text:
    Board of Education of Lonoke County v. Lonoke County.
    Opinion delivered June 16, 1930.

      George E. Morris and O. E. Williams, for appellant.

      Guy E. Williams and Chas. A. Walls, for appellee.
   Butler, J.

On January 8,1927, the Bank of Central Arkansas closed its doors on account of its insolvency. It was the -county depository of Lonoke County, and was indebted to the county and its various school districts for public funds deposited with it in the aggregate sum of $111,150.50 secured by a bond upon which a number of citizens of the county were sureties, all of whom were then, and are now, solvent and collectively worth more than the amount of the liability arising in favor of Lonoke County bn the depository bond. On the day after the 'bank closed its doors the county judge of Lonoke ’ County entered into a contract with C. A. Walls, an attorney, to represent the county in the collection of the bank’s indebtedness. On January 17th, following, the county court confirmed the action of the county judge by making an order appointing and employing C. A. Walls, wherein it was recited that he was to be paid a retainer fee of $500, and was to have a reasonable compensation for such services as might be performed in the matter of representing the county in the collection of the public funds, whether collected by suit, settlement, compromise or otherwise. After considerable negotiation, Mr. Walls collected the majority of the indebtedness without suit, and the remainder was collected by suit instituted which suit progressed to final adjudication. The entire amount of the county and school funds with accrued interest was collected from the sureties on the bond, which amounted in the aggregate to the sum of $113,505.94. From this sum was deducted the attorney’s fee of $4,000 which was allowed him, and a further sum due the prosecuting attorney was also deducted, and the balance paid over to the county treasurer.

On the 7th day of January, 1929, the court made an order, which, after fixing' and allowing the amount of (he' attorney’s fee, among other things, provided that “the $4,000 paid to' the said Chas. A. Walls should be paid out of the funds recovered in proportion that each fund bears to the total of $11.1,150.50 and the common school fund should be charged with $2,500.80 of said amount and the other funds should be charged with $1,499.20, making a total of $4,000 so paid.” From this order the county board of education and the England Special School District prayed and were granted an appeal on the second and fifth days of July, respectively, which appeals were consolidated in the circuit court and by agreement transferred to equity. From the decree there rendered upholding the order of the county court is this appeal.

As stated in its brief, the appellants contend that the employment of the attorney was unnecessary, and the incurring of the $4,000 fee was a useless expenditure of the public funds. In disposing of this contention, it may first be said that the appellants are concluded by the recitals of the order appointing the attorney made by the county court on January 17, 1927, and entered of record by order nunc pro tunc on February 14, following, from which there was no appeal. This order made the finding that the county depository bank had closed its doors, and was in the process of liquidation by the State Bank- Commissioner, and that at the time the depository -was indebted for public funds in the sum of $111,150.50, demand for which had been made which was not •complied -with, thereby creating the default in the conditions of the depository bond, and that, because of the official duties with relation to the prosecuting attorney’s attendance upon the terms of circuit courts in the district, the necessity arose for special counsel.

Aside from the conclusiveness of the findings of the above order, it is well settled that the matter of employment of special counsel rests within the sound discretion of the county court, which, -while subject to review, will not be disturbed, unless it is shown that there was an abuse of such discretion, the presumption being that in any given case the court will not create an unnecessary expense, but will act for the county with that degree of prudence which careful business men exercise in relation to important affairs, and, even in cases where it is the duty of the prosecuting attorney to act, the court may employ other counsel when in its judgment the interests of the county and the matter involved are of sufficient importance to demand it. Oglesby v. Ft. Smith, etc., 119 Ark. 67; Buchanan v. Farmer, 122 Ark. 562; and cases there cited; Johnson County v. Patterson, 167 Ark. 287. Without deciding that it was the duty of the prosecuting attorney to represent the county, there was testimony to the effect that he was not ignored, but that on the day the special attorney was employed, the prosecuting attorney was consulted, and he indicated that because of the press of official business the employment of special counsel was satisfactory; that his official duties required his presence in the court of a neighboring county at a regular term, and there were to be six regular terms of the courts in his judicial circuit to be held within the months of January, February and March. From this and the fact that the entire revenue of the county and its school was in jeopardy and a condition existed which reasonably excited great apprehension in the minds of the county judge and the citizens, it is apparent that immediate action was deemed necessary. Therefore, it cannot be said that the employment of the special counsel was unnecessary or unreasonable, notwithstanding the fact that the sureties on the depository bond were men of wealth and probity, since experience teaches that even men of this class are seldom ready to pay security debts that can be avoided, and that resourceful individuals have found, and do frequently find, the means to escape liability or to greatly lessen it. If it is admitted that the county court had the authority to employ special counsel in matters in which the county has an interest which the appellants do not specifically deny and of which in proper cases there can be no doubt then that authority must extend not only to those matters in which the county has the primary and sole interest, but to those also in which that interest exists by-reason of an obligation under which the county rests for the protection or enforcement of the rights of others.

In the instant case the county court, acting under the authority of law, concluded in the name of the county a contract with the depository bank and with its bondsmen whereby the public revenue, those belonging solely to the county and also the county school fund and the road fund, were surrendered to that depository for safe keeping and for payment on demand to the proper authorities. The county was obligated to see that the depository was a solvent institution, and its bond executed by responsible persons. As a necessary incident to the power to contract was the corresponding power (in the absence of some statutory limitation) to enforce the liability, not only as to the funds belonging solely to the county, but as to those which, as trustee for the use and benefit of the school fund and the various school districts, it had surrendered under its contract to the county depository. Polk County v. Sherman, 99 Iowa 60. But in this case, we think this authority springs not only from implication, but also from the express language of the statute under which the deposit was made in the depository bank. By the provisions of this act (act No. 208, Acts of 1907, and amendatory act No. 258 of the Acts of 1911), the county court of Lonoke County was directed to select in the manner prescribed a county depository for all the public funds of the county “including school funds and road funds,” requiring the execution of a bond for an amount sufficient to cover the total revenue of the county including road and school funds, to guarantee the safety of the deposits and their payment according to law. In this act as amended was the following provision: “And for any breach of said bond the county or any person injured may maintain an action in the name of the eounty to the use of the county or persons thereby injured.” From this language it is apparent that the county had authority to take the necessary steps to protect the interests involved, and, on its failure or refusal to act, any one of the several school districts had such authority. The county court exercised its implied and express authority to protect said interests and employed counsel, which, as we have seen, was within its sound discretion. As the authority to take the necessary steps to enforce a right carries with it the right to employ counsel, so does the latter right include the power to compensate. 24 R. C. L. 597, § 51; State v. Aven, 70 Ark. 291; Blount v. Baker, 177 Ark. 1162. Therefore, the county court was justified in contracting with its counsel for a reasonable fee to be paid, and we are of the opinion that, in sustaining the fee- fixed by the county court, the ruling of the court below was not against the preponderance of the evidence. The amount involved was large; the depository, one of the well-esta'blished and reputedly sound financial institutions^ had just collapsed, entailing a probable loss of the county’s entire revenue, and, while before then the sureties on its bond and the bank were thought to be solvent and responsible, -confidence was shaken and grave uneasiness was felt of great and irremediable loss. The attorney employed was one of repute and standing, and the amount of his fee contingent to a considerable extent on the amounts recovered. His duties entailed a series of meetings, with those interested, in which the interests he represented were opposed by several of the leading lawyers of the 'State whose duty it was to protect their clients by every method compatible with honor and to take advantage of every proper legal strategem. It was necessary to engage in a protracted litigation, and because of the duties of special counsel he was forced to forego other profitable employment. He manifestly conducted the various negotiations, compromises, settlements, and litigations with skill and fidelity, for the entire sum with accrued interest was recovered. A number of reputable lawyers familiar with the transactions and with the value of the appellee’s services, testified that the fee was a reasonable and proper one, and we cannot say that their opinion, or the finding of the trial court, in the light of the attendant circumstances, was unfounded or unjustifiable. Jacks v. Thweatt, 39 Ark. 340; Johnson County v. Patterson, supra.

The contention of the appellants most seriously made and insistently argued is that, if the necessity for the employment of special counsel and the authority of the county court is admitted, there was no authority to pay any part of the fee out of the school fund, but that all of it should have been paid out of the general revenue of the county. Indeed, it is their contention that “neither the county board of education nor the school districts could have used these funds to pay any part of the fee of special counsel employed by the county court to represent Lonoke County.’’ This'contention is unsound. To give effect to it would be impracticable, for, assuming that the several school boards had employed special counsel instead of the county, and it had been necessary to institute suits which proved to be expensive and protracted, but which would result in the recovery of all the school funds due, then, as the county was not interested and could not be made to bear the expense of litigation to which it was not a party, it is not reasonable to expect that any attorney could be found to conduct such litigation. In other words, to give effect to the contention of the appellants would be to say that “in a supposable case those who are charged with the administration of the school interests of a school district must stand idly by and lose all for want of power to save their rights by the use of those means which must be employed by others under similar circumstances.” It may also be said that the contention is inequitable for the reason that, where recovery is had for several, natural justice requires that the expense be borne by each in proportion to the benefits received. This view is not in conflict with article 14, § '2, of the State Constitution, which provides: “No money or property belonging to the public school fund, or to this State for the benefit of schools or universities, shall ever be used for any other than for the respective purposes to which it belongs. ’ ’ The use made of the fund in the instant case was not to divert it or to use it “for any other than for the respective purposes to which it belongs. ’ ’ It was used only to recover school funds and was a legitimate expenditure.

Our conclusion in this particular is supported by the case of State v. Aven, supra. In that case a firm of lawyers was employed to prosecute an action to recover a sum of money due certain school districts in St. Francis County. The firm collected the amount of the indebtedness and, after deducting its fee, paid the remainder to the county treasurer of said county. The treasurer charged himself with the amount actually received by him and made settlement accordingly. Suit was brought to set aside his settlement for fraud and to recover judgment against him and his sureties for the amount retained by the lawyers as a fee for their services. A decree was entered dismissing* the complaint and judgment was rendered in favor of the -defendants, from which decree the plaintiff appealed. This court., in affirming* the decree of the trial court, said: “The school districts were authorized to employ attorneys or ratify the employment of them in their behalf. * * * But the statutes authorize them to contract and to sue. As a necessary incident to this power, they have the right to employ attorneys to institute and prosecute actions in their behalf; and such attorneys are, of course, entitled to a reasonable compensation for their services.”

The case of Taylor v. Matthews, decided by the Court of Appeals of Georgia, February 24, 1912, and reported in 75 S. E. at page 166, is a case where the people had voted the local tax law. This law, as voted, was attacked in the courts, and attorneys were employed on behalf of the school districts who successfully resisted the" efforts to set aside the law and afterward appeared before a committee of the State Legislature and argued against the passage of a local bill introduced for the purpose of abolishing the school district for which the local tax had been voted. The attorneys were paid a fee for their services out of the school funds and for expense of witnesses before the legislative committee, and suit was brought to recover the same on the ground that such payment was against that law which forbade the application of public school funds to any other than educational proposes. In upholding the legality of the payment of the attorney’s fee and the traveling expenses of witnesses before the legislative committee which had been added to said fee and paid, the court said: “It is true that public school money is a trust fund, and cannot be applied except for educational purposes, but it would never do to give so strict a construction to this language as to confine the expenditure to the payment of teachers and nothing else. All language is to be given a construction which will effectuate the purpose sought to be accomplished; and so, while money raised for the maintenance of a public school may in one sense be said to be money raised for educational purposes, it is not raised for all educational purposes, but only for the benefit of pupils in strictly public or common schools. * * * But, while the expenditure of public scho.ol funds is confined to public schools, we are of the opinion that in the conduct of the public schools the proper authorities (such as the trustees of a school district) may, in their discretion, make any expenditure of the funds which is absolutely necessary for the proper maintenance of the school intrusted to their charge. They might properly expend a portion of the money in repairing or improving the school building, or in fitting it with proper appliances and conveniences. They might insure the school property against loss by fire, and pay the premium from the school fund. By a parity of reasoning we have no hesitation in holding that funds derived from local taxation within a school district may properly be expended by the trustees of the district in protecting or preserving the right of local taxation for educational purposes by the employment of an attorney, or in other legitimate expenses necessary for presenting their rights in the adjudication of the case.”

Since the county court was authorized to employ counsel for the recovery of the school funds, it follows under the authorities, supra, which are supported by sound reason, that the school funds recovered should bear their proportionate share of the attorney’s fee, and that the decree of the court below so holding is correct and is therefore affirmed.


source: Caselaw Access Project

author: Hart, C. J.,

license: Public Domain

text:
    Fort Smith Building & Loan Association v. Little.
    Opinion delivered June 23, 1930.

      Joseph R. Brown, for appellant.

      Daily S Woods, for appellee.
   Hart, C. J.,

(after stating the facts). Counsel for the defendant seek to uphold the judgment upon the theory of our casejs where it is held that a director or other fiduciary officer of a corporation may be entitled to compensation under an implied contract where services clearly outside of liis ordinary duty as such director or officer are performed under circumstances authorizing an inference that he was to be paid therefor. Red Bud Realty Co. v. South, 96 Ark. 281; and Clifford v. Walker, 180 Ark. 592. In such cases, the question of whether or not there is an implied contract for additional compensation is one of fact rather than of law. We are of the opinion, however, that, under the .undisputed facts of the present case, this principle of law has no application.

It is equally well-settled that a person who receives a salary from a corporation is not entitled to extra compensation for the performance of duties within the scope of those pertaining- to his office or position, and it is held that he is not entitled to compensation for services outside his regular duties, in the absence of a regular agreement. 14A C. J. 139; and Carr v. Chartier Coal Co., 25 Pa. St. 370.

As will appear from our statement of facts, the duties of the secretary are prescribed in § 5 of the by-laws of the corporation. The section expressly provides that the secretary shall be the manager of the association, and shall have charge of the deeds, mortgages, and other securities belonging to the association. It further provides that he shall keep a correct account of all money received and paid out, and that he shall receive all moneys paid to the association. According to his own testimony, he first commenced to collect the rents from the mortgaged premises for the mortgagors and continued to collect them after the mortgages fell due and default was made in the payment of the mortgage indebtedness. The mortgages provided for an assignment of the rents to the association, and that, if default was made in the payment of the indebtedness by the mortgagors, the association should take possession of the property at once and collect all the rents. It thus clearly appears from the defendant’s own testimony that the services in collecting rents after default made in the payment of the mortgage indebtedness was in his character of secretary and manager of the association. His services were of the character which as manager he would ordinarily be expected to .perform for his company. In addition, it will be noted that the by-laws expressly provided that the secretary should have charge of all the mortgages of the association and should keep a correct account of -all money received and paid out. In another sentence, it provides that he shall receive all money paid to the association. Therefore, his own evidence shows that the rents collected by him after the default made by the mortgagors in the payment of their mortgage indebtedness were collected in his capacity of secretary and manager of the association, and were such duties as the by-laws expressly provided that he should perform. He was paid a salary annually of $1,800 for his services as secretary and manager of the association. The commissions deducted from the rents he collected amounted to $105, and the plaintiff was entitled to judgment for this amount.

Proof of the custom of other associations in charging commissions on rents collected was not admissible because the contract was unambiguous, and the proof would have the effect to defeat the express terms of the contract. Batton v. Jones, 167 Ark. 478; and Ozark-Badger Co. v. Roberts, 171 Ark. 1105.

Again, the defendant retained $'20 for the commission claimed to be due on investment stock sold to Otis Wingo. In his letter subscribing for the stock, Wingo stated that he wished the contract for the new stock to begin on January 1, 1929. On December 31,. 1928, Wingo sent a telegram to withhold his subscription for new stock, and this was done. In his letter of February 16, 1929, Little wrote to Wingo to let him know whether he kept the stock, thereby recognizing that Wingo had a right to cancel his subscription before the first day of January, 1929. The contract provided that Little was to receive four dollars per thousand on all unpledged investment stock sold. By the language used, it was contemplated that an actual sale should he made, and that payment to Little should be had from the- price obtained. Until the price of the stock became payable or the association refused to issue it to Wingo, Little could not demand any commission for selling the stock or maintain an action for breach of the contract with him on the part of the association. Vaughan v. O’Dell, 154 Ark. 165.

Moreover, the defendant was not entitled to retain either the commissions for rent collected or for selling the investment stock for another reason. According to the testimony of Leon A. Williams, a vice president of the association, at the first meeting of the board of directors after Little resigned as secretary and manager, the board of directors gave Little a $1,000 bonus for the services he had rendered the association. This bonus was accepted by Little, and must be deemed to have been given in payment of any unusual or extraordinary services which had been performed by him while he was secretary and manager of the corporation.

It follows that the court erred in not instructing a verdict for the plaintiff. For that error the judgment must be reversed, and, inasmuch as the case has been fully developed, judgment will be entered here in favor of the plaintiff against the defendant for the sum of $125, with six per cent, interest from this date. It is so ordered.


author: Smith, J.

text:
    Andrews v. Bloom.
    Opinion delivered June 23, 1930.

      E. M, Pipkin, Jr., and Wynne <6 Miller, for appellant.

      W. G. Dinning, for appellee.
   Smith, J.

Appellee recovered judgment for personal injuries and for damages to his automobile, resulting from a collision -with, the automobile which he was driving with one owned by appellant. There ivas a conflict in the testimony as to whose negligence caused the injury, but that question was submitted to the jury under instructions conceded to be correct,, and has been settled by the verdict of the jury.

Another question in the case arises out of testimony about which there is no substantial conflict. It is to the following effect. Mr. Will Ragsdale owns and operates a garage in the city of Helena, and does a general repair business, and, as an incident to his business, sends out and gets cars, when requested by the car owner, and has them brought to his place of business. This is a part of the service which he has rendered for a number of years for those patrons who desire that service. On the morning of the collision the wife of appellant called Ragsdale and advised him that she wanted her car greased and the oil changed and a door of the car repaired. The car belonged to her husband, and she gave this order at his request. Upon receiving’ the order Ragsdale sent Oscar G-ullett and Fred Sims, two of his employees, for the car, and while Gullett was driving it to Ragsdale’s garage by a direct route the collision occurred. Gullett and Sims were regularly employed by Ragsdale, and were, paid by him.

There was nothing unusual about this service, as it was one rendered to all regular customers, such as appellant was, and no extra charge was made against appellant, or other similar customers, for going out and getting cars. Ragsdale would have charged the same price for the service rendered if the car had been driven to the garage and left there, and it was for appellant’s convenience tliat lie sent for tlie car. This and other similar services are rendered without charge to customers like appellant who pay their hills regularly and as an incident to the business for which charges are made. It is Ragsdale’s custom, in order to get the business, to send for cars, which his employees bring to his garage, and no extra charge is made for this service. He does not advertise that he renders this service without charge, and he does it as a favor when requested so to do by the owners, and he does it for their accommodation. The facts stated all appear from the testimony of Ragsdale himself.

Under this undisputed testimony the question' for decision is, whose servant was Gullett at the time of the collision?

The facts stated do not, in our opinion, present the case of a borrowed servant. There are many decisions holding one liable for the negligence of a servant temporarily or specially employed, although no compensation is paid for the service during the temporary relation of master and servant.

The case of Janik v. Ford Motor Co., 147 N. W. 510, 52 L. R. A. (N. S.) 294, which appellee cites and upon which he relies for an affirmance of the judgment here appealed from, is such a case. The Supreme Court of Michigan there said: “The essence of the best considered cases upon the temporary loan or hire of a servant for a special purpose is thus well stated in 26 Cyc. 1522: A person who avails himself of the use, temporarily, of the services of a servant regularty employed by another person may be liable as master for the acts of such-servant during the temporary service. The test is whether, in the particular service which he is engaged or requested to perform, he continues liable to the direction and control of his original master, or becomes subject to that of the person to whom he is lent or hired, or who requests his services. It is not so much the actual exercise of control which is regarded, as the right to exercise such control. To escape liability the original master must resign full control of the servant for the time being, it not being sufficient that the servant is partially under control of a third person. Subject to these rules the original master is not liable for injuries resulting from acts of the servant while under the control of a third person.’ ”

That case was a suit against the Ford Motor Company, whose servant, at the request of the purchaser of a car, undertook to drive the car to the city limits, where it was to be turned over to Wemer, the purchaser, who was a dealer in cars and who had bought the car to be delivered to a purchaser from him, 'but before reaching the city limits the car ran into a man as he was alighting from a street car. It was there held, in a suit for the damage thus occasioned, that the motor company was not liable, because its employee, who was driving the car at the time of the collision, was not acting as its servant, but was the servant of the purchaser of the car. Other facts in that case are to the effect that, having bought the car and paid for it, Werner asked the salesman of the motor company, from whom he had purchased the automobile, if they would let him have a driver to take them to the city limits, as Werner was not familiar with the city streets. Further stating the facts, the court said: “In the instant case there was no agreement or suggestion, as a part of the negotiations and purchase, that the motor company should assume or undertake any instructions to the purchaser relative to operating the car, or to see that when it left the salesroom it was properly run for any length of time, or to any place. He was a dealer in cars himself, experienced in their use, and knew what was necessary. The deal was closed, he had his receipt, and the car had been delivered to him at the time he asked for the accommodation. Groholski was sent along to drive as a ‘mere favor to the purchaser.’ At the time of the accident Werner, an experienced driver, not only owned the car, but was in actual occupation and possession of it, riding with a prospective purchaser out from the city towards their home. He was in no sense helpless, looking to, and dependent upon, the driver, as would he the case of an inexperienced purchaser. Like many other experienced drivers from the country or small towns, he felt less confidence in driving-through the congested thoroughfares of a, large city, and for that reason asked the loan of a driver to the suburbs. The fact that he found no occasion to give instructions to the driver, except to tell him along what street to drive, and relied upon his skill and experience, in no way affected Werner’s absolute rig-ht to control him in everything he did in connection with the ear. Samuelian v. American Tool & Mach. Co., 168 Mass. 12, 46 N. E. 98, 1 Am. Neg. Rep. 447. Under the undisputed testimony, the motor company had no control over nor interest in the car after it left its salesrooms, nor in the manner in which it was run, nor in where it went. It could not dictate how the car should be run; the most it could do would be to recall from this special employment the servant it had loaned. Luring Groholski’s absence from the salesrooms in this service he was doing the work of Werner, to whom he was gratuitously loaned, on the initiative and request of Werner, who had full right to dictate as to his own property and direct in what manner the car should be operated. He unquestionably could have taken charge and driven it himself, if he saw fit at any time, and, if so disposed, could have discharged the driver and proceeded without him; he was therefore for the time being the special master.”

We think that case was correctly decided under the principles there announced and herein applied. We shall not attempt to review other oases on the subject, as the number of them is almost -without limit. The legal principles applied in all these cases are the same, but the cases apply the principles to an almost infinite variety of facts.

At § 748 of Huddy on Automobiles (8th Ed.) page 856, it is said: ‘‘The general rule in the law of master and servant is that the owner of a motor vehicle is liable for the acts of his chauffeur when the latter is acting within the scope of the master’s business. 'The reverse is also true, that the owner is not liable for the conduct of the servant when the latter is not acting within the scope of his employment.” Among the large number of cases cited'in support of the text quoted are three from this court: Healey v. Cockrill, 133 Ark. 327, 202 S. W. 229; Hughey v. Lennox, 142 Ark. 593, 219 S. W. 323; Terry Dairy Co. v. Parker, 144 Ark. 401, 223 S. W. 6.

In the case of Terry Dairy Co. v. Parker, supra, we quoted from the case of Singer Mfg. Co. v. Rahn, 132 U. S. 523, as follows: ‘ ‘ ‘ * * * The relation of master and servant exists whenever the employer retains the right to direct the manner in which the business shall be done, as well as the result to be accomplished, or, in other words, not only what shall be done, but liow it shall be done. ’ ’ ’ After thus quoting from the -Supreme Court of the United States, we said: “This is also the doctrine announced by our own decisions.”

At § '255 of Huddy on Automobiles, page 252, it is said: “"Where a garage keeper has control of the motor vehicle of another-, so that the relation of bailor and bailee exists between the parties; the garageman, not the owner, is the person responsible for the chauffeur’s neglig'ence which results in an injury to a third person.”

In volume 2, Blashfield’s Encyclopedia of Automobile Law, at page 1362, this statement of the law appears: “Under the rules -stated in the foregoing sections, a mechanic holding possession of an automobile for the purpose of repairing it in his own way by the job, and free from direction or control of the owner as to detail or the manner of repairing, is an independent contractor, and the owner is not liable for injuries caused by the mechanic’s negligent operation of the ear while in the latter’s possession for such purpose; and this is true whether or not, at the time -of the accident, the repairman is testing it or returning it to the garage designated by tlie owner, since the contract of bailment is not complete until delivery of the machine to the owner.”

The annotator’s note to the case of Marron v. Bohannon, 46 A. L. R. 838, 104 Conn. 467, 133 Atl. 667, is devoted to the specific question of the ‘‘Responsibility of owner of car for negligence of one in general employment of repair man or keeper of garage while getting or delivering car, ’ ’ and the effect of the numerous cases there cited is summarized in the statement by the annotator to be that, “But as a general rule the owner of a car is not liable for the negligent driving of his car by a person in the general employment of a garage man while getting or delivering his car. ’ ’

The distinction between the instant case and the Michigan case of Janik v. Ford Motor Co., supra, from which we have quoted and upon which, as we have said, appellee relies, is well defined and' of controlling effect, and that distinction is just this: In the Michigan case the driver of the car, whose negligence caused the injury, was, at the time, the servant of the owner of the car; while in the instant case the driver of the car, at the time of the injury, was not the servant of the owner of the car.

If is true, as we have said, that Ragsdale made no separate or higher charge for sending for cars upon which he expected to perform service. But this practice was a means whereby Ragsdale’s business was enlarged, and in charging for work done upon a car he received compensation for sending for it and delivering it. He had the choice of selecting the servant who was sent for the car, and had sole control over him while that service was being performed. Glullett had no communication with appellant, and received no instructions from him. G-ullett received his instructions from Ragsdale, and continued liable to the direction and control of Ragsdale, his original master, and he was therefore the servant of Ragsdale, and not that of appellant, at the time of the collision.

It follows therefore that the judgment of the court below holding appellant liable for G-ullett’s negligence must be reversed, and, as the case has been fully developed, it will be dismissed. It is so ordered.


author: .Smith, J.

text:
    Ferguson v. Massachusetts Bonding & Insurance Company.
    Opinion delivered June 23, 1930.

      G. V. Holloway and Trimble, Trimble & McCrary, for appellants.

      Dillon & Robinson, for appellee.
   .Smith, J.

Appellants were the beneficiaries in a policy of insurance issued by appellee, the Massachusetts Bonding & Insurance Company, on December 7, 1928, upon the life of Eddie Harris. Attached to the policy and made a part thereof is. what is known as a paymaster’s order, which was signed by Harris, the insured, a section hand employed by the Missouri Pacific Railroad Company, authorizing that company to pay to the insurance company the sum of $5.90 out of his wages for the month of January, 1929, and the sum of $2.95 for each subsequent month, beginning February 1,1929. The premium of $2.95 was payable monthly, and the paymaster’s order of $5.90 was intended to pay the premiums for the months of December, 1928, and January, 1929. The insured was killed on January 13, 1929, and this suit was brought to collect the insurance. After hearing all the testimony, the court directed a verdict in favor of the insurance company, for the reason that the premium bad never been paid, and that therefore the policy had lapsed, if, indeed, it had ever been in effect, and this appeal is from the judgment rendered upon the verdict thus returned.

Nellie Ferguson, the sister of the insured >and one of the beneficiaries in the policy, testified that her brother, the insured, visited her about-a week before Ms death, and delivered to her the policy here sued upon; that he showed her his railroad pass, his identification card and a receipt for the money he had paid on the policy. The receipt was not produced at the trial, and the appellee insurance company denies that a receipt was ever issued.

The testimony of the witness Nellie Ferguson is very vague and indefinite in regard to this receipt, as she stated that she “just got a glimpse of it.” She did not know what sum of money the receipt showed to have been paid, but that “the receipt had his (the insured’s) name written in it in black t3rpe and red type filled in part of it.” That the word “Massachusetts” was the only word in the receipt that she could pronounce, but it showed that her brother’s premium was paid to February 1, 1929, which date was later than that of her brother’s death.

The probative value of this testimony is wholly destroyed by certain undisputed and incontrovertible facts.

To begin with, the agent of the insurance company who wrote and delivered the policy testified that the insured did not personally pay anything on the premium, and that it was not contemplated that he should do so, and the recitals of both the insurance policy and the paymaster’s order corroborate this testimony.

The first paragraph of the policy provided that, in consideration of the statements and representations contained in the application for the insurance and of the payment of the premium as provided for in the paymaster’s order, the company had insured the applicant.

The paymaster’s order bore the same date as the policy and was signed by the insured, and the relevant portions thereof read as follows:

“Paymaster's Order.
“Dated at St. Louis, 12-7-1928.
“To the Paymaster of the Missouri Pacific
Railroad Company,
“St. Louis, Missouri.
“I hereby request and authorize you to deduct and pay for me to the Massachusetts Bonding & Insurance Company, or its duly authorized agent, the sum of $5.90 out of my wages for the month of January, 19'29, and $2.95 out of my wages, for each consecutive month thereafter during the period of my employment with my said employer, for premiums on above numbered policy of insurance issued to me by said insurance company. * * *
“Express agreement: It is expressly agreed (1) that the first payment is to cover the insurance for the first period of insurance specified in said policy, and each subsequent payment shall be considered as the premium for one calendar month; (2) that each payment shall apply only to its corresponding insurance period; (3) that the company shall not be liable for any loss or disability resulting from injury sustained or illness beginning while I am in default in the payment of any premium; and (4) that this order is made a part of the contract of insurance.”

The insured voluntarily left the service of the railroad company on December 21, 1928, at which time he drew all the wages then due him. Testimony to this effect was given by the paymaster of the railroad company, who also testified that no payment was ever made by the railroad company to the insurance company under the paymaster’s order, for the reason that the insured had quit the service of the railroad company and had drawn all the wages then due him. The railroad company therefore had no funds on hand with which to pay the $5.90 premium covering the months of December, 1928, and January, 1929.

Had the insured paid the premium to the insurance company’s agent, he would not have given a paymaster’s order for tlie same premium, yet it is an undisputed fact that he did give a paymaster’s order on the date the policy was issued for the December and January premiums, and it is also undisputed that the order was not honored because the insured voluntarily quit the service of the railroad company before earning the wag'es out of which the premiums were to be paid, and drew all of his wages when he quit. It may be said, in this connection, that the insurance agent testified that premium receipts were not issued under policies of this character, and that the paymaster’s record showing the deduction of monthly premiums from the insured’s wages was the only receipt contemplated.

The insurance agent, after testifying that no premiums had been paid him, further testified that the first deduction of wages contemplated under the paymaster’s order was to be made January 1, 1929, but, if this interpretation of that instrument be accepted as correct, no different conclusion could be reached, for the reáson, as has been stated, that the insured had, prior to that time, quit the service of the railroad company, and nothing was due him on January 1st.

The case of Ætna Life Ins. Co. v. Ricks, 79 Ark. 38, is very similar to the instant ease. Speaking for the court, Mr. Justice Riddick there said: “If Ricks had remained in the service of -the Iron Mountain Railway Company, and had earned wages during the month of September sufficient to pay the premium that was to be paid from the wages of that month, then there might be reason for holding that the policy had not lapsed, even though the insurance company had not, at the time of the injury, actually received payment of the premium. But he left the employ of the railway company before the month of September, and collected all wages due him, leaving nothing to pay the premium.” Under these circumstances the court held that it was error not to have directed a verdict in favor of the insurance company.

We conclude, therefore, that the trial court was warranted in declaring, as a matter of law, in directing a verdict for the insurance company, that there was no competent evidence, which the jury had the right to accept as true, to the effect that the premium had ever been paid. The plan for paying the premium had been defeated by the insured’s own act before his death, and the policy had therefore ceased to be effective as a contract of insurance.

The judgment of the court below must therefore be affirmed, and it is so ordered.


author: Kirby, J.,

text:
    Smith v. Continental Casualty Company.
    Opinion delivered June 23, 1930.

      Oscar II. Winn, for appellant.

      Gockrill <& Armistead, for appellee.
   Kirby, J.,

(after stating the facts). Appellant insists that the court erred in refusing to give numerous instructions requested by him, but they are not sufficiently identified in the motion for a new trial with objections thereto to constitute assignments of error entitled to review here. A careful examination of the instructions given by the court discloses that the charge fully declared the law, correctly directing the jury in the proper consideration of the questions and issues submitted for their determination. The jury having found upon conflicting evidence, against appellant, upon whom the burden of proof rested to show a contract or agreement made entitling him to recover, its verdict cannot be disturbed here.

The case is unlike that of Gibson v. Continental Casualty Co., 178 Ark. 1090, upon which appellant relies, the facts being altogether different. In that case the insurance company furnished its agent with forms of receipts containing blanks for stating dates when the insurance should became effective, apparently authorizing him to fill in these dates and bind the company on the delivery of such receipt from the agent to the applicant for insurance. No policy was issued herein nor was any showing attempted to be made that a receipt containing any such provisions about the effective date of the policy when issued was given the applicant or any receipt at all issued to him. The burden to show the making of a contract of insurance or agreement therefor binding the insurance company to pay the amount designated was in no wise relieved against because of the difficulty thereof on account of the death of the applicant for insurance on the day his application was made, and of the agent soliciting the risk before the trial of the cause and the jury having found against appellant on conflicting evidence and the record disclosing no reversible error, the judgment must be and it is accordingly affirmed.


author: Humpheeys, J.

text:
    Maloney v. Harding.
    Opinion delivered June 23, 1930.

      June P. Wooten, for appellant.

      William L. Baugh, Jr., and R,H. Wiley, for appellee.
   Humpheeys, J.

Appellee brought suit against appellant in the circuit court of Pulaski County, Third Division, under §§ 2453 and 2455 of Crawford & Moses’ Digest for double the amount due upon a note for $800 executed on May 25, 1926, by appellant to appellee for borrowed money, which note bore interest at the rate of 8 per cent, per annum from date until paid. It was alleged in the complaint that appellant executed a mortgage of even date with the note to secure the payment of same upon the south half (S%) of northwest quarter section 25, township 1 south, range 12 west, in said county, which mortgage was never recorded, and subsequent to the execution thereof, said appellant conveyed said land to the Metropolitan Trust Company for a cash consideration of $1,000 with the intent to defraud, hinder and delay appellee in the collection of her debt. It was also alleged therein that appellee had the right to recover double the amount of the debt under said sections of the statute on account of the wrongful conduct of appellant in selling said real estate after mortgaging same to appellee.

Appellant filed an answer denying the material allegations of the complaint, and also filed a written offer on the day of the trial to confess judgment for $800, the face of the note with interest at the rate of 8 per cent, per annum from November 25, 1926, which offer appellee refused to accept.

The cause was submitted upon the pleadings and testimony introduced by appellee resulting in a verdict and consequent judgment in favor of appellee for $1,600 and interest at the rate of 8 per cent, per annum from November 25, 1926, amounting to $2,001.31 with 8 per cent, interest after the date of the judgment, from which is this appeal.

Appellant contends for a reversal of the judgment because the trial court- refused, over his objection and exception, to instruct the jury that appellee was not entitled to recover the statutory damages from appellant. The sections which were made a basis for the recovery of damages in double the amount of the notes sued on are as follows:

“Section 2453. Every person who shall be a party to any conveyance or assignment of any real estate, * * * with intent to * * * hinder, delay or défrand creditors or other persons, shall be deemed guilty of a misdemeanor,” etc. /;
“Section 2455. _Any person who shall violate any of the provisions of the two last preceding sections shall # * * pay to every person so by him injured or defrauded, by any of the means therein mentioned, double the damages sustained by him, to be recovered by proper action. ’ ’

It was said in the case of Daniel & Strauss v. Vaccaro, 41 Ark. 316, that, in order “to maintain an action on § 1378 of Gantt’s Digest (2453 Crawford & Moses’ Digest) against a grantee in a fraudulent conveyance, the plaintiff creditor must prove: 1, that he has a just debt; 2, that his debtor has fraudulently transferred his property to the defendant; 3, that the property was liable to execution or attachment; 4, that the defendant has knowingly aided the debtor to defeat the right of his creditors, and, 5, the amount of the plaintiff’s damages. ’ ’

The facts in the instant case are undisputed. Appellant on May 25, 1926, executed his note to appellee for the sum of $800, due November 25, 1926, with interest at 8 per cent. On the same day he also executed to her as security his mortgage to the land described above. On May 7, 1928, said appellant deeded the said land to the Metropolitan Trust Company for a cash consideration of $1,000. The mortgage was never recorded. Some eight or nine months thereafter appellee retained the note, but turned the mortgage over for safe keeping- to appellant, who was her lawyer and confidential adviser. She attempted to collect the note herself, but, failing, placed it in the hands of another attorney, William L. Baugh, Jr., for collection. Mr. Baugh presented the note for collection very -often and -demanded payment fihereon, and finally demanded a return of the mortgage which appellant failed to deliver to him.

Under the construction placed upon § 2453 of Crawford & Moses’ Digest in the case cited, before a recovery for double the amount of the debt can be had under the provisions of § 2455 of Crawford & Moses’ Digest, it must appear that the debtor transferred his property with the intent to hinder, delay or defraud his creditors or other persons. The record in the instant case fails to show that appellant had such a purpose in mind on May 7, 1928, when he deeded the property in question to the Metropolitan Trust Company, as appellee did not attempt, to prove by competent testimony that she could not have collected her note by execution or attachment out of other property owned by the appellant at the time of the transfer. It must have been shown that the effect of the conveyance was to denude himself of all his property, not leaving enough to pa}T his creditors, else he could not have defrauded appellee. A failure to make this proof by competent testimony entitled appellant to an instruction to the effect that appellee had no right to recover the penalty under the statute quoted. Appellant requested such an instruction, which was refused, over his objection and exception.

It is true, as argued by appellee, that the court submitted the question of appellant’s solvency to the jury, but it was not a question for the jury to determine, as there was no evidence in the record upon which to submit such an issue.

The mere fact that appellant refused to pay the note when due or when demand was made for the same is insufficient to show that he was insolvent at the time he made the transfer to the Metropolitan Trust Company.

In view of the fact that the evidence was insufficient upon which to submit the question of appellant’s insolvency to the jury, it is unnecessary to determine whether .the declaration of the court in submitting said issue was a correct declaration of law.

On account of the error indicated the judgment is reversed and judgment is directed to be entered here upon the supersedeas bond for $800, together with interest thereon at the rate of 8 per cent, per annum from and after November 25, 1926.


author: Butler, J.

text:
    Arkansas Power & Light Company v. Decker.
    Opinion delivered June 2, 1930.

      Robinson, House & Moses, for appellant.

      Albert W. Jernigcm and Henry B. Means, for appellee.
   Butler, J.

On the 4th day of September, 1913, J. H. York, then being the owner of the northeast quarter of section 36, township 3 south, range 18 west, Hot Spring County, Arkansas, executed a warranty deed to W. S. Kirkham for the express consideration of $4,000, by which deed he conveyed all the sand and gravel on and under said land for a term of ninety-nine years, the grantor agreeing for himself and his successors in title to pay the taxes on said land during said term of years. This deed was recorded in said county- on the '23d day of September, 3913, and on December 13, 1913, for. $1 and other valuable considerations W. S. Kirkham conveyed by warranty deed the above mentioned sand and gravel to Lonla M. Foster, now Mrs. L. M. Decker, which deed was recorded on the-proper record of the aforesaid county on the 23d day of December, 1913. The grantee of this deed, who afterward became Mrs. Decker (appel-lee here) was at that time visiting in Hot Springs, her home being in Texas where she has resided from that date until now. The land in question bordered on Ouachita Diver and consisted at that point of a sand and gravel bar. It was near this point that afterward the dam known as the Remind Dam was constructed for the purpose of generating electricity.

In January, 1923, negotiations were begun with York for the purchase of the gravel by the Caddo River Power & Irrigation Company which purchase was finally completed, and the land was then conveyed -by said company to the Arkansas Light & Power Company, appellant’s predecessor. An abstract was prepared and furnished to these companies in which the deeds from York to Kirk-ham and from Kirkham to Foster appeared. The title, as disclosed by the abstract not being satisfactory, certain affidavits were obtained to the effect that York had been in continued possession of the land for a considerable number of years; that the deed from York to Kirk-ham had been placed in escrow until payment of purchase price, and obtained through fraud without anything being paid York for the conveyance. These affidavits apparently satisfied the Arkansas Power & Light Company, and in April, 1923, this company installed machinery and began to remove the sand and gravel from about two or three acres of the land and used the same in the construction of the dam. From April of 1923 until the latter part of September, 1924, the work of removing the sand and gravel was continuous, and about the last of September, 1924, the employees were paid off and the record shows that on. the 4th day of October, 1924, the work of removing the gravel had been completed. The plant was shnt down and dismantling of the machinery begun, and on November 28,1924, the dam was fully completed and the production of electricity started.

Sometime in the summer or fall of 1927 Mrs. Decker, appellee, first learned by rumor that the gravel she had purchased from Kirkham was being removed from the land and thereafter on December 13, 1927, she filed this action against the appellant, successor of the Arkansas Light & Power Company, for the willful trespass on said land in the removal of sand and gravel therefrom in large amounts, for which she asked damages. The trial resulted in a decree in favor of Mrs. Decker, from which this appeal is prosecuted.

A number of questions are presented and discussed in the briefs of counsel which it will be unnecessary for us to consider, since at the outset of the case the appellee is met by the bar of the statute of limitations. Section 6950 of C. & M. Digest provides: “The following actions shall be commenced within three years after the cause of action shall accrue, and not after: First. All actions founded upon any contract or liability, expressed or implied, not in writing. Second. All actions for trespass on lands or for libels. Third. All actions for taking or injuring any goods or chattels.”

The facts are undisputed that this .suit was instituted more than three years after the cause of action accrued. There was no grave] removed after October 4, 1924, and this suit was not filed until December 13,1927, a period of more than three years after the cause of action accrued. The appellee seeks to escape the bar of the statute of limitations by virtue of the rule announced in the case of McKneely v. Terry, 61 Ark. 527-44, where it is held that “a cause of action, kept fraudulently concealed, will stop the -bar of the statute in favor of the one against whom the fraud is perpetrated, until the fraud is or should have been discovered.” Appellee insists that the facts of the present case bring it within that rule, and cite in support of her contention: Conditt v. Holden, 92 Ark. 618; Walden v. Blasingame, 130 Ark. 452; Crissman v. CarlLee, 132 Ark. 36; Catherena v. Porter, 134 Ark. 167. These cases merely restate the doctrine announced in McKneely v. Terry, supra, and hold it applicable to the facts of those cases.

There was no fraud or concealment óf the appel-lee’s cause of action on the part of the Arkansas Power & Light Company, and the rule stated has no application here. Appellant entered with a large crew of laborers on the land, and for more than a year remained thereon excavating and removing large quantities of sand and gravel. - The erection of the iiemmel Dam was a matter of State-wide interest, and no effort was made in any way to conceal the operations of the Power and Light Company. While York, in the conveyance from him to Kirkham, had agreed to paj^ the taxes on the land including the sand and gravel, this imposed upon him no duty to guard the land from trespass, and, if so, his failure to notify Kirk-ham or his assigns, if it could be said to have been a fraud, could not be imputable to York’s grantees. All that the appellant’s predecessor did was to purchase a tract of land, the title to which was clouded, and to proceed openly to occupy and use it.

The effect of the holding in the case of Western Union Tel. Co. v. Chappelle, 180 Ark. 432, was that the fact at issue was peculiarly within the knowledge of the company, and that the plaintiff in the case had no information of any circumstance that might lead a reasonable person to believe that such existed, and was therefore not bound by a rule requiring complaint to be made on account of such circumstance within a certain time, while in the instant case knowledge of the trespass was open to all the world.

Mrs. Decker resides in Texas; she had not visited the land in controversy or made inquiry about it for fourteen years, and she must be deemed to have been construe-tively present and to have known of any act of trespass committed on her property unless the trespasser, by some affirmative act on his part, had diverted her attention or put her watchfulness to sleep. As is said in McKneely v. Terry, supra: “No mere ignorance on the part of plaintiff of his rights, nor the mere silence of one who is under no obligation to speak, will prevent the statute bar. There must be some positive act of fraud, something so furtively planned and secretly executed as to keep the plaintiff’s cause of action concealed, or perpetrated in a way that it conceals itself.” This rule has been uniformly followed by this court, and its application to the facts of the-Instant case force the conclusion that the trial judge should have sustained the appellant’s plea. Rock Island Plough Co. v. Masterson, 96 Ark. 446; McKinney v. Beattie, 157 Ark. 356; Conditt v. Holden, supra; Hibben v. Malone, 85 Ark. 584. The decree is therefore reversed, and the case is dismissed. ,

Kirby, J., dissents.


text:
    Payne v. Seymour.
    Opinion delivered June 16, 1930.

      E. TP. Brockman, for appellant.

      U. J. Gone, for appellee.
   Smith, J.

This suit was brought by appellee to recover the value of certain cotton, upon which she claimed a lien as landlord, and which had been converted by appellant.

Appellant is a merchant, and does a farm supply business, and, beginning in 1921, made advances to James Pope, a tenant of appellee, who was a sharecropper paying one-fourth of his cotton as rent. Appellant made advances to Pope in 1928 and took a mortgage on his interest in the crop, and in the fall of that year remitted to appellee á check for $140:61 as one-fourth of the proceeds of the sale of five bales of cotton grown by Pope. Previous settlements for 1921 to 1927, inclusive, had been made in this .manner.

R. W. Seymour, was the son and agent of appellee, had charge of her farm, and the check referred to was remitted to him, but upon its receipt he 'wrote appellant that the land had been rented to Pope for 1928 for a cash rental of $600 per year, and not for an agreed share of the crop, as had formerly been the case. This was the first knowledge appellant had that Pope did not have the same contract for 1928 which he had previously operated under. Appellant testified that Pope had told him that he was working- the land in 1928 under the same contract, and appellant further testified that he would not otherwise have made advances to Pope, and that appellee’s agent led him to believe that no change had been made in Pope’s contract. The testimony was to the effect that there had been’some controversy about the proceeds of the last bale of 1927 cotton sold, and appellant testified that appellee’s son and agent told him that, if he (appellant) was going to furnish Pope in 1928, he might credit the entire proceeds of this last bale of cotton on Pope’s account, and that he had done so, after which a large balance still remained due him.

Appellant insists that when he bought Pope’s cotton he was in possession of no information to warn him that he was buying cotton on which there was a lien on more than one-fourth of it, and that when appellee’s agent accepted $140 check, which the statement accompanying the check showed to be one-fourth the value of five bales of cotton, she thereby waived her lien and rati-fled the sale. Appellee received other cotton from Pope and offered to settle with appellee for one-fourth of its value, and it is undisputed that he received altogether from Pope cotton of a greater value than $G00.

Pope admitted the execution of the rent note sued on in January, 1928, and testified that he did not tell appellant that he had not changed his rental contract, for the reason that he supposed appellant had secured this information from appellee, or her agent, and when appellant asked him about his rent contract he told him that he had agreed to pay $600 money rent in 1928, and appellant said then that he ought to have made the inquiry earlier.

Appellee’s son and agent testified that when the last of the 1927 crop was being settled for appellant threatened to take Pope’s team and tools, and he then agreed that appellant might apply the entire proceeds of the last bale of cotton to his account, upon condition that the team and tools be not disturbed, but that nothing was said then or at any other time about what the 1928 rent would be.

The court found “that defendant could not rely on the fact that the tenant had rented the land previously for one-fourth of the cotton, and that there was no ratification by plaintiff of tenant’s sale of the cotton to defendant,” and this appeal is from that decree.

It thus appears that this appeal presents only a question of fact, and, without further recital of the testimony, we announce our concurrence in the finding of the chancellor that appellant had no right to assume there would be no change in Pope’s rental contract, and that neither appellee nor her agent did anything to induce such a belief by appellant, and also that her acceptance of one-fourth of the proceeds of the sale of the first five bales of cotton was not a waiver of her lien. The ■cotton had been purchased and converted by appellant when he remitted the check, and appellee was entitled, in any event, to the money paid her. Appellee’s son and agent testified that tlie letter accompanying the check was the first information he had that appellant did not know the terms of Pope’s 1928 rental contract, and that he at once wrote appellant as to what the contract was.

Appellant admits that he knew of appellee’s'lien when he bought Pope’s cotton, but he thought the lien covered only a one-fourth interest in the crop. It does not appear, however, that appellee or her agent did anything to induce this misapprehension, and the decree holding appellant liable for the value of the cotton converted, to the extent of the balance due on rent, is correct., and must therefore be affirmed, and it is so ordered.


author: Kirby, J.

text:
    Bank of Manila v. Wallace.
    Opinion delivered June 16, 1930.

      Little é Buck, for appellant.

      J. F. Gautney, for appellee.
   Kirby, J.

This is the second appeal of this cause. Por a statement of the case and the decision on the former appeal reversing and remanding it, see 177 Ark. 190.

The ;judgment was reversed because the court had erroneously directed the verdict. It was there said: “It is a question of fact to be determined by the jury from the evidence whether the appellant was an innocent purchaser. And, as stated in the case last mentioned, if the appellant knew that the note was given for stock of the corporation, then it was not an innocent purchaser, and the question should have been submitted to the jury. ”

It appears from the testimony that the "bank purchased the note sued on, made by J. D. Wallace to O. A. Thompson, before it was due, paying the 'amount thereof less the discount. That Wallace, the maker, gave the note to 0. A. Thompson for “stock in this cotton mill over here,” the Jonesboro Cotton Mills. That the stock was never delivered to him. “I was to have stock in that plant they were putting up, but L never did get none;” admitted writing the letter of March 14 to the 'Bank of Manila, saying it is agreeable with me for you to purchase my note in the amount of $1,480 given to C. A. Thompson for stock in the Jonesboro Cotton Mills, Inc. Said note is dated March 10, 19'25, and due in 90 clays from date.

Braden testified that he knew the maker of the note, the man C. A. Thompson and Mr. Shaver of the Bank of Manila, who talked with him about the purchase of the note, and that Mr. Shaver called on the phone, and asked if he considered “Uncle Tuck”- Wallace or J. D. Wallace’s note good, and I told him it was good for whatever amount he mentioned, but, knowing that “Uncle Tuck” was dissatisfied with some notes he had given for stock in the Jonesboro Cotton Mills, I told him Mr. Shaver that, if it was one of those notes, that he would better be careful about buying it, because Mr. Wallace was dissatisfied with his deal, and would perhaps give him trouble about collecting it. "Witness was the cashier of the Citizens’ Bank of Monette at this time.

Judge Gregg testified he had some stock in the Jones-boro Cotton Mills, and was a director in it, and knew C. A. Thompson, who was acting as agent of the Cotton Mills making sales of its stock — selling stock generally for the Cotton Mills; was one of the -board of directors which authorized Thompson to sell the stock, and in some cases he would take notes when he could not get the cash and had authority to do so; thought he was agent at the time stock was bought by Mr. Wallace. He was to sell stock for the company and get commissions on it not taking subscriptions. Some of the stock sold by Thompson was issued. Did not know whether the particular stock purchased by Wallace was issued or not.

Appellant asked for a directed verdict, and the court gave two instructions to the jury, defining an innocent purchaser in the first and instructing' the jury that the bank would not be an innocent purchaser if it knew the note sued on was given, either to the Cotton Mills company or the agent of the Jonesboro Cotton Mills, for stock in that concern; otherwise under the evidence in the case it would be. In instruction No. 2 the jury was told that the law presumed the bank to be an innocent purchaser for value without knowledge of any defects in the note, and that the burden of showing that the bank was not an innocent purchaser was on the defendant, and, unless it found that the bank had knowledge that the note Avas given to the Cotton Mills company or its agent for stock in the Jonesboro Cotton Mills, then it must find for the plaintiff.

The jury returned a verdict in favor of appellee, from which the bank appealed.

The bank insists that the court erred in refusing to direct a verdict in its favor, and in giving instruction No. 3, and that the verdict is contrary to the evidence and the instructions given.

The bank had notice that the note was given for stock in the Jonesboro Cotton Mills, Inc.; that the stock had never been delivered; that Thompson Avas the authorized agent of the cotton mills, making sales of its stock, and also was informed, before discounting the note, by the cashier of the other bank where the maker of the note kept his account, that the maker was good for the amount of the note, but that, if it was one given for stock in the cotton mills, they would better be careful about buying it because “Mr. Wallace was dissatisfied with his deal and would perhaps give him trouble about collecting it.”

While it is true the testimony does not show that the stock sold, for which the note was taken, was not the property of C. A. Thompson, the seller and payee of the note, the reasonable inference necessarily arose from the testimony introduced that it was stock of the cotton mills sold by Thompson, the authorized agent of the mills, in the usual course of business; and, the testimony was also sufficient to show that the discounting- bank had such notice of the transaction that warranted the jury in finding that it was not an innocent purchaser for value of the note sued on. We find no error in the record, and the judgment is affirmed.


author: Mehaeey, J.

text:
    Arkansas Game & Fish Commission v. Storthz.
    Opinion delivered June 16, 1930.

      Hal L. Norwood, Attorney General, Robert F. Smith, Assistant, and Guy Amsler, for appellant.

      Ingram £ Moher, for appellee.
   Mehaeey, J.

This is a suit by appellee for the cancellation of contracts, for an accounting, for judgment for the value of fish taken from certain lakes and for, a restraining order. Appellee alleged that he was the owner of the soil upon which “H” and “Dry” Lakes are situated in the southern district of Arkansas County; that said lakes are wholly upon his property, and are not connected with any navigable or other stream. He alleges that said lakes are private lakes or ponds. The lakes are described, and it is alleged that the appellant entered into a contract with Eugene Harper, Will Ray and Sanford Bonner, giving said Harper, Ray and Bonner the exclusive right to trap and seine fish in a number of lakes, including H Lake and Drjr Lake. The parties agreed to pay the State one cent per pound for the fish taken. The evidence shows that H Lake is located entirely on appellee’s land, and Dry Lake is either entirely on ap-pellee’s land or on his land and the land of another private owner. Neither of these lakes is connected with any navigable stream except during high water or overflow, and then the whole surrounding country overflows. The following stipulation was by agreement introduced in evidence :

“By agreement between the parties the money paid to the commission by Harper, Ray and Bonner on the fish taken from H, Dry and Parish Lakes was deposited in the People’s Trust Company to be held pending the outcome of this litigation. It was agreed that said sum represents whatever damage the plaintiff sustained by virtue of defendant’s operations. It is agreed that section 16 of township 6 south, range 1 west, shown on the Querter-mous map as school lands, is now the property of the White River Lumber Company. It is also agreed that - the lakes involved in this controversy are non-navigable and non-meandered. ”

The foregoing was all of the evidence introduced on behalf of plaintiff. When plaintiff (appellee) completed the taking of testimony, defendant (appellant) filed its motion to dismiss, and for cause said that the evidence introduced by plaintiff did not entitle him to the relief song-ht.

By agreement the canse was submitted upon the complaint; the amendment thereto; the stipulation; the depositions of Strode, Martin, Quertermous, Wheeler and Storthz with the exhibits to same, the answer and exhibits thereto, and the motion to dismiss.

Whereupon the court entered an order dismissing the complaint of plaintiff, Storthz, as to Parish and Dry Lakes and rendering judgment for him in the amount of $417.53, which is supposed to represent one cent per pound on the fish which were taken from H Lake. No ruling was made upon appellant’s motion to dismiss, and, after the court’s ruling, appellant was not permitted to introduce proof bearing upon the issues as to H Lake.

The commission has appealed from that part of the chancellor’s ruling with reference to “H Lake.”

It was also agreed that, if Joe Storthz would testify that the plaintiff is the owner of the lands around Dry and H Lakes, this may be used in evidence. Joe Storthz testified that his father, the plaintiff, was at the commencement of the suit the owner of the lands upon which Dry and H Lakes are situated; that he had owned these lands about twenty-five years, and had paid the taxes on all of these lands since he had owned them. Joe Storthz also testified these lakes are located on lands that now belong to him and his brother, but at the commencement of this suit said lands belonged to his father; that these lakes are not connected with any navigable waters; that they are inland bodies of water.

The statute with reference to fish being the property of the State expressly excepts fish in private ponds. C. & M. Digest, § 4753.

There is no provision in § 2 of act 151 of the Acts of 1927 exempting from the application of said act waters wholly on the premises belonging to an individual, but, when this act is considered with § 4753 of C. & M. Digest, we tliink it is perfectly plain that the Legislature did not intend that this should apply to waters wholly on the premises belonging* to individuals. The intention of the Legislature is shown by the passage of act 82 of 1929, § 1, of which reads as follows: “Hereafter no agreement shall be made by the Arkansas Game and Fish Commission with any person or firm under the provisions of § 2 of act 151 of the 1927 General Assembly, whereby such person or firm is authorized to enter upon any lake that is not meandered by U. S. Government surveys and upon which taxes are paid, for the purpose of removing* any fish therefrom for commercial purposes unless permission in writing* is first procured from the party or parties owning* the lands around and under such lake.”

This court has said: “It can be stated without question that primarily the title to game and fish are and have for all time been in the sovereign, but the nature and extent of that title and the purposes for which it is held are not altogether free from doubt. Originally, the title seems to have been regarded as vested in the sovereign as a personal prerogative, but as civilization advanced it grew to be differently regarded, not as a personal right of kings but as a portion of the common property of subjects. It is said that by the Roman law animals ferae •naturae were classified as common property, which, having no owner, were considered as belonging to all the citizens of the State; yet the right of the owner of land to forbid another from killing game on his property was recognized as a part of the rights of ownership of the land. * * * But nowhere do we find in modern times that the absolute and unqualified ownership of such animals b3r government has been asserted and exercised further than for the purpose of controlling and regulating the taking of the same. On the other hand, we find frequent denial of the right of government to do more. * * * We assume, therefore, as firmly established by authority, that the State’s ownership of fish and game is not such a proprietary interest as will authorize a sale thereof, or the granting of special interests therein, or license to enjoy, but is solely for the purpose of regulation and preservation for the common use, and is not inconsistent with a claim of individual or special ownership by the owner of the soil, if it be found that there can be any such individual or special ownership'. * * * We therefore conceive it to be settled by authority and by long recognition in the law that the owner of the land has a right to take fish and wild game upon his own land, which inheres to him by reason of his ownership of the soil. It is a property right,' as much as any other distinct right incident to his ownership of the soil. It is not, however, an unqualified and absolute right, but is bounded by this limitation, that it must always yield to the State’s ownership and title, held for the purposes of regulation and preservation for the public use. These two ownerships or rights, that is to say, the general ownership of the State for one purpose, and the qualified or limited ownership of the individual, growing out of his ownership of the soil, are entirely consistent with each other, and in no wise conflict.” State v. Mallory, 73 Ark. 236.

The State, not only under the common law, but under the decisions of this court has the right under its title to regulate and preserve for the public use, but it has no right to prohibit the owner of land upon which there is a lake to take fish therefrom. It would not have the right to make the contract made in this instance, giving persons other than the landowner the exclusive right to take fish, even if the lake was not entirely on the land of one person. The persons owning land bordering on the lake have the right to take fish therefrom subject only to the right of the State to regulate and preserve for the public.

We deem it unnecessary to review the authorities in this case because in the case we have just cited, State v. Mallory, the court reviewed the authorities and announced the rule which has since been followed in this State.

“The only justification for a law regulating and restricting the common right of individuals to take wild game and fish is the necessity for protecting same from extinction and thus to preserve and perpetuate to the individual members of the community the inalienable rights which they have had from time immemorial.” Lewis v. State, 110 Ark. 204.

In a later case, this court said: “It is unnecessary in the present case to pass on the question as to whether or "not the Legislature has the power to regulate fishing in private ponds wholly on the premises of an owner, and we content ourselves merely by deciding the question as to whether or not such an attempt has been made in this statute.” Milton v. State, 144 Ark. 1.

The numerous authorities are again discussed in the Milton case, and while it was not decided whether the Legislature had power to regulate fishing in private ponds wholly on the premises of the owner, it is not necessary to decide that question in this case because the Game and Fish Commission undertook in this case to give other parties the exclusive right to take fish and deprive the owner of the land of that right. We do not think the Legislature intended to pass a la-w to this effect, and it would not have authority to do so. Numerous authorities are cited and discussed by counsel, but we think the question here has been settled by the decisions of this court, and it becomes unnecessary to review the authorities cited by counsel. We think that where the lake or pond is entirely within the land of the owner, and no means of passage by which fish can migrate to the waters of other owmers, such single owner will own the fish as well as the fishing rights. The evidence in this case shows that there is no more means of fish getting into this lake from the river than there is of fish from the river getting all over the surrounding country. We think the evidence shoves that both these lakes are inland lakes, and in times of high water fish might go from the river to the lake or from the lake to the river, not because there is any outlet from the lake or any channel from the lake to the river, but because the entire country overflows, including the lakes.

It is next insisted by appellant that it is entitled to a ruling on its motion to dismiss, and that it should have been permitted to introduce testimony, but the stipulation filed by counsel is in part as follows: “By agreement the cause was submitted upon the complaint, the amendment thereto, the stipulation, the depositions of Stroude, Martin, Quertermous, Wheeler and Storthz with the exhibits to same, the answer and exhibits thereto, and the motion to dismiss. The parties also agreed that the case might be decided by the chancellor in vacation, and it was submitted by agreement without any request on the part of the appellant to take testimony. The decree also recites that it was submitted by agreement, and it was after the court had rendered its decree that the appellant requested permission to introduce testimony. The refusal to permit this after the decree was not an abuse of the court’s discretion. As to the motion to dismiss, it is sufficient to say that it was submitted together with the case, and the motion to dismiss was based on the alleged ground that there was no evidence to justify a decree. Of course, the finding in favor of the appellee was in effect an overruling- of the motion which was based on the ground that there was no evidence to justify a decree.

The Game and Fish Commission had no authority to make the contracts giving persons the exclusive right to take fish from these lakes, and said contracts should be canceled. The decree of the chancery court is affirmed on appeal, and on cross-appeal as to Dry Lake the decree is reversed, and the cause is remanded with directions to cancel the contracts as to this lake and ascertain the amount of fish taken from Dry Lake and enter a decree for that amount, and to grant the injunction as to Dry Lake.