author: Humphreys, J.

text:
    Price v. Business Men's Assurance Company of America.
    4-3292
    Opinion delivered January 22, 1934.

      Roy E. Rison and Tom W. Campbell, for appellant.

      Charles W. Mehaffy, for appellee.
   Humphreys, J.

Appellant sued appellee in the circuit court of Pulaski County on an insurance policy issued by appellee, to her husband providing payment to her as beneficiary of $3,000 in the event of her husband’s death “from bodily injuries effected solely through accidental means.” It was alleged in the complaint that, during the. life of the policy, her husband, Joel Lee Price, was accidentally killed by being shot to death unexpectedly and by chance.

Appellee filed an answer denying that Joel Lee Price was accidentally killed but, on the contrary,' was killed by officers of the law in a fight which he provoked and in which he was the aggressor at a time when he and a man by the name of Eagle were engaged in robbing Terry Dairy Company plant at Scott and Eighteenth streets in Little Rock, Arkansas.

The cause was submitted upon the pleadings and evidence adduced, at the conclusion of which the court instructed a verdict against appellant and dismissed her complaint, from which is this appeal.

According to the undisputed testimony, Price and Eagle, wearing masks, and Price being armed with a .45 caliber automatic pistol, entered the property of Terry Dairy Company, tied its night watchman in the barn, broke into its iron safe, and were prowling through the building when officers appeared on the scene; that, in going out of a room into the hall, they were discovered and called to by the officers, whereupon they turned and ran into adjoining rooms; that officers Huston and Pate entered the door leading into a dimly lighted room in which Price was hiding and called to him that they were officers, whereupon he shot at them without notice and continued to fire until he was mortally wounded by them and fell to the floor; that they secured his pistol and a statement from him- that Eagle was in an adjoining room; that officers Walker and Huston entered the adjoining room in search of Eagle and, upon being attacked by him, they shot and instantly killed him; that during the time Price was shooting at Huston and Pate, Huston shot Price three times and Pate shot him twice, all five shots taking effect; that he fell to the floor when the last shot was fired by Huston into his head; that Price shot four times, twice at each officer, none of which took effect; that subsequently Price died from one or more of the wounds received by him during the encounter.

The general rule of law is that death resulting from bodily injuries effected solely through accidental means in insurance policies does not include death resulting from wounds received in an-encounter provoked by the insured or in which he was the aggressor and from which he did not attempt to retire in good faith; nor does it include death inflicted during the commission of a voluntary or intentional act on his part, the inevitable result of which, he could have or should have foreseen. Mutual Life Insurance Company v. Distretti, 159 Tenn. 144, 17 S. W. (2d) 11; McGuire v. Metropolitan Life Insurance Company, 164 Tenn. 32, 46 S. W. (2d) 53.

An insured engaged in the commission of a felony who, when discovered in .the act, becomes the aggressor in an effort to shoot his way out, necessarily takes chances on being killed, and, if killed in an effort to escape, his death cannot be regarded as accidental within the terms of such policy. He oug’ht to have anticipated or expected death from his own culpability, and hence, if killed, his death is not accidental.

Appellant contends, however, for a reversal of the judgment because Huston made a statement within 48 hours after the killing to the effect that he accidentally killed Price while he was trying to shoot the .45 caliber automatic pistol out of his hand. H. O. Davis testified that Huston made such a statement to him-. Huston denied making the statement. Appellant argues that, on account of the conflict in the testimony between Huston and Davis, the court should have allowed the jury to determine the issue of whether the killing was intentional or accidental. Even if it be conceded that Huston was impeached so that the jury would have disregarded his testimony, yet the facts detailed above, were supported by other undisputed evidence, especially by the testimony of Pate; or, to state it differently, if the-testimony of Huston were entirely eliminated from this record, the remaining undisputed evidence showed that, while Price was engaged in the commission of a felony; he was discovered, and, in order to escape arrest, he opened fire upon the officers and continued to fire upon them until he was killed by them in necessary self-defense. The court, therefore, correctly told the jury that it was shown by the undisputed evidence that Price deliberately brought on his own death; hence that his death was not accidental within the meaning of the policy.

No error appearing, the judgment is affirmed.


source: Caselaw Access Project

license: Public Domain

text:
    Weishaupt v. Bank of Russellville.
    4-3299
    Opinion delivered January 22, 1934.

      Williams & Williams, for appellant.

      Ward & Caudle, for appellee.
   Humphreys, J.

Appellee brought suit against appellant and J. C. Fincher in the circuit court of Pope County for a balance due. on two notes executed by appellant to J. O. Fincher on the 11th day of May, 1929, due and payable in two and three years after date, which notes were assigned to appellee by J. C. Fincher before maturity in payment of indebtedness Fincher owed it.

Appellant filed an answer admitting the execution of the notes but denying liability for the balance due on account of the want of title in Fincher to a part of the property for which the notes were given and on account of the fraudulent misrepresentation of appellee as to the ownership of part of said property by Fincher.

Appellee filed a reply to the answer denying each material allegation therein.

Based upon the allegations in the answer, appellant filed a motion to transfer the cause to the chancery court, which was overruled by the court over appellant’s objection and exception.

The cause was then submitted upon the pleadings and testimony, at the conclusion of which the court instructed the jury to render a verdict in favor of appellee for the amount due upon the notes and rendered a judgment in accordance with the verdict, from which is this appeal.

The record reflects that the notes were given by appellant as a part of the purchase price for the entire equipment used in and about the operation of a certain coal mine known as the Hoing 'Coal Mine located in Johnson County, Arkansas, in section 20, township 9 north, range 25 west, consisting of two tipples, one wash house, one. locomotive engine, one supply house, 3,600 feet of, tramroad and right-of-way for same, including side tracks and switches, 25 cars more or less, one blacksmith shop‘ complete; also that, at the time of the execution of the notes, a written contract for the transfer of said property, which was in the nature of a bill of sale, was executed between J. C. Fincher, as party of the first part, and appellant, as party of the second part; that the written contract contained the following provision:

“The said party of the second part on his part agrees and does by these presents accept the aforesaid property, with which he is familiar, in its present condition and quantities, taking the lease contract of the said Quick without recourse on .the said party of the first part.”

Appellant introduced testimony, over the objection and exception of appellee, tending to show that appellee’s representative, who was president of appellee bank, represented that J. C. Fincher was the owner of all the property; whereas, E. C. Quick was the owner of a part thereof by purchase under a ¡mortgage foreclosure sale of the southwest quarter, southeast quarter of section 2, township 9, range 25 west, on which some of the property or equipment was located.

Appellant contends the trial court erred in refusing to transfer the cause to the chancery court under the allegations of bis answer. We think not, because the defenses interposed in the answer, if available to him, were just as available in law as in equity.

Appellant also contends the trial court erred in disregarding the testimony tending to show that there was an outstanding interest of a third person in a part of the property or equipment and that there was a misrepresentation by appellee’s agent to the effect that J. C. Fincher was the sole owner of all the property or equipment. This, of course, was the effect of instructing a verdict for appellee. The action of the court was tantamount to excluding such testimoiry.

The defenses interposed and the evidence introduced in support thereof were not available to appellant on account of the contract he made when he boug’ht the property or equipment. The clause in the contract alluded to is as follows:

“The said party of the second part on his part agrees and does by these presents accept the aforesaid property, with which he is familiar, in its present condir tion and quantities, taking the lease contract of the said Quick without recourse on the said party of the first part.”

The peremptory instruction given by the court was based upon this clause in the contract and was correct.

No error appearing, the judgment is affirmed.


author: Kirby, J.,

text:
    First National Bank v. Meriwether Sand & Gravel Company, Inc.
    4-3250
    Opinion delivered January 22, 1934.

      Ned Stewart, for appellant.

      E. A. Upton and Searcy & Searcy, for appellee.
   Kirby, J.,

(after stating the facts). The only question for determination here is whether or not the acknowledgment of the mortgage substantially complies with the laws of this State, and whether the judgment creditors’ liens are prior and paramount to the interest and equity of appellants in the property by reason of their mortgage.

The. suit was brought to foreclose the mortgage and declare the judgment creditors’ liens subordinate and inferior to the lien of the mortgage holders. The mortgage was introduced in evidence together with the notes secured thereby, and the same appears to have been filed for record on the 1st day of August, 1927, at 9 o ’clock and recorded in the recorder’s office at 9 o ’clock that day.

The president of the appellee gravel company identified the resolution of the hoard of directors authorizing the mortgage and also the notes secured thereby. He stated the amount due on the different notes and that it was the intention to include in the mortgage everything the company owned; and that the replacements made by the company were made with the consent of the mortgage holders.

The mortgage which appellants sought to foreclose is certainly, as to form and purpose, a mortgage both in law and equity. The only question which could be raised concerning the validity of the instrument is the sufficiency of the acknowledgment to entitle it to record in this State. The mortgage was taken by appellant bank, a Louisiana corporation, from appellee gravel company, also domiciled in Louisiana, upon property owned by said • gravel company situated in Arkansas. The mortgage was drawn in Louisiana, and the acknowledgment appears to have been taken in conformity with the laws of that State. To entitle said mortgage to record in this State, the acknowledgment must have been taken by an officer authorized by the laws of this State to take acknowledgments, or in substantial compliance with our statutes. Section 7380, Crawford & Moses’ Digest, provides the manner and form of taking- acknowledgments to deeds and mortgages. Section 1516, Crawford & Moses’ Digest, provides that an acknowledgment of tie conveyance of any real estate taken without the State must be taken before a notary public, the attestation of such acknowledgment and the form of the certificate.

In the instant case the instrument was acknowledged before a notary public and the certificate attested by his official seal. The instrument as acknowledged recites the appearance of the grantor, Meriwether Sand & Gravel Company, Inc., by its president, etc., and ends as follows:

Thus done and signed at my office in the Parish of Caddo, State of Louisiana, in the presence of "Ruby C. Cochran and I. C. O’Leary competent witnesses on this 11th day of July, Nineteen Hundred and Twenty-Seven.
“Witnesses:
“Meriwether Sand & Gravel Company, Inc.,
“By Jas. S. Meriwether, President,
“Frank M. Cook, Notary Public,
“Buby C. Cochran,
“I. C. O’Leary.”

We must examine the acknowledgment as made to ascertain if it be in form and substance a substantial compliance with our laws relating to such acknowledgments.

Appellees claim that the record shows that appellants’ mortgage was insufficiently acknowledged because the acknowledgment omitted the words “consideration and• purposes, etc.,” or words of similar import; and that because of the fatal defect of the acknowledgment said mortgage was illegally admitted to record and the recording thereof constituted no notice of the existence of a mortgage to third parties nor any lien against the lands included therein. Appellees cite Drew County Bank's Trust Company v. Sorben, 181 Ark. 943, 28 S. W. (2d) 730, and Ford v. Burks, 37 Ark. 94, a case holding the acknowledgment invalid because the word “purposes” was omitted; and also Wright v. Graham,, 42 Ark. 141.

The acknowledgment of the instrument herein, however, was made by the proper officers, the president and secretary of the corporation, under a resolution by the board of directors thereof duly authorizing* said mortgage, a certified copy of the resolution being attached to tmd made a part of the acknowledgment by the official, who stated, “that for and in consideration of the sum of one dollar ($1) cash in hand paid and the premises hereinafter set forth,” the certificate ending as above set out: ‘ ‘ Thus done and signed, etc. ’ ’

The word “consideration” is properly used in the acknowledgment while the words “and the premises hereinafter set forth,” certainly are words of similar import to “purposes” reciting all the purposes instead of saying “therein mentioned and set forth”; and said acknowledgment was a substantial and sufficient compliance with our statute, the mortgage not being invalidated by the use of such language.

Appellants insist that, notwithstanding the holding of the chancellor that their mortgage was not entitled to record because of the defective acknowledgment and therefore constituted no lien against the property, the court erred in not holding their right to the property superior to that of appellees, who were only judgment creditors and not innocent purchasers. This contention must be sustained.

The instrument purports to grant, bargain, sell, transfer and assign the real estate, etc., to a trustee to be applied to the payment of the pre-existing indebtedness of these three Shreveport 'banks described therein, and would have constituted a valid legal mortgage between the parties, although no lien against the property because of the defective acknowledgment not entitling it to record. It is, however, none the less a conveyance of the property described therein by appellee to the trustee for application to the payment of appellee’s indebtedness to appellants; and, whether it be considered an equitable mortgage or not, it was effective to convey appellee’s interest in the property described for the purpose of securing such indebtedness.

The judgment creditors are not innocent purchasers, and by their judgments could only subject to the payment of their indebtedness the mortgagor’s interest remaining in the property, their liens being subject to existing equities of third parties in the land, etc. McGuigan v. Ricks, 140 Ark. 418, 215 S. W. 611; Boswell v. Adlen, 28 Ark. 82; Apperson Co. v. Burgett, 33 Ark. 328; Howe v. King, 127 Ark. 511, 192 S. W. 883; Robbins-Sanford Merc. Co. v. Johnson, 166 Ark. 330, 266 S. W. 260; Snow Bros. v. Ellis, 180 Ark. 238, 21 S. W. (2d) 162; First National Bank of Amarillo v. Jones, 107 Tex. 623, 183 S. W. 874.

The chancellor could have foreclosed the mortgage settling the rights of all the parties, and should therefore have held the lien or claim of appellants superior to the lien of said judgment creditors and erred in not so doing. The decree is reversed, and the cause remanded with directions to enter a decree in favor of appellants in accordance with the ruling herein. It is so ordered.

Smith and McHaney, JJ., dissent.


text:
    Sprague v. Clay County use School Districts.
    4-3254
    Opinion delivered January 22, 1934.

      J. L. Taylor and Oliver & Oliver, for appellant.

      D. Hopson, Foster Clarke and H. M. Cooley, for appellee.
   Kirby, J.,

(after stating the facts). The second surety bond was required to be furnished by the depository bank upon a demand therefor by the county judge under the authority of act 163 of 1927, § 14, of which reads in part as follows:

‘ ‘ The county court, or the judge thereof, may at any time, if he deems it desirable, require a new bond, or additional bond to be filed by any depository selected under this act.” The county judge demanded the execution of the new bond because of having heard of the opinion of the Attorney General that the law required it, and since most of the county officials were required to execute such surety bonds. This bond was executed and approved, and was in a sufficient amount to secure all the money paid into the depository under the law.

It was shown that all the moneys due the county and school districts were in the depository at the time the new bond was required to be executed. It appears from the testimony also that it was the intention to require the securing of the entire amount that might come into the depository thereafter by the new bond, which was given in lieu of, and in substitution for, the old bond, and not in addition thereto. Sai’d surety bond was duly executed, approved and delivered to the depository bank, which had the moneys of the county in its possession at the time.

It has been held that a surety cannot be released from a county treasurer’s bond from any liability which had already been incurred. Ex parte Talbot, 32 Ark. 424. It was also said there that the court had the discretion, however, to require the treasurer to give a new bond or security for the performance of official duties, and, upon the execution and approval thereof, the sureties on the old bond would be discharged from future liability, but not from any present liability. '

The statute relative to the discharge of sureties on the former official bond by the execution of a new bond provides that, when a new bond is taken and approved, it shall operate as a discharge of all the sureties in the former bond from all liability arising from any subsequent misconduct or default of the principal therein, and such sureties shall thenceforth be liable only on such bond for such breach thereof as shall have happened prior to the taking and approving of the new bond. Section 8303, Crawford & Moses’ Digest.

It may be urged that a depository bond is not an official bond within the meaning of the statute, but the law requires the execution thereof for the protection and security of public funds collected by public officials and deposited therein, and we see no good reason why there should be a rule for less or more liability for the sureties on the bonds of such depository than is required by law of the sureties of the official who collects the money in the first instance. Such depository bonds have been held to be official bonds. Maryland Casualty Co. v. Pacific Co., 245 Fed. 831.

The new bond was filed January 10, 1930, and approved January 25,1930, and was intended to be in lieu of and supersede the old bond, as already said. On that day the bank had on hand $35,701.85 to the credit of the treasurer, and on January 18, a few days before the new bond was approved, his balance was $34,051.17, and was gradually reduced afterwards. The treasurer continued under the new bond to make deposits and draw out funds, and by November 17, 1930, he had .drawn out $77,073.36, having a balance on hand of $29,118.29. The action of the county treasurer, after he knew of the opinion of the Attorney General and' that the new bond had been made and approved, and after his talk with the county judge about it, was certainly tantamount to acceptance on his part of the new bond instead and in lieu of the old bond, and, since he withdrew from the bank an amount in excess of the balance as of January 10, 1930, the old bond was discharged. State use Randolph County v. Pocahontas State Bank, 184 Ark. 442, 42 S. W. (2d) 546. See also School District v. McCrary, 187 Ark. 800, 62 S. W. (2d) 953, and Jefferies v. Wasson, 187 Ark. 519, 60 S. W. (2d) 903.

It will be remembered that the chancery court, at the first hearing on the approval of the proposed sale by the Bank Commissioner, denied it, and at a later hearing additional testimony was taken, which was included in the findings and decree approving the sale. There was no action taken to prevent the carrying out of the decree authorizing the sale, and the treasurer and the school districts, being fully advised about the matter, will be held to have ratified the decree.

It is manifest that the new surety bond was executed to take the place of and supersede the old bond, and that the conduct of the treasurer and the school districts amounted to a ratification of the proceeding, and the sureties on the old bond were discharged thereby. The chancellor erred in holding otherwise, and, for this error, the decree is reversed, and, the cause having been fully developed, same will be dismissed.. It is so ordered.


text:
    Marion Machine, Foundry and Supply Company v. Federal Oil Marketing Corporation.
    4-3275
    Opinion delivered January 22, 1934.

      Walter L. Goodwin and J. S. Brooks, for appellant.

      Jeff Davis and Conard E. Cooper, for appellee.
   Kirby, J.,

(after stating the facts). Appellants insist that the court erred in directing the verdict against them; but it has frequently been held that, under such circumstances of submission, the court has the right to direct a verdict, the parties having by such request waived the right to a verdict by the jury, and the decision of the court has the same effect as would have been given to the verdict of a jury, the evidence viewed in the light most favorable to appellee. St. L. Sw. Ry. Co. v. Mulkey, 100 Ark. 71, 139 S. W. 643; Upson v. Robinson, 179 Ark. 600, 17 S. W. (2d) 305; and Stewart v. Budd, 169 Ark. 363, 295 S. W. 748.

Appellants failed to sustain the burden of proof, which was upon them, to establish an abandonment of the lease as claimed; and there was no claim of any right to a forfeiture because of a cessation of operation of the wells, nor any claim of a right to cancellation of the lease because thereof.

The testimony in appellee’s favor was very substantial, it being doubtful if there was not a decided preponderance thereof, and at least it was amply sufficient to support the verdict as directed. The appellants clearly' had no right to take possession of and appropriate the casing out of the old wells under the circumstances, there having been no abandonment thereof by the lessees, and the lease not having expired or terminated by reason of forfeiture or otherwise; and the court committed no error in so holding.

The judgment is affirmed.


text:
    Brawley v. Rogers.
    4-3300
    Opinion delivered January 22, 1934.

      Coleman & Reeder, for appellant.

      John C. Ashley, for appellee.
   Kirby, J.,

(after stating the facts). The undisputed testimony shows that S. P. Murphy and Jane Spurlock executed the contract in question, and that it was done in consideration of their approaching marriage, which occurred shortly thereafter. It is not claimed that there was any fraud or undue influence used in the negotiations about the agreement or in the execution thereof; and it was entered into in good faith for the purposes set out therein, and the parties lived together as husband and wife until the death of the husband.

The evidence does not indicate the value of the property owned by the respective parties at the time of the execution of the contract.

The antenuptial contract is sought to be avoided as one without consideration, it being insisted for the appellee that, under the law and the terms of the said contract, the appellant’s intestate could have had no interest in appellee’s property by marriage, since she was too old for the possibility of issue being born alive from the union, and since under the law otherwise she would have been entitled to dower, etc., out of his property; and that therefore the antenuptial contract was void for want of consideration.

The statute, §§ 7028 et seq., Crawford & Moses’ Digest, authorize the making of antenuptial agreements by parties contemplating marriage. The law has always allowed parties in contemplation of marriage to fix the rights of each in the property of the other by an agreement equitably and fairly made between them that will exclude the operation of the law in that respect. 13 R. C. L., pages 1012-15. It is likewise held that marriage is a sufficient consideration for such antenuptial agreement or marriage settlement, See 13 R. C. L. 1016; 30 C. J. 631; Oliphant v. Oliphant, 177 Ark. 613, 7 S. W. (2d) 783, and Comstock v. Comstock, 146 Ark. 266, 225 S. W. 621.

There is nothing to indicate that this antenuptial contract was not freely entered into, or that it is unjust or inequitable, and such contracts should be liberally construed to carry out the intentions of the parties. Oliphant v. Oliphant, supra. There was no intimation that said contract was not entered into in good faith or without the expectation of the parties living together until death separated them. Id.

The court therefore erred in holding the contract was invalid and unenforceable for want of consideration, and that appellee was not bound thereby. The judgment' must be reversed, and, the case, appearing to have been fully developed, will be dismissed. It is so ordered.


author: Mehaffy, J.

text:
    Erwin v. Milligan.
    4-3301
    Opinion delivered January 22, 1934.

      Coleman & Reeder and T. J. Carter, for appellant.

      John C. Ashley and Roy Prewitt, for appellee.
   Mehaffy, J.

Suit was begun in the Sharp Circuit Court by Mrs. Noble O. Milligan, appellee, against the appellant, Wade Erwin. The appellee alleged in her complaint that the appellant, Wade Erwin, came to her home in Sharp County, and, in the absence of her husband, unlawfully, wilfully and contemptuously did insult, disturb, disquiet and threaten her by the use of indecent language and proposals; that, because of said wrongful acts, words and proposals made to her by appellant, she became ill, excited and nervous; that her moral sensibilities and ideals of decency and propriety were shocked, and that she suffered, because of said acts and proposals, a nervous collapse and great pain, anguish and humiliation.- She alleges that she was pregnant with child; that, because- of her mental condition, nervous and,physical shock brought about by the improper conduct of the appellant, she was caused to have a miscarriage, and was caused great physical pain and suffering and irreparable injury tó her health; that she was confined to her bed, and forced to expend large sums for doctor’s bills and medicine; that her health was permanently injured. She also alleges that, prior to the misconduct of appellant mentioned in her complaint, she was a strong healthy woman, able to do her housework and assist her husband in the fields, making and harvesting his crops; that since the acts complained of she had been nervous, irritable and unable to perform her necessary duties or assist her husband as before; that, because of said wrongful acts and proposals, she had been damaged in the sum of $5,000 actual damages, and in the sum of $2,500 punitive damages. She prays judgment in the sum of $7,500, and costs.

The appellee, Noble C. Milligan, also filed suit against appellant and alleged the same acts and proposals of appellant that are alleged in the complaint in the suit brought by his wife, and, in addition, alleges that he lost the services of his wife, and had to pay doctor’s bills. He prays for judgment in the sum of $2,500.

Appellant filed answer in each case, denying all the allegations in each complaint. The two cases were consolidated and tried together.

The appellee, Mrs. Noble O. Milligan, testified that she had three children, the oldest four years of age; that she had known appellant for 15 or 16 years; that in April, 1931, he came to her home twice; that he came the second time to their home a few days later about noon; when he arrived, she testified that her husband was coming from the field; that they met and shook hands, and talked something about appellant’s purchasing a tractor from her husband; that they had this talk while she was preparing dinner; that, when they had eaten, appellant and her husband talked awhile, and her husband said he had to go to the field; appellant did not make any answer; he made no attempt to get up, and her husband then said that he had to go to his mother’s to get a team, and told appellant to meet him as he came back and go to the field with him, and appellant agreed. Appellant remained sitting there talking, to appellee; her husband went on to the field, and, when she began to stack the dishes, appellant said: “I will give you my hand that I am your friend,” and she told him she never expected him to be anything else but her friend. He then said: “I keep secrets, too,” and by that time witness said appellant was reaching for her hand, and he acted as though he was going to draw her to him and kiss her. She was shocked, and told him she thought he Was a Christian man; that he took hold of her right hand and she jerked back, and told him to go back where her husband was. He then asked her if he could stop as he came back by, and she told him he could not, but to- go back where her husband was. He then said: “You will let me stop and be a friend to you for some money, won’t you?” and she told him, if he had any money to give away, to give it to her husband. He then said: “I would rather give it to you.” She testified that he asked her if she were going to tell her husband, and she said “Yes.” He then said: “If you do, he might think something if you did. ’ ’

This is substantially all of appellee’s testimony as to what appellant said and did. She then described her shock and injury, her miscarriage and suffering, and inability to do her work.

Dr. I. M. Huskey testified that he treated Mrs. Milligan, appellee, on April 20th; that she was suffering- with an abortion, and was in a serious condition. A hypothetical question was asked, him, which recited the facts testified to by Mrs. Milligan, and closed as follows: “What in your judgment would be the cause of the miscarriage or abortion?” He answered that would be a sufficient cause for the abortion in the absence of any other condition in the way of disease or injury; that it would lead him to the natural conclusion that the severe mental strain of her condition would be the cause of her trouble.

There was some evidence introduced, tending to corroborate the evidence of appellee as to her illness, and all of the facts testified to in support of appellee’s contention were'contradicted by appellant and his witnesses.

The appellee, Noble C. Milligan, testified that he bad expended $25 for doctor’s bill. He also testified that Ms wife was sick and unable to do tbe work wMcb she did prior to the time of appellant’s alleged misconduct, but he did not testify how much work she did nor'how much of her services he was deprived of by reason of her injury, and there was no testimony by any witnesses as to the value of her services.

Noble Milligan sued to recover doctor’s bills, and for loss of services, and obtained a judgment for $125. He testified about the condition of his wife and her inability to perform the services she had been performing, but he did not testify as to any acts or words of the appellant. He could not do so because he was not present. No one testified about the acts of Erwin, except Mrs.' Milligan, the wife of Noble Milligan. This evidence of Mrs. Milligan could not be considered in her husband’s case, and, since no one else testified to anything that was done or said by Erwin, there was no evidence in Noble Milligan’s case that Erwin did or said anything.

Section 4146 of Crawford & Moses’ Digest provides that husband and wife are incompetent to testify for or against each other, and the court told the jury that the testimony of Mrs. Milligan could not be considered by them in the case of Noble Milligan. TMs instruction was correct.

In the case of Railway Co. v. Amos, 54 Ark. 159, 15 S. W. 362, a case where there was a joint action by husband and wife against the railway company, the court said: “But no objection avus made to th'e joinder, and no question arises upon it now except its bearing upon the competency of the plaintiffs as witnesses in the cause. It is argued that, as both plaintiffs were interested in the result, neither was competent to testify in the cause. But either was a competent Avitness in his or her own behalf, and the rule is settled by the previous decisions of this court that, in cases in which a party may be a witness for himself, marriage is not. a disqualification as to liis'interest in the case, notAvithstanding the other pa,rty to the marriage is a party to the suit.” $o, in the instant case, the Avife ivas a coMpetent witness in her own case, and might testify in her own behalf, but she could not testify in the case of her husband.

This court again said: “So it may be taken as settled by these two decisions that the fact that the husband and wife are joint plaintiffs in an action does not prevent either of them from testifying in his or her own case.” L. R. Gas & Fuel Co. v. Coppedge, 116 Ark. 334, 172 S. W. 885.

Again we said: “This court has held that the fact that a husband and wife have joint claims in an action, does not prevent either of them from testifying in his or her own case, but that the testimony of the wife cannot be considered in the case of the husband, and the testimony of the husband cannot be considered in the case of the wife.” Murray v. Jackson, 180 Ark. 1144, 24 S. W. (2d) 960.

It therefore appears that there was no competent evidence in the case of Noble Milligan tending to show any wrongful conduct on the part of the appellant. Since there was no competent evidence in this case, and as no one except the wife can testify to anything done or said by Erwin, the judgment in the case of Noble C. Milligan against Wade Erwin must be reversed, and the cause dismissed.

The court submitted to the jury, in the case of Mrs. Milligan against the appellant, the question of punitive damages. Punitive damages are damages imposed by way of punishment, and are given for that purpose in addition to compensation for the loss sustained. It is generally said that punitive damages are awarded in view of the supposed aggravation of the injury to the feelings of the plaintiff by the wanton or reckless act of the defendant. 17 C. J. 968 et seq.; 8 R. C. L. 579; St. L. S. W. Ry. Co. v. Owings, 135 Ark. 56, 204 S. W. 1146; Mo. Pac. Rd. Co. v. Yancey, 178 Ark. 147, 10 S. W. (2d) 22; Moore v. Wilson, 180 Ark. 41, 20 S. W. (2d) 310.

We are of the opinion that, under, the rules announced by these authorities, there was no evidence justifying the award of punitive damages, and the court erred in giving instruction No. 7 at the request of the appellee, which authorized the jury to return a verdict for punitive damages in favor of the appellee.

Appellant contends that appellee cannot recover in this case under the rule announced by this court that no recovery can be had for mental pain and anguish unaccompanied by physical injury and caused by unintentional negligence. He calls our attention to several authorities. The rule is well established that there can be no recovery for fright or mental pain and anguish caused by negligence where there is no physical injury. •But the rule is equally well established that a recovery may be had where the injury is caused by wilful or intentional conduct. This suit is not based on negligence, but on the alleged intentional wrongful conduct of appellant.

“As a general rule, damages are recoverable for mental suffering consisting in a sense of wrong or insult, indignity, humiliation or injury to the feelings; and this rule is particularly applicable, it is said, where such suffering is the result of a wanton or intentional trespass on the person of a woman.” 8 R. C. L. 521.

In the case of wilful or intentional wrong, the rule invoked by appellant has no application. Rogers v. Willard, 144 Ark. 587, 223 S. W. 15.

The appellant objected to the hypothetical question propounded to the physician, but we do not think there was any error in asking this question. The objection is that it did not contain all the facts in evidence. The evidence showed that shortly after the misconduct of appellant, alleged as the basis of the action, the appellee, Mrs. Milligan, rode two or three miles in a truck, and appellant contends that this should have been embraced in the hypothetical question, but there is no evidence that she received any injury by this ride, and it was not necessary to include this in the hypothetical question. Besides, the appellant asked practically the same question when his physician, Dr. Tibbies, was testifying, and in his question there was nothing said about the ride in the truck. We are of opinion that the hypothetical question was proper.

We have carefully read and considered the instructions, and have reached the conclusion that there was no error in giving or refusing to give instructions.

The evidence of appellee, Mrs. Milligan, and of the physician, if believed by the jury, was sufficient to support the verdict, and it is the province of the jury to pass upon the credibility of witnesses and the weight to be given to their testimony. It follows from what we have said that the judgment in favor of the husband should be reversed, and the cause dismissed; that the judgment for punitive damages in favor of the wife should be reversed and dismissed, and that the judgment for $750 in favor of Mrs. Milligan should be affirmed.

It is so ordered.


author: McHaney, J. Johnson, C. J.,

text:
    State ex rel. Murphy v. Cherry.
    4-3252
    Opinion delivered January 22, 1934.

      Horace Sloan, for appellant.

      Lamb & Adams, for appellee.

      R. V. Wheeler, amicus curiae.

   McHaney, J.

Appellant, Francis A. Murphy, a large landowner and taxpayer within the limits of Big Creek Drainage District No. 15 of Craighead County, hereinafter called the district, brought this action for mandamus against appellee, Edward O. Cherry, as collector of revenue of Craighead County, to compel the collector to accept and receive overdue bonds and interest coupons of the district for the annual installment of drainage assessments due against his lands, and to issue his official receipt for said taxes. The district was made a party respondent to the petition. Appellees responded, denying the right of appellant to the writ, which the court sustained, and this appeal is from that order. The court found from the evidence adduced that the present market value of the lands embraced in the district, 47,421.62 acres, is less than the amount of outstanding indebtedness of the district on account of drainage improvement. This finding is supported by substantial evidence. A total of $310,000 in bonds was issued and sold by the district, bearing date January 2, 1918, with interest payable semiannually at 51/2 per cent, per annum. Total assessment of benefits were made against the lands in the district of $801,789.43, which bears interest at 6 per cent. Only $46,-000 in principal of the bonds has been paid, leaving a balance in principal of $264,000 and interest still unpaid. The district has been in default of its maturities, of both principal and interest, since 1928. Delinquencies in tax payments have increased greatly since 1927, and at this time approximately three-fourths of the lands in the district are delinquent for district taxes, and a large amount thereof has forfeited to the State for the nonpayment of State and other general taxes.

The Legislature of 1931 passed act 156, which provides: “The commissioners or collectors for drainage, levee and other improvement districts are authorized to and shall accept, at their face value, past-due bonds or past-due interest coupons issued by said improvement district as full payment for taxes or assessments as they accrue, and shall be accepted by the commissioners and collectors in payment for lands or other property belonging to the district that may have been forfeited to the district for the nonpayment of taxes due on the same. Provided, however, that past-due bonds or past-due interest coupons may be accepted as part payment for taxes or assessments or forfeited property; the balance to be paid in cash, provided, further, that no bondholder, by tender of bond or bonds can purchase any land from the said district in smaller quantity than as described in any call at the time said land is originally assessed.”

The validity of this act is the basis of the principal contention in this case and this question has given us a great deal of concern. Appellee contends that it impairs the obligation of the contract between the district and its bondholders, and denies to the latter due process of law, in violation of both the State and Federal Constitutions, whereas appellant contends to the contrary, and that the right of set-off existed under the statute prior to 1918.

The county court, pursuant to the drainage statute, on December 30, 1918, [Crawford & Moses’ Digest, § 3589] made an order providing for the issuance of bonds, times of payment, etc. Paragraphs E and F of this order are as follows: “E. It is further considered, ordered and adjudged that, in order to meet the interest upon the said bonds and pay the principal thereof as it matures, there is hereby appropriated for that purpose, and set aside out of the first moneys received from the collection of each installment of the said tax assessed against the real property, including lands, railroads and tramroads within said drainage district, a sum sufficient to pay the interest and principal of the bond issue maturing during the year in which that installment of the said tax is due and payable, in accordance with and.as shown on the schedule hereinbefore set out, or any bonds and coupons that may have already matured and yet remain unpaid.

“F. it is further considered, ordered and adjudged that no part of the funds arising from the collection of any of the said installments shall be applied or used for any other purpose than the payment of the interest and principal of the said bonds until there has been deposited with the St. Louis Union Trust Company, in the city of St. Louis, and the State of Missouri, an amount sufficient to pay the interest and principal maturing during the year in which the installment is due and payable, as well as all other bonds and coupons already matured and remaining unpaid.” The bonds themselves provided that principal and interest should be payable in gold.

The sections of the order above quoted are a part of the contract between the district and its bondholders. Section E appropriates from the first moneys received from the collection of each installment of tax, which had previously been assessed by order of the county court against the real property, a sum sufficient to pay bond maturities and interest of that year, or any past-due bonds and coupons. Section F goes still a step further and prohibits the use of said funds for any purpose, except the payment of principal and interest of said bonds, until there has been deposited with the St. Louis Union Trust Company a sum sufficient to pay principal and interest of bonds maturing during the year as well as past-due bonds and coupons. We think the necessary effect of the order was to require the payment of all bonds and coupons maturing during the taxable year, and all overdue bonds and coupons pro rata; that is, if the amount collected in any year should be insufficient to pay current and past-due bonds and coupons, the funds on hand should be applied thereto without discrimination. The undisputed fact is that the district is in default on bonds falling due from 1928 down to the present, and that the collections fall far short of yielding an amount sufficient to discharge bonds and coupons overdue. Therefore, if appellant is permitted to use overdue bonds and coupons to pay his assessment or tax on assessed benefits, he will receive a preference over bondholders who are not landowners or taxpayers in the district, which, as we have already shown, is violative of the terms of the contract. Past-due bonds and coupons, being on a parity with bonds and coupons maturing during any taxable year, are entitled to share ratably in the proceeds of collections made during such year. This is impossible if some of the landowners are permitted to pay taxes with such bonds or coupons. A bondholder, who is not a landowner, is entitled to the same rights as a bondholder who is also a landowner.

Less than fifty per cent, of the land in the distrú t is improved and in cultivation. The remainder is of very little value. If past-due bonds and coupons may be .used to pay taxes, it is reasonable to presume that the valuable lands will be protected and the worthless lands allowed to become delinquent. In which event, the bonds left outstanding would bo practically without security.

Viewed in any light, act 156 of 1931 permits the working of an inequality among bondholders, and therefore permits the impairment of the obligation of the contract between the district and its bondholders. In re Cranberry Creek Drain. Dist., 202 Wis. 64, 231 N. W. 588; see also Rorick v. Bd. of Commr’s of Everglades Dr. Dist., 57 Fed. (2d) 1048. In Oliver v. Western Clay Drain. Dist., 187 Ark. 539, 61 S. W. (2d) 442, we held that: “ Taking a sufficient amount of assessments to replace the money wrongfully taken from the construction fund and paid to the purchasers of the bonds will not prevent the bondholders from getting their money. It will be simply taking from the assessments the amount of money paid to them that should have been paid to the contractors, and will not deprive them of anything to which they were entitled under the law. They still have a lien on all the assessments, and there is ample provision in the law to compel the collection of the assessments. Taking this fund (judgment against the district for construction work) out of the assessments collected will simply be. returning to the construction fund the amount wrongfully taken from it, and will in no way reduce the amount that the bondholders are entitled to under the law.” This holding is no authority for a 'bondholder-landowner to pay his taxes with past-due bonds.

Nor can we agree there was any right of set-off under existing law prior to 1918 as contended by appellant. Section 1197, Crawford & Moses’ Digest, provides that: “A set-off may be pleaded in any action for the recovery of money and may be a cause of action arising upon contract or tort.’’ This is not an “action for the recovery of money. ” It is a mandamus action.

Many other arguments have been advanced by learned counsel for appellant, all more or less ancillary to the matters discussed. We find it unnecessary to review them as those herein considered are decisive of this case.

It follows from what we have said that act 156 of 1931 is unconstitutional and void, and that the judgment of the circuit court is correct, and must be affirmed. It is so ordered.

Johnson, C. J., and Mehaffy, J., dissent.

Johnson, C. J.,

(dissenting). New questions of greater importance than the one just decided have been submitted to this court for judicial determination in the past several years. I can not shut my eyes to the necessary implications of the majority opinion. Act 156 of 1931 has been struck down because of unconstitutionality. It is true that the virtues of this act should not save it; neither should its faults, if any, be invoked to accomplish its destruction.

In my humble opinion, act 156 of 1931 is a wholesome, constitutional and beneficial piece of legislation. It was promulgated, at a time when the world-wide depression was in its height and a world-wide business crisis of equal magnitude to that caused by flood, earthquake or other world-wide calamity. We can not and should not shut our eyes to the conditions as they are and were at the time of the enactment of this legislation. When this act was passed in 1931, thousands of people in this State were without employment and means of earning a living for themselves and their families; the value of income from all property situated in the State had practically vanished; these conditions produced the inevitable result of the loss of the homes of thousands of our people. On account of the many rivers and the vast quantities of low lands in this State, a large portion of the State’s tillable lands are located within drainage and ditch districts. Sixty-two of the seventy-five counties of the State have within their boundaries road improvement districts which have outstanding bonds. More than $250,000,000 in outstanding bonds are now in circulation against the various improvement districts within the boundaries of this State. The bonds of these various districts have been selling for the past several years, on the open markets, for as little as 25 cents on the dollar. It was to relieve this unfortunate situation and thereby enable the poverty stricken homeowner within these improvement districts to pay improvement district taxes that this legislation was passed. The constitutionality of this act should be measured by the actual authority reserved in the people, and not by imaginary constitutional .restrictions. Section 1 of art. 2 of the Arkansas Constitution of 1874 provides: “All political power is inherent in the people, and government is instituted for their protection, security and benefit; and they have the right to alter, reform or abolish the same in''such manner as they may think proper.”

Thus it will be seen that, by constitutional mandate, all powers not expressly or impliedly prohibited by the Constitution are reserved in the people. This exact question was before this court in the early case of State v. Ashley, 1 Ark. 513, and this court there said: “A State Legislature can exercise all power that is not expressly or impliedly prohibited by the Constitution; for whatever powers are not limited or restricted they inherently possess as a portion of the sovereignty of the State. ’ ’

The doctrine announced in State v. Ashley, has been consistently followed by this court up to the present time. I call especial attention to the cases of Sims v. Ahrens, 167 Ark. 557, 271 S. W. 720; Barton v. Drainage Dist. No. 30, 174 Ark. 173, 294 S. W. 418, and Bush v. Martineau, 174 Ark. 214, 295 S. W. 9. In each of these cases, this court expressly affirmed the doctrine announced in State v. Ashley, and made full application of its meaning and intent.

In addition to what I have just said, all acts of the Legislature are presumed to be constitutional and valid. Patterson v. Temple, 27 Ark. 202; Leach v. Smith, 25 Ark. 246.

Defining the rule, differently, this court has said: “A statute will not be pronounced unconstitutional unless there is a clear incompatibility between the act and the Constitution.” Eason v. State, 11 Ark. 481. Stating the rule another way, this court has many times held: “All doubts should be resolved in favor of the constitutionality of a statute.” Duke v. State, 56 Ark. 485, 20 S. W. 600; Carson v. St. Francis Levee Dist., 59 Ark. 513, 27 S. W. 590; Graham v. Nix, 102 Ark. 277, 144 S. W. 214; Ark. La. & G. R. Co. v. Kennedy, 84 Ark. 364, 105 S. W. 885.

Expressing the rule in a little different language, this court has said: “The courts should exercise their power of declaring an act of the Legislature void because in conflict with the Constitution with great caution, and only when the terms of the Constitution have been plainly violated.” State v. Moore, 76 Ark. 197, 88 S. W. 881. And again: “A statute will not be declared unconstitutional unless no doubt exists on the question.”. Stillwell v. Jackson, 77 Ark. 250, 93 S. W. 71.

Thus it will be seen that before this court is authorized to declare act 156 of 1931 unconstitutional and void, it must appear, beyond doubt, that the same is in violation of some mandate of the Constitution. It is my view that no such antagonism prevails between the act in question and constitutional mandate. The majority opinion holds that act 156 of 1931 violates' § 10 of article 1 of the Constitution of the United States and § 17 of article 2 of the Arkansas Constitution of 1874, which provide against the impairment of the obligations of contract. It seems to be the intention of the majority to hold that, since the trial court has found, from evidence adduced, that the present market value of lands embraced within the improvement district is less than the amount of outstanding indebtedness against the district, act 156, giving landowners a right not enjoyed by non-landowners thereby impairs the obligations of contract. This is not the correct test.

The solvency or insolvency of this improvement district cannot and should not be determined in this proceeding. No receivership has been applied for or granted, and this district should be treated as conclusively solvent in this collateral proceeding.

Big Creek Drainage District No. 15 of Craighead County was organized in 1917, under the authority of act 279 of 1909 and amendatory acts thereto. Section 7 of the act provides: “Said commissioners shall proceed to view the lands within the. district, and shall inscribe in a book the description of each tract of land, and shall assess the value of the benefits to accrue to each tract by reason of such improvement, and shall enter such assessment of benefits opposite the descriptions, together with an estimate of what the landowner will probably have to pay on said assessment for the first year. Their assessment shall embrace, not merely the land, but all public or corporate, roads, railroads, tramroads and other improvements on lands that will be benefited by the drainage system. They shall place opposite each tract of land the name of the supposed owner, as shown by the. last county assessment; but a mistake in the name shall not vitiate the assessment.”

The assessment of benefits in this district were made in conformity with the section quoted. The assessment of benefits so made is not against the whole district, but is against each separate tract of land and the aggregate or total assessment against the 47,421.62 acres is $801,-789.43, which assessment of benefits bears interest at the rate of 6 per cent, per annum. The bondholder knew when he purchased his bonds that the assessment of benefits was against each separate tract of land, and, of course, he purchased subject to this assessment. This is made certain by § 3606 of Crawford & Moses’ Digest, which provides: “Any person or corporation, co-partnership or other parties owning lands assessed for the construction of any ditch or other improvement under the provision of this act shall have the privilege of paying such assessment to the treasurer at any time before the bonds therefor are issued. ’ ’

This section gave definite notice to the bond purchaser that the landowner had the right to pay off the assessment of benefits against any separate, tract of land, as determined by the board of commissioners. I therefore assert that the rights of the bond purchaser should be measured by the assessment of benefits against the several tracts of land in the improvement district and not 'by the aggregate assessments against all the lands in the district. I also assert that neither the trial court nor this court has any right to take into consideration the present market value of the lands situated in this district for the purpose of determining the constitutional question here presented. The bondholder purchased his ■bonds on the faith of the assessment of benefits which were expected to accrue to the landowner by reason of the improvement and not upon the intrinsic value of the lands. The present holding of the court, when carried to its logical conclusion, will inevitably take from the landowners in all improvement districts in this State their last vestige of inheritance. The effect of the majority holding is that each tract of land stands as surety for each other tract in the district. I assert that this is not and should not be declared the law.

The prohibition against impairment in our Constitution of 1874 is identical with that in the Federal Constitution. In Antoni v. Greenhow, 107 U. S. 769, 2 S. Ct. 91, the Supreme Court of the United States held on the question of impairment: “In all such cases the question becomes, therefore, one of reasonableness, and of that the Legislature is primarily the judge.” The same court held in Sturges v. Crowninshield, 4 Wheat. 122, that the obligations of contract are impaired only by a law which renders them invalid, or releases or extinguishes them. In West River Bridge v. Dix, 6 How. 507, the same court held that the State’s right of eminent domain was a reservation in all contracts, and that such reservation was deemed a part of the contract. Neither does legislation regulating the public health or the public morals impair the obligations of contract. Douglas v. Kentucky, 168 U. S. 488, 18 S. Ct. 199.

Legislation to protect the public safety falls within the reserved power of the respective States and therefore does not impair the obligations of contract. C. B. & Q. R. Co. v. Nebraska, 170 U. S. 57, 18 S. Ct. 513; T. & N. O. R. R. Co. v. Miller, 221 U. S. 414, 31 S. Ct. 534.

Similar to the question now under consideration, the Supreme Court of the United States held, in Manigault v. Springs, 199 U. S. 473, 26 S. Ct. 127, that the economic interests of the State may justify the exercise of its continuing and dominant protective power, notwithstanding interference with contractual obligations.

All doubts about the reserved and protective powers of the several States were removed by the decisions of the Supreme Court of the United States in the recent cases of Home Building & Loan Ass’n v. Blaisdell, 290 U. S. 398, 54 S. Ct. 231; Block v. Hirsh, 256 U. S. 135, 41 S. Ct. 458; Brown Holding Co. v. Feldman, 256 U. S. 170, 41 S. Ct. 465; Edgar A. Levy Leasing Co. v. Siegel, 258 U. S. 242, 42 S. Ct. 289.

Chief Justice Hughes, who handed down the opinion in Home Building & Loan Ass’n v. Blaisdell, cited supra, said: “Undoubtedly, whatever is reserved of State power must be consistent with the fair intent of the constitutional limitation of that power. The reserved power cannot be construed so as to destroy the limitation, nor is the limitation to be construed to destroy the reserved power in its essential aspects. They must be construed in harmony with each other. This principle precludes a construction which would permit the State to adopt as its policy the repudiation of debts or the destruction of contracts or the denial of means to enforce them. But it does not follow that conditions may not arise in which a temporary restraint of enforcement may not be consistent with the spirit and purpose of the constitutional provision and thus be found to be within the range of the reserved power of the State to protect the vital interests of the community.”

The right of set-off created by act 156 of 1931 does not. alter or impair the medium of payment, but only has to do with the remedy of enforcement. Amy v. Taxing Dist. of Shelby County, 114 U. S. 387, 5 S. Ct. 895.

Legislation giving a more efficient or additional remedy upon a prior contract does not impair its obligations. Bernheimer v. Converse, 206 U. S. 516, 27 S. Ct. 755.

Moreover, it has been definitely determined by the Supreme Court of the United States that the right of set-off is a benefit, to bondholders and not a detriment. Woodruff v. Traphall, 10 How. 190 ; Hartman v. Greenhow, 102 U. S. 679; Poindexter v. Greenhow, 114 U. S. 270, 5. S. Ct. 903; Keith v. Clark, 97 U. S. 455.

Act 156 of 1931, when measured by the tests heretofore enumerated, is a valid exercise of reserved power and does not fall within the prohibitions of either the State or Federal Constitutions.

The majority opinion seems to hold that act 156 of 1931 discriminates in favor of landowners of the district and against non-landowners, therefore impairs the obligations of the contract. The act produces no such result. The bondholder has the right to purchase lands in the district, thereby becoming both a landowner and a bondholder, just as certainly as the landowner may purchase bonds and thereby become a bondowner and landowner. I cannot conceive just how this discriminates. Neither bondowner nor landowner, is required to alter their positions except as they may elect, and I know of no rule of law holding this to be discrimination. The majority opinion further holds, “Less than 50 per cent, of the lands in the district are improved and in cultivation. The remainder is of very little value,” etc. Just what this has to do with impairment I cannot see. As heretofore shown, the bondowner bought upon the faith of the assessment of benefits. Evidently the lands were not improved nor in cultivation when the bonds were purchased. But suppose they were, the fact that the lands have passed from a state of cultivation to one of wildness' is no fault of the landowners who have stunted and starved themselves in an endeavor to keep their lands in a state of cultivation and pay the heavy taxes against the same yearly.

The fact, if it be such, that 50 per cent, of the lands in the district are wild and unimproved is as much the fault of the bondholder as that of the present owner of improved and cultivable lands in the district, and I see no justice in penalizing the one in favor of the other.

The Wisconsin case of In re Cranberry Creek Drainage Dist., 202 Wis. 64, 231 N. W. 588, has no application to the facts of this case. The question of reserve power in the State was not considered or decided. No analogy is shown in the respective statutes creating the districts. Certainly the Wisconsin case should not be considered as controlling in the instant ease.

The majority cite Oliver v. Western Clay Drainage Disk, 187 Ark. 539, 61 S. W. (2d) 442, as supporting the opinion. Just how this conclusion is reached is beyond my powers of comprehension. The Oliver case is squarely against the present holding. In the Oliver case, although not so shown in this court’s opinion as reported, Oliver was permitted to set off his attorney’s fee against past-due taxes. The improvement district prosecuted a cross-appeal bringing- in question this set-off, and counsel there, as here, urged that this allowed set-off impaired the obligations of cqntract, but we affirmed the cross-appeal. Just how an attorney’s fee may be set off and deny the right to a bondholder is not pointed out in this opinion. It occurs to me that the holdings are inconsistent. The profession may distinguish if they can.

The judgment should be reversed and remanded.

Mr. Justice Mehaffy concurs in this dissent.


author: McHaney, J.

text:
    Humphrey v. Wyatt.
    4-3404
    Opinion delivered January 22, 1934.

      Hal L. Norwood, Attorney General, and Pat Mehaffy, Assistant, for appellant.

      Charles B. Thweatt, for appellee.
   McHaney, J.

Appellee is the tax assessor of Independence County. He brought this action to enjoin appellant, as Auditor of State, from requiring him to execute a release and acquittance to the State, as provided in § 2, act 201 of the Acts of 1933, as a condition precedent to his right to have a warrant issued to him on the appropriation made by said act. He prayed in the alternative for a certificate of indebtedness for one-half of his salary and a warrant for one-half, or a warrant for one-half the amount alone; or a certificate of indebtedness for the full amount.

Appellant demurred to this complaint, which was overruled, and a decree was entered directing appellant to issue to appellee a certificate of indebtedness for $125 which is the amount of salary due by the State for one month as fixed by act 160 of 1931. This appeal comes from that decree.

Act 160 of 1931 is an act classifying all the counties in the State for the purpose of fixing* the salaries of the assessors and their authorized deputies, which it does. It further provides that one.-half the salaries so fixed shall be paid by the State and the other half by the counties. Act 201 of 1933', p. 638, is entitled: “An act to make appropriations to cover a part of the expenses of assessing property for taxation and making up assessment records, and for other purposes.” Section 1 appropriated $162,000 for the fiscal years ending June 30, 1934, and 1935, “for paying a part of the salaries of tax assessors,” etc. -Section 2 reads as follows: “The amount herein appropriated is equal to one-half of the part heretofore authorized by law to be paid by the State to meet charges for services due tax assessors and county clerks as heretofore referred to in item 1, and the Auditor of State is directed, upon receipt by him of proper proof as to the correctness of claims filed against this appropriation, as now provided by law, to prorate said fund of eighty-one thousand ($81,000) dollars, to the end that each assessor and each clerk shall receive from the State one-half, and no more, of the amounts now provided by law for the salaries and fees of such officers out of State funds. The Auditor shall not pay any officer anything out of this appropriation until such officer has filed with the Auditor a release and an acquittance in full of all claims against the State for services rendered during the fiscal year of such payment.” The amount appropriated by said act 201 is one-half of the State’s part of the salary due as fixed by said act 160.

Appellant contends that appellee is entitled to a warrant for $62.50, conditioned upon his signing the release required by § 2 of act 201, above quoted; otherwise that he is not entitled to anything. On the other hand,, appellee contends: “(1) that act 201 does not amend act 160, but merely offers to pay part of the salary if the assessor will release the balance; (2) that the provision for a release violates the obligation of a contract and takes property without due process of law; and (3') that, if the act is valid, the assessor is entitled to his full salary, unless he signs the release.” It is conceded by both parties that the Legislature has the power to change salaries not fixed by the Constitution during the term of office of the incumbent, either to increase or decrease same. Humphry v. Sadler, 40 Ark. 101. It was there said: “Humphry’s petition is based upon the idea that his compensation could not be abridged during his continuance in office. But the Constitation contains no limitation upon the power of the Legislature in the matter of augmentation or diminution of salaries, except as to those of the Governor, Secretary of State, Auditor, Treasurer, Attorney General, Commissioner of State Lands, prosecuting attorneys, judges of Supreme and circuit courts and members of the General Assembly. Const. 1874, art. 19, § 13.

“When the office itself is created by the Constitution, but the compensation is left to the discretion of the Legislature, it may be increased or diminished so as to affect the incumbent. And it makes no difference whether the compensation be by fees or by salaries. Warner v. People, 2 Denio 272, S. C. 7 Hill, 181; Conner v. City, 2 Sandf. 355, affirmed in 1 Selden 285.

“It is well settled that an election or appointment to office creates no contract between the State and the officer, which is within the protection of that clause of our Federal Constitution, forbidding the States to pass laws impairing the obligation of contracts. Butler v. Pennsylvania, 10 How. 402.”

In Powell v. Burden, 61 Ark. 21, 31 S. W. 740, the above statement was approved, and the court further said: “The mere discretion of the Legislature is not in determining when a general or special law is applicable, but, in a case like the act under consideration, in determining the amount of pay of these officers and the manner of paying them; and this discretion may be abused so that the courts would interfere to prevent such abuses. For instance, the Legislature cannot abolish or render useless a constitutional office, or even cripple it by a reduction of the salary of the incumbent, so that it cannot be sustained or properly maintained, or by attempting to do indirectly, what it cannot do directly in reference thereto.” The third paragraph of the above quotation from Humphry v. Sadder settles appellee’s second contention against him. There being no contract between the State and appellee, there is no obligation to violate.

We are of the opinion that the necessary effect of act 201 is to reduce the salaries of tax assessors temporarily, that is for the fiscal years ending June 30, 1934, and 1935, leaving act 160 unimpaired thereafter. The Legislature was evidently attempting to accomplish the laudable purpose of reducing the expenses of State government during the period of the depression, as is evidenced by the enactment of this and many other laws at the same session. In numerous instances smaller appropriations were made for official salaries, but in the case of assessors not only was a'smaller appropriation made, but a condition was attached requiring a release and acquittance to the State before a warrant could lawfully be issued. It therefore appears to us to be. conclusive that the legislative purpose was to reduce the pay to which they were otherwise entitled during the. biennium covered by act 201 of 1933. It is said in 46 C. J., 1020, that the intention to change official salaries during the term of office must be clear, “and the mere appropriation of a less sum for the payment of salaries is not g-enerally reg-arded as changing’ the salary. ’ ’ There are cases to the same effect. But here the intention to reduce the State’s part of the salary fixed in said act 160 is clear, and act 201 is not a mere appropriation of a less sum for salaries, but contains a positive requirement that: “The Auditor shall not pay any officer anything out of this appropriation until such officer has filed with the Auditor a release and an acquittance in full of all claims against the State for services rendered during the fiscal year of such payment.” This necessarily reflects the intention of the Legislature that the officer should not be paid by the State during that time, unless the release were signed, and then only the amount of such appropriation. To this extent act 201 amends act 160 for the period covered by the act, and is therefore temporary in character and designed to effect a reduction in the State’s expenses. If it were a mere appropriation act and nothing more than an appropriation of a less sum than that fixed by law, there would be more force to appellee’s argument. This disposes of the argument that appellee is entitled to his full salary unless he signs the release, and § 4463, Crawford & Moses’ Digest, has no application, for an appropriation has been made for the amount of the claim to which appellee is entitled.

The judgment will therefore be reversed, and the cause remanded with directions to sustain the demurrer.


text:
    Alter v. Arkansas Power & Light Company.
    4-3296
    Opinion delivered January 22, 1934.

      E. W. Martin, for appellant.

      Rose, Hemingway, Cantrell & Loughborough and J. W. Barron, for appellee.
   McHaney, J.

Appellant sued appellee for damages on two counts: “First, that he was a passenger on one of appellee’s street cars in the city of Little Rock, having paid his fare, and that the operator failed to stop said car on signal given at his destination, and that he rode on to the end of the line, intending to alight at the desired place on the return trip; that the operator demanded an additional fare which he refused to pay because it was the operator’s fault in ignoring his stop signal; that after traveling seven or eight blocks on the return trip, the operator again demanded the fare, struck him with a metal instrument, knocked him down, struck him 'several times on the head, threw him to the ground, and otherwise abused and mistreated him. Second, for false imprisonment in causing his arrest, imprisonment and detention without legal authority on a false charge of attempted robbery. He prayed damages both compensatory and punitive. Appellee answered, denying the allegations of the complaint, alleged that appellant, while intoxicated and without cause, assaulted its operator who merely defended himself. As to the second count, appellee answered that the police officers arrested appellant because of his drunken condition and because of the unlawful assault made by him on its operator, for which it is not liable.”

At the conclusion of appellant’s testimony, the court withdrew from the consideration of the jury the claim for damages for false imprisonment alleged in the second count. The case went to the jury on the first count of the complaint, and there was a verdict for appellee, upon which judgment was entered.

Appellant first contends for a reversal of the judgment on the ground that the court erred in withdrawing from the jury the charge of false imprisonment. We cannot agree with this contention. The undisputed facts show that appellant was arrested by the police officers, was tried in the municipal court, convicted of simple assault and fined $25. He appealed to the circuit court, where he was again tried, convicted and fined $10. He appealed to this court, and the judgment was affirmed. See Alter v. City of Little Rode, memorandum opinion 187 Ark. 1162, 63 S. W. (2d) 279. Our statute, § 2336, Crawford & Moses’ Digest, defines false imprisonment as follows: “False imprisonment is the unlawful violation of the personal liberty of another, and consists in confinement or detention without sufficient legal authority. ’ ’ Appellant’s arrest was not “unlawful” and his “confinement or detention” was not “without sufficient legal authority.” The court therefore correctly dismissed the false imprisonment count.

It is next contended that the court erred in refusing to permit the jury to consider any element of damages for appellant’s wrongful expulsion from the street car. His requested instruction No. 7 embodied this element of damages, but assumed as an established fact, that his expulsion was wrongful. This ivas a disputed question of fact, and the court correctly refused the instruction as asked, and correctly modified same so as to eliminate this erroneous request, as also damages for false imprisonment.

It is also argued that erroneous testimony was admitted in permitting the operator to testify that about the same time there were numerous holdups of street car operators, and that he had been held up, and another operator shot. No objection was made at the time, but, after the testimony in this regard had been given, he asked the court to instruct the jury not to consider it. The court permitted the testimony to go to show the operator’s state of mind only. We think it was competent for this purpose.

Assignments are argued as to the giving and refusing to give certain instructions, and in the modification of certain others. We have carefully examined these assignments and find them without merit. The court fully and fairly instructed the jury, and its finding is against appellant. No error appearing, the judgment must be affirmed.


author: Butler, J.

text:
    Home Indemnity Company v. Banfield Brothers Packing Company, Inc.
    4-3293
    Opinion delivered January 22, 1934.

      Pryor & Pryor, for appellant.

      Hill, Fitzhugh & Brizzolara, for appellee.
   Butler, J.

The appellee, Banfield Brothers Packing Company, is a corporation engaged in the transportation of commodities for hire by means of buses and trucks, and was insured in the appellant, Home Indemnity Company, against loss imposed by law upon it for bodily injury or death occasioned to others by the operation of its vehicles, and also by another clause of the policy, against loss for damage or destruction of property caused by the operation of the said vehicles. Under the general conditions of the policy, and the subhead— “Notices to Company”- — the following stipulation is found:

“Upon the occurrence of an accident, the assured shall give prompt written notice thereof to the company’s home office at New York, New York, or to an authorized agent. If any claim is made on account of such accident, the assured shall give like notice thereof with full particulars. If, thereafter, any suit or other proceeding is instituted against the assured to enforce such claim, the assured shall immediately forward to the company at its home office every summons or other process served upon him. Notice given by or on behalf of the assured to any authorized agent of the company within the 'State in which this policy is issued, with particulars sufficient to identify the assured, shall be deemed to be notice to the company, it being understood that failure to give any notice required to be given by this policy, within the time specified therein, shall not invalidate any claim made by the assured, if it shall be shown not to have been reasonably possible to give such notice within the prescribed time, and that notice was given as soon as was reasonably possible.
“The assured shall not voluntarily assume any liability, nor incur any expense, other than for immediate surgical relief, nor settle any claim, except at the assured’s own cost. The assured shall not interfere in any negotiation for settlement, nor in any legal proceeding, but whenever requested by the company, and at the company’s expense, the assured shall aid in securing information and evidence and the attendance of witnesses, and shall cooperate with the company (except in a pecuniary way) in all matters which the company deems necessary in the defense of any suit or in the prosecution of any appeal. * * *”

While the policy was in full force and effect, on the 16th day of December, 1931, a collision occurred between a truck owned and operated by the plaintiff, and an automobile owned by J. Y. Stanfield, driven at the time by his wife, Margaret Stanfield. The driver of the truck was engaged in the business of his employer, and as a result of the collision, Stanfield’s automobile was damaged, and it subsequently developed that Mrs. Stanfield had sustained severe personal injuries. She brought suit against the packing company on the 13'th day of January, 1932, and on the day following a newspaper carried an account of the filing of the suit, which was read by the local agent of the packing company. He called Mr. Miller, the manager of the packing company, on the telephone, and they had some conversation regarding the matter. As a result of this, an attorney for the indemnity company came to Fort Smith on the 21st day of January to make an investigation of the accident. He made a partial investigation, but left before completing it, and Mr. Rush, the general claim agent of the indemnity company, came to Fort Smith about.five or six days later to investigate the case. He informed Mr. Miller that, inasmuch as the claim was not reported to the indemnity company until after suit was filed, lie could not handle it unless the packing company would execute a “Reservation of Rights Agreement.” This agreement was accordingly executed, and is in part as follows: ‘ ‘ The company disclaims liability for such accident under the aforesaid policy contract on the ground that no report of said accident was made to the company until after suit had been instituted in Sebastian Circuit Court, Port Smith District, on January 13,1932.

“Whereas, both parties now desire to cooperate to reduce to a minimum the final loss, if any, arising out of such accident, and to postpone the determination of their respective rights and liabilities under said policy until the amount of the assured’s legal liability, if any, for damages arising out of such accident is made final, definite and certain. ’ ’

Acting on the instruction of the Indemnity Company, Mr. Rush afterward wrote the packing company a letter denying' liability on the ground that no report of the accident was made to the Indemnity Company within the time required by the policy. Thereupon the packing* company notified the Indemnity Company that it would be required to defend the suit, and, this notification being ignored, the packing company employed counsel.

The case proceeded to trial, and resulted in a verdict in favor of Mrs. Stanfield in the sum of $2,406, being the total amount of the judgment, interest and costs.

This suit was brought by the packing company to recover said amount from the Indemnity Company and resulted in a verdict in its favor in the sum of $1,203. The Indemnity Company has prosecuted an appeal from the judgment, and the packing company has filed a cross-appeal from the order of the court overruling its motion for a judgment, non obstante veredicto. The cross-appeal of the packing company will not be discussed for the reason that we have concluded that the whole case must he reversed for errors hereinafter pointed out.

It is undisputed that no notice was given the indemnity company immediately after the collision, and that the first notice it received was on January 14, 1932, the day after the suit was filed. The first contention made by the appellant is that the court should have directed a verdict in its favor because the undisputed proof shows that no immediate notice was given, and that there was a failure to show that it was not reasonably possible to give notice sooner than it was given. The contention of the appellee, is that the notice could not have been given sooner because it did not know that Mrs. Stanfield had suffered any injury from winch it could be reasonably anticipated that a claim for damages would fio ay, and that the damage to the car and the injury to Mrs. Stan-field, of which it had knowledge, Avere of a slight and inconsequential nature, and that the failure to give notice was the occasion of no injury to the indemnity company, as it had ample opportunity, after receiving notice of the alleged injury, and the suit based thereon, to -make whatever investigation was necessary to prepare for a defense of the suit, or to make a reasonable settlement, if it so desired. On this phase of the case the evidence is in conflict.

Mr. Stratton, the driver of the truck which collided with the automobile driven by Mrs. Stanfield, testified that the impact was very slight, and that he immediately examined the car and found but very little damage to it, and Mrs. Stanfield stated at the time that she had not been hurt, but Avas scared. The testimony of the other employees of the packing company is to the effect that on that day, and on two or three days following, Mrs. Stanfield Avas at the office of the company, demanding that her car be repaired; that she did not complain of having suffered any injury, and appeared to be uninjured but very angry; that the car was examined, and the damage found to be so slight, and they agreed to have the car repaired without regard to whether or not they were liable; that they estimated that the cost would not be over $1; and that none of them had any information that Mrs. Stanfield Avas injured in any Away, or Avas claiming to be, until the suit was filed and they were notified of it.

In conflict with this is the testimony of Mr. and Mrs. Stanfield. The former testified that a short wdfile after the accident he informed the manager of the packing company that his car had beeni badly damaged, and that he wanted it fixed; that his wife had sustained personal injuries, and -was then being treated by a doctor; that the manager replied, “I will see to that in a day or two,” and walked off. He described how the car was damaged, and from his testimony it appears that the damage to it was not slight, but substantial.

The testimony of the attorney for the indemnity company who first came to investigate the claim is to the effect that the packing company would not cooperate with him or lend any assistance in making the investigation, and because of this he left. This is disputed by the witnesses for the packing company, its employees, who testified that they were rendering all the assistance they could, and that the reason the attorney left before completing the investigation was, as he stated, that he was called to another part of the State, and Mr. Rush would come and complete the investigation; that Mr. Rush did appear soon thereafter, and he makes no complaint of any failure of the employees of the packing company to cooperate with him, but that the manager, Mr. Miller, made some apology for his treatment of the attorney, and gave some explanation regarding it.

It appears from Mr. Rush’s testimony that he had ample opportunity to make the investigation, and that he did so, reaching the conclusion that it was a ease of liability, and from the statements made to him by Mrs. Stanfield he might have settled.

It is the contention of the appellant that the giving of the notice was a condition precedent to the appellee’s right to recover, and that, while it is not expressly so provided in the contract, it is necessarily implied by the language employed, and, being such, the requirement of notice is of the essence of the contract; that the failure to give such notice immediately after the collision avoided the contract, even though the packing company was not apprised at the time that any claim would be made for personal injuries. The contention that immediate notice was required is based on the fact that the policy indemnified the insured, not only against claims for personal injury, but also against claims for property damage, and that the court should have directed a verdict in favor of the appellant.

We do not construe the language used with reference to the giving of notice as being a condition precedent. It is not so expressly provided, neither do we think it is necessarily implied for the reason that it is not to be supposed the requirement of notice was a device designed to prevent a recovery on a just claim. To be valid, it must have been for some reasonable purpose, and this was to give the insurer a reasonable opportunity to investigate the circumstances and prepare for a defense, if necessary; or, if it thought it prudent and could do so, to settle the claim arising because of the accident. We are of the opinion, therefore, that the cases cited by the appellant on this phase of the case are not in point, and, while we do not review them at length or seek to distinguish them from the case at bar, we may say that these cases turn either on a contract different in its terms to the one now before us, or upon a state of facts essentially dissimilar.

The contract under consideration in this case is similar in all essential particulars to that in the case of Home Life & Accident Co. v. Beckner, 168 Ark. 283, 270 S. W. 529, cited by appellee, which followed and approved the case of Hope Spoke Co. v. Maryland Casualty Co., 102 Ark. 1, 143 S. W. 85, 38 L. R. A. (N. S.) 62, Ann. Cas. 1914A, 268.

The ease of Hope Spoke Co. v. Maryland Casualty Co., supra, was a suit not unlike the case at bar, and one of the defenses there made was that the notice was a condition precedent, and failure to give such notice would avoid the policy. In that case the court stated in effect that the language of the policy was ambiguous and should be given the interpretation most strongly against the insurer which it would reasonably bear. The court called attention to the unqualified stipulation in the policy that' it would indemnify the insured against liability imposed by law on account of bodily injuries, and that, construing this stipulation with that of notice, indicated that the requirement of notice was for the purpose of giving opportunity for an investigation of the facts attendant upon the accident and to effect a settlement, or prepare for defense. This case also laid down the rule that where the provision for notice was not a condition precedent, failure to give notice would not avoid the policy unless it was shown that the insurer suffered some loss or injury because notice was not given sooner. In the Beckner case there is language which might be interpreted to qualify that rule, but the real point on which the case turned ivas the long and inexcusable delay in giving notice. The accident involved in that case occurred on June 25, 1915, and the insured did not notify the insurer until, January 24, 1917. The court held that this was an unreasonable and inexcusable delay, and, while not stating the reason for so holding, it is patent that it must have indulged the presumption that injury resulted thereby, because it is apparent that the insurer was- prevented from making any reasonable investigation of the circumstances surrounding the accident, especially when it Avas further shown that a suit had been filed against the insured for injuries arising because of the accident approximately ten months before the date when the insurer was-first notified of the happening of the accident and the filing’ of the. suit.

The correct rule as announced in the Hope Spoke Company case is that, unless a stipulation constitutes a condition precedent and all rights under the policy are forfeited for failure to comply Avith it, an omission to comply therewith is not a def ense to a suit on the policy unless some injury resulted from such omission. In support of the rule announced, the court cited, as fully sus-. taining it, a number of cases from respectable courts which Avill be found on page 9 of the volume in Avhich that case is reported. See also Frank Parmelee Co. v. Ætna Life Ins. Co., 166 Fed. 741.

It is also insisted that there Aims no duty to make a report of the accident because it was a trivial one. We think this is the general rule. In McKenna v. International Indemnity Co., 125 Wash. 28, 215 Pac. 66, it is said: “It is not every trivial mishap or occurrence that the assured under such a policy of liability insurance must regard as an accident of which notice should be given immediately to the insurance company, even though it may prove afterwards to result in serious injury.” The general rule is stated in 36 C. J., 1105, as follows: “Where no bodily injury to the third person is apparent at the time of an accidental occurrence, and there is no reasonable ground for believing that a claim for damages against insured may arise, insured is not required to give insurer notice until the subsequent information as to injury would suggest to á person of ordinary and reasonable prudence that a liability might exist. ’ ’ But whether or not the accident was trivial, was a question for the jury under the evidence adduced. Prom the testimony of the Stanfields and of their attorney, the jury might have found that the personal injury was such that it might have been reasonably anticipated that serious consequences might arise and for which a claim for damages might be made, whereas the testimony adduced on the part of the packing company might have justified the contrary conclusion.

It is our opinion that the court did not err in refusing to direct a verdict for the appellant, but it is insisted, if this be so, the court erred in giving instructions Nos. 3 and 5, at the appellee’s request and in refusing to give instructions Nos. 10 and 11, requested by the appellant.

Instruction No. 3' told the jury that the failure to give immediate notice of the accident would not be a defense to the suit if the packing company had no knowledge that Mrs. Stanfield had received a personal injury until she brought suit against the company. Instruction No. 5 told the jury that, although the packing company did know that she had received a personal injury and had failed to report the same until after suit was brought, this alone would not defeat recovery, but that it must be shown also that the appellant was damaged or sustained a financial loss on account of the failure to give immediate notice, and, if it lost no substantial legal right on account of the fact that notice of the accident was not given sooner, failure to notify would not be a defense. We think these instructions were properly given, and what we have heretofore said justifies that conclusion.

The appellant, however, was entitled to the converse of instruction No. 5 which was embodied in instructions Nos. 10 and 11, requested by it and refused by the court. Those instructions in effect would have charged the jury that if it found from the evidence that the plaintiff in the case failed or refused to comply in good faith with the provisions of the policy to the defendant’s prejudice, plaintiff could not recover, and the burden was upon the plaintiff to show by the evidence that it complied in good faith with the provisions of the policy or that its failure to do so worked no injury or prejudice to the rights of the defendant. These instructions should have been given, and the appellant should have been permitted to introduce the testimony offered tending to show that it had suffered prejudice. To show that it had not so suffered, appellee elicited from the attorney of Mrs. Stanfield, the evidence that the indemnity company could not have settled the case for less than $2,500. In response to this testimony appellant offered to prove by Mr. Rush, the general manager, that it was the usual and customary manner of handling claims, when notice was given of the accident, to make an investigation and to negotiate a settlement if the investigation disclosed liability. This testimony was overruled.

Appellant asked Mrs. Stanfield whether or not she would' have accepted one hundred and fifty or two hundred dollars, and the court refused to permit her to answer this question. She had already testified that she would have been willing to settle her claim for personal injuries out of court, and in answer to the question asked as to whether or not she would have settled before she found out her condition, she answered: “I cannot say. I would have gone by what the doctor said”; and, in speaking of her attorney and as to whether or not she would have settled without consulting him, she stated that she did not know. She should have been permitted to answer the question overruled by the court, and her entire testimony should have been allowed to go to the jury to be considered for what it was worth, on the question as "to whether or not appellant suffered injury because it was not notified of the injury to Mrs. Stanfield before the filing of the suit. The appellee, however, contends that all of these questions are precluded because, having elected to investigate the case in attempting to settle the same, it waived the failure to give notice.

We are of the opinion that the “Reservation of Rights Agreement” was executed for the very purpose its title implies — namely, that the investigation made would not be a waiver of the defense stated therein. As we see it from the record before us, only two questions are involved; first, was the appellee unaware of any substantial injury suffered or claimed to have been suffered by Mrs. Stanfield until the bringing of the suit; and, second, if appellee had this knowledge, did it notify the appellant as soon as reasonably possible, and, if not, did such omission prejudice the rights of the appellant so as to cause it to be injured? The judgment of the trial court is reversed, and the cause remanded for a new trial, so that these issues may be submitted to the jury under proper instructions.