text:
    Drummond v. Alphin.
    Opinion delivered March 12, 1928.
    1. Mines and minerals — drilling of wells — commencement of operation within year. — Where an oil and gas lease, covering 27 scattered tracts of land, provided that in case operations were not commenced and prosecuted with due diligence within one year, the lease should be void, but that a forfeiture could be prevented by payment of quarterly rentals until drilling operations were commenced, after which no rent was to be paid, a drilling of two wells held not a compliance with the lessee’s obligation to continue development of lands.
    2. MINES and minerals — forfeiture of leases. — Where an oil and gas lease, covering 27 scattered tracts of land, provided that forfeiture for the lessee’s failure to begin operations within one ' year, would be prevented for five years or until drilling operations were commenced, failure of the lessees to begin development work on other tracts of land after drilling of discovery wells on two individual tracts, authorized a cancellation of such portions of the original leases as had not been explored.
    Appeal from Union Chancery Court, Second Division ; George M. LeCroy, Chancellor;
    affirmed.

      Marsh, McKay & Marlin, for appellant.

      L. B. Smead, Robert C. Knox, H. P. Smead, John Bruce Cox and C. E. Wright, for appellee.
   Smith, J.

On April 21, 1919, J. S. Alphin and wife executed to Vincent L. Hanson an oil and gas lease covering 1,947 acres of land in Union County, Arkansas. The lease described twenty-seven tracts otf land, which are widely scattered over the county, some being as much as thirty miles from others, arid, altogether, the lands were in eleven different townships.. The lease contained the grant of all rights usually found in such instruments, and reserved to the lessor “the equal one-eighth royalty or share of all oil produced and saved upon the premises, to be delivered at the well,” etc., and required the lesssee to pay $200 per annum, - payable quarterly, for the product of any well producing gas exclusively.

It was provided in the lease that, in case operations were not commenced and prosecuted with due diligence within one year, the grant should be void, but that forfeiture might be prevented by the lessee paying quarterly, from year to year for five additional years, a rental of twenty-five cents per acre until drilling operations iare commenced, after which no rent was to be paid, and that “the completion of a well shall operate as full liquidation of all payments under this provision during the remainder of the term of this grant.” No rent was to be paid while drilling operations were being carried on in good faith, whether these operations were successful or not.

It was further provided that: “In case the party of the second part should bore and discover either oil or gas, then in that event this grant, incumbrance or conveyance shall be in full force and effect for twenty-five years from the time of the discovery of said product, and as much longer as oil or gas may be produced in p'aying quantities thereon; the party of the second part binding itself, after discovery of oil or gas in paying quantities, to prosecute diligently the work of production of oil or gas, and deliver the one-eighth of the oil as above provided and the payment of two hundred and no/100 dollars per annum for gas (if a g*as well) as above provided.” “This grant is not intended as a mere franchise, but is intended as a conveyance of property above described for the purpose herein mentioned, and it is so understood by both parties to this agreement. Lessee shall have the right to surrender this lease, or any portion thereof, by written notice to the lessor, describing the portion of above tracts that it elects to surrender, and the acreage rental hereinbefore set forth shall be reduced in proportion to acreage surrendered. ’ ’

In August, 1926, Alphin, the lessor, brought suit, in which he set out the above lease, and alleged that Hanson, the lessee, had sublet or assigned the -lease as to varmus portions of the lands there described, and these sublessees or assignees, twenty or more in number, were made parties defendant along with Hanson.

The complaint alleged an assignment of the lease in so far as the same covered or affected the west half of the southeast quarter of section 24, township 16 south, range 16 west, which, by mesne conveyances, was acquired by the Unity Petroleum Company, and that company had developed the eighty-acre tract described by drilling a well which was producing oil. It was alleged that, as to the remaining 1,867 acres, there had been no development or prosecution for oil or gas, and it was prayed that the lease be canceled as a cloud upon the title, except as to the eighty acres above described.

.Some of the defendants filed no answer or other pleading, and a decree by default was rendered against them.

Hanson and certain other of the defendants filed a demurrer to the complaint, upon the grounds that it did not state a cause of action entitling plaintiff to the relief prayed, and because “the complaint shows on its face that the oil and gas lease referred to in plaintiff’s complaint is a single and undivided contract, and that, before the term of years named in said lease had expired, oil and gas was being produced from said leased premises, and that, by the terms thereof, said oil and gas lease is to remain in force and effect so long as oil and gas are produced from the leased premises.” The demurrer to the complaint was overruled, and, defendants electing to stand on the demurrer, the relief prayed was granted.

Alphin also filed a suit against Fred G. Drummond et al., in which he alleged the execution by himself of a lease to I. Felsenthal similar to the one given Hanson, and that Felsenthal had assigned or sublet leases to various persons. The Felsenthal lease covered 1,710 acres, lying in seventeen different townships and comprising thirty-one different tracts of land, and these lands were as widely scattered as were the lands involved in the Hanson lease. It was alleged in the complaint that, of all the assignees or sublessees of Felsenthal, only the Woodley Petroleum Company had developed a well, this being on tbe southeast quarter of the northwést quarter of section 24, township 16 south, range 16 west, one of the tracts of land described in the Felsenthal lease.

The assignees or sublessees under the Felsenthal lease were made defendants, some of whom failed to answer, and, as against those who failed to answer, a decree was rendered by default, canceling the lease. Other defendants filed a demurrer similar to the one filed in the Hanson case, and, the demurrer being overruled, the defendants stood thereon, and a decree was rendered canceling their leases. The cases have been consolidated, and are presented here as a single appeal.

It is the insistence of appellants that the allegations of the complaint show such compliance with the provisions of each lease as to defeat the granting of the relief prayed, inasmuch as it is alleged in each complaint that one of the sublessees has developed a producing oil well.

Appellants rely upon the paragraph of each lease which provides that: “In case the party of the second part should bore and discover either oil or gas, then in that event this grant, incumbrance or conveyance shall be in full force and effect for twenty-five years from the time of the discovery of said product, and as much longer as oil or gas may be produced in paying quantities thereon.” Appellants interpret this language of the leases as showing that the parties contemplated that, if oil Was discovered, the lessee should have twenty-five years longer in which to explore other tracts of land embraced in the lease than that upon which the original discovery well should be drilled. It is. pointed out by appellants that the complaint does not allege that the drilling of additional wells is necessary to prevent draining’ the oil from under the lands described in the lease by other wells adjacent to these lands. In addition to the insistence that appellants have substantially complied with the requirements of the leases, it is also urged that, if there has been any breach, it is only partial, and that the lessor is therefor remitted to an action at law for damages.

Appellants cite numerous cases to sustain their contentions, but, upon the question of substantial perforan ance of the requirements of the leases, they rely chiefly upon the decision of this court in the case of Hughes v. Cordell, 174 Ark. 757, 296 S. W. 735. It is the opinion of the majority, however, that the Hughes case is not controlling here. That case did quote with approval a syllabus from the case of Dulce v. Stewart (Tex. Civ. App.), 230 S. W. 485, reading as follows: “Where owner •leased ias an entirety and by lease required lesseés to develop the land for oil, without providing for development of any particular acre or tract thereof, the development of a portion of the land' by a sublessee accrued to the benefit of the lessee, precluding the owner from declaring lease forfeited as to another portion held by lessee or successors for nondevelopment thereof.” But it will be remembered that the lease in that case covered a tract of land containing only 90.26 acres. The original lease in that case was made February 16, 1920, and on September 27, 1922, the lessee contracted for the drilling of a well on a sixteen-acre tract constituting a part of the ninety-acre tract, and the first well was brought in on January 14, 19'23, and seven wells were drilled altogether on the sixteen-acre tract. In that case the plaintiff, Hughes, sought to treat the assignment of a portion of the land as an abandonment of the unassigned portion, but the court held that the original lease of the ninety-acre tract was an entirety, and that the subleases were for the purpose of development of a portion thereof, and that the development of a portion of the land by a sublessee accrued to the benefit of the. original lessee, precluding the owner from declaring the lease forfeited as to another portion for non-development.

There is no purpose here to impair the authority of that case, but it is thought that it would be an extension of it if it were held to apply to the facts of this case.

In the case of Duke v. Stewart, supra, from which we quoted, and which we followed in the case of Hughes v. Cordell, it was also said: “On the facts before it the trial court properly instructed a verdict for defendants, and this judgment is affirmed without prejudice as to the rights of appellants or their assigns to bring a new suit or suits, should the holders under this original lease fail to perform the obligations imposed upon them by this contract;” citing the case of Fisher v. Crescent Oil Co., (Tex. Civ. App.), 178 S. W. 905. The obligation there referred to was that of prosecuting the work of development, and the case of Fisher v. Crescent Oil Co., there cited, is illuminating on the exact question here in issue. The first syllabus in that case reads as follows:

“Complainant, in consideration of $6,400, conveyed all the oil and other minerals in certain land described, with the right of entry to drill and operate for oil, reserving one-eighth of all the oil produced,'the lease to be void if the lessees did not commence operations by a certain date, and providing that, if oil was discovered, the lease should be in effect for 25 years thereafter, which conditions extended to the heirs and assigns of the parties. The lessees assigned to two different assignees, one of whom, within the time prescribed, brought in. a producing oil well, which failed in about a year, after which the casing was drawn out, and the other of whom drilled a well, which proved to be dry. Held, in the lessor’s suit against the second assignee to cancel the lease, that the discovery of oil by one of the assignees executed the contract and vested rights under the entire lease -for the 25 years specified, but required the lessees to continue operations' during such term, and that their failure to operate would work a forfeiture, though a temporary cessation of work would not.”

The 25-year clause in that case -reads as follows: “In case the parties of the second part shall bore and discover either oil, gas or other minerals, then in that event this grant, incumbrance or conveyance shall be in full force and effect for twenty-five years from the time of discovery of said product, and as much longer as oil, water, gas or other minerals can be produced in paying quantities thereon.”

It thus appears that the 25-year clause in that case is almost identical with the 25-year clause in the instant case, and, while the court held that the discovery of oil by a sublessee vested rights under the entire lease for 25 years, yet it also held that the lessees were required to continue operations 'during said term, and that their failure to operate would work a forfeiture, although a temporary cessation of the work would not.

It was not the intention of this court, in the case of Hughes v. Cordell, supra, to extend the doctrine of the eases there cited and followed, and it is now held that, while the development of a portion of a lease inures to the benefit of the original lessee, that fact does not relieve the original lessee from the duty of proceeding with the development of the tract as an entirety in- the manner contemplated b3r the express and implied covenants of the lease. The question therefore arises whether the drilling of one well on each lease complied with and discharged the obligation of the original lessee to continue to develop the lands for oil or gas, or might wait twenty-five years before doing so.

If appellants are correct in their, interpretation of the contract, they have, for the period of twenty-five years from the date of the drilling in of the respective discovery wells, discharged their obligations to the lessor, and during this time will not be required to pay even the annual rental of twenty-five cents per acre, for a producing well has been brought in under each lease, nor are they required to surrender any. portion of the lands on which they conclude drilling would not be profitable, as the lease contract authorizes them to do.

As has been said, the lands here involved are widely scattered, and the drilling of. the wells which are producing oil has not determined whether oil might not be discovered under other lands. It is true, as appellants assert,' that the complaint does not allege that there is a drainage of oil from under these lands by wells which have been drilled by other persons, but it is true also that, unless appellants explore for oil, the lands may remain undeveloped as long as the lease is outstanding.

The leases were made in 1919, and suits to cancel them were brought in August, 1926. One of the producing wells was drilled in April, 1923, and the other in. May of that year, so that more than three years elapsed after the last well had been brought in before the institution of the consolidated suits, and, under the allegations of the complaint, nothing has been done towards the further development of the land during that interval.

In the case of Millar v. Mauney, 150 Ark. 161, 234 S. W. 498, it was’said:

“The contract set up in the complaint does' not create the ordinary relation of landlord and tenant. It is not a contract by which the lessees are to occupy the property for residence, mercantile, manufacturing or agricultural purposes, and in which the lessor, landlord, receives a certain stipulated sum for one month or for one year for the use of the premises leased. But it is a contract for the exploration and development of the leased lands ‘for diamonds and other precious stones and valuable minerals.’ As compensation for thé use of his lands for such purposes, the lessor receives, by way of rental or royalty, a certain percentage of the output from the development of the leased property. In other words, this is strictly a lease for ‘mining purposes,’ such as was under consideration by this court in the case of Mansfield Gas Co. v. Alexander, 97 Ark. 167, 133 S. W. 837. In that case we said: ‘In the construction of mineral leases such as is involved in this case, the authorities uniformly hold that there is an implied obligation on the part of the lessee to proceed with the search and also with the development of the land with reasonable diligence, according to the usual course of such business, and that a failure to do so amounts, in effect, to an abandonment, and works a forfeiture of the lease.’ And further: ‘According to the uniform holding of the authorities, the law will read into this lease a covenant on the part of the lessee that it will, with due and proper diligence, search the land described in the lease for minerals and with due and proper diligence develop the same. This implied covenant is in effect a condition upon which the lease was made; á failure or refusal to perform that condition results in a forfeiture of the lease.’ ”

After reviewing a number of authorities, including several prior decisions of this court, it was there further said:

“If the conduct of the lessees in contracts of this nature is such as to show that they do not intend, in good faith, to perform the covenants by which they are bound, then they have, in legal effect, rescinded those covenants and released the lessors from the obligations of the contract, and the latter are justified likewise' in treating the contract as rescinded.” And this case is also authority for holding that an action may be brought in equity to cancel a lease under such circumstances.

Through the industry of counsel many of, and possibly'all, the leading cases bearing on the question here under review have been cited and discussed. We do not review these cases or attempt to distinguish them, for to do so would unduly protract this opinion, as the authorities are not harmonious. The majority are content, under the allegations of the /complaint, to say that appellants have not, except as to the two tracts upon which producing wells have been developed, prosecuted the work of development which the original lease contracts contemplated, after bringing in the discovery wells. As supporting this view, the following cases may be cited: Mansfield Gas Co. v. Alexander, 97 Ark. 167, 133 S. W. 837; Mansfield Gas Co. v. Parkhill, 114 Ark. 419, 169 S. W. 957; Mauney v. Millar, 150 Ark. 161, 234 S. W. 498; Murdoch v. Sure Oil Co., 171 Ark. 61, 283 S. W. 4; Brewster v. Lanyon Zinc Co. (C. C. A.), 140 Fed. 801; Papoose Oil Co. v. Rainey, 89 Okla. 110, 213 Pac. 882; Fox Petroleum Co. v. Booker, 123 Okla. 276, 253 Pac. 33; Alford v. Dennis, 102 Kan. 403, 170 Pac. 1005; Brown v. Union Oil Co., 114 Kan. 166, 270 Pac. 286; W. T. Waggoner Estate v. Sigler Oil Co. (Tex. Com. App.) 284 S. W. 291; White v. Green River Gas Co. (C. C. A.), 8 Fed. (2d) 261; Id. 270 U. S. 660, 46 Sup. Ct. Rep. 356, 70 L. ed. 786; McCamey v. Freel, 121 Kan. 189, 246 Pac. 500.

Upon the question of the remission of appellee to an action at law for a suit for damages for a partial breach of the contract, it may be said that the original lessee has, by assigning and subletting various portions of the leases, made many leases out of the various tracts of land, and no one of these assignees or sublessees could be held responsible for the dereliction of other assignees or sublessees. Indeed, two of them have complied with their subleases by developing the land, and they could not be sued for damages, nor would it be equitable to cancel their leases because of the default of others.

In the case of Millar v. Mauney, supra, it was held (to quote the third syllabus) that, “Where a lessee in a mining lease, the consideration of which is a royalty to be paid, has, after a reasonable time, failed to begin and to continue the work of development and exploration provided in the contract, the lessor has three remedies, viz: (1) he may sue in equity to cancel the contract and recover incidental damages; (2) he may sue at law for damages for breach of the contract; or (3) he may treat the contract as rescinded, and sue at law to recover possession of the property leased.”

The majority are of the opinion, upon the authority of the cases previously cited herein, that appellants have failed, beyond a reasonable time, to begin the work of exploration and development as provided in the original leases, after drilling the discovery wells, and that the cancellation of such portions of the original leases as had not been explored was properly decreed.

A case which contains an exhaustive review of the authorities and which is thought to sustain the decrees here appealed from is that of Brewster v. Lanyon Zinc Co., 140 Fed. 801. This is a decision of the Circuit Court of Appeals of the Eighth Circuit, the opinion being delivered by Mr. Justice Van Deventer, then a circuit judge.

It is therefore the opinion of the majority — in which view the writer does not concur — that the decrees of the court below are correct, and should therefore be affirmed, and it is so ordered.


source: Caselaw Access Project

author: Kirby, J.

license: Public Domain

text:
    Ward v. Pelton.
    Opinion delivered April 16, 1928.
    1. Schools and school districts — legislative control. — The Legislature has plenary power in the establishment' and division of State or counties into school districts.
    2. Schools and school districts — district overlapping boundaries of COUNTY. — Acts T927, p. 531, providing for organizing into a county unit school district of all territory in Pulaski County outside of single and special school districts within cities of over 10,000 population, abrogates special school districts composed partly of land within the county and incorporates territory of the county within a county district, though included in a special school district within territory in an adjoining county by Acts 1891, p. 148, as effectively as though such act were expressly repealed.
    Appeal from Pulaski 'Chancery Court; Frank H. Dodge, Chancellor;
    affirmed.

      Troy W. Lewis and Clayton Freeman, for appellant.

      E. B. Dillon and George W. Emerson, for appellee.
   Kirby, J.

The sole. question for determination on this appeal is whether the territory in Pulaski County organized into the Alexander School District with territory of Saline County, ;by special act 82 of the Acts of 1891, has been included in the county unit district of Pulaski County, organized under act 152 of the Acts, of 1927, and the special act in that respect repealed by the later general act.

The said act. 152 of 1927 was construed and held to be not in conflict with the Constitution in LeMaire v. Henderson, 174 Ark. 936, 298 S. W. 327.

Said act 152 provides for the organization into a school district of all the territory in the county outside of the single and special school districts within cities with a population exceeding. 10,000 inhabitants as shown by the last Federal census, and that such district shall at once become the owner of all the property belonging to the former school districts of the county outside of the special and single school districts within such cities, and shall be a special or single school district, with all „ the powers and responsibilities of a single or special school district in cities of the first class. .Suctions 5 and 6. ' ! , ’ : 1 ¡

It is also expressly provided, in the last paragraph of § 6, that every school district, except those in which there is a city of not less than 10,000 inhabitants, “whether created by county courts, county boards of .education or by special acts of the Legislature, shall cease to exist when a county school district as herein provided for has been created, and its directors, trustees, agents and teachers .shall turn over to the county board of education all its books, records and other property.”

The act also requires the county school district to assume and perform all obligations of any valid contract to which any district of the county is a party.

Under said act 82 of 1891 six sections of land in Pulaski County were included in the special school district, the “Alexander School District,” but it was provided therein that the school taxes on the property included in Pulaski County and that included in the district in Saline County should be levied and collected by the respective officers of the different counties and paid into the county treasuries for the benefit of the special school district, and the children were required to be enumerated within the district, and the number living within the territory of the particular county returned to the county examiner of that county in order to the apportionment of the school tax in accordance with the number of children in each county.

The Legislature had plenary power in the establishment and division of the State or counties into school districts, and the evident purpose of this act 152 of 1927 was to organize all the territory within the county, not especially excepted as included in single or special school districts in cities of not less than 10,000 population, into the county school district. It expressly provides that every other school district, save the excepted single or special school districts in cities and towns of not less than 10,000 population, “whether created by county courts, county boards of education or by special acts of the Legislature, shall cease to exist when a school district as herein provided for has been created,” and as effectively abrogates any special school district composed partly of the lands within the county organized into the county school district as though the entire district was within the limits of the county; the result being to incorporate the territory of the county, notwithstanding it had been included in a special school district with territory in an adjoining county by a special act of the Legislature, as effectively as though said special act had been expressly repealed.

We do not need to suggest what may be done with that portion of territory of the Special Alexander School District in Saline County, the authorities of that county having ample authority to dispose of it, and no injustice will result from the dismemberment of the district, since the new law provides that the county school district shall take care of, perform and discharge the (valid contracts and obligations' of the dismembered joint district, so far as same is a charge against the lands of Pulaski County withdrawn therefrom.

There being no error in the record, the judgment i's affirmed.


text:
    Watson v. Poindexter.
    Opinion delivered April 16, 1928.
    1. Pleading — matters reached by demurrer. — Facts which do not appear in the allegations of the complaint cannot be taken advantage of on demurrer.
    2. Pleading — admissions by demurrer. — A demurrer admits allegations properly pleaded with all intendments and inferences arising therefrom.
    3. Homestead — equitable estate. — An equitable estate will support a homestead right, and form a sufficient basis under the law for a claim of homestead.
    4. Homestead — nonjoinder of wife. — A married man cannot make ■a valid conveyance of the homestead if his wife fails to join in the execution of the deed, nor can he make a contract to convey the homestead which would be obligatory upon the wife or of any validity without her joining in the execution of such instrument.
    5. Homestead — assignment of husband’s interest. — Where a husband had paid for land occupied as a homestead, but had not received a deed, his assignment of his contract as security for a loan was void where the wife failed to join, and she was entitled to have such deed canceled and to have the conveyance of the property from the vendor to her husband.
    6. Divorce — disposition of homestead. — Where a wife was the innocent party in a suit for divorce, the court in decreeing conveyance to the husband of property purchased and occupied as a homestead could award the homestead to the wife along with the custody of the dependent child during its minority and so long as appellee remains á widow.
    Appeal from Logan 'Chancery Conrt, Northern District; JohnE. Chambers, Chancellor;
    affirmed.
    STATEMENT BY THE COURT.
    Appellee brought this suit for divorce, against her husband, Dewey Poindexter, alleging three of the statutory grounds therefor — habitual drunkenness for the •space of a year on the part of the husband; that he was guilty of cruel and barbarous treatment such as to endanger her life, and offered such indignities to her person as rendered her condition intolerable. She later filed an amendment to her complaint, alleging that she and her husband had acquired, by their united efforts, a small home in the town of Paris, on the south half of block 2, Ledgerwood Addition, worth about $1,500, m which her husband was living’ with his family now. That the house was purchased from Joe Watson, Sr., in 1921, under an ordinary written contract of sale, for the consideration of $950; that she and her husband immediately moved into the house and started paying it out in accordance with the contract, and that they continued to reside on the property as their homestead, and paid all the money due on the property in accordance with the contract. That it was fully paid out, but the same had notsbeen conveyed to him in accordance with the- ternas of the contract; that, after such full payment, he borrowed some money from the defendant, American Bank & Trust Company, upon his note, indorsed by Joe Watson, Jr., as security; that, in order to secure the indorser, he delivered to him the paid-up contract of purchase of the property, with the notes and receipts; that this was all done over the protest of plaintiff, who did not consent to or join in any such agreement or contract for the conveyance of the homestead. That she lived with her husband upon and occupied the premises as a homestead about four years from the time of its purchase until more than a year after all the purchase money had been paid, and her husband, the defendant, had become entitled to a deed therefor. That the assign- . ment of the contract from Joe Watson, Sr., to Joe Watson, Jr., was made without her consent, and that the property was later wrongfully conveyed by Joe Watson, Jr., to the American Bank & Trust Company in payment of the note executed by her husband for money borrowed from said bank, and for which the said Joe Watson, Jr., had become surety. It was alleged that these transactions were had without her consent or concurrence, that she did not join in any of them, and that the conveyance of her said homestead was absolutely void, and should not affect her homestead rights nor that of her husband. Asked that all these parties be made defendants; that the attempted assignment of the contract of purchase of the homestead by her husband to Joe Watson, Jr., and his conveyances of the property to the bank, be declared void, and the deed canceled; that the property be declared the homestead of her husband, Dewey Poindexter, subject to all her rights and equities and those of their minor child.
    Joe Watson, Jr., filed a general demurrer, which was overruled, and he then filed an answer, denying the allegations of the complaint, and that the contract of sale was in his possession or that of the American Bank & Trust Company, and alleged that he entered into a contract of sale of the property to Dewey Poindexter for $900; that the first two notes given for the purchase money were paid when due, but, before the last note was paid, early in 1924, Poindexter wanted to enlarge the dwelling, and borrowed from defendant and his partners, for whom he was working, $100 for that purpose. Later in the summer he wanted to go into the grocery business and to borrow $1,500 for that purpose. That he agreed with Dewey Poindexter and his wife, Ruby Poindexter, to enable them to borrow this money, to sign their notes to the ¡bank as surety, and was paid the balance of the purchase money, “and contract was surrendered to Joe Watson, Jr., to be held until the said $1,500 note was paid by defendant, Dewey Poindexter, and his wife, Ruby Poindexter,” when a deed was to be executed to the premises. That the note to the bank was never paid, and, after it had become due, and Poindexter and his wife had become insolvent, and made an assignment of the grocery business to their creditors, and when the bank demanded payment of him of their debt, for which he was surety, he had declared the contract of sale of the land forfeited, and had conveyed the land by warranty deed, iii which his wife joined, to the bank in payment of the $1,500 Poindexter note, with interest.
    Watson, Sr., denied the allegations of the complaint, the amended complaint, and disclaimed any interest in the property.

      The hank neither denied nor made admission as to the allegations of the purchase of the land by appellee’s husband and the contract of sale thereof; admitted that 'it was composed of city lots, but. denied that it was held and occupied by the appellee with her husband for more than one year after all payments were made under said contract and before the sale of same to the bank. Admitted the allegation that Dewey Poindexter, the appellee’s husband, had borrowed the money from the bank, and procured the signature of Joe Watson, Jr., and Tom Watson as sureties, and that Dewey Poindexter had transferred the contract of sale and whatever title he had in the property to Joe Watson to secure him for his indorsement, and that Joe Watson had executed and delivered to the bank his warranty deed conveying the real estate in payment of his liability as indorser upon the note of Dewey Poindexter upon the loan made to him. That it had no knowledge or information about the conveyances or assignments of the contract of purchase of the lands between the Watsons and Poindexter. That it purchased same for the consideration of the note and interest due it from Dewey Poindexter, upon which Joe Watson, Jr., was surety; that it was a fair consideration, and accepted without any attempt to defraud. Prayed, in case the deed was canceled, that the bank be restored to its rights under the note for the money loaned, delivered in payment for the real estate, and for judgment against Dewey Poindexter, Joe Watson, Jr., and Tom Watson for the amount of same with interest.
    The testimony was sufficient to support the allegations of the complaint for divorce, and also showed that appellee’s husband, Dewey Poindexter, had purchased the land in controversy under a written contract of sale, and that he and his wife immediately moved on the premises and continued to occupy same as a homestead. That, more than a year after1 all payments under the contract of purchase had been duly made and Dewey Poindexter was entitled to a conveyance of the property, lie made a new arrangement, without the consent of his wife or her joining in any way in the transaction, and turned over the contract of purchase to Joe Watson, Jr., to secure him against his indorsement of Poindexter’s note to the bank for $1,500 to enable him to go into the grocery business. All the parties knew that Dewey Poindexter and his wife, appellee, had established their homestead on the property immediately upon its purchase under the contract of sale; that it was occupied as such homestead by them long after all the purchase money under the contract had been paid, and it continued to be occupied as their homestead to the time of the rendition of the decrees herein.
    There was no testimony tending to show that the wife consented to the assignment or transfer of the contract of purchase of the land after it had been paid for, and certainly none tending to show that she joined in any such assignment or conveyance.
    The court rendered a judgment for the divorce on. the first hearing and postponed the consideration on the homestead question until later, when it held the assignment to Watson and the conveyance of the lands to the bank void, and canceled the conveyance to the bank as a cloud upon the title of Dewey Poindexter, and ordered Joe Watson, Jr., to execute and deliver a warranty deed to the homestead of appellee and her husband, Dewey Poindexter, to Dewey Poindexter within 10 days specified for performing the condition of the contract; and that appellee with her child is entitled to the possession and control of the homestead, describing it, during the minority of the child, Hilda Louise Poindexter, and so long thereafter as appellee remained a widow. The complaint was dismissed as to Joé Watson, Sr., and from the decrees Joe Watson, Jr., prosecutes this appeal.

      Hall Brothers, for appellant.

      White & White, for appellee.
   Kirby, J.

It is insisted for reversal that the court erred in overruling the demurrer to the complaint. Appellant urges the objection, however, against the complaint for things not alleged therein, rather than because of the insufficient allegations thereof. If the vendor of-the land by the written contract could not and did not make a valid contract for their conveyance, that fact did not appear.in the allegations of the complaint, and certainly could not be taken advantage of on demurrer, which admitted all the properly pleaded allegations with all intendments and inferences arising therefrom.

The undisputed testimony shows that Dewey Poindexter, with his wife, Ruby Poindexter, appellee, established their homestead upon the land purchased under the contract o'f sale, immediately, and continually resided thereon until long after the full purchase price therefor was paid and Poindexter was entitled to his deed of conveyance. It is no longer questioned that an equitable estate will support the homestead right and form a sufficient basis under the law for the claim of homestead. Spaulding v. Haley, 101 Ark. 296, 142 S. W. 172; Kirby v. Vantreece, 26 Ark. 370.

It is also true that a married man cannot make a valid conveyance of the homestead if his wife fails to join in the execution of the deed, and that he cannot even make a contract to convey the homestead which would be obligatory upon the wife or of any validity, without her joining in the execution of such instrument. Section 5542, C. & M. Digest; Waters v. Hanley, 120 Ark. 465, 179 S. W. 817; 13 R. C. L. § 84, page 625.

No error was committed by the court in canceling the deed of conveyance of this homestead from Watson to the bank, nor -in directing its conveyance to Dewey Poindexter under the terms of the contract of purchase which had been performed by him, and it was also competent for the court to award the homestead to appellee, the innocent party, along with the custody of the dependent child during the minority of such child, and so long thereafter as appellee remains a widow. Woodall v. Woodall, 144 Ark. 159, 221 S. W. 463.

We find no error in the record, and the decree is in all things affirmed.


text:
    State v. Dabney.
    Opinion delivered April 16, 1928.
    Automobiles — tax on carrier op passengers. — One who rents or hires to individuals applying therefor automobiles to be operated by the hirer at his own risk and discretion was neither a private nor a public carrier of passengers, nor engaged in the business of using motor, vehicles for transportation of passengers for hire, within the meaning of the Acts Sp. Sess. 1923, pp. 55,. 59, § 36, requiring payment of a tax in addition to registration fees.
    Appeal from Pulaski 'Circuit Court, First Division; Abner McGehee, Judge;
    affirmed.

      11. W. Applegate, Attorney General, and John L. Carter, Assistant, for appellant.

      Martin K. Full, for appellee.
   Kirby, J.

This appeal necessitates the construction of § 36(d)iof act. 5, Special Acts of 1923 (Castle’s Supplement to Crawford & Moses’ Digest, § 5166). Information was filed against appellee charging him with operating motor vehicles for hire without the payment of license fee required under said section. The case was tried on an agreed statement of facts, which the court held insufficient to support a conviction, and dismissed the cause, from which the State has prosecuted this appeal.

■ The appellee, George Dahney, operates a business in the city of Little Rock under the style or name of “DriveItYourself Company.” He owns 23 automobiles, all passenger cars, including coupes, sedans and touring cars. He conducts his business by leasing them to the customers, who come to his garage where they are kept, .under a contract in printed form, the customer himself being in exclusive control of the car during its operation. He does not have in his employ any drivers or chauffeurs, does not drive the leased cars himself, nor operate a jitney, taxicab line, or motor bus business. A certain price is charged for the leased car, which is used by the bailee at his own discretion, and the rental charged is the same whether the customer alone occupies the car or whether he carries other persons with him. Virtually all the cars rented are used exclusively within the limits of the city of Little Rock. Appellee refused to pay the license fee required under said section of the statute.

The statute-provides, § 36:

“(d) In addition to the registration fees herein provided for all motor vehicles, when such vehicles are used for the transportation or delivery of persons for hire, there shall he paid two dollars and fifty cents ($2.50) for each passenger-carrying capacity. * * *
“ (m) Bach of the fees herein authorized is declared to he a tax on the privilege of using the vehicle on the public roads and highways of the State of Arkansas.”

Subdivision (n) of § 36 declares it a misdemeanor for any person to operate or permit the operation of a Vehicle without having'paid the required fee.

The classification is made herein for charging an additional fee for motor vehicles “when such vehicles are used for the transportation or delivery .of persons for hire” according to the carrying capacity of the vehicle.

The undisputed testimony shows that the appellee was not engaged in the business of operating a jitney, taxicab or motorbus line, but only in renting or hiring to individuals, who applied therefor, cars of different styles and sizes, to be operated by the hirer at his own risk and discretion. Such operation of such business did not constitute appellee either a private or public carrier of passengers or his business the using of motor vehicles for the transportation or delivery of persons or passengers for hire within the meaning of the act. He was not a carrier of passengers al all, nor liable to the payment of the additional tax required under § 36 (d) of the act. Forbes v. Reinman, 112 Ark. 417, 166 S. W. 563, 51 L. R. A. (N. S.) 1164; Locke v. Ft. Smith, 155 Ark. 158, 244 S. W. 11; Winfrey v. State, 133 Ark. 357, 202 S. W. 23; State v. Bee Hive Auto Service Co., 137 Wash. 376, 242 Pac. 384; State v. Robinson, 42 Minn. 107, 43 N. W. 833, 6 L. R. A. 339; Burlington v. Unterkircher, 99 Iowa 401, 68 N. W. 795; Rathborn v. Ocean Accident Guaranty Ass’n., 299 Ill. 562, 132 N. E. 754, 19 A. L. R. 140; Booth v. Dallas, Texas (Tex. Civ. App.), 179 S. W. 301, 4 R. C. L. 549.

No error was committed in so holding, and the judgment is affirmed.


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    Threlkeld v. Baptist Hospital.
    Opinion delivered April 16, 1928.
    Evidence — parol testimony to contradict writing. — Where defendant signed a guaranty of payment of a hospital bill, in his individual capacity, it was inadmissible for him to prove that the guaranty was signed as superintendent of the company for which the patient was working when injured, with the intent only to hind such company.
    Appeal from Crawford Circuit -Court; J. O. Kincamnon, Judge;
    affirmed.

      D. H. Howell, for appellant.

      Starbird & Starbird, for appellee.
   Kirby, J.

Appellee brought this suit against appellants on an account for an indebtedness of the sum of $314.05 for service alleged to have been rendered to appellant Threlkeld while confined as a patient at appellee’s hospital in Alexandria, La., it being also alleged that appellant Gerhardt had guaranteed in writing the payment of the account.

A. L. Threlkeld was an employee of the Vincennes Bridge Company of Vincennes, Ind., at work upon the construction of a bridge near Trout,» in Louisiana, and appellant Gerhardt was foreman or superintendent of the construction of the bridge, and father-in-law of appellant. Threlkeld was injured in the course of his employment on October 6, 1926, and taken by Gerhardt to the Baptist Hospital at Alexandria, La., for treatment, being admitted there on the afternoon of that day. On October 11 Gerhardt signed the following notation on the ledger sheet upon which Threlkeld’s account was being kept: “This bill is guaranteed in full by me, and I hereby sign my name. F. O. Gerhardt. Now at Trout, Louisiana; permanent address, Alma, Arkansas.”

Suit was brought against both appellants for the services rendered, the payment of which was guaranteed by Gerhardt. Appellants denied the allegations of the complaint.

The undisputed testimony shows the amount of the account charged to Threlkeld was correct, a copy of it in fact having been “O.K.’d” by him, and that Gerhardt signed the guaranty.

Testimony was introduced showing that, under the workmen’s compensation law of Louisiana, the bridge company, appellant’s employer, was bound to the payment for his hospital bill and medical treatment to the sum of $250, and also to the payment of a certain per cent, of the amount of wages, that would have been earned during the disability caused by the injury at the regular contract price.

Gerhardt offered to testify that he did not intend to personally guaranty the payment of Threlkeld’s account for medical treatment, etc., at the hospital, but only to bind the company to its payment by signing the guaranty.

The superintendent of the hospital said he understood the liability of the employer, under the law, for payment of hospital bills and medical treatment to an injured employee, and stated that he was only trying to have secured, by obtaining the guaranty of Gerhardt, the payment of any amount that should become due for treatment of Threlkeld while he was iii the hospital, since his injury was so severe as to apparently require his staying- therein longer than the amount the employer was required to pay would satisfy the account for.

After the introduction of the testimony in chief, appellant was allowed to amend his answer, to allege that he signed the guaranty as the superintendent of the bridge company, and on its account placed Threlkeld, another employee, in the hospital, and, as such agent, contracted with appellee for his care and treatment.

The court directed the jury to return a verdict for the amount sued for, and from the judgment thereon this appeal is prosecuted. •

Appellant insists that the court erred in directing the verdict.

The undisputed testimony showed that the account sued on was correct, it had been O.K.’d by the injured employee to whom the services were rendered, and appellant Gerhardt did not deny its correctness, but attempted to show by parol testimony that, in signing the'guaranty for its payment, he did so as the superintendent of the Vincennes Bridge Company, for whom Threlkeld was working at the time of his injury, acting as its agent, and intending only to bind the company to the payment of the account by such guaranty. The court correctly refused to allow the introduction of parol testimony to alter, contradict or vary the terms of the written guaranty, whose meaning is plain and unambiguous. Bryant Lumber Co. v. Crist, 87 Ark. 434, 112 S. W. 965; United Drug Co. v. White, 145 Ark. 96, 223 S. W. 372.

There being no conflict in the testimony, no error was committed in directing the verdict, and the judgment is affirmed.


author: Mehaffy, J.

text:
    Bailey v. Fenter.
    Opinion delivered April 16, 1928.
    1. Work and labor — indebtedness for services rendered. — In an action to recover for services rendered, in which proof showed the performance of services for which plaintiff had not been paid, the question as to the existence and amount of the indebtedness was for the jury.
    • 2. Appeal and error — conclusiveness op verdict. — A verdict supported by substantial evid.ence is conclusive on appeal.

      3.. Work and labor — recovery on quantum meruit. — In an action on an express contract to recover for services rendered, an instruction authorizing recovery on a quantum meruit in case the jury found there was no express contract was warranted where both parties, without objection, introduced testimony tending to show the value of the services performed.
    4. Pleading — failure to file affidavit to account. — A complaint in an action on a contract for services rendered, which states the cause of action, is not demurrable under Crawford & Moses’ Dig., §§ 1187, 1189, though plaintiff failed to file an affidavit to establish the account sued on as required by § 4200.
    5. Work and labor — presumption of promise to pay. — Where one accepts the services of another, the law implies a previous request and a subsequent promise to pay.
    Appeal from Union Circuit Court, Second Division; W. A. Speer, Judge;
    affirmed.

      John E. Harris, for appellant.

      T. O. Abbott, for appellee.
   Mehaffy, J.

The plaintiff, appellee here, on June 15, 1926, filed suit in the Union Circuit Court against the defendant, J. E. Bailey, alleging that the defendant was indebted to him for services in the sum of $868, with interest from January 1,1924.

' Defendant filed answer, denying the material allegations of the complaint, and, some time thereafter, filed a demurrer to the complaint, alleging as grounds therefor: “The complaint fails to have attached thereto as an exhibit an itemized statement of the account sued upon, and fails to have a sufficient account sued upon incorporated in said complaint.”

The court overruled the demurrer, and defendant saved exceptions. After the overruling of the demurrer both parties announced ready for trial, a jury was impaneled, and, after hearing the evidence and the instructions of the court, returned a verdict for plaintiff in the sum of $500, and judgment was- entered for that amount.

Defendant filed motion for new trial, which was overruled, exceptions saved, and this appeal is prosecuted to reverse said judgment. . > :.

The appellant urges a reversal on three grounds. First, that the court erred in refusing to give defendant’s instruction No. 1, which instructed the jury to find for the defendant; second, because the court erred in giving the court’s instruction upoxi the question of quern-turn meruit; and third, because the court erred in overruling defendant’s demurrer to the complaint.

Appellant first insists that the court erred in refusing to give the peremptory instruction requested by him. Appellant does not mention this question in his motion for a new trial. He does, however, state in his motion for a new trial that the verdict is contrary to the evidence and contrary to both the law and the evidence. If the evidence was xiot sufficient to support the verdict, of course it would have been the duty of the court to direct a verdict for the defendant. But the proof is undisputed that plaintiff performed services for the defendant for which he had not been paid. The defendant himself testified that he did not have any agreement with Fenter at any time during 1923 to pay him $200 a moxxth; that what he owed Bailey and what the Bailey-Murray Oil Compaxxy owed him was paid jointly, $75 during the month of August. He said also that Fenter might have had a little more work to do if he ordered feedstuff, although that was not his business. And although the defendant testifies that Fenter never mentioned any balance that he was claiming, and never told him that he was going to charge him $225 a month, or $200 a month, and testified that nothing was said about $200 a month, axxd that Fenter told him that if he would see that he got his room rent and a little eating moxiey he would take care of his books, if witness could pay him a little bit, and witness testified that he told him he would do his best, but he did not know whether he could or not. Defendant also admitted writing a letter and testified that he gave Fenter authority to act for him in trying to save his property; that it would take very little of his time; and the plaintiff testified very positively about doing the work.

Whether Bailey owed Fenter anything at all, and, if he did, the amount of the indebtedness, were both questions of fact for the jury, and there was substantial evidence to support the verdict of the jury, and the verdict is conclusive on this court.

Counsel for appellant argue that, according to defendant’s statement, he had paid all that he owed plaintiff at the rate of $75 per month, and that, at the ■filing of the suit, he would not have owed him anything. However, he also testifies that he did some work, and it was a question for the jury to determine how much.

It is next insisted by appellant that, if Fenter is entitled to anything at all, he is entitled to recover what he sued for, and not entitled to recover on a quantum meruit basis. Appellant relies on the case of Bayou Meto Drainage Dist. v. Chapline, 143 Ark. 446, 220 S. W. 807, and quotes from that case as follows: “ Where there is no agreement as to a stipulated sum for the fee in the employment of an attorney, then the attorney can recover for services rendered upon quantum merwit.” In that ease it was contended on the part of the plaintiffs that there was an agreement for the customary fee. However, there was a controversy about what the contract was, just as there is in this case, and both parties introduced testimony for the purpose of showing the value of the services. There is in this case proof of employment to perform services, but no evidence to show an agreement as to the amount to be paid for the services. It is true that plaintiff alleged in his complaint that there was a contract for $200 a month, and it appears that, in the absence of defendant, the plaintiff, who kept the books, had charged the defendant with $200 a month. He did not; however, testify that the defendant agreed to pay this amount, but he did testify that defendant, in effect, said that he would make it all right. In other words, pay him what his services were worth. And again, although the plaintiff alleged a contract and the defendant denied it, evidence was admitted without objection tending to show the value of the services performed. The defendant himself introduced evidence tending to-show that there was very little work to he done; that it would take only a very short time each day to do all that plaintiff was required to do, and, of course, if he had been contending that there was a contract or relying on the fact that defendant’s suit was based on an express contract, testimony of the value of his services would have been inadmissible. That is, if he had a right to recover on an express contract fixing a definite amount, the contract would, of course, govern as to the amount of recovery, and testimony as to the actual value of the services would be inadmissible.

The court in discussing this question said:

“Under the issue joined the court did not err in refusing to admit testimony showing the value of appellants’ services. Without reference to the value of the services, they were either entitled, to five per cent, of the sale price of the land, or they were not entitled to anything. Where there is an express contract for services at a fixed compensation, there can be no recovery quantum meruit.” Christian & Taylor v. Fancher, 151 Ark. 102, 235 S. W. 397.

In the case of Bayou Meto Drainage Dist. v. Chapline, referred to by appellant, the court said:

“The appellants answered, denying all the material allegations of the complaint except the employment of the appellees by the appellants. They set out in their answer that appellants had refused to- pay the appellees because these fees were unreasonable and greatly in excess of the fee for. which the appellants contracted with the appellees. * * * Moreover, under the undisputed evidence in this case, the commissioners did not fix the fee of the appellees until after the services which they had been employed to render had all been performed. The compensation for their services was fixed by the board at the time they were discharged, not when they were employed. The preponderance of the evidence shows that the appellees were employed and that the compensation to be paid for their services was not stipulated in advance. The appellees are therefore entitled to recover upon quantum meruit.”

In the case last cited the defendants stated in their pleadings and in their evidence that there was an express contract fixing the amount. The appellees denied this. In the case at bar the plaintiff in his complaint stated that he was entitled to so much under the contract, but the evidence on the part of both the plaintiff and defendant was admitted without objection as to the character and amount of services performed. And the defendant in the instant case contends that the contract was for $75 a month. It is true that the plaintiff said that he was suing on a contract, but in the Bayou Meto Drainage District case tiie suit was on a contract, the defendants claiming that the amount was fixed, and the plaintiffs claiming that it was to.be the customary amount.

We think the court did not err in giving instruction No. 2, which authorized a recovery if the jury found for the plaintiff in whatever sum the evidence showed would be reasonable for the services performed, if they did not find that there was a contract fixing the amount.

It is next insisted that the court erred in overruling defendant’s demurrer. •. This contention is based on ^ 4200 of Crawford & Moses’ Digest. That section provides as follows:

“In suits upon accounts, the affidavit of the plaintiff, duly^ taken and certified according to law that such account is just and correct, shall be sufficient to establish the same, unless the defendant shall, under oath, deny the correctness of the account, either in whole or in part; in which case the plaintiff shall be held to prove such part of his account as is thus denied by other evidence.”

It will be observed that this section only provides that, when this section is complied with, this shall be sufficient to establish the same, etc., but it does not require the plaintiff to file the affidavit, and, if a complaint states a cause of action, the mere fact that the affidavit provided for in the section referred to is not filed would not justify the court in sustaining a demurrer to the complaint.

Section 1187 of Crawford & Moses’ Digest provides:

“The complaint must contain: (1) The .style of the court in which the action is brought. (2) The style of the action, consisting of the names of all the parties thereto, distinguishing them as plaintiffs and defendants, followed by the words, ‘complaint at law,’ if the proceedings are at law, and by the words ‘complaint in equity,’if the proceedings are equitable. (3) A state-, ment in ordinary and concise language, without repetition, of the facts constituting the plaintiff’s cause of action. (4) A demand of the relief to which the plaintiff considers himself entitled.”

A complaint for wort or labor or services that complies with § 1187, above quoted, states a cause of action.

Section 1189 provides that the defendant may demur to the complaint where it appears on its face:

“(1) That the court has no jurisdiction of the person of the defendant, or the subject of the action; or, (2) that the plaintiff has not legal capacity to sue'; or, (3) that there is another action pending between the same parties for the same cause; or, (4) that there is a defect of parties plaintiff or defendant; or, (5) that the complaint does not state facts sufficient to constitute a cause of action.”

The complaint in this case states facts sufficient to constitute a cause of action, and the court properly overruled the demurrer.

But where one accepts the. services of another the law implies a previous request and a subsequent promise. It was said by this court: “We are of the opinion that the court erred in its instructions to the jury. It is an elementary principle of the law of contracts that, where a party accepts the beneficial results of another’s services, the law implies a previous request and a sub sequent promise.” Nissen v. Flournoy, 160 Ark. 311, 254 S. W. 540.

The verdict of the jury is aot without substantial evidence to support it, and the case is therefore affirmed.


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    Barham v. Federal Reserve Bank.
    Opinion delivered April 16, 1928.
    1. Fraudulent conveyances' — voluntary transfer of property.— Where an insolvent debtor makes a voluntary transfer of property, not exempt, to those who. are near of kin, whether he intends it as a fraud or not, it operates as a fraud on his creditors as a hindering, delaying or defeating them: in the collection of their claims.
    2. Fraudulent conveyances — hindering creditors. — An insolvent debtor cannot take money which justly belong to his creditors and build a housb, nor can he make a valid conveyance of his property for such purpose and thereby hinder and delay a creditor.
    3- Fraudulent conveyances' — presumption of fraud. — Conveyances made to members of the household and near relatives of an embarrassed debtor are looked upon with suspicion and scrutinized with care, and if voluntary they are prima, facie fraudulent, and when the embarrassment of the debtor proceeds to financial wreck, they are presumed conclusively to be fraudulent as to existing creditors.
    4. Fraudulent conveyances — conveyance to wife. — In a suit against a debtor to • have certain conveyances of his property set aside as fraudulent and .subjected to payment of a judgment against the debtor, evidence held to support a decree of the chancellor that the title to certain property was in the debtor and not in his wife.
    5. Fraudulent conveyances — evidence.—In a suit to have conveyances set aside as fraudulent and to subject property to the payment of a judgment against a debtor, the circumstances developed in the case, the relation of the parties, and the credibility of the witnesses are all matters to be considered by the chancellor in determining all questions of fact.
    6. Appeal and error — conclusiveness of chancellor’s finding.— Findings of the chancellor will not be disturbed unless they are against the preponderance of the evidence.

      Appeal from Crittenden Chancery Court; J. M. Futrell, Chancellor;
    affirmed.

      J. R. Pugh, Caraway, Baker & Gautney, for appellant.

      R. V. Wheeler and S. V. Neely, for appellee.
   Mehaffy, J.

The appellee, plaintiff below, had obtained a judgment against L. L. Barham in June, 1924, on which execution was issued December 24, 1924, and no property could be found upon which to levy, the execution.

On February 5,1925, this suit was begun in the Crittenden Chancery Court against L. L. Barham, Alma E. Barham, C. E. Barham and V. Lee Brunson. Plaintiff alleged that L. L. Barham was the owner of certain described property, that he executed a deed of trust, but that said deed was without consideration, and that it was made with the intent to prevent plaintiff and other creditors of L. L. Barham from collecting their debts. Plaintiff alleged that on September 7, 1923, L. L. Barham purchased certain property, but had it conveyed to his wife, and it was also alleged that other property was purchased by L. L. Barham and deeds, made to his wife, and that all these deeds were made to the wife instead of to L. L. Barham for the purpose of hindering, delaying and defrauding the creditors of L. L. Barham. Plaintiff also alleged that L. L. Barham conveyed certain property to his daughter, V. Lee Brunson, for the purpose of defrauding creditors. It was sought to have these conveyances set aside as fraudulent and to subject the property to the payment of the judgment against L. L. Barham.

The answers of the defendants denied the material allegations of the complaint.

Plaintiff also alleged that certain other money was gotten 'by L. L. Barham and transferred to his wife, Alma E. Barham, in fraud of his creditors.

The defendant, L. L. Barham, testified, in substance, that Alma E. Barham was his wife, Y. Lee Brunson his daughter, and O. E. Barham his brother. That on December 21, 1923, he and his wife executed a deed of trust to C. E. Barham, conveying certain property in the town of Earle to secure the payment of a note to C. E. Barham. That C. E. Barham was in the lumber business at Marks, Mississippi, 'bought a lot, and erected a house for their mother, who is an invalid, and L. L. Barham was to pay one-half of the purchase price, and to pay the monthly bills incurred by his mother. Did not know the exact amount of the debt. The house was erected in 1917 and 1918 at a cost of about $4,000. Did not remember the price of the lot. He also testified that on September 7, 1923, W. W. Harrison conveyed certain property to Alma E. Barham. That Alma E. Barham and Mrs. Brunson opened a garage in the- town of Earle. Prior to that time Brunson, the husband of V. Lee Brunson, and. a man named Aldridge were in the garage business, and went into bankruptcy. Alma E. Barham and Y. Lee Brunson then opened a garage with a capital of $2,000. The money used by Alma E. Barham was got from her father. The money with which Alma E. Barham purchased the property was money that her father, gave her. The property where the gin is. belongs to Mrs. Barham. The money was borrowed from the Federal Reserve Bank in 'witness’ name. Witness insisted on his wife signing notes, but the cashier said it made no difference, and she did not sign them.

Witness’ wife bought other property from J. O. Blarham. Witness has not paid the money secured by the deed of trust to C. E. Barham, except two or three thousand dollars. Does not remember the date of the transfer of his stock in the Bank of Commerce to his son. It was in Novembei, 1923. Conveyed his stock in the Crittenden County Bank & Trust Company to his son. Was a director and vice president of the Bank of Commerce after his stock was transferred.

Alma E. Barham ‘owns, property purchased from Nesbitt and others. The contract was made in 1924. Witness’ wife furnished the money to make the payment.

Alma E. Barham also owns 160 acres south of Earle. This was bought in 1923, 80 acres of it, and the other early in 1924. She borrowed the money for the second 80-acre tract from the Joint Stock Loan Bank of Memphis. The money came from her father. She received between eight and ten thousand dollars from her father. Witness had been using part of it, and part of it was invested in Liberty 'bonds. Her money was in the Bank of Commerce at the time this property was purchased. Witness had authority to draw checks on Mrs. Barham’s account. Alma E. Barham owns the gin. She bought it from the Continental Gin Company for $5,700, and had paid $3,000 out of moneys received from the operation of the gin. Witness made a statement of his financial condition to the Bank of Commerce in August, 1924. Does not know whether the statement shows that he had notes and trade acceptances amounting to $33,100. Made the statement to J. C. Moore, and insisted on him getting witness’ wife to sign it. Told Mr. Moore that his wife owned the stuff. His wife’s property consisted of bank stock, various notes, the details of which witness does not remember. Did not read the ■ statement, and Mr. Moore filled it out. Signed it without reading it. Does not recall whether he had $31,100 of notes at that time or not. Does not recall that he had $2,800 in accounts receivable, and does not remember whether he made such statement. Did not have any live stock in 1924. In 1923 he possibly had 15 or 20 head, and sold them to various people.

The statement made by witness to the Bank of Commerce September 9, 1924, shows that he owns $8,000 stock in garage. Witness did not fill out the statement, and did not have the stock in the garage. Did not have anything in it. His wife owned it. While witness signed notes, he told Mr. Moore at the time it was his wife’s debt, and insisted on her signing it, but Mr. Moore said it was not necessary. Witness does not know how much he owed the 'bank at that time. Made a statement in 1923, but if he stated he owned anything in the garage it was wrong, for the garage was Alma E. Barham’s. Possibly made a statement in 1924 that he was farming 2,000 acres. Other real estate valued at $5,000 refers to property in the town of Earle. Witness has his home, worth $6,300, in block 64. Statement shows $15,000 machinery, but witness does not know whether he owned that much at that time. Alma E. Barham bought the farming implements from witness’ son and Albert Horner, and witness paid it for her out of her account; some money that her father gave her. Witness’ wife put $2,000 in the garage and $3,000 in farming implements, and put $2,500 in land she bought; $1,200 in the land she bought from Barham and $1,200 in the gin. The home was in witness ’ name.

Witness does not own any automobiles. .They, belong to his wife. He had three or four cars in 1924, but sold them. The mortgage to the Joint Stock Land Bank is $6,500, and there are no other outstanding mortgages against the real estate. Made statement of assets and liabilities in 1923, but does not remember having made one in 1922. The statement shows witness worked 2,000 acres in 1923, but that is not true. Statement shows witness owned real estate, including residence, of the value of $18,100. Shows bank stock and stock in garage at $17,200, but that is not correct.' Does not own the garage, and does not recall that that statement was made, and does not recall the total of the statement for 1923.

Witness made a deed to his daughter, and she has been in possession of the note since 1919 or 1920, and witness just failed to put the deed on record. Property witness had in 1923 was lost in the bank and in farming. Lost $20,000 in stock and deposits. Did not give his wife anything. Did not .give her deed to property. Deeds were made direct from parties to her. Prior to 1923 did not think Mrs. Barham had an account with the. Bank of Earle. She opened account in December, 1923. Witness had been using her money. They.kept Ms separate, but did not keep books. • Witness’ wife knew what her father had given her, and in 1920 witness ■ erected a garage building and sold it for $25,000. -At that time Mrs. Barham wanted her money, and they had a settlement, and she had around $10,000 then. She bought a section of land later and made about $6,000 profit. Witness’ wife'got a portion of the. earnings. Mrs. Alma E. Barham’s father is still living. Lives with witness. He is old and blind. Gave Alma E. Barham this money several years ago. He owned 160. acres of land in Miss-. issippi, and sold it and gave his daughter, Alma E. Bar-ham, $6,000. That dates bade to 1905 or 1906. Then, after witness moved to Crittenden County, Alma E. Barham’s father gave her some more money, $1,500 or $2,000. Up to that time witness’ wife.did not have any bank account. Witness had possession of .the money all the time, and when it was in the bank it was in witness’ name. The property was bought in witness’ name, but he always consulted his wife. Witness’ wife bought Liberty bonds in 1917, about $5,000 worth, and sold them in 1920 and put part of the money in the garage. Witness always assessed his wife’s property. Prior to 1923 she never had any personal property. Does not think the garage was ever assessed, and Liberty 'bonds did not have to be assessed.

Witness’ son looks after the gin, and signs Alma E. Barham’s name to most of the checks. Witness signs but few checks himself. Does not owe the Bank of Commerce $3,000. That is a part of the bank’s property. The agreement between the vice president and witness shows what the $3,000 was for. Witness had an agreement with the bank that the $3,000 was not an obligation, but that witness 'had title to the property for the bank.

W. F. McCorkle testified, in substance, that he is deputy State Bank Commissioner, and had charge of the records of the Bank of Commerce, at Earle. The bank failed November 29,1924. The record shows loan to L. L. Barham of $5,000 in August, 1924, note due November 12,1924. The proceeds of the note were deposited to the credit of Alma E. Barham. Note of $4,000 discounted June 5, 1924, due October, 1924, was deposited to the credit of L. L. Barham, less the discount, and the proceeds on the same day were charged to L. L. Barham’s account and credited to Alma E. Barham’s account. On December 15 L. L. Barham had to his credit a balance of $3.26. The Federal Reserve Bank has the $4,000 note. The collateral pledged to secure the $4,000 note is shown by notation. In addition to the $4,000 and $5,000 notes, Barham owed the bank $3,044.55.

Y. S. Fuqua testified that he is managing director of the Federal Reserve Bank of St. Louis, and was such in 1924. Received the $4,000 note executed by L. L. Barham to Bank of Commerce, and at the same time a statement signed by L. L. Barham, dated August 9,1924. In October, 1924, Nesbitt and others made a contract with L. L. Bar-ham to convey certain property at $40 an acre.

J. C. Moore testified, in substance, that he was connected with the Bank of Commerce of Earle until it closed. Had known L. L. Barham several years. Property known as Sallew property was conveyed to L. L. Barham. This property was conveyed to Barham, and he gave a note for the purchase price. But the payment shows that the note was not to be paid, but the property was held by Barham, and he was to make a deed to anybody the bank might designate. Witness did not think he put anything on the financial statement of Mr. Bar-ham except what he furnished him. Does not remember that Barham told him that Mrs. Barham owned the property. Does not recall that Barham wanted Mrs. Bar-ham to sign the statement.

J. R. Pugh, an attorney, testified, in substance, that in 1924 Barham came to his office with some negroes, and stated that they were selling property. Witness prepared a, contract, and, after the contract was prepared showing that L. L. Barham was the purchaser, L. L. Barham told witness that his wife was the purchaser, and he wanted the contract rewritten, and the deed was made later. It was made to Mrs. Barham. Does not remember how much was paid. Payments were made by check and by exchange. Barham gave witness a piece of Memphis exchange to Mrs. Alma E. Barham, and there was a check on the Parkin Bank by Mrs. Alma E. Barham.

W. W. Harris testified that he worked for Barham and Brunson as bookkeeper. Remembers Mrs. Barham receiving some money in 1923. She put in more money from the garage than she received.

J. C. Borum testified that he sold lots in Earle to Mrs. Barham in 1924. Was paid by check by Mrs. Bar-ham, but does not remember the signature. The negotiations on the part of Mrs. Barham were made by L. L. Barham. He told witness that Mrs. Barham was the purchaser. She executed a trust deed to secure payment of the balance.

B. B. Brunson testified that he began the garage business in 1919 with L. L. Barham as his partner. Partnership existed seven or eight months. Had a falling out, and dissolved, and then a man named Aldridge and witness continued the business for two years and went into bankruptcy. After that, witness and Mrs. Barham started the.business up. Witness and wife, who is the daughter of L. L. Barham, live in Earle, and own their property, and' put the improvements on it after the lot was given to the wife. Mrs. Barham furnished the money to start the garage business. .

The chancellor entered a decree, holding the transfers mentioned in pleadings and evidence fraudulent and void, except the conveyance to V. Lee Brunson of lot 4, block 64, was not void, and that V. Lee Brunson was the owner. Exceptions were saved, and appeal prosecuted to reverse said decree.

It is first insisted by the appellant that the court erred in declaring the deed of trust executed by L. L. Barham and wife to Harris, trustee for C. E. Barham, to be without consideration, fraudulent, and void. It is insisted that the court erred, and that no witness was called to contradict Barham’s statement. And that.the only reason that suspicion is cast upon the act is due to the fact that the conveyance is to the brother of L. L. Barham. Appellant cites and relies on the case of Martin v. Banks, 89 Ark. 77, 115 S. W. 928. But in the Martin case both Mr. and Mrs. Martin testified and showed that, at the time of their marriage, Mrs. Martin had $1,600 derived from her father’s estate. Martin failed in business, and went to work on a salary. Martin’s testimony and that of his wife was that he devoted his earnings to the support of his family and invested Mrs. Martin’s money for her. All of the investments were made in her name, and the property always kept in her name, and no mingling of her property with her husband’s.

In the instant case Barham himself testified that his wife got property from her father, and that it dates back to 1905 and 1906, and that she never had any account in the bank. She did not handle the money. Barham kept it and used it himself. It is true, he says, that he consulted his wife about investments, but it was all done in his name, and she never had any account in the bank or any money in her own name until about the time the judgment was obtained against Barham. Her father, from whom it is claimed she received the money, is old and practically blind, and lives with his daughter. Mr. Barham, in his testimony, says that his brother is in the lumber business at Marks, Mississippi, and bought a lot and erected a house for their mother, and that witness' agreed to pay one-half of it, and executed the deed of trust to secure the payment to his brother. But he also shows that the house was built in 1917 and 1918, and the deed of trust was made on December 21, 1923, about five or six years after the house was built. And the proof by Mr. Barham himself shows not only that, but that all of the business was conducted by him in his name prior to this judgment which it is sought to collect. His statements show that he was worth in the neighborhood of $70,000.

“A man must be just to creditors before he can be generous to relatives. Therefore, where an insolvent debtor makes a voluntary transfer of his property, which is not exempt under the law from his debts, to those who are near of kin, whether he intends it as a fraud or not, it operates as a fraud on his creditors, for the reason that such a transfer hinders, delays or defeats them in the collection of their claims.” Davis v. Cramer, 133 Ark. 224, 202 8. W. 239.

With reference to this particular transfer, while the evidence does not show when the lots were bought, nor for whom, nor how much they cost, nor in whose name they were held, it does show that the house was built in 1917 or 1918, and there is no reason or explanation of why it was not paid for at the time. Whether it is in the mother’s name or the brother’s, the evidence does not show. At any rate, an insolvent debtor could not take money which justly belonged to his creditors and build a house, nor could he make a valid conveyance of his property for such purpose and thereby hinder and delay his creditors.

“It is thoroughly settled in equity jurisprudence that conveyances made to members of the household and near relatives of an embarrassed debtor are looked upon with suspicion and scrutinized with care; and when they are voluntary they are prima facie fraudulent; and when-the embarrassment of the debtor proceeds to financial wreck, they are presumed conclusively to be fraudulent as to existing creditors.” Harris v. Smith, 133 Ark. 250, 202 S. W. 244.

It is also insisted by appellant that the court erred in declaring the title to the southwest quarter of the northwest quarter of section two and the southeast quarter of the northeast quarter of section three to be in L. L. Barham. This is the property about which Mr. Pugh testified and for -which he drew the contract. The contract was drawn in Mr. Barham’s name, and afterwards he testifies that objection was made because of that, and the deed was -made to Mrs. Barham. Mi. Barham himself testifies about this transfer. That it was bought some time early in 1924, and that his wife borrowed the money for the second 80-acre tract. And the other was paid by L. L. Barham with a draft on his wife’s account, and that this money came from her father. But this was in the latter part of 1923 and the early part of 1924, and the money, according to his testimony, that she had received from her father was received five or.six years before this, kept in his name all the time, and used and managed by him.

Transactions between husband and wife are scrutinized and examined with great care, and especially when the transactions affect the rights of creditors. Mrs. Bar-ham herself does not testify. Neither does the father, and the only testimony with reference to receiving the money is by Mr. Barham, and, as to whether this tract of land was that of L. L. Barham or his wife was a question of fact, and we think the decree of the chancellor is supported by the preponderance of the evidence.

It is next insisted by appellant that the court erred in finding that L. L. Barham was the owner of lots 26 and 27 in block 13. This property was purchased in September, 1924, from John C. Borum, and L. L. Bar-ham testifies that his wife borrowed the money, or he did for her, from the Federal Reserve Bank. It was borrowed in L. L. Barham’s name, the notes were signed by him, and, until recently before this purchase, Mrs. Barham had had no bank account, did not keep her money in her name, and whatever money she had was kept in the name of L. L. Barham. And we think the testimony justified the chancellor in finding that this property was the property of L. L. Barham.

The testimony of the witnesses, the - circumstances developed in the case, the relation of the parties and the credibility of tbe witnesses are all matters to be considered by tbe chancellor in determining- all questions of faet. And, where the findings of the chancellor axe not against the preponderance of the evidence, they will not he disturbed on appeal. Watkins v. Parker, 81 Ark. 609, 99 S. W. 1106; Hyner v. Bordeaux, 129 Ark. 120, 195 S. W. 3; McKinney v. New Rocky Grocery Co., ante, p. 463.

"While the trial in this court is de novo, yet the findings of a chancellor will not he disturbed unless they are against the preponderance of the evidence. And in this case we think the findings of the chancellor are supported 'by a preponderance of the evidence, and the decree-is therefore affirmed.