text:
    Missouri Pacific Railroad Company v. Arkansas Corporation Commission.
    4-3522
    Opinion delivered June 25, 1934.

      R. E. Wiley, for appellant.

      McRae •& Tompkins, T. E. Wood, Hal L. Norwood, Attorney General and Robert F. Smith, Assistant, for appellee.
   Butler, J.

Effective June 11, 1932, appellant, the Missouri Pacific Railroad Company and other common carriers of freight, published a reduced rate on certain petroleum oil products, which action was voluntary on their part and to enable rail lines to meet truck competition. This publication did not carry any restrictive routing, the rates applying on all Arkansas lines. The rate expired August 9,1932, but was republished, effective August 10, 1932, and again, by supplement No. 30, effective May 30, 1933. The only change in the last publication from the former was that the routing was restricted to certain lines of railway and to certain specifically named points within the 150-mile radius. A protest was filed to the restricted routing in said supplement No. 30, and the Arkansas Corporation Commission issued an order suspending the operation of the supplement and rates and to set the same down for a hearing.

The testimony taken before the commission was to the effect that the rates were voluntary, made to meet truck competition, and that the carriers originating the shipments amended the schedule of rates so as to permit them to designate the routes to which the same should apply; that this was done in order to facilitate the service by lessening the time required for the movement of oil products, and to enable the originating carriers to earn a greater revenue. It was shown that in some instances the earning of the originating carrier over the restricted routing named in supplement No. 30 would be about 50 per cent, of the revenue, whereas, if the routing was unrestricted and was moved over other connecting lines, they would receive not more than 20 per cent, of the revenue. On the hearing the commission canceled the restricted routing, which order was affirmed by the Pulaski Circuit Court on appeal, and from that judgment is this appeal.

It is the contention of the appellant that, since there is no question of reasonable rates involved, the commission could not properly compel the application of reduced rates over any route except that adopted by the carriers. It was and is the contention of the appellee, and that adopted by the commission and the circuit court, that the application of the rate with restricted routing is in violation of § 1 of act of April 8, 1903, which provides as follows: “That every person, company or corporation operating any railroad in this State which connects with any other railroad in this State and which form a part of a continuous line of railway communication to any point within this State, such companies and corporations, respectively, shall afford all due and reasonable facilities for receiving and forwarding by one of such railroads all the traffic arriving by the other and shall promptly forward the same at through rates, tolls and fares, without giving any undue preference or advantage to, or in favor of, any particular person or company, or any particular description of traffic, in any respect whatever, so that no obstruction may be offered to the public desirous of using the railroads of this State as continuous lines of carriage from one to another point within this State.”

It is insisted by the appellant that the controversy presented is one between the railway companies in which the public has no interest, and that there is no discrimination as to the public since all shippers are treated alike. It is further argued that the commission has no power to fix and compel a competitive rate such as the one under consideration, but can only compel the application of reasonable rates; that in this instance the rate is voluntary, and no question is being made of its unreasonableness, and that, before the statute relied upon can apply, there must be a specific abridgment contained in it of the common-law rights of the carriers to select such agents as they may see fit for the transportation of freight they had originated beyond their own lines, and that the words of the- statute invoked are general in their nature and not sufficient to divest them of their rights at common law.' In support of this contention, appellant quotes § 3 of the Interstate Commerce Act and the case of Southern Pacific Co. v. Interstate Commerce Comm., 200 U. S. 536, 26 S. Ct. 330, construing the language of the act as not authorizing the commission to order the carriers to desist from a restricted routing applied to through rates. Appellant contends that the language of our statute is no more comprehensive than that of the Interstate Commerce Act, and that the import of the two acts is the same. The Commerce. Act forbids the giving of any undue or unreasonable preference or advantage to any particular person * # *, or any particular description ’of traffic in any respect whatsoever, or to subject any particular person * * *, or any particular description of traffic to any undue or unreasonable prejudice or disadvantage * * *, and afford all reasonable, proper and equal facilities for the interchange of traffic between their respective lines * * * and shall not discriminate in their rates and charges between ■ such connecting lines. The general meaning of these acts appears somewhat the same, as contended by the appellant, bnt the language is more specific in our statute, for, among other things, it requires the “forwarding by one of such railroads all the traffic arriving by the other, and shall promptly forward the same at through rates * * * without giving any undue preference or advantage to, or in favor of, any particular person or company, or any particular description of traffic in any respect whatsoever.”

The rate fixed for the movement of petroleum products, assented to by the commission, was unrestricted with respect to the lines of railway over which they might be routed. If the initial carriers are permitted by the restricted routing to prevent the freight from being hauled over other lines of railway than those selected by them, then they manifestly give an undue preference in favor of the lines selected and discriminate against those not favored, and deny to the latter the benefit of the through rates given to others which appears to be in direct violation of the statutory mandate. It will be remembered that by supplement No. 30 no competitive rate was fixed. That had already been fixed and approved by the Corporation Commission and was effective over all the lines of railway in the State of Arkansas. Supplement No. 30 nullified to an extent the rates fixed by preventing other lines than those of their own selection to benefit by them.

It is next argued that the statute relied on by the commission as a basis for its order was repealed by act No. 193 of the Acts of 1907. Attention is called to § 17 of that act, which is identical with § 1 of the act of 1903, supra, except it does not include the clause, ‘ so that no obstruction may be offered to the public desirous of using the railroads of this State as continuous lines of carriage from one to another point within this State.” If the contention of appellant is sound in this particular, we cannot see where it is helped, for that act, with respect to discrimination by any railroad against any of its connecting carriers is identical with the act of 1903, and is the provision which supplement No. 30 violates.

While the public may have no direct interest in the present controversy, it has an important indirect interest. It is manifestly beneficial to the public that the short lines of railroad in Arkansas operate, and any discrimination against them cannot but result in an obstruction to the shippers within the State. By § 3 of the act of 1903, supra, it is made the duty of the Railroad Commission (now the Corporation Commission) to make reasonable rates of freight, etc., to be observed by all persons. Section 1 of that act, which has been quoted, prohibits discrimination, and § 4 provides that, where connecting carriers are unable to agree upon a fair and just division of the charges arising from the transportation of freight, etc., the commission shall make the division and fix the pro rata charges to be received by said connecting lines. Supplement No. 30 would prevent the application of this statute and permit the initial carrier to in effect make the joint rates and to determine the proportion of revenue .it should receive from the traffic haul.

It follows that the judgment of the trial court is correct, and it is therefore affirmed.


source: Caselaw Access Project

author: Butler, J. Butler, J.,

license: Public Domain

text:
    Hendrickson v. Farmers’ Bank & Trust Company.
    4-3485
    Opinion delivered June 11, 1934.
    Opinion on rehearing delivered July 2, 1934.

      J. ¥. Stevens, for appellants.

      Wade Kitchens and W. H. Kitchens, Jr., for appellees.
   Butler, J.

C. T. Fincher, trustee for the Farmers' Bank & Trust Company, brought suit in the Columbia Chancery Court to recover judgment on two promissory notes, one for $500 made on August 25, 1931, by the appellants, J. Gr. Hendrickson and Frances M. Hendrickson, his wife, and the other in the sum of $6,100 executed by J. Gr. Hendrickson on November 7, 1930. It was alleged that a certain mortgage, executed by the appellants on August 25, 1931, conveying to the appellee, trustee, certain property situated in the town of Magnolia, was made to secure the payment of both notes, and foreclosure was prayed with order of sale, etc. The mortgage declared on was exhibited and made part of the complaint. Summons was duly issued and served upon the appellants, and, upon their failure to appear or plead, decree was rendered by default in accordance with the prayer of the complaint. This decree was rendered on September 22, 1933, at a day of the regular July term of the court.

On January 10, 1934, after the lapse of the term at which the decree was rendered, the appellants filed a pleading setting up the proceedings heretofore mentioned and asked that the decree be opened and modified so as to restrict the foreclosure of their equity in the properly covered by the mortgage to the payment of the $500 note only. The ground upon which this prayer for relief was based was that the property was the homestead of the appellants, and the mortgage was not intended to, nor did it in fact, secure the payment of any indebtedness save the $500 note jointly executed by the appellants, and that “at the time the decree was obtained, counsel for plaintiff, by the complaint filed in said cause and by word of mouth, represented to the court that the deed of trust did include the $6,100 and did then and there obtain said foreclosure decree for said $6,100, when in fact said deed of trust was no lien against their homestead for said sum. If the court had been properly advised as to the execution of this note, the court would not have rendered such decree. The commissioner has advertised the lot to be sold on the 13th day of January,- 1934; by these statements plaintiff’s counsel practiced fraud upon the court and obtained the decree herein mentioned. ’ ’

The complaint and exhibits in the former action were exhibited with this pleading.

Appellants’ pleading, with the response of the appellee thereto, came on for hearing “upon the motion and complaint to set aside the decree filed on January 12, 1934, with exhibits thereto, and the. response of the Farmers ’ Bank & Trust Company filed on January 22, 1934, both sides announcing that they do not desire to introduce any evidence, but desire that the question be submitted on the record and pleadings.” The court thereupon treated the pleading of the appellants as a petition to vacate and modify the decree under § 6290, Crawford & Moses’ Digest, subdivision 4. The court found that no fraud was perpetrated upon it, “but that, if an error was made in declaring a lien for the entire amount of the judgment, the same was an error of law; that the petitioners, J. G-. Hendrickson and Frances M. Hendrickson, were negligent in failing to respond to the summons and complaint in said original suit and make defense thereto; that, had they made defense to said action, they could have put in issue the question of a lien, and, had they been aggrieved by the action of the court thereon, might have perfected their appeal to the Supreme Court. The court, upon this hearing, does not decide the correctness of the original decree, but holds that any error of law in the decree upon an issue that might have been raised upon the trial of the original suit must be raised by appeal and not by motion to vacate the decree after the expiration of the term at which such decree was rendered.” The prayer of the petition was thereupon denied, and petitioners have appealed.

The court below properly denied the motion to open and modify the decree. The term of the court at which the decree was sought to be modified had lapsed, and, while the court might have amended its judgment after lapse of the term to make it speak the truth, it has no power to correct its mistakes or errors or to make its judgment or decree conform to what should have been, but was not, done. Kelley Trust Co. v. Lundell Land & Lbr. Co., 159 Ark. 218, 251 S. W. 680.

It is contended by the appellants that a proper construction of the mortgage makes it a security only for the $500 specifically mentioned therein and subsequent debts contracted by the mortgagor and cannot be extended so as to make it security for antecedent debts. Counsel for the appellee placed a contrary construction on the mortgage, insisting that it was security for antecedent debts, which view the court adopted, is the fraud suggested.

It is unnecessary to set out the recitals in the mortgage upon which the contention of the appellants is-based, namely, that they did not render it security for antecedent debts. It is sufficient to say that the import of the language used is of such character as to create a reasonable difference of opinion as to its correct meaning, and the error committed by counsel and court, if any, consisted in a mistake of law. If the decree of foreclosure was not correctly responsive to the allegations of the complaint as controlled by the mortgage, which was the basis of the suit and a part of the complaint, this error might have been corrected by appeal from the default decree, and this was appellants’ remedy. Estes v. Lucky, 133 Ark. 97, 201 S. W. 815; Old American Ins. Co. v. Perry, 167 Ark. 198, 266 S. W. 943.

The fraud for which a decree will be canceled must consist in its procurement and not merely in the original cause of action. It is not sufficient to show that the court reached its conclusion upon false or incompetent evidence, or without any evidence at all, but it must be shown that some fraud or imposition was practiced upon the court in the procurement of the decree, and this must be something more than false or fraudulent acts or testimony the truth of which wa.s, or might have been, in issue in the proceeding before the court which resulted in the decree assailed. James v. Gibson, 73 Ark. 440, 84 S. W. 485; Johnson v. Johnson, 169 Ark. 1151, 277 S. W. 535; Boynton v. Ashabranner, 75 Ark. 415, 88 S. W. 566, 1011, 91 S. W. 20.

The mere fact that the security of the mortgage was erroneously extended so as to include a debt for which it might not have in fact been security is not sufficient to show that the judgment was procured by fraud (Estes v. Lucky, supra), but constituted a mistake of law which could have been corrected by appeal, and the court correctly held that it was not authorized to reopen or set aside its decree for errors of law committed bv it. Stewart v. Wood, 86 Ark. 504, 111 S. W. 983.

A great part of the briefs, both of appellants and appellee, is devoted to a discussion relative to the correct construction and interpretation of the terms of the mortgage foreclosed. This question is not properly before us, and we are precluded from deciding it because no appeal from the decree of foreclosure was ever taken in the trial court or granted by this court. The appeal from the order overruling the- motion , to vacate does not serve to bring up for review the decree of foreclosure. Bradley v. Ashby, 188 Ark. 707, 67 S. W. (2d) 739, and cases there cited.

The decree is affirmed.

Butler, J.,

(on rehearing). In this case there were two questions involved; one, the action of the court below in refusing to reopen and modify its former decree on petition filed for that purpose, the court holding that the pleading filed should be treated as a petition to vacate and modify under subdivision 4 of § 6290 of Crawford & Moses ’ Digest. In overruling the prayer of the petition the court held that no matter was alleged or proved to bring the pleading within the statute. In our opinion, delivered June 11, 1934,-we upheld the action of the trial court in this regard and now reaffirm our opinion to that extent.

The other question presented and argued was that the decree rendered on September 22, 1933, was erroneous because the same was not responsive to the allegations of the complaint. In disposing of that question we held that, as no appeal was taken from the decree of foreclosure, either in the trial court or in this court, there was nothing for us to pass upon, and that the appeal from the order overruling the motion to vacate did not serve to bring up for review the original decree of foreclosure. In the petition for rehearing filed by the appellant our attention is called to the fact that there was an appeal prayed in this court from the original decree and by this court granted on March 14, 1934, within the time allowed by law for appeal. We have examined the transcript'and freely confess our error in the original opinion and now proceed to examine the question, presented by the appeal from the original decree of foreclosure.

Omitting the formal parts, the complaint alleged that on the 25th day of August, 1931, defendants executed and delivered to plaintiff their note in the sum of $500, due November 25, 1931, with interest, and to secure said note “and all other indebtedness that might be due at or before foreclosure proceedings” the defendants executed and delivered a deed of trust whereby certain property (described) was conveyed to a trustee as security for the payment of said note and all other indebtedness due plaintiffs, in which deed of trust Frances M. Hendrickson, wife of J. G. Hendrickson, joined and relinquished her rights of dower and homestead in tho property.

The complaint further alleged that the note and interest thereon was past due and unpaid, and that, in order to protect the property, plaintiffs had made certain expenditures for insurance at the request of the defendants.

The complaint also alleged that on a date prior to the execution of the aforesaid $500' note J. G. Hendrickson was indebted to the plaintiffs in the sum of $6,100, evidenced by his promissory note secured by fifty shares of stock in the Magnolia Cotton Mill Company. Reference was made to the notes and mortgage and the same were attached to the complaint as exhibits thereto.

The prayer was for judgment in the sum of $7,979.25, the aggregate sum of aforesaid notes with accrued interest, and that a lien be declared 'by virtue of said deed of trust upon the lands, and, by virtue of the pledge, upon the personal property mentioned, and that the equity of redemption of the defendants be foreclosed and the property subjected to the payment of the judgment.

The deed of trust provided “that the said parties of the first part, being indebted to the said Farmers’ Bank & Trust Company in the sum of $500 as evidenced by their note of this date, due and payable on the 25th day of November, 1931, with ten per cent, interest thereon from date until paid, and being desirous of securing the payment of the said sum of money and all other indebtedness that may be due at or before foreclosure proceedings hereunder unto the said Farmers ’ Bank & Trust Company and in consideration thereof, and in the future consideration of $5, in hand paid to the said parties of the first part, the said J. G. Hendrickson and Frances M. Hendrickson parties of the first part, doth hereby bargain, grant, sell and convey unto the said C. T. Fincher, as trustee, and unto his heirs and assigns forever, the following land and personal property, situated in the county of Columbia and State of Arkansas, to-wit: [describing property]. ’ ’

In the defeasance clause of said deed the stipulation is “that, in case the said J. G. Hendrickson and Frances M. Hendrickson, parties of the first part, or either of them, shall well and truly pay the said note at the time the same falls due, and all other indebtedness due the said party of the third part, then this deed is to be void. But in case the said note, or any other indebtedness due by the said parties of the first part, or either of them, to the said party of the third part, shall not be paid, the said C. T. Fincher, party of the second part, is hereby authorized and empowered to take said property into his immediate possession, and, after giving 21 days’ notice by publication on the courthouse in the county of Columbia, may and shall sell said property for cash in hand, and with the proceeds arising from said sale pay off the said note and any other indebtedness due by the said parties of the first part as aforesaid.”

On September 22, 1933, the cause was reached, and, it appearing that no plea had been filed by the defendants, a decree was rendered by default, the court rendering judgment against J. G. Hendrickson and Frances M. Hendrickson jointly and severally in the sum of $602.86 with interest and the further sum of $75 with interest. The court rendered judgment individually against J. G. Hendrickson for the sum of $7,502.93 with interest and declared a lien upon the real estate described in the mortgage to secure the payment of the joint and several judgments against the defendants and also to secure the individual judgment against J. G. Hendrickson. A time was fixed by the court for the payment of the judgment and the provision made that, if not paid within that time, the real estate be sold and subjected to the payment of the aforesaid judgments.

A part of the decree dealt with the foreclosure and . sale of the stock in the Magnolia Cotton Mill Company pledged by Hendrickson to secure the payment of his individual note. That part of the decree is not affected by this appeal, no contention being made that the decree in that respect was unauthorized.

In equity exhibits to the complaint control its averments and the nature of the cause of action and may be looked to for the purpose of testing the sufficiency of the allegations of the complaint. Moore v. Excelby, 170 Ark. 908, 281 S. W. 671. It follows that upon a proper construction of the 'mortgage given by Mr. and Mrs. Hendrickson to secure the $500 note executed by them depends the measure of relief to which plaintiffs are entitled, and the correctness of the decree by which this relief is adjudged.

The contention for the affirmance of the decree rests upon the appellees’ construction of the phrase, “all other indebtedness which may be due at or before foreclosure. ’ ’ It is asserted that this language is both comprehensive and definite enough to include debts other than the particular debt secured both antecedent and subsequent. Reliance is placed on the decisions of this court in Curtis v. Flinn, 46 Ark. 72; Martin v. Halbrooks, 55 Ark. 569, 18 S. W. 1046; Hoye v. Burford, 68 Ark. 256, 57 S. W. 795. These decisions do not support the interpretation by the appellees placed upon the mortgage in the instant case.

In. Curtis v. Flinn, supra, the object of the court was declared to be to discover the intention of the parties to the mortgage, and, when this was discovered, to interpret the language so as to effectuate their purpose. The object of the mortgage in this case was to secure advances of money, goods and supplies during “the present year” to enable the mortgagor who was a farmer to make a crop and t'he mortgage wa;s given to secure supplies already received or thereafter to be furnished. The controversy arose between the mortgagee and another creditor of the mortgagor, the latter contending that the security did not cover the indebtedness due at the time of the execution of the mortgage, but only that which was incurred subsequent thereto. In denying this contention the court said: “If the mortgage contains a general description, sufficient to embrace the liability intended to be secured, * * * it is all that fair dealing and the authorities demand.” It was held that the language of the mortgage was sufficiently explicit, the object of the mortgage being shown to satisfy the rule stated. In Hoye v. Burford, supra, the rule stated in Curtis v. Flinn was held to lie applicable to the mortgage involved, and that its language, “to secure all indebtedness I owe,” was sufficient to cover certain specific sums where it was conceded that the object for which the mortgage was given was to secure these. It is to be inferred from these decisions that the real purpose of construction is to discover the intention of the parties and to give effect thereto.

In Martin v. Halbrooks, supra, the mortgage covered certain mentioned notes due on a date named in the future “and all other indebtedness which may then be due.” The mortgagee sought to foreclose for an antecedent debt unconnected with the purpose for which the mortgage was given, contending that such was included by the general phrase “and all other indebtedness which may then be due.” In considering the attendant circumstances, the court viewed the language of the mortgage in their light. It denied the inclusion of the antecedent debt within the security of the mortgage and, passing upon that question, said: “When they added the words ‘and all other indebtedness,’ it is fair to presume that they meant indebtedness in excess of $225 of the same nature as that already described and within the purpose of the mortgage. That construction of the language fully accomplishes the purpose which called the mortgage into being. If the mortgagees expected to acquire a right under the mortgage which was not in contemplation of the parties at the time of its execution, they should have employed unambiguous language expressing that intention.” A debt created subsequent to the mortgage being not yet in existence may not in all cases be clearly indicated; whereas, antecedent debts may always be definitely stated, and for this reason the general expression, ‘ ‘ other indebtedness, ’ ’ would usually be treated as referring not to an antecedent debt but to one subsequently incurred. Detroit Fire & Marine Ins. Co. v. Helms, 184 Ark. 308, 42 S. W. (2d) 394; First National Bank etc. v. Corning Bank, 168 Ark. 17, 268 S. W. 606. In the. latter case it was decided, after naming a particular debt secured, that the expression, “together with all other indebtedness which may be due,” would not cover antecedent debt evidenced by notes, but only advances subsequently made.

In Berger v. Fuller, 180 Ark. 372, 21 S. W. (2d) 419, in construing the general expression, “or any indebtedness of whatsoever sort or nature that may be due from mortgagors to mortgagee at the time of the foreclosure of this mortgage,” it was held to be “clearly referable to the character of indebtedness named in the. language of the clause preceding, and cannot be extended to include the class of indebtedness other than those- specifically mentioned. ’ ’ •

As suggested by our early cases, in the construction of a mortgage the real question is, “what was the intention of the parties to the mortgage ? ” In determining this all the circumstances attendant upon the execution of the mortgage and the nature of the transaction itself are to be considered (Martin v. Holbrooks, supra; American Bank Trust Co. v. First National Bank of Paris, 184 Ark. 689, 43 S. W. (2d) 248); and, in order to extend the intention of the parties beyond the primary purpose of the mortgage so as to secure the payment of debts other than those specifically mentioned, from our decisions and principles of natural justice the following rule may be deduced.: where a mortgage is given to secure a specific debt named, the security will not be extended as to antecedent debts unless the instrument so provides and identifies those intended to be secured in clear terms and, to be extended to cover debts subsequently incurred, these must be of the same class and so related to the primary debt secured that the assent of the- mortgagor will be inferred. The reason is that mortgages, by the use of general terms, ought never to be so extended as to secure debts which the debtor did not contemplate. “Where one contracts in good faith with a debtor that the security given should include not only that specifically mentioned in the mortgage • but other indebtedness, whether existing then or to be incurred in the future, it is not difficult to describe the nature and character thereof, so that both the debtor and third parties may be fully advised as to the. extent of the mortgage.” American Bank Trust Co. v. First National Bank of Paris, supra.

In the case at bar the $6,100 note executed by Hendrickson to the appellees has no connection, so far as the mortgage indicates, with the primary debt secured, and there is nothing in the mortgage which would call to the attention of the appellants the fact that the security of the mortgage given was to be extended so as to cover that debt. This appeared from the exhibit which must control the averments of the complaint, and therefore the decree was not responsive to the allegations and was erroneous. It will therefore be reversed, and the cause remanded for such further proceedings as the parties may be advised in conformity with principles of equity and not inconsistent with this opinion.


author: Johnson, C. J.

text:
    McEachin v. Yarborough.
    4-3542
    Opinion delivered June 18, 1934.

      Cocjcrill, Armisteacl \& Rector, for appellants.

      A. G. Thomas and W. R. Bonham, for appellee.
   Johnson, C. J.

To compensate an injury which was received under the circumstances hereinafter detailed, this suit was instituted by appellee, Jack T. Yarborough, against appellants, Grover C. McEachin et at., in the Saline County Circuit Court. The facts are not in material dispute and may be summarized as follows:

On and prior to June 27, 1933, appellants, as a partnership, were engaged in constructing a hard-surfaced highway and bridges incident thereto in Perry County, and appellee was employed by appellants as a stone mason to assist in building and constructing a stone bridge over Cove Creek. It was the duty of appellants to furnish the stone and other materials used in the construction of the bridge, while it-was the duty of appellee to, and he did, furnish the tools with which the stone was sized and shaped for use in the "structure. The stone employed in the construction of the bridge were obtained in the vicinity of the immediate work and were commonly known and designated as “native stone.” Appellee had been in the employ of appellants for some time prior to June 27, 1933, performing similar services, and during this period practically, if not all, the stone furnished by appellant to appellee for use in construction of bridges was obtained from a rock quarry near Stone Mountain; practically if not all this stone was of a sand stone nature and easily broken and shaped for the builder’s uses. On June 27, 1933, the supply of stone theretofore furnished being exhausted, appellants obtained a truck load or more of stones from the bed of South Fourehe Creek. The stone thus obtained from South Fourehe Creek was of a hard and brittle nature and not pliable for the uses contemplated as were the stones theretofore used, although from outside appearances this stone appeared to be of the same nature and quality as stone theretofore obtained from Stone Mountain. Appellants did not apprise appellee that this last load of stone was obtained from the bed of South Fourche Creek, and appellee assumed that these stones came from the Stone Mountain quarry. In the forenoon of June 27,1933, appellee, while engaged in performance of his duty constructing said bridge, obtained a stone, which was one stone from the load of stones theretofore furnished by appellants and obtained from South Fourche Creek, and undertook to size and shape it for the use contemplated. To effect this purpose, appellee, struck the stone with a hammer, whereupon it shattered and crushed, a fragment of which struck appellee in the eye and destroyed the sight thereof. Appellants admit that if liability exists the award is not excessive, therefore it is not necessary to state the facts in reference to the extent of appellee’s injury. The theory upon which the trial progressed is reflected in appellee’s instruction No. 1 as follows-.

“If you find from a preponderance of the evidence that the plaintiff, Jack T. Yarborough, at the time he was injured, and for some time prior thereto, was in the employ of the defendants doing stone work in the construction of a bridge, and, if you further find that it was the duty of .the defendants to furnish the stone used by the plaintiff; and if you further find that, prior to furnishing the last few loads of stone, the stone furnished by the defendants was of a sandstone or limestone formation, being of such formation that it would not shatter when struck in shaping same for use; and if you further find from a preponderance of the evidence that the last few loads of stone furnished by the defendants came from a different place and was of a different nature, being of different formation, and that said last few loads of stone were not workable and were unfit for the use for which they were intended, same being a kind of hard flint rock, and if you further find that, from the nature of said last few loads of stone, it was dangerous to undertake to break the stone or trim same into shape, and that because of its hard flinty nature when it was struck by the plaintiff for the purpose of putting it into shape, if you find it was of such nature, it shattered and small pieces thereof flew in all directions, one of which struck plaintiff in the eye and destroyed the sight thereof; and if you further find that the defendants failed to warn plaintiff that said last few loads of stone were of a different kind and failed to warn him of the dangers incident to the use of said stone, provided you find that same was dangerous, and that, in furnishing said stone and in failing to warn him, the defendants failed to exercise ordinary care; and that because thereof the plaintiff was injured as alleged, while he was in the exercise of ordinary care for his own safety and when he had not assumed the risk, that is, when the risk was not open or apparent to him in the exercise of ordinary care and was wholly unknown to him, then you are instructed to return a verdict for the plaintiff.”

No liability exists against appellants and in favor of appellee under the facts and circumstances here presented. It is a fundamental rule in the law of negligence that liability exists' when the perils of the employment are known to the employer but not to the employee, and no liability is incurred when the employee’s knowledge equals or surpasses that of the employer. 18 R. C. L., p. 548. Arkansas Smokeless Coal Co. v. Pippins, 92 Ark. 138, 122 S. W. 113. The uncontradicted testimony here shows that the employer had no superior knowledge to that of employee in reference to the nature of the stone being used, therefore had no duty to perform the neglect of which would create liability. The fact is appellee was employed in this line of work because of his superior knowledge. He was an expert stone mason of long experience. The burden of appellee’s contention is that the employer or master had the duty of examining the stone for latent defects. The application of this contention would be that the master would be required to examine each stone offered to the mason before the work progressed. Also, if necessary, the master would be required to break each stone before giving it to the mason to be sized and shaped. A more simple thing than native stone does not exist. Every one with or without wide experience knows that one native stone may be hard whereas another lying adjacent is harder or softer than the other. We conclude that no duty rested upon the master in this case to examine the stone and determine in advance whether it was hard or soft, and that no liability can be predicated upon his failure to do so.

Moreover, it has been the long-established doctrine in this jurisdiction that an employee assumes all the ordinary risks and hazards incident to his employment. Southwestern Telephone Company v. Waughter, 56 Ark. 206, 19 S. W. 575; Choctaw, O. & G. Ry. Co. v. Thompson, 82 Ark. 11, 100 S. W. 83.

The testimony is conclusive that appellee had and possessed knowledge equal to and superior to that possessed by appellants in reference to the nature, formation and uses of stone employed in the performance of his duties as a stone mason. He knew that native stone was being employed in the construction, and he knew that it was imperative to break and shape the stone for the builder’s uses. He knew, as every one else knows, that native stone is not of uniform formation and nature, and he had no right to assume that his master was better informed on this subject than he. The formation and nature of the stone employed in these bridges was one of the ordinary risks and hazards of his employment, which was assumed by him when he entered the service of the master. True, appellee suffered a very serious injury, but it is the result of a risk assumed by him, and he must bear the consequences.

The judgment is reversed, and the cause of action dismissed.


author: Humphreys, J.

text:
    Federal Land Bank of St. Louis v. Priddy.
    4-3515
    Opinion delivered June 18, 1934.

      Guy V. Head, J. R. Crocker and L. F. Reeder, for petitioner.

      C. C. Wait, for respondent.
   Humphreys, J.

This is an application to this court for a writ of prohibition to prevent the circuit court of Pope County, Arkansas, from proceeding with the trial of the case of S. M. Brisco v. the Federal Land Bank of St. Louis, a corporation, upon constructive service. Constructive service was obtained under the provisions of our statute (Crawford & Moses’ Digest, §§ 1159-1160) by suing out a general writ of attachment on the ground that the Federal Land Bank of St. Louis was a foreign corporation and by levying same upon land in Pope County belonging to said corporation and duly publishing a warning order notifying said corporation to appear in said court and defend the action.

The petitioner herein appeared in response to the warning order for the sole purpose of contesting the service and filed an unverified motion to quash the service on the grounds: first, that it was not a foreign corporation ; and, second, that its property in the State of Arkansas is not subject to attachment because said corporation is an instrumentality of the government of the United States.

The motion was overruled, and this application for a writ of prohibition followed.

The basis of this suit was a claim for a commission of $300 alleged to have been earned by a duly licensed real estate broker for the sale of a farm valued at $6,000, acquired by the Federal Land Bank of St. Louis, Missouri, through foreclosure proceedings to enforce the collection of money it had loaned.

Personal service could not be obtained because the Federal Land Bank of St. Louis, Missouri, had not, and was not required to maintain, a branch office in the State of Arkansas nor to designate an agent in the State of Arkansas upon whom service of summons may be had before it could do business in the State.

The banking corporation was organized under the provisions of an act of Congress of the United States, approved July 17,1916, for the purpose of lending money upon mortgage securities in the States of Missouri, Illinois and Arkansas, with its domicile or its principal place of business in the city of St. Louis, Missouri.

The act authorizing the creation or organization of the corporation provides, in paragraph 6 of § 4, that such banking corporations, when organized, may “sue or be sued, complain, interplead and defend in any court of law or equity as fully as natural persons.”

(1). The first contention of petitioners in support of their request for a writ of prohibition is that the Federal Land Bank of St. Louis cannot be sued anywhere except in a court of competent jurisdiction within the territorial limits of its domicile in St. Louis, Missouri. This contention is without merit, as the act of Congress authorizing the creation of said banking corporation provides in the plainest language that it may be sued in any court of law or equity as a natural person may be. This section can have no other meaning except that the corporation may be sued wherever service can be obtained upon it, actually or constructively. However, petitioner argues that the constructive service in the instant case was insufficient because the basis of the service rests upon the allegation that it is a foreign corporation; whereas it was not made a foreign corporation with respect to Arkansas by the act of Congress authorizing its creation. Authorities are cited by petitioner tending to support the theory that it is a domestic corporation of the United States and consequently a domestic corporation or resident of the State of Arkansas, as Arkansas is a part of the United States. These authorities are not in point because they do not take into consideration our statutes defining foreign corporations. Foreign corporations, in contemplation of law in this State, are defined by statutes in the following language:

A foreign corporation is one created by the laws of some other State or country. ’ ’ Section 9743 of Crawford & Moses’ Digest.

“The words ‘other country’ signify any part of the world out of this State.” Section 9744 of Crawford & Moses’ Digest.

In 14a C. J., 1214, ^ 2934, in discussing the subject of whether a Federal corporation is foreign to States, it is said: “Under statutes defining a foreign corporation as one created under the laws of any other State, government or country, a Federal corporation has been held to be a foreign corporation with respect to a State.”

We are of opinion that the Federal Land Bank of St. Louis, Missouri, is a foreign corporation, and that the constructive service was sufficient.

(2). The second contention of petitioner in support of its request for a writ of prohibition is that the Federal Land Bank of St. Louis, Missouri, is an instrumentality of the government of the United States, and that on that account its property is not subject to attachment. In the act authorizing the creation of said banking corporation, there is no limitation or restriction against reaching its property by attachment. We know of no law preventing levy by attachment against the property of corporations created by act of Congress except preventing attachment against the property of national banks before judgment is obtained against them. Van Reed v. People’s National Bank, 198 U. S. 554, 25 S. Ct. 775. If Congress had intended that the property of the Federal Land Banks should not be subject to attachment, it would have prohibited same in the act. We think the case of The State of Missouri ex rel. St. Louis, Brownsville & Mexico Ry. Co., v. Taylor, Judge of the Circuit Court of the City of St. Louis, 266 U. S. 200, 45 S. Ct. 47, announces principles applicable to the case in hand.

The writ is therefore denied.

McHaney and Butler, JJ., dissent.

Smith and Mehaeey, JJ., concur in the result.


author: Mehaffy, J.

text:
    Healey & Roth v. Balmat.
    4-3500
    Opinion delivered June 18, 1934.

      Fred A. Isgrig and Buzbee, Harrison, Buzbee '<& Wright, for appellants.

      Bonham & Fulk and Philip McNemer, for appellee.
   Mehaffy, J.

On the 14th day of November, 1931, the appellee, Louis Balmat, with two companions, Jack Reed and Stanley Price, between twelve and one o’clock, left Little Rock in Balmat’s car, a Chevrolet roadster to attend a football game in Pine Bluff. After eating supper, Balmat and his companions started back to Little Rock in Balmat’s car with Jack Reed driving. At a point near Woodson, about fifteen miles from Little Rock, the car turned over and Reed was severely injured. Balmat and Price were not injured. Shortly after the car turned over, a man and woman in a Ford two-door sedan came along going to Little Rock and proposed to take Balmat and his party to Little Rock. It was decided, however, to leave Price in charge of the wrecked roadster and that Balmat would accompany Reed, the injured man, in the Ford sedan. The driver of the Ford then proceeded towards Little Rock with Reed and Balmat riding in the back seat. On arriving at Sweet Home, about five miles from Little Rock, Balmat had the driver of the Ford to stop his car while Balmat ’phoned for an ambulance to come out and meet the Ford car and take Reed to a hospital. Balmat called appellants, Healey & Roth. Balmat had formerly been in the employ of appellants, and had ridden on ambulances when responding to emergency calls. Appellee’s ’phone call was received by Hugh Revely, an employee of appellants. Appellee told Revely that Reed had been severely injured and instructed him to come out and meet the Ford and take Reed to a hospital. In order that Revely might identify the car in which Reed was riding, appellee told him that the driver of the Ford would flash his lights as a signal when he saw the ambulance approaching. Balmat then resumed his place in the Ford, which proceeded towards Little Rock, and the driver of the Ford was told that the ambulance was coming out to meet them, and that he was to signal the ambulance by flashing the lights of the Ford when the ambulance came in sight. When the Ford reached a point near the Little Rock city limits he saw the ambulance approaching. He stopped his car on the east side of the highway, the right-hand side facing Little Rock, and began flashing his lights as a signal for the ambulance to stop and pick up the injured man. The ambulance pulled up and stopped on the west side of the highway, which was the right-hand side facing Pine Bluff. When the ambulance came to a stop, the two left wheels were about five feet from the west edge of the pavement, the right front wheel was over on the west shoulder of the highway. As soon as the ambulance had stopped, the- injured man got out of the Ford assisted by appellee, on the east side, walked around the rear end of the Ford, across the highway to a position at the rear of the ambulance. The driver of the ambulance and his assistant had in the meantime gotten out the ambulance cot and placed it on the pavement lengthwise of the highway, immediately back of the ambulance. The cot was about seven feet long, mounted on wheels and was about two feet above the surface of the highway. Reed lay down on the cot and appellee took a position on the highway at the -ear of the cot, west of the center line of the highway and about twelve feet behind the ambulance. Elijah Jackson, a negro preacher, who lived near where the ambulance had stopped, appeared and took a position near appellee. The driver of the ambulance and his assistant were on opposite sides of the cot preparing to lift Reed into the ambulance when Elijah Jackson called, “Look out, white folks!” Some one shoved the cot upon which Reed was lying off the highway and everyone got to a place of safety except appellee who was struck by an automobile which had approached from the direction of Little Rock and was going towards Pine Bluff. The automobile was going at a rapid rate of speed and appellee was knocked down and severely injured, and, immediately after striking appellee, the automobile collided with the rear end of the' ambulance and an explosion of gasoline followed, resulting in severely burning the face and head of appellee. The car which struck appellee was occupied by two young men and two young women, and was driven by Henry Blake.

This suit was begun on December 14, 1932, by appellee against appellants and Henry Blake, to recover damages for the injuries he had received. He alleged that the driver of the ambulance negligently stopped it and left it standing on the public highway in such a position with reference to the automobile, which was parked on the opposite side of the highway, that traffic could not pass between the two vehicles.

Appellants filed answer, denying the material allegations of the complaint, denying that it was guilty of any negligence, and denying that the position of the ambulance was the proximate cause of appellee’s being struck by the Blake automobile. Henry Blake filed separate answer. There was a trial and a verdict and judgment against Henry Blake and appellants for $8,000. Blake did not appeal. The appellants filed motion for new trial which was overruled, exceptions saved, and the case is here on appeal.

The rear light and dome light on the ambulance were burning.

Henry Blake testified that he was going about thirty miles an hour, it was misting rain,, and when he approached the place of the accident he saw the Ford car standing on the east side of the highway and its lights were on and created a glare on the pavement which shone in his face, and he could not see the ambulance. When he discovered the ambulance, he put on the brake, but he could not go between the cars, and his front fender hit the ambulance but he did not remember hitting any person. He did not see the lights on the ambulance. When Blake’s car hit the ambulance, it knocked it several feet. -The two cars, the Ford and the ambulance, blocked the road to traffic, and, if the ambulance had gone a little further, there was an open space where it could have stopped, and there would have been room for traffic.

This was an emergency call'by the ambulance, and the drivers of the ambulance were in a hurry to get the injured man to the hospital and paid no attention to the parking.

Appellants first contend that the court erred in refusing to direct a verdict in their favor. It is contended that the operator of the ambulance violated no traffic law and was guilty of no negligence. It is not contended by appellee that the traffic law was violated, but the cause of action is based solely on the negligence of appellants in stopping the ambulance opposite a car which was already parked on the highway in such a manner as to block traffic.

Appellants call attention to American Company of Arkansas v. Baker, 187 Ark. 492, 60 S. W. (2d) 572. The court, however, said in that case: “It appears to us that the negligence, if any, was the sudden stopping of the truck without giving any signal or warning of that intention to one who might be driving closely behind it. * * * This court has no power to vacate a verdict of the jury or the judgment based thereon on the weight of the evidence, but we are obliged on appeal to view the evidence in the light most favorable to the appellee, giving to ft every reasonable inference in support of the verdict, and. however much we may think the evidence preponderates against the finding of the jury, we may not interfere. This court has repeatedly pointed out that this is a duty and power resting’ solely with the trial judge, to be exercised whenever in his opinion the verdict is against the clear preponderance of the evidence, and on that question his judgment is conclusive if there is any substantial conflict therein.”

In the instant case, the undisputed proof shows that the ambulance was so parked with reference to the other car, which was already parked there, that it was impossible for vehicles to pass. The road- was wet and slippery, and whether under the circumstances in this case the appellants were guilty of negligence in blocking traffic as they did when they were bound to know that other vehicles would be on the highway was a question for the jury, and, if there is any substantial evidence to sustain the verdict, we cannot set it aside, although we might think that the preponderance of the evidence showed that appellants were not guilty of any negligence. The jury might have found that there was ample space within a'few feet of the place where the ambulance stopped where it could have been stopped without interfering with traffic.

Instruction No. 10 given by the court submits this question to the jury. It is true the ambulance was on the highway at this place a very short time before it was struck by Blake’s car, but the jury was justified in finding that it was not necessary to stop the ambulance for any length of time so as to obstruct traffic.

Appellants say that the ambulance was on an errand of mercy. It is true it was an emergency call, and it was endeavoring to get an injured person to the hospital as quickly as possible. This, however, did not relieve it from the consequences of its negligence, if it were guilty of negligence. One cannot, even on an errand of mercy or in an effort to relieve an injured person and remove him to a hospital, block the traffic in such a manner as to endanger others, especially when in a few feet of the place the ambulance might have been parked without any interference with the traffic.

' Appellants contend that the ambulance had a superior right to the immediate use of the highway by virtue of the traffic regulations, but the traffic regulations did not give appellants any right to commit an act of negligence endangering others. Moreover, the court instructed the jury that an ambulance, when operated upon official business, has a superior right on the highway to other traffic so long as the operator does not exercise that right in an arbitrary manner, and in the same instruction told the jury that, if it found that the ambulance was blocking the highway but further found that in doing so said operator was not acting arbitrarily and in wilful disregard of the rights of other persons who might be using the highway in a proper manner but was acting as a person of ordinary prudence would act under similar circumstances, it would not be justified in finding against appellants.

It is next contended by appellants that the appellee was barred from recovery by his own negligence. The undisputed evidence shows that the cot was behind the ambulance, and that appellee was standing behind the cot when he was struck by the automobile. The court under proper instruction, submitted the question of appellee’s contributory negligence to the jury, and the jury’s finding on this question is conclusive here.

Appellants then contend that the stopping of the ambulance was not the proximate cause of the accident complained of. It was certainly not the sole cause. The undisputed proof shows that Blake was driving on the wet, slippery road at about thirty miles an hour, and he was unquestionably guilty of negligence, as the jury found, but the accident could not have happened if the ambulance had not been parked so as to obstruct the traffic. “As a general rule, it may be said that negligence, to render a person liable, need not be the sole cause of an injury. It is sufficient that his negligence, concurring with one or more efficient causes other than plaintiff’s fault, is the proximate cause of the injury. So that, where several causes combine to produce injuries, a person is not relieved from liability because he is responsible for only one of them, it being sufficient that his negligence is an efficient cause without which the injury would not have resulted to as great an extent, and that such other cause is not attributable to the person injured. But it must appear that the person sought to be charged was responsible for one of the causes which resulted in the injury. The concurring negligence of. another cannot transform the remote into the proximate cause of an injury, or create or increase liabilities therefor. ’ ’ Coca-Cola Bottling Co. v. McAnulty, 185 Ark. 970, 50 S. W. (2d) 577; 45 C. J. 920.

As we have already said, whether this conduct on the part of the drivers of the ambulance was negligence was a question for the jury.

It would serve no useful purpose to set out or comment- at length on the instructions. We have carefully examined the instructions given, those modified, and those refused, and have reached the conclusion that there was no error in giving, refusing or modifying instructions. The only serious question in this case is whether the appellants were guilty of negligence in parking the ambulance as they did under the circumstances. As we have already said, this was a question for the jury, and, although we might believe that the jury’s verdict was against the preponderance of the evidence, we have no authority to set it aside for that reason.

We find no error, and the judgment is affirmed.


text:
    Gantt v. Arkansas Power & Light Company.
    4-3502
    Opinion delivered June 25, 1934.

      Marsh d Marsh, for appellants.

      G. W. McKay, W. JEL. Kitchens and House, Moses S Holmes, for appellees.
   Johnson, C. J.

Bringing into question the correctness of the Columbia County Chancery Court’s findings and decree sustaining a demurrer interposed by appellees to appellants’ complaint, this appeal is prosecuted. In effect, the complaint alleged: That appellants are citizens, taxpayers and property owners within the boundaries of Waterworks Improvement District 1, situated within the corporate limits of Magnolia, Arkansas; that in the year 1923 appellee Waterworks Improvement Dist. 1 of Magnolia was duly organized and established, and that J. O. Hutchinson, H. P. Carrington and D. D. Good are now and have ever been since the organization of said district the duly constituted board of commissioners thereof; that on May 12, 1924, the board of commissioners of said Waterworks District 1 of Magnolia made and entered into an invalid contract with the 'Consumers’ Ice & Light Company, a domestic corporation, by the terms of which contract the Waterworks Improvement District 1 of Magnolia surrendered to the Consumers ’ Ice & Light Company the right and privilege to furnish consumers located in said district water and make and collect charges therefor, and in consideration of which the Consumers’ Ice & Light Company agreed to pay 10 per cent, of its earnings therefrom, upon certain conditions and contingencies then and there agreed upon; that the contract between the Waterworks Improvement District 1 and the Consumers ’ Ice & Light Company was invalid and void because all members of the board of commissioners of said Waterworks District 1 were at the time of the execution of said contract, and are now, stockholders in the Consumers’ Ice. & Light Company; that said board of commissioners and each member thereof was therefore directly and indirectly interested in said contract. Appellants further alleged that in 1925 the city council of Magnolia was composed of J. W. Colquitt, H. B. Couch, T. P. Lewis, C. J. Gantt, J. B. Lee, E. C. Lyle and T. H. Westbrook, mayor; that on the 20th day of July, 1925, said city council, composed of the members aforesaid, by ordinance, approved and ratified the contract theretofore executed between the board of commissioners of Waterworks Improvement District 1 of Magnolia and the Consumers ’ Ice & Light Company, but that said ratification and approval was invalid and void because at the time of the passage of said ordinance ratifying and approving said contract all members of said city council of Magnolia, save one member, were stockholders in the Consumers ’ Ice & Light Company, and were therefore directly and indirectly interested in said contract; that, after the ratification of said invalid and void contract by said city council of Magnolia, the Consumers’ Ice & Light'Company transferred and assigned to appellee, Arkansas Power & Light Company, all its interest therein, and since said date the Arkansas Power & Light Company has unlawfully charged and collected rentals and charges against the consumers in said Waterworks Improvement District 1 of Magnolia, and converted same to its own use and benefit; that the rentals made and charged by the Arkansas Power & Light Company and the Consumers’ Ice & Light Company during the periods of their respective operations were exorbitant, unreasonable, unlawful and without right or authority; that the board of commissioners of Waterworks Improvement District 1 of Magnolia, although requested so to do, have refused to institute, prosecute or maintain a suit for the collection of said unlawful rentals and charges against appellees, and have refused to endeavor to collect said rentals and charges for the benefit of said Waterworks Improvement District 1 of Magnolia.

It is the established doctrine in this jurisdiction that a demurrer to a complaint admits the truth of its allegations. Greer v. Strozier, 90 Ark. 158, 118 S. W. 400; Adams v. Primmer, 102 Ark. 380, 144 S. W. 522; Keopple & McIntosh v. National Wagonstock Co., 104 Ark. 466, 149 S. W. 75; Hamiter v. State Nat. Bank of Texarkana, 106 Ark. 157, 153 S. W. 94.

It appears therefore, for the purpose of this determination, that the contract between Waterworks Improvement District 1 of Magnolia and the Consumers’ Ice & Light Company was executed and consummated by a board of commissioners acting’ for Waterworks Improvement District 1, who were stockholders at the time in the Consumers ’ Ice & Light Company.

On the question of the validity of the contract, between Waterworks Improvement District 1 and the Consumers’ Ice & Light Company, in its inception, but little need be said. Section 5711, Crawford & Moses’ Digest, provides: “It shall be unlawful for any board of improvement, or any member thereof, in any city or town in this State, to be interested either directly or indirectly in any contract made by the board for or on behalf of any improvement district.”

Therefore, when it is admitted that the members of the board of commissioners of said Waterworks District 1 were stockholders in the Consumers’ Ice & Light Company at the time said contract was executed and consummated, it follows as a matter of law that each of them was directly interested in said contract, which is inhibited by the plain provisions of the statute just quoted. Just how or why a stockholder in a corporation should not be considered as interested in the business and affairs of such corporation is not pointed out in the briefs, and we cannot conceive such being the law. Although a stockholder may own only one share of the capital stock of a corporation, he is directly interested in its affairs. Any other construction of the statute under consideration would have the effect of nullifying it.

Counsel for appellees contend that we decided in Davidson v. Sewer Improvement District, 182 Ark. 741, 32 S. W. (2d) 1062, that a contract with a corporation ivas not inhibited by § 5711 merely because one of the contracting parties was a stockholder in such corporation. This is not the effect of the holding in the Davidson case. Primarily, the Davidson case presented the question of the validity of the assessment of benefits. Davidson contended that the mere fact that the Mcllroy Bank & Trust Company had purchased and owned certain bonds of the improvement district which were obtained by said "bank while J. H. Mcllroy, the president thereof, was on the board of commissioners of the improvement district rendered the assessment of benefits invalid. The court determined that the assessment of benefits was valid, and that whether the Mcllroy bank had contracted unlawfully with the board of commissioners of the improvement district subsequent to the assessment of benefits was not of controlling importance. Moreover, the language quoted from tlie Davidson case appears to be dictum and was not necessary to a decision of the point involved.

It seems to be the rule of universal application that any contract prohibited by a constitutional statute is absolutely void. Ridge v. Miller, 185 Ark. 461, 47 S. W. (2d) 587. See Levison v. Boas, 12 L. R. A. (N. S.) 575, and notes thereunder, page 583. Tallman v. Lewis, 124 Ark. 6, 186 S. W. 296.

Based upon reason and authority, the contract between the Waterworks Improvement District 1 of Magnolia and the Consumers ’ lee & Light Company was and is void because inhibited by § 5711, Crawford & Moses’ Digest. Appellee next contends that, although the contract may have been void in its inception, yet it was impliedly ratified by the city council of Magnolia subsequent to the assignment of the contract by the Consumers’ Ice & Light Company to the Arkansas Power & Light Company. The first answer to this contention is the complaint alleges that the ratification by the city council occurred prior to the assignment of the contract. Since the ratification was prior to the assignment of the contract, the question is presented whether or not this ratification was void under the allegations of the complaint. The complaint alleges that all members, save one, of the city council at the time of the ratification were stockholders in the Consumers’ Ice & Light Company. Section 7520, Crawford & Moses’ Digest, in effect, inhibits any member of the city council from being interested either directly or indirectly in any contract or job or services to be performed for the corporation. The only meaning of this section of the statute is that any contract made by the board of aldermen who are interested either directly or indirectly in the consideration of the contract is prohibited. Viewed from the allegations of the complaint, the ratification by the city council of the contract between the Waterworks District 1 and the Consumers’ Ice & Light Company was inhibited by the section of the statute just quoted.

Moreover, since the contract has been determined to be null and void from its inception because prohibited by a constitutional statute, we know of no authority holding, and none have been cited in briefs, that such contract may be given life by subsequent acts of the parties. If the contract is void from its inception because being prohibited by statute, it cannot be vitalized by subsequent acts of the parties thereto or thereunder. The rule is thus stated in Page on the Law of Contracts, § 1038, “Ratification in its correct sense is impossible equally of an illegal and of a void contract.” 13 C. J. 506, states the rule as follows: “A contract malum in se or against public policy cannot be made valid by ratification.” In line with the authorities just quoted, we stated the rule in the early case of Tucker v. West, 29 Ark. 386, quoting from the fifth headnote: “Where the consideration of a contract is either wicked in itself, or prohibited by law, is void and incapable of ratification.”

Lastly, it is contended on behalf of appellee that this ease should be affirmed because the complaint shows upon its face that appellants cannot recover any moneys that the Arkansas Power & Light Company has collected from the water consumers for the services rendered by it.

We cannot agree with this contention. Since we have determined that the contract was void in its inception, the ConsumersIce & Light Company acquired no rights thereunder which may be enforced either in law or in equity. The position of the Arkansas Power & Light Company rises no higher than that of its assignor. The general rule is that, where a contract is expressly prohibited by law, and the statute in terms declares the contract to be null and void, no recovery can be had under it, and a taxpayer has a right to maintain an action to recover back money when its officers neglect or fail to perform their duty in that respect. Capron v. Hitchcock, 98 Cal. 427; Winchester v. Frazier, (Ky.) 43 S. W. 453; Milford v. Milford Water Co., 124 Pa. St. 610.

The status, however, of appellees does not come strictly within the prohibition of the rule just stated. The prohibitory statute here involved does not, in terms, declare the contract to be “null and void.” The rule seems to be that, in the absence of the prohibitory words “null and void” and where the contract has been performed by the parties in good faith, compensation may be retained measured by the reasonable value thereof. Such recovery, however, is not because of the contract, but is grounded squarely upon the proposition that valuable services having been rendered which have been accepted by the parties, it would be inequitable and unjust to permit one party to substantially gain under the contract to the great and irreparable damage of the other. Smith v. Dandridge, 98 Ark. 38, 135 S. W. 800; Spearman v. Texarkana, 58 Ark. 348, 24 S. W. 883; Frick v. Berkley, 61 Ark. 397, 33 S. W. 527; Ark. State Highway Commission v. Keaton, 187 Ark. 306, 59 S. W. (2d) 481.

For the errors indicated, the case will be reversed, and the cause remanded with directions to overrule appellees’ demurrer and proceed not inconsistent with this opinion.

McIIaney, J., dissents.


text:
    Bailey v. Riggs.
    4-3501
    Opinion delivered June 25, 1934.

      James B. McDonough, for appellants.

      G. L. Grant, for appellees.
   Humphreys, J.

This suit was commenced by appellees in the chancery court of Sebastian County, Fort Smith District, to recover $1,000 from the makers of a note executed on the first day of May, 1929, by John Mayne Bailey and Della Mae Bailey to the City National Bank of Fort Smith as agent; and to foreclose a mortgage on certain real estate therein described to secure same. It was alleged that said note of $1,000 was one of a series of six separate notes evidencing an indebtedness of $6,000 for borrowed money, secured by said mortgage, and the appellees purchased the $1,000 note in question from said bank for $1,000 in cash, and that the-interest on said note was payable at said-bank, and that at maturity the principal was also payable at said bank. It was also alleged that, the day after the note matured, the appellees left the note at said bank for collection and took a receipt therefor reciting that it was left with said bank for that purpose, and that they notified the bank that they wanted the money on the note and not to renew or extend it. It was also alleged that, in violation of their instructions, said bank took renewal notes for $6,000' and a new mortgage to secure it and canceled and surrendered the old notes and mortgage, including the $1,000 note belonging to appellees. The prayer of the complaint was for a judgment against the Baileys, the bank, and I. H. Nakdimen, president of same.

A demurrer was filed on the grounds that the complaint failed to state a cause of action; that the action of foreclosure was prematurely brought; and that there was a defect of parties for failure to make the holders of the other notes parties defendant.

The demurrer was sustained, and appellees filed an amended complaint incorporating all of the allegations of the original complaint and, in addition, alleged that said bank and its president were acting as the agent of the Baileys and themselves in renewing the loan and not as appellees’ agent; and also more specifically alleged the conversion of appellees’ $1,000 note by the cancellation and surrender thereof to the Baileys and their acceptance and retention thereof without paying same. Appellees renewed the prayer of their original complaint.

■ Appellants thereupon filed a motion to transfer the cause to the circuit court on the ground that, if any cause of action were stated in the amended complaint, it was an action at law and not in equity.

The chancery court sustained the motion, and, after the cause was lodged in the circuit court, appellees made a motion to remand same to the chancery court, which was overruled.

Thereafter, appellants filed a demurrer to the complaint upon the same grounds set forth in the demurrer in the chancery court, which demurrer was never ruled upon by the circuit court, no request being made by appellants that it do so.

Appellants then filed an answer denying the material allegations of the complaint, reserving the right to question the sufficiency thereof. Further answering, appellants stated that the original $1,000 note was left with said bank for renewal; that, after the new notes and mortgage were executed in exchange and satisfaction of the original notes and mortgage, two interest payments were made by the. Baileys to the bank and by it paid to appellees with full knowledge of appellees of the exchange and cancellation of the old notes for the new, thereby ratifying the extension of the loan. The prayer was for a dismissal of the complaint.

The cause was submitted to the jury upon an instruction to the effect that they should return a verdict in favor of appellees for the face of the old note as damages against the Baileys and said bank, if they should find from a preponderance of the evidence that appellees left their note for $1,000' with said bank for collection, with specific instructions not to renew same, and that the makers and said bank renewed same without their knowledge and consent and pursuant thereto new notes and a mortgage to secure them were executed to said bank as agent without the knowledge of appellees, and that the bank tendered appellees one of the new $1,000 notes in lieu of their old note, which they refused, unless the appellees subsequently ratified the renewal thereof.

Under this instruction and others requested by appellants and appellees relative to whether the renewal was ratified, the jury returned a verdict against appellants in the amount prayed for, upon which judgment was rendered, from which is this appeal.

Appellants first contend for a reversal of the judgment because no cause of action was alleged in the complaint.

It is unnecessary to determine whether a cause of action in equity was stated in the complaint because that question was determined in favor of appellants on demurrer, and the motion to transfer the cause to the circuit court, and no appeal has been taken from that decree.

The amended complaint sufficiently alleges a conversion of the old note of $1,000’ belonging to appellees jointly by said bank and the makers thereof, and the attempted substitution of the new note therefor, which appellees refused to accept, all without the knowledge and consent of appellees. Arkansas Fertilizer Co. v. City National Bank, (Tex. Civ. App.), 137 S. W. 117.

Appellants also contend for a reversal of the judgment because the evidence is insufficient to support same. The uncontradicted evidence shows that, when the old note for $1,000 matured, it being payable at said bank and executed to said bank as agent, the note was presented to said bank for collection and was received and receipted for that purpose alone with specific instructions by appellees not to renew or extend same. The uncontradicted evidence also shows that said bank violated the instruction and renewed the note by agreement with the Baileys, the. makers thereof, to take new notes and a new mortgage to secure same without the knowledge or consent of appellees. At this juncture, a sharp dispute or conflict arises in the testimony.

The testimony on the part of appellants reflects that, after being informed of the transaction, appellees accepted the new note in lieu of the old, but, becoming dissatisfied, returned the new note, with full knowledge of all that had been done and thereafter received two interest payments on the new note knowing they were .interest payments on same.

The testimony on the part of appellees reflects that, when they were informed of the transaction and the new note was tendered to them in lieu of the old note, they declined to accept same and demanded a return of their old note or money in payment thereof, and that the two payments of interest thereafter received by them were payments of interest on the old note.

This issue of fact was clearly one for the jury and not the court, and their finding is binding on appellants, as • the instructions of the court upon the question of ratification were correct.

The court gave instruction No. 3 requested by appellees on the issue of ratification, which is as follows:

“Even though you may find from the evidence in this case that the plaintiffs, J. A. Biggs and P. L. Biggs, received the interest on the $1,000 after the date-that the $6,000 loan was renewed by the bank and Mr. Bailey, this alone would not constitute a ratification of the renewal, or prevent the plaintiffs from recovering in this action.
“Before the plaintiffs can be held to have ratified the renewal by accepting the interest on the $1,000, they must have accepted it with full knowledge that it was being paid on the new note.”

The court also gave instruction No. 3 requested by appellants on the same issue, which is as follows:

“If the plaintiffs left the old note at the City National Bank for collection, and if the said note of John Mayne Bailey and his wife were renewed, and if the plaintiffs received said renewed note and returned the same to the bank with a statement that they did not wish to purchase the note or to renew the old note, and if plaintiffs thereafter received interest on the new note, they cannot recover.”

Both are correct, and there is no conflict between them.

Instruction No. 2, given at the request of appellees, fully covered the main issue in the case, and it was unnecessary to give instructions requested by appellant upon the same issue, as those requested were a repetition of the one given.

No error appearing, the judgment is affirmed.


text:
    Dent v. Froug’s, Incorporated.
    4-3509
    Opinion delivered June 25, 1934.
    . Louis Tarlowshi, for appellant.

      House, Moses Holmes and Eugene H. Warren, for appellees.
   Mehaffy, J.

This suit was begun by appellees, Froug’s, Incorporated, and the Union Bank, against the appellant, S. M. Dent, receiver of Globe & Rutgers Fire Insurance Company, in the Pulaski Circuit Court, to recover on two insurance policies issued by appellant. One of the policies for $2,500 covered the store and office fixtures. Liability on this policy was admitted in the court below, and this policy is not involved here. The other policy, the one here involved, was for $5,000 covering stock of merchandise in appellee’s store at 414 Main Street, Little Rock, Arkansas. The appellant denied liability on the ground that the policy had been canceled. Jury was waived, and the case was tried by the court sitting as a jury, and resulted in a finding and judgment against appellant for the amount of the policy. The case is here on appeal.

The policy was regularly issued and accepted by the appellee. The appellant states the question to be determined by this -court as follows: “The sole question therefore as to policy No. 5,510,782 is whether notice by the company to the agent (who is also the agent of the assured) to cancel, without tender of unearned premiums, and the .return of the policy itself, is sufficient to constitute a cancellation in fact of the policy.”

There is practically no conflict in the testimony, and the facts may be stated as follows: 'Bruce S. Biddle, agent of appellant, issued the policy sued on. Appellant instructed its ag’ent to cancel the policy and retake the same from the appellee. The said agent did in fact report to the company that the policy was canceled, and he secured another policy to be issued by the Westchester Fire Insurance Company. Biddle, however, never notified the appellee either about the cancellation of the policy or that the other policy was issued by the Westchester Fire Insurance Company, and the appellee never heard anything about this until after the fire. The undisputed evidence shows that the Biddle agency had a small portion of appellee’s insurance, but that on all occasions when they would get a policy for appellee it would be submitted to Froug for his approval and did not become effective until he approved it. Biddle had no authority to put in effect any policy issued until it was approved by Froug. While he had authority to write insurance policies and did write them for Froug, Froug always required that the policies be presented to him for his approval. There is no evidence in the record that Biddle had authority to cancel a policy, to waive the notice, or to waive return of premium, and there was no notice given to Froug, no premium returned, and no notice that any other policy had ever been issued. The policy sued on contains the following statement with reference to cancellation of policies: “This policy shall be canceled at any time at the request of the insured; or by the company by giving five days’ notice of such cancellation. If this policy shall be canceled as hereinbefore provided or become void or cease, the premium having been actually paid, the unearned portion shall be returned on surrender of this policy or last renewal, this company retaining the customary short rate; except when this policy is canceled by this company by giving notice, it shall retain only the pro rata premium.” After the fire, Froug made proof of loss under the policy here involved, and, at the suggestion of one of the adjusters for the insurance company, he filed proof of loss with the Westchester Fire Insurance Company, but stated in the proof of loss as follows: “We are furnishing this proof of loss so as to preserve the rights of the parties in interest because of the controversy with respect to liability under the policy.” He never had the policy of the Westchester Fire Insurance Company, never saw it, and never accepted it, and did not know until after the fire that it had been issued or was in existence, and he did not return the policy sued on in this action.

Appellant cites and relies on Phoenix Ins. Co. v. State, 76 Ark. 180, 88 S. W. 917. That case holds, as many others, that the stipulation for five days’ notice was made for the benefit of the assured and could be waived by the assured, but the court stated: “The policy was in fact canceled by the agent, and his act in doing so was ratified as soon as brought to the attention of the assured.” There is not only no such evidence in the instant case, but the undisputed evidence is that the assured did not ratify it, did not know about it, and never accepted any policy without an opportunity to first examine it.

Appellant next calls attention to the case of Allemania Fire Ins. Co. v. Zweng, 127 Ark. 141, 191 S. W. 903. The court stated in this case: “The court held in effect that, where a policy of insurance provides that it may be canceled upon notice to the insured, notice by the company to its own agent to cancel the policy is ineffective as a cancellation, in the absence of authority to the agent from the insured to act for him in receiving notice of cancellation and in procuring other business.” In thé instant case, there is no evidence of authority of the agent to r'eeeive notice of cancellation of the policy or write a policy in substitution thereof. On the contrary, the undisputed evidence shows that the agent did not have authority, that no policy was in effect until it had been submitted to and approved by Mr. Froug..

The next case to which attention is called is Insurance Underwriters’ Agency v. Pride, 173 Ark. 1016, 294 S. W. 19. The court in that case said: “It is true that mutuality is one of the essentials of a contract, and such essential is not lacking in this contract. 'Both Pride and Howard conferred authority in the beginning on Burns to insure their property in any company he represented, leaving the selection or designation to him. Our court is committed to the doctrine that authority of such breadth and scope has the effect of constituting the agent of the insurer the agent of the insured also to accept the policy when written, and to waive the cancellation in this clause, and to accept a new policy in lieu of an old one. ’ ’ In the instant case, the evidence of both the agent and of Froug is to the effect that the agent could not accept the policy but that it must be submitted to Froug.

Appellant calls attention also to Commercial Union Fire Insurance Co. v. King, 108 Ark. 130, 156 S. W. 445. The court in that case said: “The notice must be given to the insured, and it should state not merely an intent to cancel, if some condition be not complied with, but it must be an actual notice of cancellation within the meaning of the policy and so unequivocal in its form that the insured may not be left in doubt that his insurance will expire on the time limited by the terms of the notice, and that the company will not be liable for any loss after the expiration of that time.”

The next case relied on by appellant is Firemen’s Ins. Co. v. Simmons, 180 Ark. 500, 22 S. W. (2d) 45. The court in this case approved the rule announced in other cases, citing the cases above mentioned, and then said: “In most of the cases coming before this court where the rule above stated had been announced and followed, there appears to have been an agreement between the insured and the agent that the agent would keep the property insured, and this agreement may be either expressed or implied from the circumstances under which the policy was issued, or from continued course of conduct of the parties; as, for instance, where the agent renews on ex-pirations and accepts notice of cancellations and issues other policies in their stead, which is either known or acquiesced in by the insured.” The evidence in the instant case not only shows no circumstances indicating an agreement on the part of the insured but both parties testify very positively that a policy would not be in effect until submitted to and approved by Froug.

Appellant then refers to National Union Indemnity Co. v. Standard Accident Co., 179 Ark. 1097, 20 S. W. (2d) 125. That case simply holds that the parties may agree to a cancellation with or without refund of unearned -premiums, but there is no agreement in this case.

Attention is also called to Home Fire Ins. Co. v. Parker, 177 Ark. 678, 7 S. W. (2d) 324:. The court said there: “We think we may safely assume, in this case, that the agent of appellant had authority from appellee to keep his property insured.” There is nothing in that case which supports the contention of appellant.

It is well settled by the decisions of this court that the provision in the policy for notice is for the benefit of the insured and may be waived by him. It is, however, equally well settled that, unless there is evidence of a waiver, the notice must be given.

It is also contended that furnishing proof of loss to the Westchester Fire Insurance Company was a ratification of the cancellation. There was no ratification. This proof was made at the suggestion of one of the adjusters of the insurance company, and Mr. Froug added: “We are furnishing this proof of loss so as to preserve the rights of the parties in interest because of the controversy with respect to liability under the policy.” The appellee did not have the Westchester policy, did not know until after the fire that it had been issued, never did receive it or accept it, but kept the policy sued on constantly and never did anything, so far as the evidence in the record shows, to indicate that he knew anything about any suggestion that this policy be canceled.

We find no error, and the judgment is affirmed.


author: McHaney, J.

text:
    Texarkana Baptist Orphanage v. Wilson.
    4-3510
    Opinion delivered June 25, 1934.

      Bonham, Fulk, for appellant.

      Louis Josephs and Frank B. Qmnn, for appellee.
   McHaney, J.

Appellee sued appellant to recover for eight months’ salary as superintendent of its orphanage in Texarkana, Arkansas, at $85 per month, and for certain expenditures he claimed to have made in improving its property and in operating it, in a total sum of $862.49. He claims to have been employed by appellant in such capacity for a period of one year from November 10,1932, to November 10, 1933, and that it failed to pay him his salary, except for a period of three months; that it, through its board, demanded his resignation on June 1, 1933, notified him his contract of employment would no longer be recognized and repudiated it. He prayed judgment in said amount, that it be declared a lien on its property, and that same be foreclosed and the property sold. Appellant defended the action on the ground that, although appellee had been employed by it as superintendent of its orphanage at a salary of $85 per month, he had been discharged by its board of trustees for cause on July 15, 1933, and that, if appellee had vacated the orphanage on that date, as he should have done, it would have been indebted to him in the sum of $382.50, which amount it offered to pay him, but same was refused, and that he refused to vacate said orphanage after his discharge, continued to remain in possession and supported himself and family out of the funds donated to care for the orphans. It further alleged that he was discharged after an investigation of his moral fitness for the position after an investigation by the board at his request. Cross-complaint was filed against him seeking to recover possession of its property and for damages in the sum of $1,000. A trial of the ease resulted in a decree in appellee’s favor for $793.35, and required him to vacate the property and deliver possession within 10 days from the date of the decree. Thereafter appellee sued out a writ of garnishment against J. B. Richardson and caused execution to issue on said judgment. Timely motions were made to quash said writs, which were overruled by the court. This appeal challenges the correctness of said decree in rendering judgment for appellee, and the action of the court in overruling said motions to quash said writs.

In view of the disposition we make of the case, it becomes unnecessary to discuss or decide whether the funds or property of a public charity may be lawfully subjected to a writ of garnishment or the levy of an execution on a judgment.

For the purpose of this decision we assume that appellee had a contract for one year as superintendent of appellant’s orphanage, although this allegation in the complaint was denied in the answer, and there is little, if any, evidence in the record to support it. But, assuming that there was such a contract, the law does not impose the burden on appellant of compliance therewith for the full term at all hazards. Disability, death, resignation or disqualification for cause, such as gross immorality, theft, embezzlement or other criminal conduct rendering him unfaithful or unfit for the performance of his duties, would discharge appellant of its further obligation to perform the contract. See 39 C. J., p. 84 et seq. The fact is that certain charges of immorality had! been made against appellee relating to misconduct with his adopted daughter. The board of trustees met on June 7,1933, pursuant to adjournment. At the previous meeting these charges or accusations against appellee were considered and certain witnesses were heard. Other witnesses were heard at the June 7 meeting, including appellee, his wife, adopted daughter, inmates and former inmates of the orphanage. The minutes of this meeting read in part as follows: “The board retired to give the matter due consideration as to the truthfulness of the charges and to render to the best of their ability a proper decision. After due consideration, the board found that the alleged accusations and rumors were in the main true.

“Whereupon a motion was made and unanimously adopted that it would be for the best interest that Eld. A. T. Wilson be discharged, his resignation being called for effective July 1, 1933, and, if resignation not be made by then, the office of superintendent be declared vacant, and that he be discharged and that he- and family vacate by July 15th.”

This record clearly shows he was discharged for cause after a full and fair investigation. He was asked to resign effective July 1, but, if he failed to resign by that time, the office was “declared vacant, and that he be discharged and that he and his family vacate by July 15.” He was so notified immediately. He refused to resign, and he refused to vacate. The board had the. right, and it was its duty, to make the investigation it did make. Its judgment in the premises is final since no review thereof was sought, and there is nothing in this record to show the board’s action to be arbitrary. Appellee’s employment ceased on July 15, 1933, and appellant was not liable for further salary under the contract. He thereafter had no right to remain in the institution, but he continued to do so until about the middle of December, some five months, with his wife and children, maintaining himself and family for such time out of donations to the orphanage. Appellee contends, however, that he remained on duty, performed services, accepted orphans, etc., all with the knowledge and acquiescence of the board. It is true he remained after his discharge, but not with the consent of the board. A committee was sent to the institution to check him out, make an inventory, etc., but appellee refused them the right to do so. In order to prevent more trouble and undue publicity to an institution dependent upon charity for support, the board refrained from the use of physical force or court procedure to remove him. It cannot be said it estopped itself or approved his action so as to make it liable for his expenditures or salary during such time.

It is admitted that appellant is indebted to appellee for salary unpaid in the sum of $382.50, but we are of the opinion that the upkeep for himself and family during the time he unlawfully and wrongfully remained in possession of the institution after his discharge should be offset against this amount. The record does not show what this would reasonably be worth. The judgment will be reversed, and the cause remanded with directions to determine this amount and to offset same to the extent thereof against the amount due for salary in the sum of $382.50.


text:
    Pfeifer v. W. B. Worthen Company.
    4-3514
    Opinion delivered July 2, 1934.

      E. Charles Eichenbaum, for appellants.

      G. DeMatt Henderson, for appellee.
   Johnson, C. J.

This appeal involves the liability of appellants to appellee for debt which arose under the following circumstances: On April 7, 1926, F. J. Schmutz and wife executed and delivered their promissory note and real estate mortgage securing payment thereof to appellee, W. B. Worthen Company (the amount of which is not here of importance), which note by its terms matured one year after date. On June 1,1926, Schmutz and wife conveyed the mortgaged property to one Levy, who assumed and agreed to pay the mortgage debt. On November 9, 1926, Levy conveyed the mortgaged property to appellants, who assumed and agreed to pay the mortgage debt. On April 7,1927, the due date of the Schmutz note and mortgage, upon the application of appellants, the mortgagee extended the maturity of the Schmutz note and mortgage until April 7, 1930. On November 6,1928, appellants conveyed the mortgaged property to one Keys, who purchased, subject to the mortgage debt, and not assuming or agreeing to pay the same. Prior to the advanced maturity date of April 7, 1930, upon application of Keys, appellee extended the maturity date of said note and mortgage from April 7, 1930, to April 7,1933. This extension to Keys was granted by appellee without notice to appellants or either of them. From the facts thus adduced, the chancellor determined that appellants were liable for the mortgage debt, and this appeal is prosecuted therefrom.

Appellants’ contention is that on November 6, 1928, when they conveyed the mortgaged property to Keys, thereby their legal status to appellee was converted into one of suretyship and that the extension of time by appellee to Keys without notice to appellants discharged them from liability.

It is the settled doctrine in this State that a purchaser of mortgaged lands from a mortgagor who assumes and agrees to pay the mortgage debt thereupon becomes personally liable therefor, and this personal liability inures to the benefit of the mortgagee who may enforce it in an appropriate action. Wallace v. Hammonds, 170 Ark. 952, 281 S. W. 902; Felker v. Rice, 110 Ark. 70, 161 S. W. 162; Walker v. Mathis, 128 Ark. 317, 194 S. W. 702; Kirby v. Young, 145 Ark. 507, 224 S. W. 970; Beard v. Beard, 148 Ark. 29, 228 S. W. 734.

In the more recent case of Central Life Ins. Co. v. Thompson, 182 Ark. 705, 33 S. W. (2d) 388, we expressly held that one primarily liable for a mortgage debt was not converted to the status of suretyship therefor by showing a conveyance of his interest in the mortgaged land to a third party plus an extension of the maturity of such mortgage debt by the express agreement of the mortgagee with such third party. We think the doctrine announced in the case last cited is controlling here. Appellants, by assuming and agreeing to pay the mortgage debt recited in their deed, and also by applying to appellee for and receiving an extension of the maturity of such mortgage clebt, became personally and primarily liable therefor, and their subsequent conveyance of said mortgaged lands to Keys and the procuring by Keys of an extension of the mortgage debt from appellee did not have the legal effect of converting their legal status from primary liability to that of suretyship. Appellants, being primarily liable for the mortgage debt, could escape liability only by payment, release or other defenses which might inure to one primarily liable.

It may be that the doctrine thus announced is contrary to the weight of American authority on this question, but, if such be true, it is equally as important that quasi rules of property be stable and permanent, as that court opinions of all States should be uniform.

No error appearing, the judgment is affirmed.