author: Humphreys, J.

text:
    Standard Oil Company of Louisiana v. Giller.
    Opinion delivered May 4, 1931.

      T. M. Milling, and Gcmghan, Sifford, Godwin S Gcmghan, for appellant.

      J. K. Mahony, H. S. Yocum, W. T. Saye, and J. N. Saye, for appellee.
   Humphreys, J.

This is an appeal from a decree of the chancery court of Union County, Second Division, cancelling’ an oil and g’as lease on the-undeveloped portion of the southwest quarter of the southeast quarter of section 11, township 16 south, range 15 west, in said county, upon the south half and the northeast quarter of said 40-a.cre tract on the ground that appellant had failed to explore, develop and produce oil therefrom. Appellant acquired the lease on the forty-acre tract from the Humble Oil & Refining’ Company, which acquired same by assignment from J. R. Crawford, the original lessee from appellant of a 440-acre tract in a body, of which this 40-acre tract was and is a part. J. R. Crawford acquired the lease on the whole tract in the year 1922 for the consideration of $12,500 cash, $22,500 from the sale of one-half of the first oil produced, and thereafter an equal one-eighth part of all oil produced and saved from said premises and one-eighth of the net proceeds of the gas used off of said premises or marketed by the lessee.

This court is firmly committed to the doctrine that, in any oil and gas lease in which royalties constitute the chief' consideration, an implied covenant exists on the part of the lessee to explore the property with reasonable diligence, so as to produce oil and gas in paying quantities upon the entire tract. Especially is this true after either or both commodities has or have been discovered on any part of the tract. The reason is that oil and gas are of a wandering and vagrant character in their natural state. Mansfield Gas. Co. v. Alexander, 97 Ark. 167, 133 S. W. 837; Mansfield Gas Co. v. Park Hill, 114 Ark. 419, 169 S. W. 957; Mauney v. Miller, 150 Ark. 161, 234 S. W. 498; Murdock v. Sure Oil Co., 171 Ark. 161, 283 S. W. 4; Hughes v. Cordell, 174 Ark. 757, 296 S. W. 735; Drummond v. Alphin, 176 Ark. 1052, 4 S. W. (2d) 942; Ezzell v. Oil Association, Inc., 180 Ark. 802, 22 S. W. (2d) 1015. In the case of Essell v. Oil Associates, supra, this court formulated a rule as a guide for the lessee in the performance of his implied covenant to explore, develop, and produce oi|l and gas upon the leased premises, and, in doing so, used the following language:

“Of course, due deference should be given to the judgment of the lessee as operator to determine how many wells should be drilled, but he must use sound judgment in the matter and cannot act arbitrarily. He must deal with the leased premises so as to promote the interest of both parties and to protect their mutual interests. He must act for the mutual advantage and proceed for both of them, and must not consider his own interest wholly or for the most part. He must perform the contract so as to further the original purpose and intention of the parties.”

It appears from the record herein without dispute that the Humble Oil & Refining Company drilled one well in the northwest corner of the forty-acre tract in June, 1924, which initially produced ninety barrels of oil per day and is still producing eighteen or twenty barrels per day; that 108,931.56 barrels of oil altogether had been produced from the well at the time of the trial, of the value of $94,206.38, one-eighth of which had been paid to appellee as royalty; that, although appellee requested it to drill additional wells thereon, it assigned the lease to appellant on the 29th day of June, 1929, without having done so; that, after the assignment of the lease to appellant, appellee made three written demands and several oral requests to its officers to drill additional wells, even threatening to bring suit for abandonment of the lease unless it would do so; that appellant refused to comply with the demands and requests of appellee and told her to bring the suit .for abandonment if she wanted to. The record also discloses by a preponderance of the testimony that in the Smackover Oil Field, in which the forty-acre tract covered by the lease is located, one -well will drain the oil from only ten acres surrounding it, and it is impossible for one well in the corner of a forty-acre tract to produce all the oil therefrom; that the probabilities are oil will be found in commercial quantities under the entire tract if explored.

In the light of this testimony, the duty clearly rested upon appellant, under the rule announced in the Ezzell case, supra, to make further exploration in order to discover and produce the oil on the entire tract. It refused to proceed with further exploration or development and thereby forfeited or abandoned its privilege to do so.

Appellant contends, however, that, in view of .the large production of oil from other lands contained in the 440-acre tract, transferred to various assignees, no part of the 440-acre tract should be treated as forfeited and abandoned for failure to explore and develop same. There might be merit in the contention if appellant had been the assignee of the lease upon the whole tract and if it had drilled all the producing wells thereon. It appears from the record that several assignees of the various parts of the 440-acre tract had drilled twenty-six wells, twenty-five of which had produced, at the time of the trial, $180,000 in royalties for appellee. We do not understand that appellant can justify his failure to carry out the implied covenants in the lease on account of the large recoveries of oil from certain parts of the land assigned to others. This identical question has been decided against appellant’s contention by the Court of Appeals of Texas in the following cases: Cox v. Sinclair Gulf Oil Co., (Tex.) 265 S. W. 196; Sinclair Oil & Gas Co. v. Bryan, (Tex.) 291 S. W. 692; Fisher v. Crescent Oil Co., (Tex.) 178 S. W. 905. In deciding this point, the 'Court of Appeals of Texas said:

“If an oil and gas lease covering several tracts is assigned to different assignees, and the assignee of one tract obtains production, and the lessee and other assignees benefit thereb3r, each from that time must depend on his own conduct and acts of exploration and drilling for a compliance with the implied covenants, and can receive no help from the other segregated owners if he has failed to perform the measure of development required of him.”

We think the rule thus announced a just and reasonable rule and should be applied to the facts in the instant ease.

No error appearing, the decree of the chancellor is in all things affirmed.

Kirby, J., dissents.


source: Caselaw Access Project

author: Hart, C. J.,

license: Public Domain

text:
    Campbell v. Arkansas State Highway Commission.
    Opinion delivered May 11, 1931.

      W. II. Ben-gel, for appellant.

      Hal L. Norwood, Attorney General, and Glwiule Duty, Assistant, for_appellee.
   Hart, C. J.,

(after stating the facts). The right of eminent domain in the premises is conceded in the Arkansas Highway Commission, but it is insisted that this right is and must, under our Constitution, be subordinate to the right of the property owners to be first compensated for the damages to their property by the construction of the bridge and the approaches thereto. Their claim is based upon the guaranty given by § 22 of the Bill of Rights of our present Constitution, which provides that private property shall not be taken, appropriated, or damaged for public use, without just compensation therefor. It is claimed that under it, whether the property is taken or not, if it has 'been damaged by reason of the construction or operation of any improvements made for the use of the public, the owner may recover whatever damage the property has actually sustained. Under our decisions, the owner of property abutting upon a street or highway has an easement in such street or highway for the purpose of ingress and egress which attaches to his property and in which he has a right of property as fully as in the lot itself; and any subsequent act by which that easement is substantially impaired for the benefit of the public is a damage to the lot itself within the meaning of the constitutional provision for which the owner is entitled to compensation. The reason is that its easement in the street or highway is incident to the lot itself, and any damage, whether by destruction or impairment, is a damage to the property owner and independent of any damage sustained by the public generally.

In Hot Springs Railroad Co. v. Williams, 45 Ark. 429, affirmed in 136 U. S. 121, 10 S. Ct. 955, it was held that the section of our Constitution above referred to makes a railroad company constructing its railroad in a public street under grant from the Legislature or municipality liable to owners of abutting land for consequential injuries to their land resulting from such improvement. The rule was re-affirmed in Little Rock & Fort Smith Ry. Co. v. Greer, 77 Ark. 387, 96 S. W. 129.

The same construction was placed upon the constitutional provision in Dickerson v. Okolona, 98 Ark. 206, 135 S. W. 863, 36 L. R. A. (N. S.) 1194, where the owner of property abutting on a street in a city or incorporated town was held entitled to recover compensation for damage done to. his property in lowering the grade of thé street.

In Chicago v. Taylor, 125 U. S. 161, 8 S. Ct. 820, it was held that, under the provision in the Constitution of the State of Illinois adopted in 1870 that “private property shall not be taken or damaged for public use without just compensation,” a recovery may be had in all cases where private property has sustained a substantial injury from the making and use of an improvement that is public in its character; whether the damage be direct, as when caused by trespass or physical invasion of the property, or consequential as in a diminution of its market value.

In Pennsylvania Rd. Co. v. Miller, 132 U. S. 75, 10 S. Ct. 34, in discussing a similar provision of a State Constitution, the court said:

“The provision contained in the Constitution of 1873 was merely a restraint upon the future exercise by the defendant of the right of eminent domain imparted to it by the State. By its terms, it imposes a restraint only upon corporations and individuals invested with the privilege of taking private property for public use, and extends the right to compensation, previously existing', for property taken, to compensation for property injured or destroyed by the construction or enlargement of works, highways or improvements, made or constructed by such corporations or individuals. Such provision is eminently just, and is intended for the protection of the citizen, the value of whose property may be as effectually destroyed as if it were in fact taken and occupied. The imposition of such a liability is of the same import as the imposition of a liability for damag’es for injuries causing death, which result from negligence, upon corporations which bad not been previously subjected by their charters to such liability.”

The rule was applied without any discussion or review of the authorities in Donaghey v. Lincoln, 171 Ark. 1042, 287 S. W. 407.

In the case at bar, although the injuries are consequential, they are to the corpus of the plaintiff’s property. The demurrer admits that the injuries resulted from the construction of the bridge and the approaches thereto as they now are. In specific terms, it is alleged that the right of ingress and egress to the plaintiff’s property was interfered with by the change in the grade of the highway and the construction of the bridge and the approaches thereto. It is alleged that the grade of the highway was changed so that the bridge and the approaches thereto are higher than the plaintiff’s house and thereby obstructs the free course of light and air thereto. We do not think the plaintiff, however, should recover anything for noise, dust and matters of that sort, which, in varying form, are incidents to living upon a public highway or street and, as such, must be borne by all owners of abutting property.

There is nothing- in the contention that the Arkansas State Highway Commission could not be sued in this kind of action. Arkansas State Highway Commission v. Dodge, 181 Ark. 539, 26 S. W. (2d) 878. In that case, by a divided court, it was held that a suit by highway contractors against the State Highway Commission for the amount due under a highway construction contract could be maintained. Varying reasons were given by the majority of the court for so holding, but that becomes immaterial in this case. It matters, not whether the State Highway Commission be considered a corporate entity or as an administrative agency of the State in the present case. As we have already seen, the bridge was constructed by the State Highway Commission under an act of the Legislature; and, when so constructed, it became a part of the public highway with which it connects, and the bridge and its approaches form a part of such highway. When the grade of the highway was raised by the construction of the bridge and its approaches to the damage of the lots of abutting owners, such act brought the case within the guaranty of the clause of the Constitution above referred to. Neither the State nor any of its agencies is exempt from the constitutional guaranty that private property shall not be taken or damaged for public use without just compensation therefor.

It is true that the Arkansas' State Highway Commission did not institute condemnation proceedings against the property owners, but the property owners had a right to maintain this action. It was a remedy given them under the common law for a trespass or injury to their real estate. The right existed under the provision of the Constitution; and where the statutes provides no adequate remedy, it may be enforced by an action for damages. County of Chester v. Brower, 117 Pa. 647, 12 Atl. 577, 2 Am. St. 713; and Swift & Co. v. Newport News, 105 Va. 108, 3 L. R. A. (N. S.) 404, 52 S. E. 821. In the case last cited it was held that a constitutional prolusion that private property shall not be damaged for public use without compensation is self-executing, and the common law will furnish an appropriate remedy in the absence of one expressly given by Constitution or statute. This view is sustained by our own cases above cited, and is in harmony with the views expressed in them.

It follows that the judgment in each case will he reversed, and the cause remanded with directions to the circuit court to overrule the demurrer and for further proceedings according to law.


author: Hart, C. J. Smith, J.,

text:
    Keith v. Drainage District No. 7 on Poinsett County.
    Opinion delivered May 11, 1931.

      C. T. Carpenter, for petitioner.

      C. D. Frierson, for respondent.
   Hart, C. J.

This is an original application for a writ of mandamus by Harry A. Keith and Mamie Keith against A. H. Landers, sheriff of Poinsett County, Arkansas, to compel him to levy an execution on certain real and personal property to satisfy a judgment rendered in this court in favor of petitioners against Drainage District No. 7 of Poinsett County in the sum of $3,200, with interest and costs.

The judgment was obtained under the provisions of § 22 of the Bill of Bights- of our present Constitution, which provides that private property shall not be taken or damaged for public use without just compensation therefor. In the construction of this provision of the Constitution, this court has frequently held that the public, like a private person, must so use its own as not to injure another’s property, and that any injury to the property of an individual which deprives him of the ordinary use of it, falls under the protection of the constitutional provision and entitles the property owner 1o compensation. Keith v. Drainage District No. 7 of Poinsett County, ante p. 384.

After the judgment had become final, upon the request of Keith, the clerk of this court issued an execution directed to the sheriff of Poinsett County, Arkansas, in which the drainage district was organized. Keith directed the sheriff to levy the execution upon certain personal property belonging to said drainage district, which consisted of a cabin boat, three motor boats, a Ford truck, a Ford coupe, a pile driver, and two drag lines, and certain office furniture, and also upon certain town lots belonging to said district. The sheriff refused to levy the execution on the ground that he had been informed that the property was exempt from execution under our statutes and laws.

All agree that, when the judgment of this court became final, it was the legal duty of the district to pay the judgment, but it is earnestly insisted by counsel for the sheriff and for the district that the only remedy available to collect the judgment was by a writ of mandamus to compel the drainage commissioners to levy an additional tax with which to pay the judgment. It is not to be questioned but that this would be an appropriate remedy, but it is as little to be questioned that the Keiths, as judgment creditors, might by any appropriate method compel the payment of their judgment. This brings us to a consideration of the single proposition, whether or not an execution, levy, and sale of certain personal and real property of the district is a lawful method for the collection of the debt.

It is first insisted that the property is not subject to execution under the provisions of § 1274 of Crawford & Moses ’ Digest. The section provides that no property, real or personal, belonging to the State, or any county, city, town, borough or other public or municipal corporation, regularly incorporated according to law, shall be levied upon or sold by virtue of any execution.

In the opinion of a majority of the court, this section does not exempt the property from levy and sale under the execution in this case. The drainage district was organized under the laws of this State for the purpose of draining and leveeing the lands within the limits of the district. The district was not in any sense' a county, city, town, or other public or municipal corporation within the meaning of the statute just referred to. The powers of the drainage district are derived directly from the Legislature; and, in exercising them, the board of commissioners of the district acts as the agent of the property owners whose interests are affected by the duties it performs. Fitzgerald v. Walker, 55 Ark. 148, 17 S. W. 702; and Lewis v. Rieff, 114 Ark. 366, 169 S. W. 1184.

The statute was directed to counties and municipal corporations which are local agencies of the State creating them, and they exercise such governmental powers as are conferred by statute. Their property necessary for the exercise of the powers conferred become part of the machinery of government, and to permit a creditor to seize and sell it to collect his debt would be to permit him in some degree to destroy the government itself. Klein v. New Orleans, 99 U. S. 149.

It is next, insisted that the property belonging to an improvement district is devoted to public use and comes within the general rule that the property of a county, municipal corporation, or other corporation holding it for use for public purposes is not subject to sale under execution. This is a correct rule, when properly applied, but has no bearing on the issues herein presented. Under § 4270 of the Digest, in general, the real and personal property of a defendant under an execution upon any judgment may be levied upon and sold in satisfaction of the judgment. Under § 4287, if an officer who is required to levy an execution upon personal property, doubts whether it is subject to execution, he may give to the plaintiff therein notice that an indemnifying bond is required. In the case at bar, the notice required by this section of the statute was given by the sheriff to the plaintiff in the execution. The sheriff notified the plaintiff that he had been informed that the personal property was devoted to the public use for which the district had been organized. The truth of this depended upon the facts as they really existed; and it cannot be said, when the description of the property is considered, that the sheriff acted arbitrarily in refusing to levy the execution on the personal property without the indemnifying bond required by the statute. Hence no writ of mandamus should be awarded against him under the facts presented to require him to levy upon the personal property. Mayfield Woolen Mills v. Lewis, 89 Ark. 488, 117 S. W. 558, 16 Ann. Cas. 1041.

A different question, however, is presented as to the real estate. No indemnifying bond can be required under our statute before levying upon land. Crawford & Moses’ Dig., § 4287, and Smith v. Spradlin, 136 Ark. 204, 206 S. W. 327. The record before us shows that the lands upon which the sheriff was required to levy the execution had been acquired by the drainage district in the foreclosure of drainage assessments upon lands situated in the district and subject to the lien thereof. It cannot be said that such property is necessary to the exercise of the gMasi-puhlic functions which the drainage district was organized to carry out, and that it is necessarily protected from levy and sale by virtue of being owned by the drainage district. As we have already seen, after the compensation provided by our Constitution in favor of the owner of the land damaged became fixed by the judgment rendered in his favor against the drainage district, he had a vested right to such compensation, and payment might be enforced according to the statutes and laws of the State. Even if it should be held that all property of every kind belonging to the drainage district is presump.tively for public use, this presumption is one of fact and may be overcome on proof that the district is holding it for other purposes, and that it is not needed or intended for use in carrying on the purposes for which the district was organized. In a case like this, if the property should be sold under execution and purchased by third persons, it would again become subject to the drainage and levee taxes just as other lands located within the district.

We do not think the case of Fordyce v. Woman’s Christian National Library Association, 79 Ark. 550, 96 S. W. 155, 7 L. R. A. (N. S.) 485, applies. There the trust expressly limited the property to the use of the Library Association as a site for the building, and it could not be devoted to any other purpose. Under the express terms of the trust the property could not be sold by the trustees nor under execution sale without doing direct violation of the terms of the trust:

To carry the contention of the sheriff and of the drainage district to its last analysis, although the property required to be levied on was not needed and was not intended to be used for the purposes for which the district was organized, still it could not be sold in satisfaction of a judgment of a property owner whose property had been damaged for public use without a just equivalent being paid.

If the land claimed or owned by the drainage district is not necessary to its operation, the sheriff should be directed to sell it. Neither he nor the drainage district will be permitted to say that such accumulation of real estate, not used nor necessary for carrying out the public functions for which the drainage district was organized, may be made when that course may render inoperative the constitutional guaranty to the landowner for compensation for destruction or diminution of the value of his property. To illustrate, if land had been condemned for use as a right-of-way for the drainage or levee district, and such use should at any time be no longer required, then the land would revert to its original owner and could not be levied upon for the satisfaction of a judgment against the improvement district. Neither could a levy or sale of land used for right-of-way or other necessary public use be had while it was being actually devoted to that purpose. In the case at bar, however, this would be a question of fact which may, by a court of competent jurisdiction, be the subject-matter of inquiry and adjudged accordingly. In the opinion of the majority, lands acquired by the district at a sale for the enforcement of drainage and levee assessments and held by the district for resale, as provided by the statute, may be levied upon and sold in satisfaction of a debt of a judgment creditor.

The result of the views of the majority is that a writ of mandamus should not be directed to the sheriff to levy and sell upon execution the personal property involved in this proceeding; but the sheriff will be directed to levy upon and sell the real estate involved in this proceeding unless his right is assailed and determined adversely to him in a court of competent jurisdiction according to the principles of law announced and set out herein. Of course, the rights of third persons who may have claims to the property involved herein are not affected by this decision. It is so ordered.

Smith, J.,

(dissenting). The sheriff was requested by the plaintiff, a judgment creditor of the defendant drainage district, to levy an execution on certain personal property of the district, and.also upon certain real estate to which the district had acquired title by the sale of the lands to it for the nonpayment of the improvement district taxes due and delinquent thereon. The majority hold that the lands of the district may be levied upon and sold, except the right-of-way, but that, as the personal property may or may not be exempt, the sheriff did not act arbitrarily in demanding an indemnifying bond before levying upon it. This holding, in my view of the law, demonstrates the error into which the majority have fallen in holding that any part of the plaintiff’s judgment may be collected through an ordinary execution at law.

If any of the district’s property may be sold under an execution, all of it may be. No proper distinction may be made between the right to sell the personal property and the real estate.

The majority hold, in effect, that the personal property is exempt from a sale under execution if the use of that property is necessary to the operation of the district’s affairs and the discharge of its functions as such. But, if so, why?

By § 4274, Crawford & Moses’ Digest it is provided that no property, real or personal, belonging to the State, or any county, city, town, borough or other public or municipal corporation shall be levied upon or sold by virtue of any execution.

Unless the drainage district is a corporation within the meaning of this section, its personal property, however indispensable t'O its business, is not exempt, and, if it is exempt, this is true only because it is such a corporation. But, if it is such a corporation, all of its property, both real and personal, is exempt from seizure and sale under an execution. It therefore appears illogical to say that the drainage district’s real estate may be sold, but not its personal property, for if one class of property is exempt from sale under execution, the other is also exempt.

The statute to which I have referred declares the public policy of the State to be that the administration of the affairs of a governmental agency shall not be disturbed by the levy of an execution upon its property. Such an agency is not exempt from the enforcement of payment of its debts and obligations, but this enforcement must be accomplished by other means than a sale of the agency’s property under an execution. A receivership might lie had, or the board of directors might be compelled by a mandamus to levy a larger per cent, of the betterments to be collected. Faulkner Lake Drainage Dist. v. Williams, 169 Ark. 592, 276 S. W. 604.

At § 105 of the chapter on Executions, 23 C. J. p. 355, the law is stated to he that whether the property of a municipal or other public corporation is subject to execution to satisfy judgments recovered against them is to be determined by the usage and purposes for which the property is held, and that property held for public uses is not subject to levy and sale under execution against such corporations, and that the rule also applies to funds in the hands of a public officer, and that taxes due to such corporations cannot be seized under execution by a creditor. An apparent exception to the rule is stated to be that, where a corporation owns in its proprietary, as distinguished from its public or governmental capacity, property not useful- or used for a public purpose but for quasi private purposes may be seized and sold under execution, precisely as similar property of individuals may be seized and sold, but that the question whether property held as public property is necessary for the public use is a political, rather than a judicial, question. The notes to this text cite numerous cases, a number of these being annotated cases which fully support the text.

In the response of the drainage district it is made to appear that the personal property upon which the sheriff is asked to levy the execution, while of small value, is indispensable to the district. The drainage district in question is probably the largest in the State, and embraces practically half of Poinsett County, and has issued about five million dollars in bonds. The sheriff is asked to levy upon the office furniture of the district, which is not expensive and would bring only a nominal sum if sold at public sale, yet this furniture is shown to be necessary to protect the valuable records of the district and is indispensable to its officers in the performance of their duties. As a part of the plan to control the flood waters of the St. Francis River, which runs throug’h the district, locks were constructed, and are maintained, and certain tools which the sheriff is asked to levy upon are shown to be necessary for the operation and maintenance of the locks, which were installed under the authority of the War Department of the United States Government, and if the district is deprived of these simple, but essential, tools, the locks may not be operated and the navigability of the river will be interfered with and the most serious complications will arise. It is shown also that other personal property upon which the sheriff is asked to levy the execution is also indispensable to the proper functioning of the district.

In Sloan’s Improvement Districts in Arkansas it is said, at § 17 of this excellent work, that improvement districts, whether municipal or non-municipal, are usually regarded as public quasi corporations, and at § 28 of the same work it is said that public policy forbids that the funds of public corporations or agencies should be diverted by garnishment from the purposes for which they were collected.

In the case of Goyer Co. v. Williamson, 107 Ark. 189, 154 S. W. 525, it was said: “The levee board was one created for public purposes and given certain powers and required to perform certain duties for the public good and was an agency for the government in fact for such purposes, and, as such, was not subject to garnishment at law. Upon the transfer of the suit to equity, however, the allegations of the insolvency of the contractors and that appellee was without remedy at law, he could have subjected the funds in the hands of the levee board due the contractors to the payment of his debt within the doctrine heretofore announced in Plummer v. School District, 90 Ark. 236, 118 S. W. 1011.” The doctrine of that case was reaffirmed in the cases of Sallee v. Bank of Corning, 134 Ark. 115, 203 S. W. 276, and Bayou Meto Drainage Dist. v. Chapline, 143 Ark. 453, 220 S. W. 807.

The same public policy which inhibits the seizure of funds of an improvement district under garnishment would appear to inhibit their seizure under an execution at law.

The lands of the district are funds of the district in legal effect. The district acquired these lands through the sale thereof to it for the nonpayment of the taxes due on the lands. They therefore represent taxes due the district.

Tn the case of Chicago Mill & Lbr. Co. v. Drainage Dist. No. 17, 172 Ark. 1059, 291 S. W. 810, the delinquency in tax payments were so great that it became necessary to levy a larger per cent, of the assessed betterments to enable the district to meet its maturing obligations of bonds and interest thereon, and certain taxpayers who were not delinquent resisted this action upon the ground that it constituted a discrimination against them, in that they were thereby required to pay an undue proportion of their assessed betterments. But in refusing to sustain that contention we said: “The contention of appellant, expressed in its second request, that the levy of the proposed rate would result in requiring it and other landowners who had paid and who continued to pay their taxes to bear a greater proportionate burden than that imposed upon the lands which were allowed to go delinquent, is answered in the Rowland case, supra, [170 Ark. 1168, 282 S. W. 990] and in that of Arkansas-Louisiana Highway Imp. Dist. v. Pickens, 169 Ark. 603, 276 S. W. 355. It was pointed out in those cases that the lien of the district continued until the taxes were paid or until the lands themselves were acquired by the district through sales for the nonpayment of the taxes, and that, when the delinquent taxes were paid, they became available and should be used in paying the obligations of the district, and further that, if the lands were sold to the district and not redeemed, then the entire value of the lands to be realized by a sale thereof would be available for this purpose. So that, while a delay would be entailed in obtaining and applying revenues from the delinquent lands, these revenues would finally be obtained and applied, and thus no unequal burden would be imposed.”

It would hardly be contended that taxes collected from lands 'in the district on deposit in the bank to the credit of the district could be levied upon by any process from a court of law. Yet in legal effect this is the character of the lands upon which the judgment creditor here seeks to have an execution levied. These lands represent laxes not yet converted into money, but the authority to so convert them by selling them exists and is imposed upon the directors of the drainage district by the Acts of the General Assembly under which the district is performing the functions for which it was created.

The taxes of the district, which are represented, in part, by the lands sold for the nonpajunent of taxes, have been pledged to the holders of the bonds of the district, and the judgment creditor in the instant ease should not, by this proceeding, be given this preference over the holders of these obligations of the district. Kochtitzky v. Mercantile Trust Co., 16 Fed. (2d) 227; Canal Const. Co. v. Federal Life Ins. Co., 21 Fed. (2d) 928.

The execution should not therefore be awarded, and I respectfully dissent from the judgment ordering it done.


text:
    Blanton Company of Delaware v. Burke.
    Opinion delivered May 11, 1931.

      Moore S Moore and Daggett $ Daggett, for appellant.

      A. M. Coates, for appellee.
   Humphreys, J.

This is an appeal from a judgment for $600 rendered in the circuit court of Phillips County in a suit hy appellee against appellant for a balance due him on an alleged contract of employment for a year, beginning July 15,1928, and ending July 15,1929. Appellee alleged that he was employed on the..................day of July, 1928, for the term of one year as manager of appellant’s cotton seed department at a salary of $200 a month, and that he was discharged on the 15th day of April, 1929, in violation of the terms of the contract and was unable to procure employment elsewhere during the remainder of the term.

Appellant filed an answer admitting that appellee had been employed on the 15th day of July, 1928, under a verbal contract, but denying that the contract was for a year, and also pleaded in bar of the action the statute of frauds.

When the cross-examination of appellee had been completed, appellant moved the court for a continuance of the cause on the ground that appellee had testified to an oral contract of date July 20th, whereas he had alleged and sought to recover upon an oral contract of date July 15, 1928, and, on account of the variation between the proof and the allegation, it was surprised. The court refused to continue the cause, and appellant contends that reversible error was. committed in refusing to do so. We think not. The day on which the oral contract was actually made was alleged to have been entered into on the..................day of July, 1928. It was perfectly consistent with this allegation to prove that the contract was made on the 20th day of July, 1928, the day appellee began to work for appellant without any definite understanding’ as to the amount he was to receive or the length of time he was to work. Appellee testified that negotiations for employment to buy cotton seed for appellant had been pending for some time, and that he began to work for appellant on the 15th day of July, 1928, under a proposed agreement of $200 per month, but that no certain amount per month nor any definite time of employment was agreed upon until the 20th of July, 1928, at which timo it was agreed between him and the representatives of the company that he should receive $200 a month for one year and a bonus at the expiration of the season. Appellant seems to have drawn the inference from the complaint that appellee would testify that the oral contract was made on a day prior to July 15th to take effect on the 15th of July, 1928, but such inference does not necessarily follow from the allegation.

According- to the allegation in the complaint, it could as Avell have been made on a day in July subsequent to the 15th to relate back to the 3 5th. In any event, appellant was not prejudiced by the testimony as both representatives of appellant who made the contract writh appellee were available as witnesses. They were the only ones that knew anything- about the contract except appellee, so appellant needed no additipnal time to procure witnesses relative to the date the contract was made. The court correctly overruled appellant’s motion for a continuance.

At tlie conclusion of the testimony, appellant requested the court to instruct a verdict for it upon the theory that under appellee’s own testimony he entered into the performance of a contract on July 15th, 1928, for the period of one year, which had been verbally made prior to that time and hence void under the statute of frauds requiring such contracts to be in writing to be binding upon the parties thereto. Crawford & Moses’ Nig., § 4862, 6th paragraph. Appellant would be correct in this contention if its interpretation of appellee’s testimony were the only reasonable interpretation that could be placed upon it. Taking his testimony as a whole, just the opposite interpretation can be placed upon it. In addition to excerpts from his testimony quoted and relied upon by appellant in interpreting same, he also testified that he went to work for appellant on July 15, 1928, pursuant to negotiations in which neither the amount he was to receive nor the duration of the contract wras definitely fixed, but that on the 20th day of July, 1928, it was verbally agreed between appellant’s representatives and himself that the date of employment should begin as of date July 15, 1928, the day he had actually begun work, and continue for a year on a monthly drawing account of $200 per month and a bonus in addition in case the profits of the cotton oil company justified it. The jury accepted the latter statement of appellee as true, although it was not in perfect harmony with the statements quoted by appellant from his testimony. The discrepancies in it were partly due to confusion in failing to fully and completely understand the purport of the cross-examination propounded to him. Under the rule announced by this court in ihe case of Blanton Company v. Stewart, 182 Ark. 934, 33 S. W. (2d) 50, governing discrepancies in testimony of witnesses, appellee’s testimony was not -wholly and entirely discredited by the slight contradictions con tained therein.

No error appearing, the judgment is affirmed.


author: Mehaffy, J.

text:
    People's Building & Loan Association v. Leslie Lumber Company.
    Opinion delivered May 11, 1931.

      J. 8. Utley and T. M. Hooker, for appellant.

      Rowell <& Alexander, for appellee.
   Mehaffy, J.

The appellant, People’s Building & Loan Association, oh the 25th day of July, 1929, entered into a contract with J. Gr. Ish, Jr., to sell the west half of lot 4, block 31, in the city of Pine Bluff, Arkansas, for the sum of $20,000, $500 of which was paid in cash and a note executed for $19,500. There was a three-story brick building- on the property which was known as the Arlington Hotel, and the contract included all furniture, fixtures and equipment within the building. The contract also provided that said J. Gr. Ish, Jr., should begin at once and complete within ninety days certain improvemonís named and pay for all labor and material used in making said repairs. A further condition was that said Ish had deposited with the People’s Building & Loan Association $500 in cash and a real estate gold bond for $1,000, payable July 30, 1938, said bond being secured by first mortgage on property in Chicago, Illinois. The bond and the $500 was pledged to guarantee the improvements mentioned should be made and paid for as stipulated in the contract. It was also provided in the contract that, if the said Ish failed to make the improvements and pay for the labor, the bond should be sold and the proceeds, together with the $500 cash pledged, should be applied as a credit on the note for $19,500.

The contract also contained the following provision: “It is expressly agreed that the party of the first part does not constitute or appoint.the party of the second part its agent to make the repairs herein above listed, and that the party of the second part has no authority or rig’ht to place on said property or to subject said property to any lien for labor or material.”

The contract provided that the title should be retained not only to the land and improvements to secure the payment of the purchase price, hut the title was also retained to the furniture, fixtures, and equipment.

Either at the time the contract was made or some time thereafter, J. G-. Ish, Jr., transferred and assigned his interest in the contract to Marietta Hotel, Inc., and he also, about the same time, entered into some sort of an agreement with Walter E. Parker. This arrangement, whatever it was, must have been made immediately after the contract was made with Ish.

W. W. Pinch, secretary of the appellant, was asked: “When did you first know Parker in the deal?” He answered: “After Ish bought it I knew that Parker was doing the work for him. Ish would bring Parker up with him, and wo had Parker sign the papers for the $3,000 loan' with Ish as we thought he might have an interest in it.”

On the 28th day of September, 1929, while the work was being done by Ish and Parker, the appellant required both Ish and Parker to execute a note and mortgage on the property for $3,000 to get money to pay for the improvements.

After the improvements had been made, the appellant brought suit in the Jefferson Chancery Court against Ish to foreclose on its original contract and against Ish and Parker to foreclose the mortgage given on the 28th of September, 1929, and each of the appellees was made a party defendant in plaintiff’s original suit. Plaintiff alleged in its complaint that the Leslie Lumber Company and C. A. Smith, the appellees, had caused to be filed in the office of the clerk of the circuit court of Jefferson County on January 20, 1930, an account, and that each of them claimed a materialman’s lien on the property covered by plaintiff’s vendor’s lien and mortgage.

Each of the appellees was served with process, and the appellant in its suit denied that either of them had any lien against the property, but, if they did have a lien, it was subordinate to its lien, both its vendor’s lien and mortgage lien, and prayed for a decree bolding its liens prior and paramount to the claims or liens of the appellees.

Each of the appellees, defendants in the original suit, filed an answer and cross-complaint against appellant and Ish and Parker.

The chancery court entered a decree in favor of appellant against Ish on its claim for a vendor’s lien and against Ish and Parker for the amount due under the note and mortgage and foreclosing the lien. The court further decreed that the Leslie Lumber Company and C. A. Smith, trading as Co-Operative Plumbing Company, have judgment against Ish and Parker, and that each of the appellees have a mechanic’s lien which was prior and paramount to any liens of the other parties to the suit, and that, out of the first proceeds from the sale of the real estate after the payment of costs of said sale and commissioner’s fee, the judgments of the Leslie Lumber Company and C. A. Smith be first paid.

The chancellor ordered the sale of the property, holding that the appellees’ mechanic’s liens were prior to appellant’s lien, but did not give personal judgment against the appellant.

Appellant prosecutes this appeal to reverse said decree, and appellees prosecute a cross-appeal in which they seek to have personal judgment against appellant.

Appellant first contends that no summons was issued in the case and no service had on Ish and Parker, and therefore the court erred in giving personal judgment against Ish and Parker.

In the first place, Ish and Parker were made defendants in appellant’s original suit, and a waiver of service of summons or other process was filed in the Jefferson Chancery Court on the 19th of October, 1930, long after the cross-complaints of appellees wem, filed. The record does not indicate who had the summons issued nor who filed the.waiver in court. The cross-complaint of the Leslie Lumber Company was filed July 28, 1930, and the cross-complaint of Smith was filed July '23, 1930. While it appears that the waiver was signed by Ish on the 9th of July, and it also appears from the record that service of summons was accepted by Walter E. Parker and Willie S. Parker on July 1, 1930, they were not filed in court until the 17th of October, 1930.

If Ish and Parker were contractors, as the lower court held, they were necessary parties. Of course, if they were agents of appellant, they 'would not be necessary parties in a suit to foreclose the mechanic’s liens.

Appellant calls attention to the cases of Simpson v. J. W. Black Lumber Co., 114 Ark. 464, 172 S. W. 883; and Cruce v. Mitchell, 122 Ark. 141, 182 S. W. 530.

In the first case the court held that the contractor was a necessary party and should have been made co-defendant with the owners, because the owners would know nothing about what amount of materials bad been furnislied nor how much material had gone into the improvements, and therefore he was a necessary party, both for his own and the owner’s protection. In that case, however, the appellants demurred to the complaint for a defect of parties defendant, and the court overruled the demurrer, and the case went to trial without the contractor being-made a party.

In the nest case, Cruce v. Mitchell, supra, the court again held that the contractor was a necessary party.

This court, therefore, is committed to the doctrine that in suits to foreclose mechanic’s liens the contractor is a necessary party. He should be made a party because the original contract for the improvements is made between the contractor and the owner. The other contract, that with materialmen, is made between the contractor and materialmen; the owner is not a party to it, and it is therefore necessary, in a suit to foreclose a mechanic’s lien against the property of the owner, to make the contractor a party. The owner is not primarily liable, and it is necessary to make the contractor a party to prove the debt against him, show that the material went into-the construction of the building, before the materialman is entitled to a lien against the owner’s property, but the contractors here were made parties both in the original suit and in the cross-complaints filed by the materialmen. There is therefore no question here about defect of parties or a waiver of any such defect, but it is contended that the personal judgment against the contractors is erroneous because it is argued that they were never served with process. They were parties defendant in both suits and had entered their appearance in the suit. It is claimed that Tsh is a nonresident, and that Parker was present in court when the case was tried.

The record does not show that Parker and Ish had been served with process, but it does not show that they had not been.

- “The present litigation was initiated by the landowner at a time when the materialman could have come into court and foreclosed their liens. The owner of the premises undertook to bring the contractor before the court, and procured an order enjoining the materialmen from instituting any suit against the owner or its property, looking to the foreclosure of their liens, and the whole matter should be settled in this litigation. The owner so tied the hands of the materialmen as to prevent any action outside of this litigation. It brought them into this litigation, and it does not lie in its mouth to say that they cannot obtain a judgment of foreclosure of their liens because they have not independently obtained a judgment against the contractor. They were enjoined from taking any steps looking to the foreclosure of their liens against the Realty Trust Company or its property. One of the necessary steps in a proceeding to foreclose that lien was to sue the contractor,in an independent suit and obtain judgment, or to sue him concurrently with the owner of the premises. We therefore think that, by the voluntary action of the Realty Trust Company (the owner of the premises) requiring these materialmen to establish their liens in this litigation, it cannot contend that the contractor has not been personally served. ’’ Mass. Bonding & Ins. Co. v. Realty Trust Co., 142 Ga. 499, 83 S. E. 210; 40 C. J. 412; Peninsula Stone Co. v. Crane, 226 Mich. 130, 197 N. W. 693.

In the instant case the appellant began the suit against the appellees and the contractors, brought them all into court, alleged that appellees were claiming mechanic’s liens, and by the action of appellant they were required to litigate their claims in the suit brought by appellant with all the parties in court and it does not lie in its mouth to say that they cannot obtain a judgment of foreclosure of their liens because they have not obtained an independent judgment against the contractors, as was stated in the case above cited.

It is next contended by appellant that the ten days’ notice required by the statute was not given, and it contends that this was jurisdictional. If the appellant had no notice, and the appellees had brought an independent suit, they would fail because of not having given notice to the owner. It is necessary to give notice to the owner because there may be a lien fixed on its property, and the statute requires that, before this be done, a subcontractor or materialman must give the notice, but the purpose of this notice is to give the owner an opportunity to defend the action or to take whatever steps it may think proper after it receives notice of a claim of a lien; but notice in this case would be perfectly useless. The materialmen did not bring this suit; the appellant brought it, and made the materialmen parties defendants, and required them to litigate their claims in that suit. Of course, it would not be necessary in that suit to give them notice of claim, to litigate which appellant had brought them into court.

Notice required by our statute is for the sole benefit of the owner, but it cannot claim that it is entitled to notice of the very thing put in issue by its own pleadings, but the appellant had notice, its own pleading wherein it said: “These materialmen claim liens” shows it had notice. When a person knows a thing, he has notice thereof. No one needs notice of a thing he already knows. St. L. S. F. R. Co. v. State, 179 Ark. 1128, 20 S. W. (2d) 878; 20 R. C. L. 1263.

In discussing the question of notice this court has said: ‘ ‘ There must, according to our previous decisions, be a substantial compliance with this statute unless the owner had, by contract or by waiver, or in some manner by his own conduct, estopped himself from insisting on such compliance.” Conway Lbr. Co. v. Hardin, 119 Ark. 43, 177 S. W. 408.

Of course, notice in this case, after the appellant had brought suit alleging that the appellees claimed liens, would he entirely useless.

It is next contended by the appellant that the lien for the purchase money is superior to that of the material-men. Appellant cites and relies on Gunter v. Ludlam, 155 Ark. 201, 244 S. W. 348. In that case, however, the owner did not authorize any improvements and did not consent to the improvements being made, and the court said: “Appellants, having placed Ludlam in possession under a contract of sale, were in the attitude of vendors who had conveyed property and had accepted a mortgage back as security for the debt.

“The statute (C. & M. Dig., § 6911) gives priority to liens for labor or material only against other incumbrances created after the commencement of the. improvement, and in effect subordinates the lien to prior incumbrances by way of mortgage or otherwise.”

The contract for sale in the instant case expressly provided that the improvements should be made, and this was' a part of the consideration. The appellant authorized the improvements itself, required them to be made, and according to its own testimony, knew that the improvements were being made and knew that Parker was doing the work.

Mr. Pinch, the secretary of the appellant, testified that after Ish bought the place that he knew Parker was doing the work; that Ish brought Parker up with him and Parker signed the note and mortgage with Ish.

If a sale of the place had been made by appellant to Ish and no improvements authorized by the appellant, and the purchaser had thereafter made improvements without any authority from the vendor to do so, under the principal announced in Gunter v. Ludlam, supra, the vendor’s lien would have been prior to the mechanic’s liens; but when the owner contracts to sell the place and expressly requires the improvements to be made for its own benefit, it cannot then claim that its lien is superior to the lien of persons furnishing- labor or material.

Appellant next calls attention to and relies on Harvey v. Gay, 42 N. J. L. 176. That case holds that the written consent, which under the lien law will bind the land of the owner for repairs contracted bv the tenant, must be absolute in its terms. The relation of vendor and purchaser did not exist in that case, but the relation of landlord and tenant existed. Tlie New Jersey statute construed by tlie court in the above case expressly provides that if any building- is erected by a tenant or persons other than the owner of the land, then the building- and estate of such tenant only shall be subject to the lien created by the act unless such building be erected by the ■consent of the owner of such lands in writing.

The act also provides for the acknowledgment and recording of the writing consenting to the improvement.

There was, in the New Jersey case above cited, a consent to make the improvements, provided they should be at the expense of the owner, and the court held, as we have already slated, that the consent mentioned in the statute must be absolute.

It is contended, however, by appellant that the clause in the contract of purchase, that, the purchaser shall make the improvements, pay for them, and that they shall not create any lien on the property of the owner, prevents a mechanic’s lien on the property. This contract was between the vendor and vendee, or owner and contractor. The subcontractors were not parties to the agreement and knew nothing about it. When they furnished the material to the persons authorized and required by the owner to make the improvements, the statute created the lien, and the owner could not, by contract between itself and the purchasers, have the things done for which the statute gives a lien, and in the agreement abrogate the statute.

This court recently said: “Our statute g’ivés subcontractors, laborers and materialmen a lien upon the improvement, and this is based upon the right of the implied agency of the original contractor to bind the owner’s title. If the owner could give a mortgage to the principal contractor and thereby defeat' the rights of subcontractors, laborers and materialmen, then we would have the case of the owner and the principal contractor making a contract which would have the effect, of' abrogating a statute lawfully enacted by the Legislature. This could not be done.” Home Oil Co. v. Helton, 179 Ark. 132, 14 S. W. (2d) 549.

“It is claimed that the authority of the vendee in such a contract to charge the interest of the vendor rests upon the principle, of agency, and that this provision is a limitation upon the agency, and that the rights of everyone who furnishes labor or material are subject to this limitation. If this is so, it would be a very convenient way to repeal the provisions of the lien law. Such a stipulation cannot deprive of their rights under the statutes, persons not parties to it. It is the law which at once creates the authority to charge the land and defines its extent.” Malmgren v. Phinney, 50 Minn. 457, 52 S. W. 915, 18 L. R. A. 753.

In construing a contract similar to the one in this case, the New York Court of Appeals said: “The stipulation in respect to the priority of liens did not destroy the owner’s consent that the houses should bo built, nor diminish its effect, nor did it lessen the absolute obligation resting upon the vendee to build them. It was not the design of the parties to accomplish any such results, but simply to circumvent the statute, and defeat the rights given by it to persons furnishing labor and materials for the work, which design could not be accomplished by such a stipulation as against persons not in privity with either of the parties to it who should, without notice of the stipulation, furnish labor or materials for the work.” Miller v. Mead, 127 N. Y. 544, 28 N. E. 387, 13 L. R. A. 701.

The appellant in this case required the improvements to be made, and it could not, by a clause in the contract between it and the contractor, circumvent the statute- and defeat the rights given by the statute to persons who furnished material to make the improvements. As between the owner and the contractor, the stipulation was, of course, binding, but it could. not in this way abrogate the statute.

What we have said makes it unnecessary to discuss the question of agency.

The appellees prosecute a cross-appeal in which they seek personal judgment against the owner. They would be entitled to this, of course, if Ish and Parker were agents of the owner and had authority as such agents to purchase the material, but under the evidence in this case we think the relationship was that of owner and contractor, and not principal and agent.

It follows that the decree of the chancellor, both on appeal and cross-appeal, must be affirmed. It is so ordered.

Mr. Justice Kirby dissents.


author: Butler, J.

text:
    Hannah v. State.
    Opinion delivered May 25, 1931.

      J. D. Shackleford, for appellant.

      Hal L. Norwood, Attorney General, and Robert F. Smith, Assistant, for appellee.
   Butler, J.

Appellant was convicted in the court below for the crime of murder in the first degree, and sentenced to imprisonment for life, from which verdict and judgment he has appealed. Appellant has assigned as error the insufficiency of the evidence to sustain the verdict, errors of the trial court in its failure to quash the indictment returned by the grand jury and in the selection of the petit jury, and in its refusal to give instruction No. 2, requested by the appellant, and in permitting the clothing of the deceased to be exhibited to the jury.

The testimony tended to establish the following state of facts: H. C. Van Dyke, the deceased, was a barber about sixty-three years of age whose home was in Kosciusko, Mississippi. A few days prior to the third day of January, 1931, he disappeared from Kosciusko and was discovered dead by the highway near Malvern with his head almost severed from his body, his pockets turned wrong side out, his shoes partly unfastened and his socks pulled down over the tops of his shoes: His body was identified by a card found on his person with his name and address thereon, and an investigation was made which resulted in the discovery of the car in which he had been traveling on the highway near Kosciusko with two flat tires and without any gasoline. Shortly after this the defendant was arrested. It was then discovered that the defendant had been employed by Van Dyke, on or about the Sunday preceding the discovery of the latter’s body, to accompany Van Dyke on a trip through western Tennessee into Arkansas as the driver of the car; that at about the point where Van Dyke’s body was discovered the car was stopped for some purpose, and there Van Djdce had been killed by the defendant. When first arrested, the defendant denied knowing Van Dyke or ever having been in his company. Within a short time after this, however, he admitted that he had left Kosciusko with Van Dyke, hut denied having killed him, and stated that Van Dyke had been attacked by some unknown persons, and that he had left in the car during the rencounter. In another statement made soon thereafter to the officers he admitted having killed Van Dyke and gave as a reason that he was defending himself at the time from an attack made on him.

It was shown that Van Dyke, during the journey, had made statements relative to having money in his possession, and a witness testified as to having seen some money under Van Dyke’s sock, the witness being able to see sufficiently through the sock to distinguish it as money.

Apparently the first person who reached the scene of the killing after the happening stated that there was only one track or set of footsteps which led from the road to the edge of the embankment where the body lay and around the body and back to center of the road, and at that time the pockets of deceased’s clothing were turned wrong side out, and the socks pulled down over the shoes, and that witness remained until the officers arrived when a search was made of the body and nothing of value discovered thereon except a cheap watch worth perhaps $1.50 or $2. Van Dyke had purchased some time in the afternoon or evening preceding the discovery of his body four fifteen cent bottles of vanilla extract, all of which he drank at intervals as he traveled. He was last seen alive about eight o ’clock after dark on the evening of the third of January, and his dead body discovered early on the morning of the fourth. The defendant testified that during the night of the homicide Van Dyke had become intoxicated, as he had done frequently during the journey, but that he had shown no evidence of being quarrelsome; that where the killing occurred Van Dyke had the car stopped and got out on the right and went behind the car, and that defendant got out on the left and told Van Dyke that he was going to leave him there and go no further with him; that Van Dyke told defendant if he tried to do this that he would kill defendant, and started at him with a razor;- that he caught Van Dyke’s arm and during the struggle he cut Van Dyke’s throat because he believed Van Dyke was about to kill him and that he acted in self-defense ; that he did not rob Van Dyke of any money, but admitted that he took a number of razors belonging to the dead man and returned with them in Van Dyke’s car over the way they had previously come and traded them for gasoline.

The jury evidently did not believe the defendant’s testimony, and we think the circumstances abundantly justify them in the conclusion reached that the defendant murdered the deceased and that the motive was robbery.

The grand jury convened, and the indictment in. this ease was returned while the defendant was confined in the jail of Hot Spring County, the indictment being returned on the 20th of January, 1931. The record shows that on the 21st of -January, 1931, the defendant was arraigned in open court, and at that time was represented by an attorney who entered a plea of not guilty. The case was then continued and set for January 27, 1.931, on which day the defendant, by his attorney, filed his motion to quash the indictment the grounds of the motion being that defendant was confined in jail at the time the grand jury was impaneled, that he was a negro, and that there were no negroes on the grand jury, and alleged that the failure to include negroes in the panel was a discrimination against the defendant on account of his race.

The court did not err in overruling this motion. No attempt was made to prove that negroes were excluded from the jury, and that none such had been selected because they were negroes, but the defendant rested on the allegation contained in his motion. This was not sufficient, for the allegation is one of fact, and must be determined as any other fact in the case, and, in the absence of any showing- to the contrary, it must be presumed that the jury commissioners made their selection in accordance with law. “The mere absence of negroes from the grand jury cannot of itself be considered as a sufficient showing to sustain the motion to quash. It must appear that the exclusion of negroes from the grand jury was brought about for the purpose solely of denying- equal protection of the law to the defendant or his race on account of race or color.” Eastling v. State, 69 Ark. 189, 62 S. W. 584; Threet v. State, 110 Ark. 152, 161 S. W. 189; Jordan v. State, 141 Ark. 504, 217 S. W. 788. To support his contention on the motion to quash the appellant has cited the cases of James v. State, 68 Ark. 464, 60 S. W. 29, and Mallory v. State, 141 Ark. 496, 217 S. W. 482. We have carefully read these cases, and find nothing in them in conflict with the rule announced above.

After two of the petit jurors had qualified and had been accepted by both the State and the defendant, the court permitted the State to peremptorily challenge them. The defendant made proper objection and exceptions and contends here on the authority of Brewer v. State, 72 Ark. 145, 78 S. W. 773; Carr v. State, 81 Ark. 589, 99 S. W. 831; McGough v. State, 113 Ark. 301, 167 S. W. 857; and Dewein v. State, 114 Ark. 472, 170 S. W. 582, that this action of the court was prejudicial error. These cases do not support the defendant in his contention, for there is no showing made that at this time the challenges of the defendant had been exhausted. This was a matter within the discretion of the court, and it must be shown that such discretion was abused or that the' court acted arbitrarily. Here no such showing- is made, and, instead of supporting the contention of the appellant, the cases above cited support the rule here announced.

In Carr v. State, supra, the court said: “Appellant says that the trial court erred in permitting the State to peremptorily challenge two jurors after they had been examined and accepted as jurors in the case, but this was not error. It was lawful to do so.” In Dewein v. State, supra, the court held that it was not error to permit the State to peremptorily challenge a juror after he had been accepted by both the State and the defendant, when the defendant had not exhausted all his peremptory challenges, and that the court, in the exercise of its discretion could permit the State to peremptorily challenge the juror after he was accepted on the jury. The court there cited Carr v. State and McGough v. State, supra.

The correct rule appears to be that, at any time during the impaneling of the jury, where the defendant has not exhausted his peremptory challenges, it is within the discretion of the trial court to permit the State to excuse peremptorily a juror already taken, but that, if the defendant has exhausted his peremptory challenges, the case will be otherwise.

Instruction No. 2, requested by the defendant, submitted to the jury the defendant’s theory that he was acting in self-defense, and instructed the jury that he had the right, if attacked by another with a deadly weapon under such circumstances as to make it appear to him that his life was about to be taken, to stand his ground and defend himself. This instruction as drawn is criticized by the State as an inaccurate declaration of law, but, assuming that it was correct, we think there was no error committed in refusing’ to give it, for the reason that it was fully covered by other instructions given at the request of the defendant.

The last alleged error is the action of the court in permitting the clothing of the deceased to be exhibited to the jury after all of the evidence had been introduced. We have examined the transcript of the evidence, and we find that during the introduction of the testimony on the part of the State the clothing was offered in evidence. The defendant objected to its introduction at that time, and asked that it not be introduced then, stating, "I have no objection to their being exhibited at a later stage.” To this the prosecuting attorney assented "with the statement that he would exhibit it later on. Therefore, if this evidence was introduced out of its proper order, it was an error invited by the defendant, of which he cannot now complain. There was a question as to the position in which the deceased was standing at the time he received the death stroke, and the blood on the clothing might have shed light on this question, and therefore the clothing was admissible in evidence.

On the whole case, we find no prejudicial error, and the judgment of the trial court must therefore be affirmed.


text:
    Vaughan v. Screeton.
    Opinion delivered May 11, 1931.

      8. Brundidge, for appellant.

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

The appeal in this case calls for a determination of two questions, namely: The validity of the execution sale and the correctness of the trial court’s action in refusing to vacate the order confirming the commissioner ’s sale.

On the 15th day of November, 1929, appellees obtained a personal judgment against appellant for $17,818.08 on a promissory note and a decree of foreclosure and order of sale of certain real estate described in the deed of trust executed by him to them to secure the payment of same.

At the instance of appellees, an execution was issued on the judgment' on the 27th dáy of January, 1930. The sheriff levied the execution upon 270 acres of land and lots 9, 10, 11, 12 in block 16 in Des Are, all of which belonged to appellant; also upon 780 acres of land and lots 9 and 10 in block 72 in Des Arc, none of which belonged to appellant, and sold the property levied upon in bulk for $1,500 to appellees, who were the only bidders at the sale. Under the statute law of this State, an execution debtor is accorded the right to redeem his land within one year from the execution sale for the amount of the bid. Crawford & Moses’ Dig., § 4329. To uphold the execution sale in the case at bar would result in a denial of this right because the property owned by him was not sold on a separate bid but in bulk with a large amount of other property which did not belong to him upon the single bid of $1,500. In order to have redeemed his own property from the sale, he would have been compelled to tender the whole amount of the bid, or $1,500, as there was no way to determine the amount bid for his part of the property. An execution creditor will not be permitted to thus burden and embarrass his judgment debtor in the exercise of his right to redeem.

"We now proceed to .a consideration of the trial court’s action in refusing- to vacate the order confirming the commissioner’s sale under the decree of foreclosure. All the property described in the deed of trust was sold ■by the commissioner named ini the decree of foreclosure, notwithstanding- a part thereof had been sold under said execution sale, in separate parcels, on the 3rd day of July, 1930, to appellees for the aggregate sum of $8,192.50. The sale was reported on the morning of the 5th day of August, 1930. Same was in all things approved and confirmed, immediately after which the court adjourned, and the judge left the city for his home. Appellant had employed an attorney to prepare exceptions to the sale and received them at 10:30 a. m. on the 5th of August, 1930. He would have received and filed them sooner had he not been in an automobile wreck on the night of the 4th of August. This wreck detained him, and he did not reach Des Arc until 10:30 on the morning of the 5th of August. He immediately called the clerk and was informed that the court had adjourned and the judge had gone home. Owing to this fact, he did not file the exceptions to the sale until August 13, 1930. The court met again in November and heard the motion to vacate the order confirming the sale upon the testimony adduced by both parties and overruled the motion, over appellant’s objection and exception.

According to the decided weight of the testimony, the property was sold at a grossly inadequate price. Its value was in the neighborhood of $50,000 or $60,000, and it only brought $8,500. The fact that the title to part of the property was thus clouded may have been one reason why others did not bid on the property and why same sold for a grossly inadequate price. The sale should have been set aside for the reasons assigned.

Appellees argue that appellant was not diligent in filing his exceptions to the sale, but we think he was prevented from filing them sooner by an unavoidable casualty.

Appellees also argue that the decree of confirmation of the sale should not be overruled because court had adjourned until court in course at the time the exceptions were filed. It is true the court entered an order adjourning court in course on the 5th day of August, 1930, but the order was ineffective. In that chancery district it is provided by statute that court shall remain open at all times. This court said in the case of Sanders v. McClintock, 175 Ark. 633, 300 S. W. 408, that, “Under the act of 3923, as amended by the act of 1925, the term of chancery court in each county in the chancery district (referring to Chancery District No. 1, including Prairie County) continued until the arrival of the day designated by the statute for the beginning of another term of the same court for the same county. The evident purpose of the statute was to continue the term of court in each county from the beginning of the term until the opening of the next term in the same county. ’ ’ Under this ruling, the court had power over its decrees and might vacate, set aside, modify, and annul them at any and all times. The exceptions were not filed after, but before, the expiration of the term at which the sale was confirmed.

On account of the error indicated, the decree confirming the execution and commissioner’s sales is reversed, and the cause is remanded for further proceedings not inconsistent with this opinion.


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    Rex Oil Corporation v. Crank.
    Opinion delivered May 11, 1931.

      A. T. Davies and Reinberger ■£ Reinberger, for appellant.

      Verne McMitten, Fred A. Snodgress, M. V. Moody and Henry E. Spitzberg, for appellee.
   Butler, J.

The casualty out of which this lawsuit has arisen occurred in this way: two young women were journeying from Little Bock to Hot Springs in a Ford coupe when they were met by one Evans, an employee of appellant corporation, traveling in a truck of the appellant and coming from the opposite direction. As Evans turned in the highway and while he was crossing the same for the purpose of driving to a nearby filling-station, the Ford struck the truck about midway practically demolishing the car and seriously injuring its occupants. This suit was brought by them against the appellant corporation on the theory that Evans, the driver of the truck, was an employee of the appellant corporation and at that time engaged in the furtherance of its business; that, while so engaged, Evans carelessly turned in the highway immediately in front of the approaching Ford so as to cause the collision, the appellees themselves at the time being in the exercise of ordinary care.

It is conceded that, on the issues raised by the pleadings and the testimony in the case, the court fully and fairly declared the law except as contended by the appellant, in its failure to grant a peremptory instruction directing a verdict in favor of the appellant. The jury found for the plaintiffs, appellees here, in the sum of $5,500 for Buth Crank and $5,000 for Irene Holcomb.

There are only two questions presented for our consideration on this appeal; first, the failure of the court to direct a verdict as requested by the appellant, and second, that the amounts of damage awarded were excessive. The testimony regarding the negligence of Evans, the driver of appellant’s truck, and as to whether the appellees were exercising ordinary care at the time of the accident, is conflicting, but it is not seriously contended that the testimony was not sufficient to warrant the jury in finding that Evans was guilty of negligence. Indeed, we think the preponderance of the testimony establishes that fact, and that the appellees were not negligent themselves.

The principal contention and the one which has given us concern is that, while Evans might have been guilty of negligence at the time of the collision, the relation of master and servant between him and the appellant had been for the time suspended, and that, while the truck furnished him by the appellant was to aid him in the discharge of his duties, he ivas not so using it at the time of the collision, but for his own convenience and on a mission personal to himself and wholly disconnected from any service for his employer. It is the law of this jurisdiction, as settled in numerous decisions, that the master is responsible for the negligent act of his servant if such act occurs during the time the servant is engaged in the service of the master, although the act itself might have been unauthorized; but it is essential io the master’s liability that the wrong complained of must have been occasioned by the negligent conduct of the servant who at the time was acting within the scope of his employment. An important exception to this rule is also found in numerous cases of this court, namely, that, although one may be a general servant of another, the master is not responsible for the negligent, act of the servant where the latter steps aside from the discharge of his duty and engages in something entirely disconnected from the performance of services for his master and of a nature purely personal to himself, even though the casualty may be the result of the negligent use of some instrumentality furnished the servant by the master for the conduct of his employment.

The rule and the exception are stated and fully discussed in Sweeden v. Atkinson Improvement Co., 93 Ark. 397, 125 S. W. 439, 27 L. R. A. (N. S.) 124; Healey v. Cockrill, 133 Ark. 327, 202 S. W. 229, L. R. A. 1918 D, 115; and in the very recent cases of Hunter v. First State Bank of Morrilton, 181 Ark. 907, 28 S. W. (2d) 712, and Mullins v. Ritchie Grocer Co., ante p. 218. In those cases numerous decisions of this and other courts are cited which fully state, explain and illustrate the rule. The difficulty lies in the application thereof, as there is no definite rule by which it can be said that the acts of a servant are within or without the scope of his employment, each case of necessity depending upon its own peculiar facts and circumstances.

It is admitted that Evans was in the general employ of the appellant corporation, and that the truck in which he was traveling was the property of appellant committed to the custody of Evans for use in the prosecution of his duties; but the evidence on which appellant relied in the court below as a warrant for the request for a directed verdict and for a reversal of the judgment is this: Evans testified that on the morning of the day on which the collision 'Occurred he had wholly abandoned the service-of the master and was pursuing his journey on a purely personal matter, using the truck solely for his own convenience, it being his purpose and mission to convey his wife and child to Pine Bluff where his wife’s father and mother resided that she might spend the weekend in their company; that, as a companion on the trip to Pine Bluff and back to Hot Springs on the same night, another person was riding in the truck with Evans and family; that he had in mind no ¡business for the appellant corporation or the performance of any such along the way or at Pine Bluff nor on -the return trip was any contemplated ; that, as he pursued his way, his child became thirsty, and he turned from the right side of the highway, on which he was traveling at an ordinary rate of speed, crossing to the left for the purpose of procuring a drink of water for the child from a filling station opposite when the collision occurred.

The testimony of Evans regarding his purpose for the journey was corroborated by that of his wife and his companion. This was all the direct testimony adduced with regard to Evans’ mission. It is the contention of the appellant that this testimony was undisputed, and therefore brings the ease within the exception above stated. We are of the opinion, however, that such is not the case. The testimony given by Evans and those with him in the truck was the only direct evidence relative to his actions and his motivation, but there was certain other evidence, not direct but circumstantial, which, after careful consideration and analysis, we have concluded raised an issue of fact on this proposition. In the first place, as we have seen, it is admitted that Evans was in the general employ of the appellant. He had been in its employ for a number of years and by gradual stages had risen until at the time of the accident he had become the manager of appellant’s business within a given territory. He had charge of a filling station in Hot Springs from which he sold, both wholesale and retail, the commodities of the appellant whose home office was in the city of Pine Bluff where he had been accustomed at times to transact business of the appellant with his superiors, and it was to that city that he was going at the time of the collision. Among his customers was one McAtee, into whose place of business he was in the act of turning when the accident took place. It was the duty of Evans to sell McAtee oil and gas and to collect therefor, and, while both McAtee and Evans testified that at that time McAtee owed nothing to be collected nor was Evans delivering to him any commodity, still the mere fact that Evans was directing his course to the place of business of a customer was a circumstance to be considered by the jury in determining what was the purpose of Evans on that occasion. Before leaving Hot Springs on that morning, Evans had placed in charge of his filling station there one McDonough, who testified that Evans was his boss, and that ho had been placed in charge of the station with the information conveyed to him by Evans that he was going over to Pine Bluff on business. In that conversation Evans did not make any specific statement with regard to the business or for whom it was to be transacted, but it is not shown that Evans was engaged in any other business than that of his employer, and the truck in which he left was one belonging to his employer which he used for the purpose of calling on the trade and seeing different people in regard to the business of the appellant. ‘ ‘ The doctrine is settled in this State that, if the automobile causing the accident belongs to the defendant and is being operated at the time of the accident by one of the regular employees of the defendant, there is a reasonable inference that at such time he was acting within the scope of his employment and in the furtherance of his master’s business.” Mullins v. Ritchie Grocer Co., supra.

We see therefore that there was a prima facie case made out that Evans -was in the conduct of the master’s business, 'which case was supported by the statement made by him to McDonough that he was going- to Pine Bluff on business and the further fact that he was in the act of stopping at the place of business of a customer at the time of the accident. These circumstances, which were established by the testimony, raised certain inferences of fact, and, this being so, it v?as the province of the jury to weigh these inferences of fact with the conflicting direct testimony and to say whether such direct testimony overcame the inferences of fact raised by the circumstances proved. The court below did not err in submitting the case to the jury, and there is evidence of a substantial nature tending to support its verdict.

The verdict was not excessive. Mrs. Ruth Crank was the owner of the Ford coupe which was worth on the market before the collision from four to five hundred dollars and afterward was not worth in excess of $75 nr $100. The evidence tended to show that Mrs. Crank’s ■right leg was broken and a hole knocked in the knee of her left leg; one of her ribs on the left side was broken which affected the left mammary gland; a severe blow was received over her heart and other cuts and bruises suffered. She was taken to a hospital where her leg was put in a metal cast. It was swollen to almost double its size and kept in the metal cast until the swelling subsided and then put in a plaster of paris cast for several additional "weeks. She was in the hospital for over a mouth, and from there removed to the house of a friend where she continued in bed for a long time. The hospital bill amounted to over $100 and the physicians’ bills are yet unpaid. She still suffers from her injuries, being unable to walk and stand upon her feet without pain.

Mrs. Crank’s companion, Irene Holcomb, had no bones broken, but was lacerated in many places, so much so that it required 82 stitches to sew up the cuts, and was confined in the hospital 20 days. Her back was wrenched, and it has continued to give her pain since the accident. Some of her front teeth were shattered and a jaw tooth broken off. The skin was cut from the hairline on the forehead downward in a TJ-shape through the eyebrow and torn from the skull, hanging down over her face. The skin was replaced in position, but it has left a large IT-shaped scar with one eye 'weakened and the lid drooping out of its normal position, thus seriously disfiguring her. While the scar may improve in appearance, it will remain permanently, and the area on the head in the vicinity of the scar is numb because of the disturbance of the nerves in that locality.

These were two young women whose vocation was that of waitresses. Their work required them to be on their feet through long hours, and a material part of thfeir earnings which averaged $25 a week was in the nature of tips. Both of them were unable to work for several months, and, while it was in the testimony that the ability of Miss Holcomib to work would not perhaps be permanently impaired, it is reasonable to think that she might be unable to secure employment in as favorable location as she could before because of such disfigurement. Unquestionably the shock to the nervous system of both these women must have been very great,' and, coupled with otherwise severe physical injuries, the pain they endured, mental anguish, loss of time, the nature and extent of their injuries, leads us to conclude that the verdicts awarded are not greatly out of proportion, if any, to the damages sustained.

Affirmed.


author: Hart, C. J.

text:
    James v. Echols.
    Opinion delivered May 18, 1931.

      Wm. J. Clark, W. T. Price, Brundidge & Neelly and Carmichael <db Hendricks, for appellants.

      Bogle <& Sharp, for appellee.
   Hart, C. J.

This appeal involves the compensation which should be allowed D. H. Echols, as executor and trustee under the will of R. R. James, deceased, and the carrying charges and expenses which should be allowed him, and the interest on legacies which should be charged to him. The will of Dr. R. R. James was duly admitted to probate, and the Bank of Cotton Plant & Trust Company, the executor and trustee named in the will, was duly appointed and entered into the execution of the trust. Subsequently, the Bank of Cotton Plant & Trust Company became insolvent and was taken over by the State Bank Commissioner. D. H. Echols was appointed trustee in succession and proceeded to carry out the terms of the trust under the will.

The legatees named in the will questioned the power of the chancery court to appoint a new trustee upon the insolvency of the trustee named in the will. This court upheld the power of the chancery court, when properly exercised, to appoint a trustee in succession; and D. H. Echols, as such trustee, duly proceeded with the execution of the trust according1 to the terms of the will as he construed them. Bieatt v. Echols, 181 Ark. 235, 25 S. W. (2d) 431.

The principal issue raised by the appeal in this case is the proper construction of the 6th clause of ihe will which reads as follows:

“Sixth. After the death of my wife, Carrie L. James, I give, devise and bequeath unto the Bank of Cotton Plant & Trust Company, of Cotton Plant, Arkansas, as trustee, all the remainder of my estate of whatever kind, to be held in trust by the said Bank of Cotton Plant & Trust Company for the uses and purposes hereinafter set forth.
“I hereby direct that the said trustee shall hold and manage said property for a period of twenty years, and that said trustee shall annually distribute all income derived from said property, as follows:
“It shall pay to the said Bank of Cotton Plant & Trust Company twenty per cent, of said income as payment for its services in administering' this trust. Second, to pay to the trustees of Galloway College fifteen per cent, of the said income; third, to pay to the trustee of Hendrix College fifteen per cent, of said income; fourth, to pay to the trustees of the Methodist Episcopal Church, South, of Cotton Plant, Arkansas, ten per cent, of said income, and ten per cent, of said income shall be held by said trustee for the benefit of the poor people of the town of Cotton Plant, Arkansas, to be paid out and distributed by said trustees as if may deem best and at such times as it may deem proper.
“I direct that twenty per cent, of said income shall be paid to John M. James during his lifetime, or until the termination of said trust, but if the said John M. James should die before the termination of this trust, then in that event this payment shall cease and the said twenty per cent, shall be distributed pro rata to the other beneficiaries named above in this paragraph. ’ ’

Echols filed his .account in the chancery court in which he asked for 20 per cent, of the gross income of the estate as his compensation under the terms of the will. He was also allowed the sum of $297, which he paid out under the orders of the court for guarding property belonging to the estate at Eagle Pass, Texas. The estate consisted of a large amount of real and personal property. Appellants herein, who were legatees under the will, filed exceptions to the account of said trustee, and also asked that he be charged with interest on the amount of legacies due them because he had unduly postponed the payment of the same.

We are of the opinion that the court erred in allowing- the trustee for his compensation twenty per cent, of the g-ross income annually derived from the estate. A gift of the income generally means a gift of the net income after deducting- taxes and other expenses necessary to the preservation of the property from which the income is derived. This rule applies to gifts of income of either realty or personalty. 2 Page on Wills, (2d ed.) § 1026, pp. 1687-1688; Rothschild v. Weinthal, 191 Ind. 85, 17 A. L. R. 1377, 131 N. E. 917, 132 N. E. 687; Johnson v. Johnson, 164 Ky. 724, 176 S. W. 199; Heard v. Read, 169 Mass. 216, 47 N. E. 778; Dickinson v. Henderson, 122 Mich. 583, 81 N. W. 583; Dewey’s Estate, 153 N. Y. 63, 46 N. E. 1039; Spencer v. Spencer, 219 N. Y. 459, Ann. Cas. 1918E 943, 114 N. E. 849; Martin v. Kimball, 86 N. J. Eq. 10, 96 Atl. 565; and Stone v. Littlefield, 151 Mass. 485, 24 N. E. 592. In these cases, the established rule is that, where the income from real estate is devised to the trustee to pay over to certain legatees, they are entitled only to the net income after the payment of taxes, repairs, and other expenses of administering the trust unless the will contains a provision to the contrary. Otherwise the principal of the estate would be exhausted ultimately in its self-support. So, it is said that a direction to trustees to pay certain named beneficiaries the income of the estate means what is left after paying taxes and other necessary and proper expenses incident to the care, preservation, and handling of the estate. Hence it is said that, unless the testator so states, a construction which Avould require a regular, annual diminution of the corpus of the estate and thus, through the mere lapse of time, ultimately destroy the income of the heirs, is not admissible.

We have only copied paragraph 6 of the will, and we are unable to find from it or from any other language used in the will any intention on the part of the testator to give to the legatees anything except a designated per cent, of the net income. The compensation given to the executor is fixed by the same paragraph, and it is a well-known rule of construction that the meaning of a word is oftentimes derived from those accompanying it. There is nothing in the context of the sixth paragraph which would indicate that the testator intended that the twenty per cent, of income given to the trustee for administering the trust was used in any different sense from the word “income” in which a per cent, of the income is given to various legatees. Otherwise, as above stated, the amounts left to the various legatees to be paid out of the annual income of the estate would be gradually diminished and ultimately consumed in payment of services to the trustee if we should hold that he was to receive twenty per cent, of the gross income for his services in administering the trust.

In this connection it may be stated that when the trustee accepts the trust and qualifies and enters upon the discharge of his duties as such trustee, he accepts the trust upon the conditions named in it and is entitled to no other or greater compensation than the will allows. Gordon, Executor, v. Greening, 121 Ark. 617, 182 S. W. 272, and cases cited in note to 34 A. L. R. at page 918.

Inasmuch as the decree must be reversed because the chancery court erred in fixing the compensation of the trustee, it may also be stated for the future guidance of the court that the executor was entitled to credit for personal expenses necessarily and reasonably incurred by him in transacting the business of the estate; but he must prove the particular items of expense and cannot claim the amounts of a gross sum without a specification of particular items. He would be entitled only to traveling expenses bona fide incurred, and such other expenses as must necessarily be incurred in the care and management of the estate. All expenses of this kind are regarded as expenses of administration. Holland v. Doke, 135 Ark. 372, 205 S. W. 648; and Scroggins v. Osborn Company, 181 Ark. 424, 26 S. W. (2d) 95.

It is next insisted that the court erred in allowing the trustee the sum of $297 for a night watchman for guarding certain property belonging to the estate at Eagle Pass, Texas. This sum was paid out by the trustee under orders of the court, and there is nothing whatever in the record tending to show that it was not a proper allowance made to the executor in the preservation and care of the estate, and it was properly allowed as expense of administration.

It is next insisted that the trustee should be charged with interest at the legal rate on the various amounts which should have been paid to the legatees. The estate consisted mainly of farm lands and other property which provided an annual income in varying amounts. In the very nature of things, the net income could be arrived at only at the end of the year by deducting taxes and other carrying charges in the preservation and management of the estate from the gross income received by the trustee. Until the net income was fixed, the trustee could not tell what amounts should be paid to the legatees. When it became fixed, it would become his duty to pay the same over to the various legatees. It does not appear certainly from the record herein whether the trustee failed to pay the annual income to the legatees and held it until the succeeding year. If he distributed out the income annually, he should not be charged with interest; otherwise he should be charged with interest at the legal rate of six per cent, unless it is made to appear to the court that he did not do so until he obtained a construction of the will by the chancery court in order to ascertain whether he should be entitled to twenty per cent, of the gross or net income for his services rendered and-whether the legatees should receive the net income after deducting taxes, costs of administering the trust, and other proper expenses of administration. Dyer v. Jacoway, 50 Ark. 217, 6 S. W. 902; and Jacoway v. Hall, 67 Ark. 340, 55 S. W. 12.

The result of our views is that the decree must be reversed, and the cause will be remanded with directions to the chancery court to state the account of the trustee in accordance with this opinion and for further proceedings in accordance with the principles of equity. It is so ordered.