author: McCulloch, C. J.

text:
    State v. Martineau.
    Opinion delivered June 20, 1921.
    1. Prohibition — notice required in supreme court. — Crawford & Moses’-Digest, §§ 6251, 7023, requiring ten days’ notice of application for the writ of prohibition, do not apply to original proceedings in the Supreme Court, whose jurisdiction is derived from the Constitution.
    2. Prohibition — notice required in supreme court. — Since there is no statute regulating the practice on original applications to the Supreme Court for the writ of prohibition, and no established rule of the court on the subject, the writ may be issued after reasonable notice of the application; the reasonableness depending upon the circumstances of the case.
    3. Prohibition — requirement op objection to jurisdiction. — The general rule that objection to jurisdiction must be raised in the inferior court and overruled before the writ of prohibition will issue is subject to certain exceptions.
    4. Prohibition — refusal to rule on objection to jurisdiction.— Where the State properly objected to the jurisdiction of the chancellor to issue writs of habeas corpus to procure the discharge of men under sentence of death, but the chancellor refused to pass on the question of jurisdiction or on the merits of the case until the Supreme Court passed upon the question of jurisdiction, but did exercise jurisdiction to the extent of enjoining the execution of the sentence of death, his action was tantamount to overruling the objection to jurisdiction.
    5. Equity — jurisdiction to review criminal proceedings. — Courts of equity have no jurisdiction to review proceedings in criminal cases, or to interfere with such proceedings, either by injunction or by habeas corpus.
    6. Habeas corpus — scope of inquiry. — If a petitioner for habeas corpus is in custody under process regular on its face, nothing will be inquired into save the.jurisdiction of the court whence the process came.
    7. Habeas corpus — federal statute. — Act of Congress, February 5, 1867 (U. S. Comp. Stat., § 1281), which enlarged the jurisdiction of the United States courts in habeas corpus proceedings, did not enlarge the jurisdiction of the State courts in such proceedings.
    8. Criminal law — new trial for newly-discovered evidence. — A new trial of a criminal case for newly-discovered evidence, or for retraction of testimony by witnesses for the State, which in effect is newly-discovered evidence, can not be granted after expiration of the term.
    Prohibition to Pulaski Chancery Court; J. E. Mar-tineau, Chancellor;
    writ of prohibition granted.

      J. S. TJtley, Attorney General, Elbert Godwin and W. T. Hammoch, Assistants, for appellants.

      E. L. McHaney, Scipio Jones and J. II. Carmichael, for appellee.
   McCulloch, C. J.

Prank Hicks, Prank Moore, Ed Hicks, J. E. Knox, Ed Coleman and Paul Hall, who had previously been indicted and convicted of the crime of murder, and who were being confined in the State penitentiary awaiting execution of the death sentences, filed a petition for habeas corpus in the chancery court of Pulaski County, praying that they be discharged from custody and from said judgments of conviction. This petition was filed and presented to the chancellor on June 8, 1921, who immediately ordered the issuance of a writ of liabeas corpus directed to the keeper of the penitentiary, and the chancellor also ordered the issuance of a writ of injunction restraining the said keeper from executing the death sentences upon said petitioners in accordance with said judgments of conviction and the proclamation of the Governor fixing the date of executions. The writs were issued and made returnable for hearing before the chancery court at 2 o’clock p. m. on June 10, 1921, arid E. H. Dempsey, keeper of the penitentiary, was made respondent in the proceeding, and copies of the proceedings and process were served on him and on the Attorney General, who appeared before the chancellor on behalf of the State and the keeper of the penitentiary and made objections challenging the jurisdiction of the chancery court.

A petition has been filed here praying for a writ of prohibition to restrain the chancery court from proceeding in the matter, alleging that it is not within the jurisdiction of that court. The chancery court postponed further hearing on the matter until a decision of this court could be rendered as to the jurisdiction of that court. The petitioners in the proceeding below, as well as the chancellor, have responded to the present petition, and the former seek to uphold the jurisdiction of the chancery court. Eelators presented the present petition to the justices of the Supreme Court on June 9, 1921, for a temporary writ of prohibition pending the presentation of the matter to the court in session, but, on objection being made by respondents to the hearing at that time, it was postponed to the first session of the court on Monday, June 13, 1921, and the cause was set down for hearing on that day.

At the outset of the hearing by this court respondents were opposed to proceeding at this time on the ground that the notice was not given for the length of time required by statute. There is a statute regulating the practice on applications for mandamus and prohibition, which provides that ten days’ notice of an application shall be given. Crawford & Moses’ Digest, 6251 and 7023. This statute manifestly applies only to proceedings of this nature in courts of original jurisdiction It defines a writ of mandamus, treated in the - chapter, ‘ ‘ as an order of a court of competent and original jurisdiction,” and defines a writ of prohibition as <£an order from a circuit court to an inferior court of limited jurisdiction prohibiting it from proceeding in a matter out of its jurisdiction.” Crawford & Moses’ Digest, §§ 7021-22. This does not apply to proceedings in the Supreme Court where jurisdiction is derived from the Constitution, but there is no statute regulating the practice. Prairie C. C. M. Co. v. Kittrell, 107 Ark. 361. This leaves the matter of notice as one to be fixed by rules o.f this court. This seems to have been the thought in the mind of the court deciding the case of Ex parte Tucher, 25 Ark. 567, which arose shortly after the adoption of the Civil Code containing the provision referred to in regard to notice. In the opinion it was said, following the common-law practice, that a writ of prohibition should not be “issued unless an opportunity be offered those sought to be prohibited of' showing cause against it,” but no reference was made to the statute requiring notice. There is no established rule of this court on the subject, and it is a question to be determined in each instance whether reasonable notice has been given. In the present case we concluded that the notice was, under the circumstances, reasonable and the request for further postponement was denied. In fact, there was no contention that the notice was unreasonable if we concluded that the statute referred to did not apply.

Again, it is urged that the remedy should not be awarded under the writ of prohibition for the reason that proper objection had not been made to and overruled by the chancellor to the exercise of jurisdiction. The rule has often been recognized in déeisions of this court that prohibition is not available until objection to the wrongful attempt to exercise jurisdiction has been raised in the inferior tribunal and overruled; but exceptions to that rule have been found. Reese v. Steel, 73 Ark. 66; Monette Road Imp. Dist. v. Dudley, 144 Ark. 169.

The state of the matter as presented here is this: The chancery court has already exercised jurisdiction by issuing an injunction staying execution of the judgments in the criminal cases and has set the cause for final hearing. Relators made objection to the exercise of jurisdiction, but the chancery court declined to decide either the question of jurisdiction or the merits of the cause until after this court determined the question of jurisdiction. The chancery court on June 10 postponed the hearing indefinitely until this court decides the present case. The effect of the court’s attitude is therefore to retain jurisdiction and to further exercise it in due time unless prohibited by this court. The case, therefore, falls within the exceptions stated in Monette Road Imp. Dist. v. Dudley, supra,. Relators are now under restraint of the writ of injunction issued by the chancery court in the attempt to exercise jurisdiction which it is alleged that court did not rightfully possess, and the failure of the court on the request of the relators to relinquish jurisdiction is tantamount to overruling the objection.

This brings us to the consideration of the main question in the case, whether ¡or not, upon the allegations of the petition filed below, the chancery court possesses jurisdiction, either by injunction or under the writ of habeas corpus, to review the proceedings in which the accused respondents were convicted of the crime of murder .or to interfere with the judgments of conviction. The facts are stated in detail and at great length in the petition filed, and include the record of the proceedings in which the accused respondents were indicted, tried and convicted, the record of the appeal to this court, the judgment of affirmance and the opinion of this court, and also the record of the application to the Supreme Court of the United States for a writ of certiorari to review the proceedings.

The accused respondents were indicted by the grand jury of Phillips County for the crime of murder in the first degree, alleged to have been committed by shooting one Clinton Lee. It was charged in the indictment and proved at the trial that the killing of Lee occurred on October 1, 1919, and the indictments were returned by the grand jury on October 29, 1919, and on the 3d day of November, 1919, the trials occurred, Prank Hicks was tried separately and the other five were tried together, and each trial resulted in a conviction of murder in the first degree. When the accused were brought into court and arraigned, they had no attorneys to represent them, and the court appointed counsel, certain members of the Phillips County bar, who represented the accused throughout the trials. There were no exceptions saved during the progress of the trials, but the records show that counsel for the accused cross-examined all of the State’s witnesses at length. Before the final adjournment of the circuit court for the teim and within the time allowed by law, the accused or their friends, employed to represent them the counsel who now appear in their behalf in the present proceedings, and they filed a motion for new trial, supported by affidavits, which was heard by the court and overruled on December 18, 1919: The motion set forth, as grounds therefor, that the verdicts were contrary to the law and the evidence, and that the court erred in rendering judgment upon the verdict. The motion also set forth at considerable length and in detail the circumstances, surrounding the accused at the time of the killing of Clinton Lee and from then up to and throughout the trials of the causes, stating among other things that “at the time ¡of the returning of said indictment and trial said excitement and bitterness of feeling among the whites of said county against the ne-groes, especially against the defendants, was unabated and still at the height of intensity.” It alleged, in substance, that the trials of the accused occurred during a period of great excitement; that the accused were given no opportunity to consult with friends ¡or to employ counsel, and, while they were confined awaiting trial, a mob composed of several hundred armed white men surrounded the jail and courthouse, and that the excitement and feeling against the accused among the white people of the county was such that it was impossible to obtain ■an impartial jury. The substance of the ground thus pleaded was that they had not been given a fair trial on account of the alleged domination of a mob over the court and. jury. Upon overruling the motion for new trial, the circuit court allowed the accused sixty days within which to prepare and file a bill of exceptions, which was filed within the time allowed, and an appeal was duly prosecuted to this court, and after arguments the case was decided by this court affirming the judgment of conviction. All of the assignments of error in the motion for new trial were reviewed in the opinion of this court and decided against the contention of the accused. Hides v. State, 143 Ark. 58. Thereafter a petition was presented to the Supreme Court of the. United States for a writ of certiorari, which was by that court refused. Since that time the accused respondents have remained in the custody of the keeper of the penitentiary awaiting the action of the Governor in fixing the date of execution, and the proclamation of the Governor fixing the date of the execution on June 10, 1921, has been suspended by the injunction of the chancery court.

The petition filed below contains a repetition of the allegations contained in the motion for new trial with reference to the excitement prevailing at and before the trial in the circuit court and the alleged domination of mob violence. It also contains a charge, which was also stated in the motion for new trial, that the accused, being negroes, were denied the right and privilege guaranteed by the Constitution of the United States by the exclusion of their race from the. grand jury and from the trial jury in Phillips County. The petition recites facts in regard to publications in newspapers and resolutions passed by civic and fraternal organizations prior to the trial and subsequent thereto alleged to be calculated to arouse the people of Phillips County to a high pitch of excitement. It also gives a history of the events which are said to have led up to the killing of Clinton Lee, and declares the innocence of the accused of the crime charged in the indictment. It also alleges that the witnesses introduced by the State in the prosecution of the accused were tortured into giving false testimony, which said witnesses had retracted since the trial. It contains an allegation that prior to the indictment of the accused there had been an investigation by a committee of white citizens in Phillips County for the purpose of ascertaining who were the guilty parties in the homicide which had occurred, and it is stated in the petition that “the entire trial, verdict and judgment against them was but an empty ceremony; that their real'trial and condemnation had already taken place before said ‘Committee of Seven,’ that said committee, in advance of the sitting of the court, had set in judgment upon their and all other cases and assumed and exercised the jurisdiction of the court by determining the guilt or innocence of those in jail, had acquired the evidence in the manner herein set out, and decided which of the defendants should be electrocuted and which sent to prison and the terms to be given them, and which to be discharged; that when court convened, the program laid out by said committee was carried through, and the verdict against petitioners was pronounced, not as the independent verdict of an unbiased jury, but as part of the prearranged scheme and judgment of said committee; that in doing this the court did not exercise the jurisdiction given it by law and wholly lost its jurisdiction by substituting for its judgment the judgment of condemnation of said committee.”

The doctrine has been announced by this court that courts of equity in this State are not clothed with jurisdiction to review proceedings in criminal cases or to interfere with such proceedings, either by injunction or under the writ of habeas corpus. State v. Williams, 97 Ark. 243; Ferguson v. Martineau, 115 Ark. 317. In State v. Williams, there was an instance where the chancellor- had, after indictment of the accused in the circuit court, issued a writ of habeas corpus for the purpose of allowing bail, and we held that the circuit court acquired exclusive jurisdiction of the cause upon the return of the indictment, and that the chancery court had no jurisdiction to interfere, even to the extent of allowing bail. In disposing .of the matter, we said: “The chancellor has nothing to do with the administration of the criminal laws nor right to interfere with them, neither has he appellate jurisdiction over criminal trials nor appellate or supervisory jurisdiction over the actions of chancellors or circuit judges granting or refusing bail.”

The case of Ferguson v. Martineau, supra, was one where the chancellor issued an injunction to restrain the keeper of the State penitentiary from executing >a death sentence-, the writ being issued to suspend proceedings and stay the execution until the sanity of the accused could be inquired into in the probate court. In disposing of the case, in which we held that the chancery court was proceeding beyond its jurisdiction, we said: ‘ ‘ Courts of equity have to do with civil and property rights, and they have no jurisdiction to interfere by injunction with criminal proceedings. They can not stay processes of courts having the exclusive jurisdiction of criminal matters, where no civil or property rights are involved.” •

These two decisions seem to be conclusive of the controversy now before us, and to settle the question that the chancery court is without jurisdiction. But it is insisted that, while such is the effect of our decisions in establishing the jurisdiction of courts, they do not reach to the particular question now presented, which is that, under the “due process of law” provision of the Constitution of the United States, any court having authority to issue a writ of habeas corpus possesses jurisdiction to inquire into and review the proceedings in criminal cases for the purpose of determining whether or not the judgment was the result of “due process of law within the meaning of the Federal Constitution.” In other words, the contention.is that the provision of the Constitution with reference to • due process of law and the Federal statutes prescribing the remedies whereby the constitutional guaranty may be enforced must be read into the State laws, so that the prescribed remedies may be afforded in the State courts.

Counsel for respondents rely on the case of Frank v. Mangum, 237 U. S. 309, as sustaining this contention, but an analysis of that decision and a consideration of the language employed by the learned justice who wrote it shows very clearly that such is not the effect of that decision. The court distinctly recognized the well-established rule at common law and under the British statutes, that on habeas corpus a court was confined in its inquiry to the face of the process of the judgment under which the prisoner was held in custody. The case of Ex parte Watkins, 3 Peters 193, was cited where Chief Justice Marshall, in delivering the opinion of the court, followed the common-law rule stated above and decided that a court could not, under habeas corpus, look beyond the face of the judgment of a court of competent jurisdiction to determine whether or not a prisoner was being unlawfully held. This is in accordance- witli repeated decisions of our own 'court bolding that, if a petitioner for habeas corpus “is in custody under process regular on its face, nothing will be inquired into save the jurisdiction of the court whence the process came.” State v. Neel, 48 Ark. 283; Ex parte Barnett, 51 Ark. 215; Ex parte Perdue, 58 Ark. 285; Ex parte Foote, 70 Ark. 12; Ex parte Byles, 93 Ark. 612; Ex parte Williams, 99 Ark. 475.

But the Supreme Court of the United States in the Frank case, supra, held that Congress had, by the act of February 5, 1867 (Revised Statutes, §§ 753 et seq.), conferred upon the Federal courts express authority to inquire beyond the face of the process or judgment under which a prisoner is being and had “extended the writ of habeas corpus to all cases of persons restrained of their liberty in violation of Constitution or law or treaty of the United States.” Further speaking on this subject, the court said: “The effect (Acts 1867) is to substitute for the bare legal review that seems to have been the limit of judicial authority under the common-. law practice, and under the act of 31 Car. II, c. 2, a more searching investigation, in which the applicant is put upon his oath to set forth the truth of the matter respecting the causes of his detention, and the court, upon determining the actual facts, is to ‘ dispose of the party as law and justice require. ’ ’ ’

The statute referred to does not apply to any courts except to the Supreme Court -and -circuit and district courts of the United States, and it defines the practice in those courts -and the powers of the courts under the remedy afforded by the writ of habeas corpus. The statute does not purport to apply to the courts of the States, and Congress had no authority, had it attempted so to do, to prescribe the powers of the State courts -and the prao* tice to be followed in matters within their jurisdictions. The court in the Frank case in effect held that the statute had no application to the State -courts, for it said this: “But repeated decisions of this court have put it beyond the range of further debate that the ‘due process’ clause of the Fourteenth Amendment has not the effect of imposing upon the States any particular form or mode of procedure, so long as the essential rights of notice and a hearing, or opportunity to be heard, before a competent tribunal are not interfered •with. ’ ’

And again, in speaking of the due process mandate in the Constitution, the court said: “The prohibition is addressed to the State; if it be violated, it makes no difference in a court of the United States by what agency of the State this is done; so, if a violation be threatened by one agency of the State but prevented by another agency of higher authority, there is no violation by the State. It is for the State to determine what courts or other tribunals shall be established for the trial of offenses against its criminal laws, and to define their several jurisdictions and authority as between themselves. And the question whether a State is depriving a prisoner of his liberty without due process of law, where the offense for which he is prosecuted is based upon a law that does no violence to the Federal Constitution, can not ordinarily be determined, with fairness to the State, until the conclusion of the course of justice in its courts.”

And again the court said on this subject: “As to the ‘due process of law’ that is required by the Fourteenth Amendment, it is' perfectly well settled that a criminal prosecution in the courts of a State, based upon a law not in itself repugnant to the Federal Constitution and conducted according to the settled course of judicial proceedings, as established by the law of the State, so long as it includes notice, and a hearing, or an opportunity to be heard, before a court of competent jurisdiction, according to established modes of procedure, is ‘due process’ in the constitutional sense.”

~What the result would be of an application to a Federal court under the statute referred to and upon the facts stated in the petition we need not inquire. A perusal of the opinion of the Supreme Court of the United States in the Frank case, supra, is, however, illuminative of the subject. The court, after reviewing all of the facts as narrated in the petition and referring to the various proceedings in the State courts, said: “The narrative has no proper place in a petition addressed to a court of the United Sattes except as it may tend to throw light upon the question whether the State of Georgia, having-regard to the entire course of the proceedings, in the appellate as well as in the trial court, is depriving appellant of his liberty and intending to deprive him of his life without due process of law. Dealing with the narrative, then, in its essence, and in its relation to the context, it clearly appears to be only a reiteration of allegations that appellant had a right to submit, and did submit, first to a trial court and afterward to the Supreme Court of the State, as a ground for avoiding the consequences of the trial.”

The court further said that “this familiar phrase, ‘due process of law,’ does not mean that the operations of the State government shall be conducted without error or fault in any particular case, nor that the Federal courts may substitute their judgment for that of the State courts, or exercise any general review over their proceedings, but only that the fundamental rights of the prisoner shall not be taken from him arbitrarily .or without the right to be heard 'according to the usual course of law in such cases. ”

Further discussion would seem to be useless. It was not contended in the argument here that there is any other charge in the motion upon which relief could be granted, except the one to the effect that, the trial court, was dominated by a mob, which suspended the functions of the court and prevented a fair trial. There are no other facts in the petition which would warrant a review of the judgment of the circuit court of Phillips County. The allegations with regard to newly discovered evidence and the retraction by the State’s witnesses, which is, in effect, an allegation of the discovery of new evidence, affords no grounds for a review of the judgments of conviction, for there is no provision in the laws of this State for the granting of a new trial after the lapse of the term on the ground of newly discovered evidence. Howard v. State, 58 Ark. 229; Thomas v. State, 136 Ark. 290; Satterwhite v. State, ante p. 147.

It follows that the chancery court is without jurisdiction to proceed, and the writ of prohibition will therefore be granted, and the writ of habeaus corpus as well as the injunctive order issued by tne court will be quashed.


source: Caselaw Access Project

author: McCulloch:, C. J.

license: Public Domain

text:
    Fowler v. Pine Bluff Spoke Company.
    Opinion delivered June 20, 1921.
    1. Appeal and ereor — question raised. — Where a demurrer was sustained and the cause dismissed as to one defendant, and the cause placed on the calendar as to the other defendant, the only question presented on plaintiff’s appeal is whether the court erred in dismissing the cause as to one of the defendants.
    2. Logs and logging — privity of contract.' — A complaint which alleges that plaintiff sold timber to a third person for a per cent, of the price of the manufactured products, and that such ven-dee sold to defendant all of such manufactured products, and that defendant knew of the agreement between plaintiff and vendee, and made payments to plaintiff on the purchase price, dies not show a privity of contract between plaintiff and defendant.
    Appeal from Jefferson Circuit Court; W. B. Sor-rells, Judge;
    affirmed.

      E. B. Stokes, for appellant.
    The court erred in sustaining the demurrer to the complaint.
    Where a vendee acquires personal property under actual notice as to the conditions relating to title and liens, he, the vendee, can only acquire such right, title or interest as the vendor may have.

      Where one, with, actual or constructive notice or knowledge of the facts, induces, by his words or conduct, another to believe that he acquiesces in a transaction, or that he will offer no opposition thereto, and that other, in reliance on such belief, alters his position, the former is estopped from. repudiating the transaction to the other’s prejudice. 72 Ark. 494, 82 S. W. Kep. 836; 76 Ark. 282,188 S. W. 983.

      Rowell & Alexander, for appellee.
    1. Timber, until it is severed from the soil, is real estate; where the timber was cut into material at the mill, it became personal property, and was disposed of by Jordan, the active manager, and Doctor Fowler is estopped to object, as he can not take advantage of his own voluntarily made partnership agreement. The property had passed into the hands of innocent purchaser for value. 91 Ark. 218. Personal property and the title thereto will pass and the sale be completed, if it is the intention of the parties to transfer the title on the one part and to accept same on the other part, even though something remains to be done, as the fixing of the quantity or value of the property or the payment of the' purchase money. 91 Ark. 240.
    2. There must be an assent or agreement between parties competent to contract to do, or not to do, certain specified things. 6 ft. C. L. 592. It is not alleged in the complaint that appellee assented or in any way agreed to pay Doctor Fowler twenty-five per cent, of the .proceeds, and neither the complaint nor amendment thereto stated a cause of action, and the demurrer was properly sustained. 91 Ark. 240.
    The cases in 91 Ark. 218 and lb. 240 are not in point and have no bearing here.
   McCulloch:, C. J.

Appellant instituted this action in the circuit court of Jefferson County against the Pine Bluff Spoke Company and W. A. Jordan, alleging in his complaint that he was the owner of certain tracts of timber land in Arkansas County; that he entered into an oral contract with defendant, W. A. Jordan, whereby he sold to Jordan all of the hickory timber on said lands suitable for certain purposes; that he was to receive for said timber as stumpage 25 per cent of the price of the manufactured products of the timber sold by Jordan, and that the latter has sold to the Pine Bluff Spoke Company all of the manufactured products of the timber so purchased from appellant. The complaint contains a further allegation that the Pine Bluff Spoke Company kenw of the agreement between appellant and Jordan, and that “on numerous occasions during the period stated executed and delivered to this plaintiff their check for the said twenty-five per cent, of the materials so inspected, as stumpage charges.” It is alleged in the complaint that there is a balance of $587.06 due on the price of the timber, and there is a prayer for judgment against both of the defendants. The record before us does not show that Jordan appeared, but it does show that appellee, the Pine Bluff Spoke Company, appeared by attorneys and filed a motion to require appellant to make his complaint more definite and certain, which was sustained by the court, and then filed a demurrer to the complaint as amended, which the court sustained. The judgment reads as follows:

“Now on this day comes on to be heard the demurrer of the defendant, the Pine Bluff Spoke Company, to the complaint herein; and the court, being well advised in the premises, doth sustain said demurrer as to The Pine Bluff Spoke Company. Plaintiff declining to plead further, it is ordered that the complaint be dismissed, and that the defendant, the Pine Bluff Spoke Company, have and recover from the plaintiff all its costs herein expended. Plaintiff excepts and prays, an appeal to tbe Supreme Court, which is granted by-the court and noted of record. ’ ’

After the transcript was lodged in this court the circuit court made an order correcting its record so as to affirmatively show that the cause was not dismissed as to defendant Jordan, and ordered the cause redocketed against Jordan, and directed the issuance of process for service upon Jordan. It is. clear, we think, from the lap-guage of the first entry of the judgment that the canse was dismissed only as to appellee, the Pine Bluff Spoke Company. The other defendant did not appeal at all, and the demurrer did not call for a ruling .of the court as to Jordan, the other defendant. The correction by the uourt, however, makes this plainer ,and from the record, as is now appears, the cause is still pending against Jordan.

The only question, therefore, presented on this appeal relates to the correctness of the court’s ruling in holding that no cause of action is stated in the complaint against the Pine Bluff Spoke Company. "We think the ruling of the court on this point is correct. The complaint contains no statement of facts which shows any privity of contract between appellant and Jordan, except as vendor and vendee, nor any statement of facts to constitute privity of contract between Jordan and appellee, except that of vendor and vendee. All that the complaint shows is that appellant sold the timber to Jordan and that Jordan resold it to appellee. This statement of facts does not give a right of action to appellant against appellees for the unpaid balance on the price of the timber thus sold to Jordan by appellant and resold by the former to appellee. Nor does the fact that appellee made payments to appellant on the purchase price render the former liable for the unpaid balance. In the absence of an express allegation to the contrary, the presumption is that appellee made the payments for Jordan and not as an assumption of Jordan’s contract to pay. There is no theory upon which there can be extracted from the language of the complaint a cause of action in favor of appellant against appellee.

The judgment is therefore affirmed.


text:
    Perkins v. Gillett Warehouse Company.
    Opinion delivered June 20, 1921.
    Master and servant — discharge for accepting other employment.
    ■ — -Where the officers of a warehouse company permitted its warehouse manager, who had agreed to “devote his entire time to the work required of him by the company,” to continue his work for two months without objection after discovery that he was employed as food inspector by the government, and he devoted all the time that was required of him in performance of his duty to the company, and one of such officers was receiving one-half of the manager’s salary -as food inspector, the company was not authorized to discharge him on the ground that he had accepted other employment, since, if there was a breach of the contract, it was waived by the company.
    Appeal from Arkansas Chancery Court, Southern District; John M. Elliott, Chancellor;
    reversed.

      Botts & O’Damei, for appellant.
    The contract was entire for a certain sum of money, and appellant, having been dismissed without cause prior to the expiration of his contract, was entitled to recover the full amount of his salary at the expiration of his time. 57 Ark. 374, 383. The decree of the chancellor is not - sustained by any evidence whatever, and the facts are undisputed. The case is fully developed, and decree should be entered here for appellant for $495, the full amount due him. 56 Ark. 128, 131. The cases relied on by -appellee are not in point.

      T. J. Moher and John L. Ingram, for appellees.
    The contract was an entire one and was breached by appellant, and he was not entitled to recover. 57 Ark. 374 does not apply, nor does 102 Ark. 79.
    One who sues on a special contract to recover compensation due on its performance must show performance on his part if that matter is put in issue. 13 C.'J., § 762, and cases cited; lb. 635, § 706; see 128 Ark. 535-541; 65 Ark. 320; 93 Id. 47i8; 88 Id. 491. The decree is in all things correct.
   McCulloch, C. J.

This is an action instituted by appellant in the chancery court of Arkansas County to establish his claim for a debt due under contract by the Gillett Warehouse Company, a dissolved corporation. Appellant alleged that he was employed by said corporation to perform services for ten months beginning on August 15,1918, and ending on June 15, 1919, at a stated salary of $1,500 for the term; that he had been paid the sum of $1,050 in monthly installments, leaving a balance due in the sum of $450, and that he was wrongfully discharged on May 1,1919, and was unable to procure other employment during the remainder of the term. The answer of appellee admitted the execution of the contract,' but alleged that, according to the terms thereof, appellant was to “devote his entire time to the wort required of him by the company, ’ ’ and that appellant had broken the contract himself by accepting other employment. The cause was heard by the chancery court on the testimony adduced by each side, and the court found the issues against appellant and rendered a decree dismissing his complaint for want of equity.

The Gillett Warehouse Company, a domestic corporation, was engaged at Gillett, Arkansas, in the business of buying, storing and selling rice. Appellant was an expert rice grader and weigher with many years experience, and in August, 1918, the corporation employed appellant as manager of the business for a period of ten months, as stated in the complaint, at a salary of fifteen hundred dollars. The contract was oral, but the terms thereof are recited in a resolution of the board of directors of the corporation at a meeting at which, according to the testimony, appellant was present. This resolution recited that appellant was employed as manager for ten months at $150 per month, and that it was agreed that appellant “would devote his entire time to the work required of him by the company.” E. L. Chaney was president of the corporation and L. L. Chaney, his son, was secretary and treasurer. Early in September, 1918, appellant was employed as inspector under the United States Food Administration at a salary of $100 per'month. When offered the appointment tp this place, he stipulated in his contract with the Pood Administration that his services were to he performed at the warehouse of the Gillett Warehouse Company, and that he was not required to perform any duties which would require his absence from that place.’

Appellant testified that before he accepted this appointment he submitted the matter to E. L. Chaney, the president of the corporation, who consented to his accepting it and performing the work. L. L. Chaney worked at the warehouse, and he and appellant worked together in the operation of the business of the corporation, and also shared the work and salary of appellant under the appointment by the food administrator. E. L. Chaney denied that he was consulted by appellant as to the «appointment as food inspector. The duties of appellant as food inspector were to grade and weigh rice, which were also a part of his duties in the management of said corporation. L. L. Chaney admitted that he knew about appellant’s employment as food inspector, and that in December, 3919, he began the acceptance of part of the salary, and that he received half of the salary for four months. Appellant said that L. L. Chaney accepted the salary from September 15, 1918, up to the time of appellant’s discharge on May 1,1919.

It is conceded that all of the parties, including the directors of the corporation .other than E. L. Chaney and L. L. Chaney, ascertained in January, 1919, that appellant had been employed as food inspector and was receiving a salary as such, and no objection was made until he was discharged on May 1. Appellant testified that, when he was discharged, the only grounds stated for the discharge were that the corporation was not making any money on that year’s business, and that his discharge was essential for economy in the operation of the business. Each of the two Chaneys testified that appellant was discharged on account of giving a portion of his time to the service of the United States Pood Administration. It is also conceded that appellant properly performed all of his duties as manager of the business of his employer, Gillett Warehouse Company, and that lie did not neglect ¿is work in any respect; that all of his services performed., for the Food Administration were at the warehouse and that the corporation suffered no loss or injury by reason of neglect on the part of appellant to perform his duties.

It is unnecessary to determine where the preponderance of the .testimony lies as to some of the issues in the case, for we are clearly of the opinion that, according to the uncontradicted evidence, appellant is entitled to recover on the ground that appellees waived the alleged breach of the contract by appellant, if there was indeed a breach, according to the testimony, by permitting him to Bontinue in the performance of the contract for at least two months without objection after discovering that he was working in other employment. It will be observed that, according to the terms of the contract as specified in the resolution adopted by the board of directors of the corporation, appellant was not expressly prohibited from accepting other employment, but that he would “devote his entire time to the work required of him by the company.” According to the uncontradicted testimony, appellant did devote all the time that was required of him, and he did not to the least extent neglect his duty to his employer. And, according to the undisputed testimony, the directors of the corporation, including the two Chaneys, who were its active managers, ascertained that appellant was performing other work in January, and they permitted him to continue without objection until he was discharged on May 1, 1919. In the meantime one of the Chaneys was getting half of appellant’s salary as food inspector.

Counsel for appellees rely on the case of Van Vleet v. Hayes, 56 Ark. 120, as sustaining their contention that the failure to object to appellant’s employment as food inspector and his retention in the employment did not constitute a waiver of the breach of the contract. The facts of that, case are entirely different, and have no application to the present one. In that case Hayes was employed as a traveling salesman, and was to receive a certain salary unconditionally. Under the contract he was to receive an additional salary on certain conditions, and the issne in the case was whether or not he had broken the contract by failing to perform those conditions. The court held that, under those circumstances, the employer did not waive the breach by retaining the employee in the service, for the reason that part of the contract and the salary pertaining thereto was unconditional, and that the employer had the right, without waiving the breach, to permit the employee to remain in the service and receive the unconditional salary. In the present case the condition related to the whole of the contract, which was indivisible, and the breach of the contract was entirely waived by the retention of appellant in the employment and failure to make objection to the breach.

The decree is therefore reversed with directions to render a decree in favor of appellant for the sum of $450, the balance due him on his salary,, with interest at legal rate from June 15,1919, the date on which the final payment of his salary was due.


author: Wood, J.

text:
    Jenkins v. International Life Insurance Company.
    Opinion delivered June 20, 1921.
    1. Appeal and error — amendment of complaint to conform to proof. — In an action on a written policy of life insurance, where testimony tending to prove an oral, instead of a written, contract of insurance was introduced without objection, the complaint will be treated as amended to declare on such oral contract. .
    2. Insurance — delivery of policy. — Since contracts of insurance may be made by parol, delivery of the policy is not essential to the completion of the contract.
    3. Insurance — when contract complete. — -Where the minds of the insured and the insurer for a valuable consideration have met upon all the terms of the contract,. it is complete and enforceable, even though it was intended by the parties to be evidenced by a policy which by some fortuity was not delivered before the death of the insured.

      4. INSURANCE — DELIVERY OF POLICY DURING GOOD HEALTH. — The parties to a contract of life insurance may .agree, as a condition precedent to a complete and enforceable contract of insurance, not only that there shall he a delivery of the policy, hut also a delivery while the insured is in good health.
    5. Insurance — approval of application by medical director. — In view of the practice of life insurance companies not to issue policies except upon approval of the application therefor by a medical examiner or director, the issuance of a policy on the terms called for in the application and for the premium therein mentioned, and providing that it was to take effect as of the day previous, and the fact that the policy was registered and secured as required by the insurance department of another State, ■ , made a prima facie showing that the application had been approved by the medical director, and made a ease for the jury on that issue. (i!
    6. Insurance — premium receipt as part of application. — Where , an application for life insurance provided that, if the premium ,, ’ be paid with the application, such payment is made .subject to 1:1 the conditions in the attached receipt, and the receipt provided ■ ■ > that no conditions or agreements other than those printed therein ’ ',i,‘and in the application should be binding, the receipt must be considered in connection with, and as a part of, the application.
    7. Insurance — undelivered policy as evidence. — A policy of insurance which has been issued and sent to the insurer’s agent to delivered on certain conditions, among which was that it should not take effect until the first premium was paid and the policy delivered to the insured while in good health, was com- : v petent evidence to be considered, in connection with the appli- . . 'patiop and receipt, in determining when the insurance was to take ,, effect.
    8,i- Insurance — payment by note in lieu of cash. — Where an ap-plicatibn for life insurance provided that the insurance should not take effect until the premiums had been paid in full in cash ,, - and the policy delivered to insured while in good health, and that (.if.the .premium was paid with the application the payment was to be subject to the conditions in an attached receipt, and the ..receipt provided that, if a full settlement has been made with ,the application, the insurance would be in force from the date of approval of the application by the medical director, payment i ’ partly by cash and partly by note was not such a full cash set- " (tlemej}tt as was required to make the insurance effective from the approval of the application.

      -:9., {•) InSpRANCE-rATJTHORITY OF, AGENT, IN .AGOEETilNG (?AY,TÍIENTi CRtPRE-0(li Miujffl. — Where an insurance agenj;. has, aj^th.ori^,£o, solicit applications for insurance and'to conduct the ..negotiations,inuclos-mg up an insurance contract, he may accept notes or cash or ," ' !bo“th, unless-,'his authority* is limited-as to the "timé¡ and ¿lode of .payrpent of the premiums. , ... ai>.
    .10/) IñsuRañGe-^when. contract 'COMP¿ETEn.-HWheré an application for.-life.{insurance:provided,that.,the. insurance shpuld;iiot¡ he.?i]n eifect until the premium had been paid in full in. cash, and ¡the policy delivered to the insured during good health, and that such paynient was made subject to the conditions -in an1 attached re--•niri'ceipt/which provided ,for payment by cash, or-notes," arid'that, If a .full cash settlement had been made-with the, «application,,1: the insurance,-¡should, bp in force, .from, .the, date of, japprpvab of the , application' by the medical director, the policy wpul&become, ef-fe'ctive either (1)' when thé premium was,.paid in full in’cash i; with the 'application on the approval of!the application 'by'*the ' • medical. ■ director, or (2) ■ when • payment of -the premium - was j,partly¡ or. wholly, by note'-on delivery..of. the policy*while th'e i, , {applicant was, in good health., ... , - , ■ i;
    . -. Appeal from. Clay Circuit Court, Eastern: District ; 11. H. Dudley, Judge:
    affirmed:

      .W. E. Spence and Oliver & Oliver, for.appellant.
    :iu! 1. The contract of insurance,,(according; to its .express terms, wa® complete and in force from the- date (if its approval by the company’s medical director and- binding, and the company was .without, power or right to modify, ..cliange or attach further .conditions- to. the contractor,to the delivp— of the policy, The contract ;was consummated., 66 Arki 612; 40 N- J. L. ,103 ,1 Bacon on Ben. Scjc., § 2-72, .p. 538y Cooley’s Bjriefs on .Ins.,, p. 442 (a) and cases cited; lb. 451 (f), 453-,(g)...; - - >,,
    2. The issuance of.a policy,of, insurance is,acceptance and an approval -of the application for insurance. 44 S. E. 28, , , , - . ; . .. , „ '! " '
    3. If policies of insurance contain inconsistent .provisions or are,^o.framed as to be fairly open fo construction, that view- should bo adopted, .if tpossib'le,, which would sustain rather than forfeit the contract. 102.-Ark. 1. It should be most strongly construed against, the inr surance company. 113 Ark,-174,;- 58, J1-- 528, ,;,The acceptance by an insurer of the insured’s note for the first premium hinds the company. Cooley’s Briefs on Ins., p. 586 (e); 94 Ark. 578.
    A contract of insurance may he by parol. 25' Cyc. 716 A; Cooley’s Briefs on Ins. 395 (d)-396-7; 124 Ark. 505; 49 U. S. App. 548; 23 C. C. A. 365; 83 Fed. 631. Signature is not always essential to bind an agreement. 13 C. J., § 128.
    4. Where correct answers are given by an applicant for insurance ánd the agent, through fraud, mistake or negligence, writes them incorrectly, the company is estopped to take advantage of the wrongful act of its agent. Cooley’s Briefs on Ins. 2555 et seq.; 81 Ark. 205. The authority of the agent to take and fill out applications for insurance requires him to do everything needed to perfect the policy. A practical construction given to the construction of a contract by an insurer in his dealings with the insured will be accepted by the courts. Cooley’s'Briefs on Ins. 643 (k); 109 Ark. 17-23.
    The application, receipt and note for the first premium make a complete contract. Cooley’s Briefs on Ins. 413 (c); 115 Fed. 81. See, also, 90 Ú. S. 85; 41 S'. W. 319; 72 Am. Dec. 379; 94 N. W. 211; 99 Id. 130; 115 Pac. 779; Cooley’s Briefs on Ins., p. 42S (i).
    Here the terms of the proposition expressly provide that the insurance shall be in force from the date of the approval of the application. The judgment should be reversed, and, as the case is fully developed, judgment should be entered here for appellant. 116 Ark. 420.

      M. P. Huddleston and Chas. G. Revelle, for ap-pellee.
    It is permissible and perfectly lawful for parties to agree to the payment of the first premium and delivery and acceptance of the policy conditions of the contract. Until this is done, there is no contract. 66 Ark. 612; Cooley’s Briefs on Ins. 2555, 643 (k), 413 (c). Without assent or mutual meeting of minds, there can be no con-traqt, 9Q U. g. 85; 129 Ark. 137; 187 S. W. 265, Anote is not cash, and the first payment was not made. 46 C. C. A. 393; 92 U. S.161; 104 Id. 18 ; 59 N. H. 298; 158 Mass. 132; 140 N. Y. 79; 67 N. W. 876; 48 Neb. 870; 8 N. J. L. (3 Halst.) 172; 30 Pao. 1064; 136 IT. S. 257; 36 Pa. (12 Casey) 204. See, also, 8 Yt. 252. See, also, 46 C. C. A. 393; 103 Mass. 78; 30 Fed. 545; 28 Id. 705; 51 Iowa 679; 18 Minn. 448; 140 Mo. 599; 50 S. W. 519; 151 Mo. 620; 52 S. W. 356.
    To be effective, an acceptance of an application for insurance must be in the very terms offered. 14 R. C. L., p. 71; 44 S. W. 28. Under the evidence there was no approved of the application, and the policy was not binding on appellee.
   Wood, J.

This is an action brought by the appellant as administrator of the estate of M. E. Jenkins against the appellee on a contract of insurance on the life of M. E. Jenkins made payable to his estate. The appellant set up the policy and alleged that it insured the life of M. E. Jenkins for the sum of $3,000. He alleged the death of M. E. Jenkins, the compliance with the terms of the policy on his part, the refusal of the appellee to pay, and prayed judgment for the sum mentioned, and for penalty, attorneys’ fees and costs.

The appellee answered, denying all the material allegations of the complaint. It tendered to appellant a note executed by M. E. Jenkins and the cash paid by him. The policy and application were introduced in evidence by the appellant. The application signed by appellant was dated February 21,1920. It contained among others the following provisions: “ (3) Th© insurance herein ap-. plied for shall not be in effect until the premium has been paid in full in cash and the policy delivered to me during my good health. (4) If the premium be paid with this application, such payment is made subject to the conditions in the receipt hereto attached.” The receipt attached to the application is as follows:

‘ ‘ Receipt.
“This receipt not valid for more than first year’s pre7
miran, nor in excess of a premium on $50,000 insurance. ..19.
“Received from.an application for insurance on h,..life for $.on the.plan; also.dollars in cash, and note for $... due...to he applied in payment of premium on said insurance, provided a policy of insurance upon such application is issued by the company. If full cash settlement required has been made with the application, the insurance will be in force from date of approval of the completed application by the company’s medical director. If said application is not approved by the company, the settlement herein acknowledged will be returned by me forthwith, upon surrender of this receipt. ■
“No conditions or agreements other than those printed herein and in the application shall be binding. Conditions on back of this receipt a part thereof same as if printed herein. “.51829.”

On the back of the receipt is the following: “The agent is not authorized to give this receipt to persons exceeding the limits of height and weight indicated in the table below, or to those who have been rejected by another company, or who are not in good health. ’ ’

The application contained blanks to be filled out by the soliciting agent of the appellee, one of which required him to show how, if at all, the first premium had been settled. This was filled out, and showed that the premium had been settled by note. The application was approved by the appellee’s medical director on March 4.

Among the provisions of the policy are the following : “After the delivery of this policy to the insured, it takes effect as of the 4th day of March, 1920. This contract of insurance shall not be deemed to have been made until the first premium is paid, and the policy delivered during the lifetime and good health of the insured.”

E. R. Winton testified that he was the soliciting agent of the appellee, and took the application of M. E. Jenkins. 'YVlien an applicant made settlement of the premium, witness signed the receipt and gave it to the applicant. In this case Jenkins made settlement by paying seventy-one cents in cash and executing his note payable to witness for the sum of $100. Witness accepted that in full settlement. Witness did not detach the receipt from the application and give it to Jenkins because they were in a hurry. The witness accepted the note unconditionally, just like he would have accepted the cash. After witness received the policy, he did not see Jenkins again before his death. When witness received the policy for delivery, it was accompained by'a letter which instructed witness to deliver the policy only during the lifetime and continued good health of the applicant, and that the signature of the applicant must he obtained showing that he was in good health. Witness never delivered the policy nor collected the note. Witness offered to return the note and the seventy-one cents to the .administrator, and he refused it. Witness returned the policy to the company on March 19. The policy sent witness for delivery was the kind of policy applied for by Jenkins.

On behalf of the appellee, Anthony Gazert testified that he was the manager of the policy department which has jurisdiction over applications and the writing of policies. Appellee had a form letter, “7-B,” one of which was sent to appellee’s agent, Winton, on or about the 6th of March, 1920, together with the policy on the life of Jenkins. The records would usually show if this letter had been returned. Witness had made a careful search for it and could not find it. Winton was recalled by the appellant, and stated in addition to his former testimony that form “B” referred to and which he received with the policy was a kind or receipt showing that the applicant for insurance had received the policy, and that he was in good health and had had no sickness since his examination. The applicant had to state in this form letter that neither he, nor any of his family, had had influenza since his examination. It instructed witness not to deliver the policy unless witness first obtained the signature of Jenkins to the receipt form 7-B.

At the conclusion of the testimony the court, at the request of the appellee, instructed a verdict in its favor. Judgment was rendered in favor of the appellee dismissing appellant’s complaint, and for costs, and from that judgment is this appeal.

The appellant contends that the contract of insurance upon which he bases his action was consummated upon the approval of the application by the company’s medical director and became a complete and binding contract without the issuance and delivery of the policy. As there was no objection on the part of the appellee to the testimony adduced by the appellant, we will treat the complaint as amended to declare upon an oral contract of insurance, such as appellant 'contends was evidenced by the documentary and oral testimony in the case. Bank of Malvern v. Burton, 67 Ark. 426; Wrought Iron Range Co. v. Young, 85 Ark. 217; Griffin v. Anderson-Tulley Co., 91 Ark. 292; Pulaski Gas Light Co. v. McClintock, 97 Ark. 567; Oakleaf Mill Co. v. Cooper, 103 Ark. 79; Aetna Ins. Co. v. Short, 124 Ark. 505.

There was no completed contract of insurance' under those provisions of the application and the policy to the effect that the insurance shall not be in force until the payment of the premium and the delivery of the policy while the assured was in good health. The general doctrine is that contracts of insurance may be made by parol, and, such being the case, of course delivery of the policy is not essential to the completion of the contract of insurance; and where the minds of the insured and the insurer for a valuable consideration have met upon all the terms of the contract, the contract is complete and enforceable, even though it was intended by the parties to be evidenced by a policy, but which because of some fortuity was not delivered before the death of the insured. Mutual Life Ins. Co. v. Parrish, 66 Ark. 612; 1 Cooley’s Briefs, 442 (a), 395 (d), 396, and cases cited in note: Aetna Ins. Co. v. Short, 124 Ark., supra; 25 Cyc. 716 (a). But of course the parties may agree, as a condition precedent to a complete and enforceable contract of insurance; not only that there shall be a delivery of the policy, hut also a delivery while the insured is in good health. McGully v. Phoenix Life Ins. Co., 18 W. Va. 782; Kohen v. Mutual Reserve Fund Life Assn., 28 Fed. 705; 1 Cooley’s Briefs, 444, 445, and other cases there cited. See Nat. Life Ins. Co. v. Speer, 111 Ark. 173.

The liability or nonliability of the appellee turns upon the meaning of the following clause in the receipt, towit: “If full cash settlement required has been made with the application, the insurance will be in force from date of approval of the completed application by the company’s medical director.” It is the usual, and so far as we know the universal, practice of life insurance companies not to issue policies of insurance except upon approval of the application therefor by a medical examiner or director as the case may be. The issuance of the policy on the 5th of March upon precisely the terms called for in the application, and, as .shown by the recitals in the policy, for the premium mentioned therein, and which policy was to take effect when delivered as of the 4th day of March, were facts tending to prove that the completed application was approved by the company’s medical director. The policy was registered and secured as required by the insurance department of Missouri. It occurs to us that these facts raised a presumption, and were sufficient to constitute, at least, a prima facie showing, that the completed application had been approved by the company’s medical director. These facts made a case for the jury on that issue and shifted the burden to the appellee to show to the contrary.

In O’Grier v. Mutual Life Ins. Co., 132 N. C. 542, 44 S. E. 28. it is held: “The issuance of the policy is acceptance of the application and should be based upon the status at the time the application is made.”

The undisputed testimony shows that the appellee’s agent accepted a promissory note of $100.71 in cash in settlement of the first premium “just like he would have accepted the cash,”

The only remaining inquiry, therefore, is, was ap-pellee’s agent authorized to accept part cash and a promissory note for the balance in full cash settlement of the premium as required by the above clause of the receipt? The application and the receipt each contain provisions which show that the receipt must be considered in connection with and as a part of the application. The application contained the following provision: “If the premium be paid with this application, such payment is made subject to the conditions in the receipt hereto attached.” The receipt contained the following provision: “No conditions or agreements other than those printed herein and in the application shall be binding.”

The policy, having been issued and sent to the ap-pellee’s agent to be delivered on certain conditions, was also competent evidence, and its provisions in regard to the payment of the first premium should also be considered in connection with the above provisions of the application and receipt to determine the meaning of the clause in the receipt quoted. After considering the various provisions of the application, the policy, the receipt and the oral testimony of the appellee’s agent who conducted the negotiations for the appellee, we have reached the conclusion that the agent had no authority to accept a promissory note as “cash” in compliance with the “full cash settlement” required by the above clause to make a complete and binding oral contract of insurance. '

“The fact that an agent has authority to collect premiums does not imply that he has authority to accept property or anything but cash in the payment of premiums.” 2 Cooley’s Briefs on the Law of Insurance, page 96, and cases cited. To so construe the words “full cash settlement” would obliterate all distinction between the word “cash” as it is defined by lexicographers and commonly understood, and the word “note,” or any other property that the agent might see proper to accept as cash in settlement .of the premium. Such interpretation would also destroy the difference in meaning between the words “cash” and “note” appearing in the receipt. These words have an entirely different meaning and as nsed in the receipt were intended to perform an entirely different function. ‘ ‘ Cash ” is “ current money in hand — money paid down. ” “ Note ” is “ a written promise to pay money.” Webster’s New International and Funk & Wagnall’s Diets. If the words “cash” and “note” do not have a different signification as used in the receipt, then it was wholly unnecessary to use the word “ cash” at all in the clause under review, because “full settlement” would have embraced either a “cash” settlement or a settlement by “note,” or both. “A note is an agreement to pay money; it can not be treated as cash.” Pierce v. Bryant, 5 Allen (Mass.), 91-93; Cox v. State Bank of Trenton, 8 N. J. Law, 172; Dazet v. Laundry, 30 Pa. 1064.

In insurance terminology, the words “cash” and “note” are not used synonymously, and where these words are used in insurance contracts or negotiations, they should be given effect according to their ordinary meaning. The authority of the agent in this case must be determined by the terms of the receipt, as he had no authority to bind the company to a contract of insurance contrary to the express terms of the receipt. Therefore, if the word ‘ ‘ cash’ ’ in the clause under review means “cash” and not “note,” the settlement of the premium in the manner disclosed by this record was ultra vires. State v. Moore, 167 N. W. 876, Hoffman v. Hancock Mutual Life Ins. Co., 92 U. S. 161-164.

In Dunham v. Morse, 158 Mass. 132, A, in order to obtain insurance upon his life at once, instead of waiting for the action of the insurance company on his application, gave a promissory note for the amount of the premium payable to B, an agent of the company, who signed and delivered 'to A a contract purporting to give such insurance, which was expressed to be subject to certain conditions printed on the back, one of which was that the contract was not valid unless the premium was “actually paid in cash.” B tendered the poliev to A, but the latter would not receive it and repudiated the contract. In an action by B against A upon the note, the court held that the note was without consideration. Among other things the court said: “If this premium was not paid in cash, the contract of insurance was not binding on the company. * # * ” The insurance company had no knowledge that the defendant had not paid his premium in cash, and did not waive the condition printed on the back of the contract. They might be willing to allow their agent to bind them by a contract if he received the premium in cash, even though he was permitted to deposit it in his own bank account, when they would not be willing to be bound on his promise to pay them if he had no cash, but only a promissory note, as his reliance for the means of performing his promise.”

In Mutual Reserve Fund Life Assn. v. Simmons, 107 Fed. 418-424, it is said: “Aside from any statutory regulations a life' insurance company has a direct interest in maintaining the solvency of its agents, through whom large sums are often transmitted to or from it. It has therefore a direct interest in prohibiting them from involving themselves by incautious credits for amounts for which they, the agents, are kolden responsible in cash and from loading themselves with unavailable assets with reference to any sum for which they must account.”

Where an insurance agent has authority to solicit applications for insurance and to conduct the negotiations on the part of the company in closing up an insurance contract, unless such agent’s authority is limited as to the time and mode of payment of premiums, he may accept notes or cash or both. “When no special mode of payment is stipulated for, any mode of payment which is accepted without objection on the part of the insurers •or their agent will suffice.” 2 May on Insurance, § 345; 1 Joyce on the Law of Insurance, § 80 (a), p. 293, and cases cited in notes. Now, when the provisions of the application, the policy, and the receipt in regard to the payment of premiums are considered, it is clear that two modes were specified for the payment of premiums. By the one method there is no completed contract of insurance until the premium is paid in cash in full, or by cash and note, and until the policy has been issued and delivered while the applicant is in good health. By the other method, the one adopted by the agent and the applicant in this case, the insurance took effect immediately upon the approval of the completed application by the company’s medical director, regardless of whether the policy had been issued and delivered or not.

By the one method which we will call the “first,” the premium must be paid “in full in cash” and the policy must be delivered while the applicant is in good health. But the first part of the receipt shows that the agent is authorized to waive the full payment in cash and to accept in payment of the premium part cash and a note for the residue. Where the agent and the applicant adopt this, the first method, if the company issues the policy and same is delivered to the assured, it will be conclusively presumed, in the absence of fraud, that the requirement of full “cash” payment was waived, and that the policy was delivered during the good health of the applicant. The insurance will then be in full force and effect from the date of the policy. O'Grier v. Mutual Life Ins. Co., supra.; Kendrick v. Ins. Co., 124 N. C. 315, 32 S. E. 728, 70 Am. St. Rep. 592. See Home Fire Ins. Co. v. Stancill, 94 Ark. 578; American Trust Co. v. Life Ins. Co., 92 S. E. (Va.) 706.

By the other, the “second”, method, there must be a full “cash” settlement of the premium with the application. If there is, and the company’s medical director approves the completed application, then the' insurance takes effect and becomes a completed contract as of the date of such approval. It will be observed that the word “cash” has the same signification, whether the “first” or “second” method be adopted, and there is no conflict between the provisions of the application, the policy, and the receipt concerning the payment of the premium.

' "We are not confronted "with any, issue'of Waiver) nr estoppel1 hy course of conduct on' the part of' appellee,; because there is ho evidence upon which'to predicate such* issue'?. Under the first method above outlined) while the premium was paid, there was no delivery of the policy" and’hence no completed contract of insurance! ‘ 'Under' the secbnd method, while there was "evidence tending to prove that the completed, application was approved by- the! appellee’s medical director, there was no. payment iof the premium, and hence no completed contract. Therefore, the appellee is not,liable, either under, thelalle-gátions of , the original complaint, or ) the' complaint treated as amended to conform to the proof. . , ')/ j

)The judgment of the trial court so holding was correct) and it is afiirmed.^ ,, '/)