establish the corpus delicti.

    Appeal from Lafayette Circuit Court; James H. McCollum, Judge;
    reversed;

      Allen H. Handler and-Torn W. Campbell, for appellant. .

      H. W. Applegate, Attorney General, and John- L. Carter, Assistant, for appellee.
   Hart, J.

Soolc Washington, prosecutes this appeal to reverse a judgment of conviction against her for the statutory crime of concealing the death of her bastard child.

The Attorney General confessed error.

The indictment was returned under § 2365 of Crawford & Moses ’ Digest, which, when construed in connection with the section following it, provides in effect that, if any woman conceals the death of her bastard child, she shall suffer the same punishment as for manslaughter.

The gist of the offense is the concealment of the death of the bastard child, and not the causing it; and the purpose of the statute is to make such concealment a crime, so that it may come to light whether or not the infant was born alive. Sullivan v. State, 36 Ark. 64; State v. Ellis, 43 Ark. 93; and Dunn v. State, 57 Ark. 560.

According to the evidence for the State, the defendant is an unmarried woman, and lived with her mother and father in Lafayette County, Arkansas, during the year 1925 and up to the time of the trial in February, 1926. She appeared to the witnesses to be pregnant, and ivas taken by one of them to be examined by a physician to ascertain whether or not she had been pregnant and had given birth to a child. The defendant told the physician that her baby was born dead, but she did not know what became of it. She said the child had been born two weeks before, at her mother’s house in Lafayette County, Arkansas.

This evidence is not legally sufficient to support the verdict under the statute. It is necessary to show that .the defendant gave birth to a bastard child, whether alive or dead at the time of its birth, and that she concealed its death.

The evidence for the State showed that the defendant was an unmarried woman, and her admission at the doctor ’a office, where she was taken for examination, was in the nature of a confession out of court. This testimony was not sufficient to convict the defendant, unless it had been shown by other evidence that she had given birth to a child.

Hence there is no evidence in the record legally sufficient to establish the corpus delicti. In Reg v. Williams, 11 Cox’s Crim. Cases, it is said that the dead body must be found and identified. The reason is that the bastard child of which the defendant is charged to have been delivered may be somewhere alive.

It follows that the judgment must be reversed,because the evidence is not legally sufficient to sustain-the verdict, and the cause will be remanded for a new trial. -


text:
    Bald Knob State Bank v. Bellville.
    Opinion delivered June 7, 1926.
    1. Bills and notes — forgery of indorsement. — Forgery of the payee’s indorsement of a check carries no title.
    2. Principal and agent — liability of agent. — Where a contract provided that an agent to procure a loan on plaintiff’s land was authorized %o- pay off an existing mortgage on the land and pay the balance to another agent, delivery to the latter of a check payable to plaintiff and the latter, held to be at the risk of the agent securing the loan.
    3. ‘ ’Principal and agent — right of agent to- commission. — Where an agent procured a loan for his principal, and delivered a check for the amount of the loan, payable to plaintiff and another agent, to the latter agent, instead of first paying off a mortgage which .he was authorized to do before turning over the balance to the other agent, the fact that the other agent forged the plaintiff’s indorsement to the check will not deprive the first agent of his right to his commission for procuring the loan, where he had no reason to suspect that the other would forge plaintiff’s name to the check.
    Appeal from White Chancery Court; John E. Martineau, Chancellor;
    affirmed.
    STATEMENT BY THE COURT.
    Clint Bellville and E. A- Bellville, his wife, brought this suit in equity against J. W. Halliburton,.trustee, and Fred and C. S. Perkins of Oswego, Kansas, to cancel a certain mortgage executed by them and delivered to the defendants on account of failure of consideration.
    The defendants filed an answer and cross-complaint. They denied the allegations of the complaint, and in their cross-complaint asked for judgment against Eugene Moseley and the Bald Knob State Bank in the event of a recovery against them by the plaintiffs. The Bald Knob State Bank entered its appearance and filed an answer to the cross-complaint, denying all its material- allegations.
    J. A. Roetzel was allowed to intervene, and asked to be subrogated to all the rights of the plaintiffs. The various interests of these parties will appear in our statement of facts.
    The record shows that Clint Bellville and E. A. Bell-ville signed a written application on the 21st day of November, 1922, for a loan on their farm of 280 acres in White County, Arkansas. The application recites that Eugene Moseley is appointed agent to procure for the applicants from the Fred Perkins Investment Company of Oswego, Kansas, a loan for $3,000, for the term of seven years at seven per cent, per annum.
    On the 21st day of November, 1922, Clint Bellville and wife entered into a written contract with the Fred Perkins Investment Company to secure for them a loan of $3,000 for ten years at eight per cent, per annum, payable semi-annually at the office of Fred and C. S'. Perkins of Oswego, Kansas, which was to be secured by a first mortgage on their farm of 280 acres of land in White County, Arkansas. There is a clause in the contract which authorizes the Fred Perkins Investment Company to pay off and discharge all existing liens on said lands out of the proceeds of the loan. The contract also contains a clause as follows:
    “After deducting expenses and paying existing liens, my said agent is authorized to pay the balance of proceeds of this loan to Eugene Moseley of Judsonia, Arkansas, and the said Eugene Moseley is hereby authorized to receipt for same for me.”

      Pursuant to the term’s of the contract, Clint Bell-ville and wife executed a deed of trust to said lands and delivered the same to the Fred Perkins Investment Company of Oswego, Kansas. - J. W. Halliburton was designated as trustee in the deed of trust.
    J. A. Eoetzel had a mortgage on the lands in the sum of $3,600 at the time Clint Bellville applied for the loan in question. On the 26th day of June, 1923, J. A. Eoetzel executed a deed of release in which he acknowledged full payment and satisfaction of his indebtedness, and released the lands in question from any lien. This instrument was duly acknowledged and -filed for record on the 26th day of July, 1923, and delivered to the said Fred Perkins Investment Company.
    Pursuant to the terms of his contract,- Clint Bellville filed a suit in the chancery court for the purpose of clearing the title to said lands, and obtained a decree in the chancery court in June, 1923. The Fred Perkins Investment Company was duly notified of this fact,, and it then sent to the Bald Knob State Bank in White County, Arkansas, a check which, together with the indorsements on it, reads as follows:
    “Oswego State Bank
    “Oswego, Kansas, August 8, 1923. ‘ ‘Pay to- the order of Eugene Moseley & Clint Bellville, $3,000, three thousand dollars, Bellville avails.
    (Signed) “Fred Perkins."
    (Indorsed) “Eugene Moseley and Clint Bellville."
    This check was duly collected by the Bald Knob State Bank, and a part of its proceeds was used in paying an overdraft of Eugene Moseley, and the rest of it was deposited to his credit in the -bank and subsequently checked out by him. No part of the proceeds of said check was ever received by Clint Bellville or by J. A. Eoetzel.
    According to the testimony of ' Clint Bellville, he had-'been doing business with the Bald Knob State Bank for seventeen or eighteen years, and his signature was well known to the officials' of -the bank. He never indorsed the check in question nor authorized Eugene Moseley or any one else to indorse it for him. His signature to the indorsement on the check is a forgery. Bellville made inquiries at the bank from time to time to ascertain why the money which he had borrowed had not come. The officials of the bank understood that he had executed a mortgage on his farm to secure a loan of $3,000, and that the money was to be sent to the bank for him by the Fred Perkins Investment Company.
    E. R. Wynn, the cashier of the Bald Knob State Bank, was a witness for it. According to his testimony, Eugene Moseley handled quite a number of farm loans through the bank in the latter part of 1922 and 1923. The checks for these loans were deposited to his personal account. This was the way the Bellville check was handled. A part of the check was used in paying a debt of Moseley to the bank of about $1,300, and the balance was credited to his account. Wynn also admitted that the check was for a loan in favor of Clint Bellville, and that Bellville had been in the bank several times looking for it before the check came.
    Other evidence will be stated or referred to in the opinion.
    The chancellor found that J. A. Roetzel had not been paid the consideration for the deed of release executed by him whereby he released his mortgage lien on the land of Clint Bellville; that the defendants, Fred and C. S. Perkins, mailed the check for $3,000 payable to Clint Bellville and Eugene Moseley, to Eugene Moseley on August 8,1923, and that said Eugene Moseley forged the indorsement of Clint Bellville to said check, and that the samé was paid by the Bald Knob State Bank to Eugene Moseley on August 13, 1923, by depositing said sum of $3,000 to the individual account of said Moseley.
    The court found that Clint Bellville should recover from the Bald Knob State Bank and from the defendants, Fred and C. S. Perkins, said amount of money, and that the intervener, J. A. Roetzel, should be subrogated to the rights of the plaintiffs in said judgment.

      The court further found that the Bald Knob State Bank was primarily liable for the payment of said $3,000 and the accrued interest, and that, if Fred and C. S. Perkins should be required to pay any part of it, they would be entitled to recover it from the Bald Knob State Bank.
    The chancellor also found that Fred and C. S. Perkins should recover from Clint Bellville the amount of commissions due them according to the terms of the contract for procuring the loan of the date of November 21, 1922.
    A decree was duly entered of record in accordance with the findings of the chancellor. To reverse that decree, the Bald Knob State Bank and Fred and C. S. Perkins have duly prosecuted an appeal, and Clint Bell-ville has prosecuted a cross-appeal.

      Brumdidge & Neelly, for appellants.

      John E. Miller, Gulbert L. Pearce and Avery M. Blount, for appellee.
   Hart, J.,

(after stating the facts). The judgment against the Bald Knob State Bank was . correct. The undisputed evidence shows that the signature of Clint Bellville to the check for $3,000 was forged, and that the Bald Knob State Bank collected said check and credited the account of Eugene Moseley with the amount thereof.

Under § 7789 of Crawford & Moses’ Digest, when a-signature to a check is forged, it is wholly inoperative, and no right to enforce payment thereof against any party thereto can be acquired under such signature, unless the party against whom it is sought to enforce such a right is precluded from setting up the forgery or want of authority. Bank of Black Rock v. B. Johnson & Son Tie Co., 148 Ark. 11. See also Bank of Hatfield v. Chatham, 160 Ark. 530; and Polk v. Garrison, 162 Ark. 624, and cases cited. The reason is that forgery can carry no title to the paper, even in the hands of a bona fide holder.

This brings us to a consideration of what facts or circumstances will preclude the person whose signature has been forged from setting up the forgery or want of authority. Certainly, there is no testimony in the case at bar which would prevent Bellville from setting up the fact that Moseley had, no authority to indorse the check for him. Bellville testified that he made frequent trips to the bank to see if the check had arrived, and that the officials of the bank knew that the proceeds of the check were to be used in paying off a prior mortgage on his farm. The cashier of the bank expressly admits that he knew that Bellville was securing a loan through the Perkins Investment Company, of Oswego, Kansas, and giving a mortgage on his farm to secure the payment of the money for the express purpose of using the -money obtained in paying off a prior mortgage on his farm. Bellville had been doing business with the bank for seventeen or eighteen years, and his signature was known to the cashier. Notwithstanding these facts, the cashier of the bank permitted Moseley to indorse the check in his own name and in the name of Clint Bellville and to credit the proceeds to his own account. A part of the proceeds was used in paying off an overdraft of Moseley to the bank, and he «Was allowed to check out the balance in due course of business.

Counsel for Fred and C. S. Perkins contend that the decree in favor of Clint Bellville should be reversed in so far as it adversely affects them. In making this contention, they rely upon the fact that Bellville, in his application for the loan, named Eugene Moseley as his agent to procure for him a loan of $3,000 from the Fred Perkins Investment Company, Oswego, Kansas,, and that this carried with it at least the apparent authority for Moseley to indorse his name to the check for the loan. Conceding this to be true, the application is not the controlling factor in the case. Bellville made a written contract with the Fred Perkins Investment Company, of Oswego, Kansas, to procure the loan of $3,000 for him. It is true that it was made on the same day as the application, but, in the very nature of things, it was executed after the application had been signed, and its terms must control the rights of the parties in the present controversy. The contract expressly provides that the Fred Perkins Investment Company'is authorized to pay off and discharge all existing liens on said, land out of the proceeds of the loan.

Another clause of the contract provides that, after deducting the expenses and paying existing liens, “my said agent is authorized to pay the balance of the proceeds of this loan to Eugene Moseley of Judsonia, Ark., and the said Eugene Moseley is hereby authorized to receipt- for same for me.” This shows that the words, “my agent,” referred to the Fred Perkins Investment Company, and this clause expressly declares that Eugene Moseley is to receive the balance, after deducting expenses and paying the existing liens. The concluding part of the quoted clause shows the Eugene Moseley was not authorized to receipt for anything except the balance of the proceeds after deducting the expenses and paying the existing liens.

J. A. Roetzel, who had a prior mortgage on the land, had executed a deed of release vdth the expectation of receiving the proceeds of thé loan, and all the parties knew that the money was being borrowed for the very purpose of paying' off the prior mortgage held by Roetzel. Under these circumstances, the defendants, Fred and C. S. Perkins, who are the Perkins Investment- Company, at their peril sent the check to Eugene Moseley and allowed him to cash the proceeds and apply them to his own use. It was their duty, under the contract, to see that the proceeds of the loan were applied to the discharge of the-prior mortgage of Roetzel, and they had no authority to turn over any part of the proceeds to Moseley except what remained after deducting the expenses of the loan and paying off the lien of Roetzel.

On the cross-appeal but little need be said. On this branch of the case counsel for Bellville rely upon the well-known rule that, where the agent is guilty of fraud, dishonesty, or unfaithfulness in the transaction of his agency, such action is a bar to recovery by him of compensation.

We do not think that the facts of this case show that Fred and C. S. Perkins were guilty of bad faith or gross misconduct in the premises. It is true that their contract with Bellville made it their duty to see that the prior liens on the land were paid off. They had, in good faith, secured the deed of release from Roetzel and had obtained a deed of trust from Clint Bellville and his wife to J. W. Halliburton as trustee. They then sold this deed of trust or mortgage to an Eastern client for the purpose of securing the money for Bellville. ¡When Fred and C. S. Perkins received the money, they made the check payable to Eugene Moseley and Clint Bellville. This was done because Moseley was the local agent of Bellville, and there is nothing to show that they were not acting in perfect good faith in the matter. They had no suspicion whatever that Moseley would forge the name of Bellville to the check and thereby convert the proceeds to his own use.

On the other hand, their course of conduct in the matter shows that they intended for the money to be received jointly by Moseley and Bellville and to be applied in paying off the Roetzel mortgage. Under these circumstances, we do not think that they were guilty of such bad faith and fraudulent conduct as would require them to forfeit their right of compensation for their services.

The result of our views is that the decree was correct, and it will therefore be affirmed.


text:
    Williams v. Brents.
    Opinion delivered June 7, 1926.
    1. Pardon — commutation of sentence defined. — A commutation of sentence is a change of punishment into one less severe.
    2. Pardon — reprieve defined. — The legal meaning of “reprieve” is to suspend the execution of sentence for a definite term.
    3. Pardon — effect of “indefinite furlough.” — An instrument-signed by the Governor granting an “indefinite furlough” to defendant convicted of a felony, subject to revocation for satisfactory cause or violation of the conditions therein, is a commutation of sentence conditionally releasing defendant’s punishment without removing his guilt.
    4. Pardon — construction of commutation. — Commutations, like pardons, must be construed most strictly against the State and most beneficially for the convicted person.
    5. Pardon — conditional commutations. — Commutations, as well as pardons, may be granted upon conditions.
    6. Pardon — construction of commutation. — An instrument signed by the Governor granting an indefinite furlough to a felon, subject to revocation for cause, is to be construed as a whole to carry out the Governor’s intention.
    7. 1 Pardon — construction of commutation. — An instrument commuting a sentence of three years’ imprisonment for voluntary . manslaughter, on condition that he violate no law, carry no weapons nor gamble, and that he will report monthly to the warden until the expiration of his sentence, held to contemplate that the conditions were to be complied with only during the period of the sentence.
    8. Pardon — language used. — Technical words or terms are not necessary to constitute a pardon or commutation of a sentence.
    9. Pardon — conditional commutation — rearrest.—One sentenced to three years’ imprisonment whose sentence was commuted upon certain conditions, who has complied therewith during the period of his sentence, cannot be rearrested after his term of imprisonment has expired. •
    Certiorari to Conway Circuit Court; J. T. Bulloch, Judge;
    affirmed.
    STATEMENT BY THE COURT.
    The Attorney G-eneral, on the relation of J. L. Williams as sheriff of Conway County, Arkansas, filed a petition in this court for a writ of certiorari to quash a judgment of the county court granting a writ of habeas corpus to John Brents and dismissing him from custody on a judgment in a felony case.
    According to the allegations of the petition, at the October term, 1922, of the Conway Circuit Court, John Brents was convicted of the crime of voluntary manslaughter and sentenced to three years in the State Penitentiary, and, by due process of law, was committed as a prisoner to the State Penitentiary to serve said sentence.
    On the 19th day of April, 1923, the Hon. Thomas C. McRae, as Governor of the State of Arkansas, issued to said John Brents what is termed a “furlough,” which by its own terms expired January 3, 1924. On the last-named date, Governor McRae issued a second furlough to the said John Brents, which, by its own terms, would have terminated on the 2d day of January, 1925. On the 29th day of October, 1924, Governor McRae delivered to John Brents an instrument, which reads as follows:
    “To the commissioners, superintendent, and wardens of the State Penitentiary:
    “An indefinite furlough is hereby granted to John Brents, who was convicted at the October, 1922, term of of the Conway County Circuit Court for the crime of voluntary manslaughter, and sentenced to three years in the penitentiary, which furlough is issued upon the following conditions, agreed to and accepted by said prisoner:
    “That he will not engage in the sale, manufacture or transportation of intoxicating liquors of any kind, and that he will cooperate with the officials arid law-abiding citizens of the community in the prosecution of those who have or may hereafter do so. He shall refrain from the use of intoxicating liquors as a beverage, and the use of deleterious drugs or dope. He shall not carry any weapons, shall not gamble, nor be in possession of any gambling device. He shall not violate any of the criminal laws of any State, nor of the United States, nor the ordinance of any town or city. He shall, on the first day of each month, until the expiration of his. sentence, notify the warden of the penitentiary, Little Rock, where he is and what he is doing. He. shall reside with and support his family. This furlough is subject to be summarily revoked for the violation of any of said conditions, or for any other satisfactory cause, and the time granted in this furlough is not to be counted in computing said prisoner’s term of confinement. In testimony whereof, I have hereunto subscribed my name as Governor, at Little Bock, this the 29th day of October, 1924.
    “Thomas C. McBae, Governor.”
    On the 19th day of February, 1926, Governor Terral issued the following warrant:
    “To any sheriff, the commissioners and warden's of the State Penitentiary:
    “The indefinite furlough which was granted to John Brents, who was convicted at the October term, 1922, of the Conway County Circuit Court, for the crime of voluntary manslaughter and sentenced to three years in the penitentiary, is hereby revoked, for cause satisfactory to me, and it is hereby ordered that he be immediately returned to the penitentiary walls, Little Bock, Arkansas, to complete his sentence.
    “Done at my office in Little Bock, Arkansas, this the 19th day of February, 1926. Tom J. Terral, Governor. ’ ’
    J. L. Williams, as sheriff of Conway County, executed said warrant by arresting said John Brents.
    On the 26th day of February, 1926, John Brents filed a petition in the Conway Circuit Court for a writ of habeas corpus. In his petition it is alleged that he was convicted of the crime of voluntary manslaughter for killing Leonard Hare, and his- punishment fixed at three years in the State Penitentiary, at the October term, 1922, of the Conway Circuit Court. It is further alleged that-judgment and sentence was rendered accordingly, and that he, John Brents, in keeping therewith, surrendered himself into custody and in execution of said sentence, and that he was by due process of law committed as a prisoner to the State Penitentiary to serve said sentence. It is also alleged that on the 19th day of April, 1923, while the petitioner was confined as a. prisoner in the execution of the judgment and sentence of the court, the Hon. Thomas C. McRae, as Governor of the State, granted him a commutation under an instrument commonly referred to as a furlough, and that he was permitted to be in part at liberty until the termination of the period of time mentioned therein, which was on the 5th day of January, 1924. It is also alleged that on the 3rd day of January, 1924, the said Governor renewed the extension of clemency until January 2, 1925, by a written instrument similar in form. It is also alleged that on the 29th day of October, 1924, the renewal of said commutation was granted by said Governor for an indefinite length of time, subject to the said conditions therein set out. A copy of this instrument is attached as a part of the petition and made an exhibit to it. The petitioner further alleged that he complied with all the conditions in the commutation, and that, after' the expiration of the full term of his sentence, to-wit, on February 19, 1926, the Hon. T. J. Terral, then Governor of the State of Arkansas, delivered a warrant to J. L. Williams, the sheriff of Conway County, and directed that he be immediately taken into custody and returned to the penitentiary walls at Little Rock to complete his sentence. By virtue of said warrant the petitioner was taken into custody and illegally deprived of his liberty.
    A demurrer was filed to the petition of John Brents for a writ of habeas corpus, which was overruled by the circuit court.
    The defendant, J. L. Williams, as sheriff of Conway County, refused to plead further, and elected to stand upon the demurrer. It was by the circuit court ordered and adjudged that the plaintiff, John Brents, be discharged from custody and granted his freedom. This judgment was rendered by the circuit court of Conway County on March 8, 1926, a day of its March term.
    The petition for a writ of certiorari was duly filed in this court on April 5, 1926.

      H. W. Applegate, Attorney General, and Walter J. Terry, for appellant,

      Strait S'Strait, for appellee.
   Hart, J.,

(after stating the facts). Onr Constitution provides that in all criminal cases, except in those of treason and impeachment, the Governor shall have power to grant reprieves, commutations of sentence, and pardons after conviction. Constitution of 1874, art. 6, §18.

In Ex parte Garland, 4 Wall. 333, Mr. Justice Field, who delivered the opinion of the court, said: “A pardon reaches both the punishment prescribed for the offense and the guilt of the offender;' and, when the pardon is full, it releases the punishment and blots out of existence the guilt, so that in the eye of law the offender is as innocent as if he had never committed the offense. ’ ’

Such is the effect of our own decisions. This court has also held that, where the Governor is authorized to grant pardons, he may do so under such conditions or restrictions as he may think proper. Ex parte Hunt, 10 Ark. 284; Baldwin v. Scoggin, 15 Ark. 427; Ex parte Hawkins, 61 Ark. 321; and Ex parte Brady, 70 Ark. 376.

A commutation of sentence is a change of punishment into one less severe, substituting ,a less for a greater punishment by authority of law. Mullen v. United States, 212 U. S. 516. This is the generally accepted legal definition of commutation of sentence. 29 Cyc. 1561, and cases cited.

The legal meaning of reprieve is to suspend the execution of sentence for a definite time. 34 Cyc., p. 1621, and 20 R. C. L., p. 528.

In the application of these definitions to the instrument under consideration, we all agree that it is'not a pardon, conditional or absolute, nor a reprieve. The court, however,- is of the opinion that the instrument is a commutation of sentence, and was therefore,' under our Constitution, an instrument which the Governor had the power to grant.' In this connection it m^y be said that the statute construed in Horton v. Gillespie, 170 Ark. 107, applies only to pardons.

It is insisted that the instrument it not a commutation of sentence because, in the beginning of it, it is termed “an indefinite furlough.” It is true that the word “furlough” is a military term, and means leave given to a soldier to be absent from service for a certain time, but the name should not control where it is at variance with the substance of the instrument. The rule is that a pardon must be construed most strictly against the State and most beneficially for the convicted person. Ex parte Hunt, 10 Ark. 284; and Redd v. State, 65 Ark. 475.

There seems to be no good reason why this rule of construction should not be applied to commutations of sentence as well as to pardons.

Again, this court has held that the Governor may grant conditional pardons, and for the same reason we think that he may grant conditional commutations of sentence. If' commutation of sentence means to change from a higher to a lower or less severe punishment, the instrument in question should be construed as a whole, and that meaning given to it which it was intended by the Governor to have.

As we have already seen, to commute means to change, and, as the Constitution vests this power in the executive as well as the power to grant pardons, the same rule of construction should be applied to both, and the instrument should be read and construed as a. whole in order to carry into effect the intention of the Governor.

A judgment of conviction and sentence is the basis upon which the commutation is grounded. The prisoner was sentenced to three years’ imprisonment in the penitentiary. The Governor first granted him a commutation which, by its own terms, ended on January 3, 1924, which was before his sentence of three years had expired. Again a commutation was granted to the prisoner, which would have terminated on the second day of January, 1925, which was also before his sentence had expired.

On the 29th day of October, 1924, Governor McRae delivered to Brents the instrument under consideration in this case. It is true it is termed “an indefinite furlough,” hut it is coupled with such conditions and restrictions as show that they were only to be complied with during the period of the sentence. When the instrument is considered from its four corners, the terms of the commutation do not indicate that it was contemplated that the conditions should operate beyond the term of the sentence from which the defendant was released.

In the absence of language showing such intention, there seems no good reason for holding that the conditions of the commutation were to be extended beyond the period of his sentence. He was required to refrain from the use of intoxicating liquors as a beverage and the use of deleterious drugs. He was required not to carry a weapon, and not to gamble or be in possession of any gambling device. He was also required, on the first day of each month until the expiration of his sentence, to notify the warden of the penitentiary where he was and what he was doing. This indicates that, if he complied with the conditions of the commutation until the expiration of the period of his sentence, he was to be released and discharged from further punishment.

The provision “that the time granted in this furlough is not to be counted' in computing said prisoner’s term of confinement,” when read in connection with the words preceding it, shows that it was intended that, if Brents should violate any of the conditions of his commutation of sentence and should be rearrested for violating such conditions, the time he had.been at liberty under the commutation should not be counted as a part of the term of his sentence. But, if he should not be rearrested during the period of his sentence for a violation of any of the conditions of his commutation, he was entitled to be free at the end of the term of his sentence.

One of the main objects in granting the commutation was to look to the reformation of the defendant, and the special control of the conduct of the defendant ceased when his term expired, and there seems to be no controlling language in the commutation showing an intention on the part of the Governor to extend the conditions and restrictions beyond the expiration of the sentence, and, under the beneficent rule above announced, all doubts should be construed in favor of the defendant’s liberty. This is especially true when we consider that, under our Constitution, the Governor had the power to grant Brents a commutation of sentence, and had none to grant him a “furlough.”

It is well settled that no technical words' or terms are necessary to constitute a pardon or a commutation of sentence. The instrument in question had the effect of remitting or releasing conditionally the punishment of Brents, without removing his guilt. It is only a full pardon of the offense which can wipe away the infamy of the conviction and restore the convict to his civil rights. Perkins v. Stevens, 24 Pick. (Mass.) 277, and Ex parte Garland, 4 Wall. (U. S.) 333.

It would take a pardon to restore his citizenship, but, having complied with the terms of the commutation of sentence during the period of his sentence, and this being the period of time provided for in the commutation, in the opinion of the court, the Governor had no right to have'Brents rearrested after his term of imprisonment had expired, and the circuit court properly released him from custody.

It follows that the petition for a writ of certiorari to quash the judgment of the circuit court will be denied, and the judgment will be affirmed.


author: Smith, J.

text:
    Walker v. State.
    Opinion delivered June 7, 1926.
    1. Forgery — description of person defrauded. — An indictment for forgery need not state whether the association or company intended to be defrauded was a corporation or a partnership.
    2. Forgery — name or signature used. — To constitute a forgery, the named alleged to be forged need not be that of an existing person but may be that of a fictitious person.
    3. Forgery — variance.—Where an indictment for forgery of a cheek alleges that the check was indorsed 'by the payee, but does not allege that the indorsement was forged, proof that the indorsement was made after the forgery does not constitute a variance.
    4. Criminal law — proof of other crimes. — In a prosecution for forgery of a check, where accused denied having forged or uttered the check, proof that he had uttered other forged checks was admissible as tending to prove a similarity of handwriting and to show a method of procedure or course of conduct.
    Appeal from Franklin Circuit Court, Ozark District; James Cochran, Judge;
    affirmed.

      D. L. Ford and Evatñis & Evans, for appellant.

      H. W. Applegate, Attorney General, and Darden Moose, Assistant, for appellee.
   Smith, J.

Appellant was tried under an indictment which charged him with forgery, and with uttering a forged instrument. The writing alleged to have been forged and uttered was a check drawn on the People’s Bank of Ozark, Arkansas, for $4.50, payable to the order of Mathews Hardware Company and purporting to he signed by T. E. Smith. Each count of the indictment alleged that the check was indorsed on the back thereof “Pay to any hank, Ozark, Arkansas. Chas. E. Mathews Hdw. 'Co., Chas. E. Mathews, Prop.”

Appellant was convicted on the count charging him with forging the check, and was acquitted on the second count, which charged him with uttering it.

A motion in arrest of judgment was filed upon the ground that the indictment did not state facts sufficient to constitute a charge of forgery, in that it did not allege whether the payee, the Mathews Hardware Company, was a person, a copartnership, or a corporation..

It was shown that the name of the drawer of the check, T. E. Smith, was that of a fictitious person, and instructions were asked which, if given,-would have told the jury that, if this were true, appellant would not be guilty of forgery, but would be guilty of the offense of obtaining goods and property under false pretenses, an offense not charged in the indictment, and to acquit the defendant on this account. It is also insisted for the reversal of the judgment of conviction that error was committed in admitting certain testimony, and that there was a variance between the testimony and the allegations of the indictment.

As to the assignment of error that the indictment failed to allege whether the Mathews Hardware Company was an individual, a copartnership, or a corporation, it may be said that this allegation is unnecessary in an indictment for forgery. , In the case of Blais v. State, 94 Ark. 327, it was said: “Moreover, the authorities seem to sustain the view that, in an indictment for forgery, unlike an indictment for larceny or kindred offenses, it is unnecessary to state whether the association or company intended to be defrauded was a corporation or a partnership.”

The court did not err in refusing to instruct the jury that, if T. B. Smith were found to be a fictitious person, the crime committed was not forgery, but that of obtaining money under false pretenses. In the case of Maloney v. State, 91 Ark. 485, it was held that to constitute forgery the name alleged to be forged need not be that of any person in existence.

The assignment of error in regard to the variance between the allegations of the indictment and the testimony is based upon the fact that the indictment alleges that the check was “indorsed on the back thereof: ‘Pay to any Bank, Ozark, Arkansas. Chas. E. Mathews Hdw. Co.,- Chas. E. Mathews, Prop.’ ”, whereas the proof shows that the check accepted hy the Mathews Hardware Company contained no indorsement whatever.

We think there was no variance. In the ease of Crossland v. State, 77 Ark. 537, it was held that the indorsement on a check does not constitute.in law a part of the check, and need, not be set out in an indictment for forgery of such check, but that, if the indictment is for the forgery of the indorsement, it should be set out, accompanied with such averments as will make the offense affirmatively appear.

There was no allegation 'that appellant forged the indorsement: This allegation was not essential to the validity of the indictment, but was placed therein merely for the purpose of more complete identification. No doubt, if it had been omitted, the contention would have been made that there was a variance, .as the forged check did not contain the indorsement, but the cheek introduced at the trial did. The indorsement resulted, of course, from the fact that, upon depositing the check for collection, the payee indorsed it. The testimony on the part of the State shows that the .check was delivered td Matt Self, a salesman of the hardware company, in payment of 'a purchase which appellant had made, being thus accepted as cash. There was therefore no variance.

' A more serious question is that the court erred in admitting certain incompetent evidence. The testimony on the part of the State was to the effect that ón January 16, 1925, appellant purchased from the Mathews Hardware Company a pair of'clippers, the price of which was $4.50, ¡and gave the check in question in payment therefor. In about four days the cheek was returned by the bank in which it was deposited for collection to the hardware company, with the information that the drawer had no account in the bank on which it was drawn. Appellant denied signing the check, or that he uttered it in payment of the clippers, or for any other purpose.

The prosecuting attorney offered in evidence two checks which appellant had drawn in favor of Mrs. George Hutchens. The first of these checks was dated April 17, 1925, and was signed T. J. Smith. The second was dated July 10, 1925, and was signed T. E. Brown. Mrs. Hutchens testified that she cashed the two checks for appellant.

Mrs. G-ussie Haberer testified that she received from appellant a check for $4 dated June 29, 1925, which bore the signature of T. E. Walker, and that this check proved to have been signed by a fictitious person, as were those cashed by Mrs. Hutchens.

Appellant testified as a witness in his own behalf, and, at the request of the prosecuting attorney, wrote the names :'T. E. Smith, T. J. Smith, T. E. Brown, and T. E. ¡Walker, and these signatures were submitted to the jury for comparison. Appellant denied having signed any of the checks offered in evidence by Mrs. Hutchens and Mrs. Haberer, and objected to the introduction of these checks in evidence.

We think no error was committed in admitting the checks cashed by Mrs. Hutchens and Mrs. Haberer in evidence. Appellant denied having purchased the clippers from the Mathews Hardware Company, and denied any knowledge of the check which the State’s witnesses testified was accepted in payment of the clippers. There was a question therefore of identity in the case. Mrs. Hutchens and Mrs! Haberer testified that appellant signed the checks which they did cash, and appellant wrote, without objection, the names signed to all the checks. The names written by him in the presence of the jury were, of course, in his writing, and the jury had the right to' compare these admitted signatures to identify the similarity of the writing of the check alleged to have been forged with the admitted writing done in the presence of the jury. This evidence tended to identify appellant as the man who had purchased the clippers, a fact which he denied.

The testimony tended also to show the system by means of which appellant obtained the goods and property of others. The method employed in all the cases was the same, and the times of the passing of these checks were in January, April, June and July, of 1925.

In the very recent case of Duvall and Rice v. State, ante, p. 68, we held that proof of similar crimes was admissible when such proof tended to show a method of procedure or a course of conduct, provided such similar crimes were not remote in point of time from the crime charged. The other crimes here were not so remote as to be without probative value. The evidence of these crimes tended to show the system or method of procedure employed by appellant to defraud, and the comparison of the handwriting on the check here alleged to be forged and the signatures written in the presence of the jury tended to identify him as the author of all the writings, and as being the person who bought the clippers and tendered the forged check in payment thereof.

In the chapter on Forgery in 12 R. C. L., page 168, § 31, it is said: “However, evidence of distinct offenses of the same character committed by the accused is admissible, though not contemporaneous nor a part of the same transaction, if it shows or tends to show that the accused had adopted the same plan to utter forged instruments in other cases as is charged by the prosecution in the case on trial. ’ ’

Upon a consideration of the whole case we find no prejudicial error, and the judgment is affirmed.


text:
    First National Bank of Lepanto v. First National Bank of Monette.
    Opinion delivered June 7, 1926.
    1. Banks and banking — conversion op note — variance.—In an action by a bank against another bank for conversion of its cashier’s personal note sent to it for collection, where defendant raised the issue of collusion between the cashiers of the two banks to defraud the banks, admission of correspondence relating to notes and showing the course of dealings between the two banks was not objectionable as changing the action from- one for conversion to one on contract.

      2. Banks and banking — letter as evidence. — In an action by a bank against another bank for conversion of a note sent for collection, a letter of plaintiff’s cashier to his brother asking him to secure a renewal of the note in question then in possession of defendant bank, held admissible, in view of the brother’s testimony that he exhibited the letter to defendant’s cashier and that the cashier acknowledged receipt of a copy of the letter.
    3. Trial — instruction—general objection. — In an action by a 'bank against another bank for conversion of a note executed by the latter’s cashier and sent to the latter bank for collection, an instruction as to the general scope of authority of a cashier was not objectionable as not taking into consideration whether the latter’s cashier was acting for himself or for the bank, in the absence of a specific objection.
    Appeal from Poinsett Cirenit Court; Q. E. Keck, Judge;
    affirmed.

      Scobey Mosby, for appellant.

      Horace Sloan, for appellee.
   Smith, J.

This is the second appeal in this case, and in the former opinion the facts out of which this litigation arose were fully stated, and it is unnecessary therefore to restate them. First Nat. Bk. of Monette v. First Nat. Bk. of Lepanto, 159 Ark. 517, 252 S. W. 594.

J. H. Harkins, the cashier of the Lepanto bank, had borrowed $2,000 from the Monette bank, and the note had been indorsed by L. D. Mullins, and a renewal note had also been indorsed by Mullins. This second note was not paid, but was renewed, and the note here sued on is the note which was given in renewal. The last renewal note was sent to the Lepanto bank for renewal or collection, but was never renewed or returned, whereupon the Monette bank sued the Lepanto bank for the conversion of the note. There was a verdict and judgment for the Monette bank, and the Lepanto bank has appealed.

The defenses set up in the trial from which this appeal comes were: (1), that Mullins had not indorsed the renewal note sued on, which was dated June 25, 1920. It is conceded that a note indorsed by Mullins for $2,000 would be good and collectible, but it was insisted that Mullins had not indorsed the note, that the last note which he did indorse had been paid by the giving of a new note indorsed by a man who had since become insolvent, and that Harkins too had become insolvent, so that the note in suit was without value; (2), that the transaction was a collusive arrangement whereby the cashiers of each of the banks loaned money to the other; that the notes were not handled by either cashier in the usual and ordinary course of the banking business, and that therefore the defendant bank is not responsible for the loss of the note, the same having been received-from the plaintiff bank by Harkins, who was the cashier of the defendant bank, in his personal capacity, and not as cashier of the defendant bank.

Mullins testified that the last note-which he indorsed was payable to the Lepanto bank, and not to the Monette bank, but the question whether Mullins had indorsed the note alleged to have been converted is concluded by the verdict of' the jury, and it is not questioned that a note so indorsed was worth its face value.

For the reversal of the judgment of the court below, it is insisted that the court erred in admitting certain incompetent evidence and in giving conflicting instructions.

It is asserted that the alleged incompetent testimony, which was admitted over the objection and exception of the Lepanto bank, changed the nature of-the suit, which was originally for the wrongful conversion of the note, to a suit on a contract wherein the -Lepanto bank had agreed to pay the note. • This testimony consisted of certain correspondence between the two banks signed by the respective cashiers. In one of the letters from the defendant bank the cashier of that institution had stated that the defendant bank was overloaded with paper which was good, but which the bank was unable to carry, and the plaintiff bank was asked to take certain amounts of this paper, and the letter containing this request guaranteed the payment of the paper which the plaintiff bank was asked to take. Other letters -related to paper which was being .transmitted between the banks, and several of these letters referred to paper owned by tbe defendant bank other than the Harkins note.

We think these letters were competent under the issues joined, and we do not think they tended to change the nature of the cause of action from a suit for a conversion to a suit on a contract, for the reason that one of the principal contentions was that the loan to Harkins was the result of a collusive agreement whereby each cashier loaned money to the other. It was competent for the plaintiff' bank therefore to show that there was no collusion between the respective cashiers of tlie two banks. The purpose of the letters offered in evidence was to show that there was a regular course of dealing between the banks by which plaintiff bank had undertaken to accommodate some of defendant bank’s customers, and that the Harkins note, indorsed by Mullins, was one of these notes, and that it was not therefore a collusive affair between the two cashiers for the purpose of defrauding their respective banks or of using the funds of the banks without authority.

According to the testimony offered in appellee’s behalf, this arrangment was first an oral one, which had been discussed by the president and cashier of the plaintiff bank with the president and cashier of the defendant bank. These letters, which were admitted over ,appellant’s objection, tended to show that, pursuant to this arrangement, appellee bank had been handling paper of the customers of the appellant bank, including two officers thereof, one a vice president and another a director, and the letters had some probative value to show that there was nothing wrong or collusive between the cashiers of the two banks, but that the loan to Harkins and the renewal thereof were made in due course of business. The verdict of the jury is conclusive of this issue.

Special objections were made to a letter written 'by Ned Fraser, the cashier of the Monette bank, to hi's brother, Leving Fraser, who resided in Lepanto, but was not connected with either bank, this letter being made “Exhibit M” to .the testimony of Ned Fraser. This letter inclosed three notes for which the Monette hank was asking either payment or renewals, and also requested Leving Fraser to secure renewals of five other notes which were referred to as being then in the possession of thé Lepanto bank. Among these last five notes whs one referred tó as the Harkins-Mullins note for $2,000, the note alleged to have been wrongfully converted. It is insisted that this letter was self-serving, and was highly incompetent. '

The letter made “Exhibit M” was dated October 18, 1920, and was offered in evidence under the following circumstances : Ned Fraser testified that he was unable to get returns from the Lepanto bank on certain notes which had been sent to -that bank for payment or renewal, and among these notes was the one in suit, so he wrote his" brother, Leving Fraser, to call at the Lépanto bank and make inquiry about them. The objection was made that the letter would be the best evidence of any authority con-. ferred upon Leving Fraser, whereupon the letter was produced and offered in evidence. Objection was then made to the admission of the letter upon the grounds,' (a), that the Lepanto bank never, came in contact with the letter, and (b), that the letter' was a self-serving declaration.

Leving Fraser testified that he received the letter, and,-in order to show his authority to act for the Monette bank, he exhibited the letter to Harkins, who was at the cashier’s window of the Lepanto bank.and in charge., of the bank at the time, and he testified that Harkins told him that he had received a copy of the letter, and: admitted that the bank then had the Harkins-Mullins note.

We think there was no error in admitting this letter. The testimony of Leving Fraser made it admissible, even though it would appear to have been only a self-serving declaration at the time Ned Fraser offered it in evidence. Leving Fraser testified -that he exhibited the letter to Harkins to show his authority for inquiring about the note, and Harkins admitted having received a copy of it from the Monette bank. '

The court gave, over appellant’s objection, an instruction numbered 11, reading as follows: “You are further-instructed that it is within the general scope of employment of the cashier of a bank to. receive and handle notes sent to that bank in due course of trade for collection, and you are told that it needs no special authority given by special or separate resolution of the board of directors of that bank to authorize him to handle said notes so sent for collection. Any note, sent in due course of business from one bank to another, or from individual to a bank,-for the purpose of collection, would come under the general scope of authority of the cashier of the bank, and the cashier would have authority to handle that note as the agent of and for the bank.” .

There was- testimony showing what the duties of a bank cashier w;ere, and the objection is not made that the instruction does not correctly declare the law; the objection is that the instruction does not take into consideration the question whether Harkins was acting for himself or the bank of which he was cashier, and is therefore in conflict with other instructions which submitted the question of collusion between the two cashiers.

As has been said, it is not contended that the instruction does not correctly declare the law defining the duty and authority of a bank cashier. The- instruction refers only to notes sent in the ordinary course of business from one bank to another, and it was the theory of appellee that the note in suit had been so remitted to appellant bank. The court gave, at appellee’s request, three instructions dealing with the question of collusion between the two cashiers. In another instruction the court told the jury that no one instruction was to.be taken as the whole law of the case, but that all the instructions were to be considered together. There was no specific objection that the instruction took no account of the question, of. collusion,, and this should have been made if appellant-conceived the instruction to be in conflict with, the instruetions on that subject. Alexander v. Williams-Echols Dry Goods Co., 161 Ark. 363, 256 S. W. 55.

We find no error in tbe record, so the judgment will be affirmed.