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if they were in earnest about buying said es- to take $1,000. The Delolmes were unable to tablishment, as he did not know them they raise the money, and witness told them that would have to give a mortgage upon their if they could give any guaranty that they lands in Arkansas as a guaranty that they could get the money, or give a mortgage on were in good faith; that thereafter, through their land, he would give them plenty of fraud and connivance on the part of Ray time. They examined the property very closeBidell and N. A. Williams, they procured ly before they finally purchased it. They exfrom appellant and wife their signatures to ecuted the note and deed of trust in suit, and a certain deed of trust, which was at the the property was turned over to them. The time represented by Bidell and Williams to restaurant was reasonably worth every dolbe in blank, and that they secured their sig- lar they agreed to pay for it when judged by natures to a certain note which Bidell and the value of other restaurants around it. It Williams assured the Delolmes would not be was sold prior to the time they purchased it binding upon them but was only to show the for $1,050. latter's good faith in the transaction; that Witness, on the 11th day of December, Bidell further assured appellant and wife 1911, signed a note in favor of the bank for that they would place the deed of trust and $500. The note was also signed by N. A. Wilnote in the Green County Bank In escrow, liams and C. D. Williams. Witness at the and that they did so in the presence of ap- time turned over to the bank the $1,000 note pellant and wife. They represented to the and deed of trust as collateral security for appellant and his wife at the time that they the $500 which he and Williams received. could draw said papers out at any time, and when the $500 note to the bank fell due Wilthat same would not be in any way binding liams failed to take it up, so witness bought on them; that they should not be delivered to it. The note to the bank was the note of Williams until appellant and wife were ful. Williams. The reason witness signed it was ly satisfied with the restaurant;, that Bidell that the bank would not take it unless witand Williams got possession of the note and ness indorsed it. After the first note for deed fraudulently through said representa- $500 became due and was unpaid by Wiltions, without any consideration therefor; liams, witness gave the bank a new note for that thereafter appellant and wife reported $500, secured by the note and mortgage in to Bidell that they were not satisfied with suit. There was nothing said by the Dethe restaurant, and asked him to return to lolmes to witness about putting the note and them the note and deed of trust; that the deed of trust in escrow. Witness thinks the restaurant was not as represented by Bidell note was executed the day the Delolmes took and Williams, who were in position to know possession of the restaurant. The payee's its value; that they fraudulently misrepre- name was in the note and deed of trust at sented to appellant and wife that the value the time they were executed. It was two or of the restaurant was $1,000, when in truth three months before Williams indorsed the and in fact it was worth not over $300; that note. Witness did not think that the deed appellant and his wife were ignorant of the of trust was recorded until after it was put laws of Missouri, and so informed Bidell and in the bank as collateral. Williams, and they, being in a position to The cashier of the bank testified that the know, conspired together to defraud appel- bank loaned Bidell and Williams, on Decemlant and his wife, and informed them that ber 11, 1912, $500, taking their note, secured under the laws of Missouri they would have by the note and deed of trust in suit as colto accept the restaurant; that appellant and lateral. When the loan of $500 was due Wilwife realized very little from the restaurant; liams failed to pay it, and the bank notified that appellant, a short time before execut. Bidell. The collateral was sold June 10, ing the purported note and deed of trust, 1912, to Bidell, and he redeposited it as coland at the time the same was executed, was lateral. The bank now has the note of Bidell non compos. They prayed that the note and for $500, and the note and deed of trust of deed of trust be canceled and set aside as a $1,000, signed by the Delolmes, as collateral. cloud on their title.
The note for $500 of Bidell was due. There was a demurrer to the answer, The lawyer who wrote the note and deed of which does not appear to have been passed trust in controversy testifies that he lived in upon.
Springfield, Mo.; that he met the Delolmes The testimony of appellee Bidell was, in in his office, and remembered their buying a substance, as follows: He was a real estate certain restaurant at Springfield. He wrote agent at Springfield, Mo. The Delolmes came the note and deed of trust, and at the time to his office inquiring for a restaurant or he testified they were in the same condition bakery. He told them of several places and they were in when he wrote them as to the of the place mentioned in the pleadings that payee's name. He knew that the words "conwas listed with him by the owner at the price taiuing sixty acres" were in the deed of trust, of $1,200. The Delolmes seemed to prefer because he had the abstract when he drew that place. He showed it to them, and they the deed. He went to Batesville the latter were there several days before the deal was part of November, about 30 days after the made. Williams, the owner, finally agreed | deal, to see if the note was negotiable. He
did not make any investigation of the de- that they had defrauded me, and that I didn't scription of the land while in Batesville fur- want to sign anything more. He said again that ther than was shown by the abstract.
I didn't know the law, and that he would send
his lawyer to explain the matter. The lawyer, A witness by the name of Crane testified Cowden, came on Saturday evening, and he that he lived in Springfield, and that his oc- said for us to sign it; that the other mortgage cupation was running a restaurant. He own
was defective. He explained it, but I didn't un
derstand what was wrong, and didn't sign it." ed the restaurantpurchased by the Delolmes about 18 months prior to the time they
The testimony of the appellant corroboratbought it. He sold it for $1,050. He paid ed, in detail, the testimony substantially as about $300 for the old fixtures that the De-given by his wife. When asked if he underlolmes had at auction. Witness thought they stood the transaction of the purchase of the were worth $500.
restaurant he replied, “No, not in English.” The testimony of the Delolmes was to the The restaurant was sold, after they had reeffect that Bidell guaranteed that the res- fused to pay for it, for $100 by the contaurant be sold them was a good business and stable. Appellant said he did not underworth $1,000. They showed him the papers stand English sufficiently at the time of the to their land, and he stated that he did not alleged sale to follow the negotiations; that want the cash for the restaurant; that he his wife explained everything to him. There would advance the money for them. After he
was testimony on behalf of the appellant to got the information about their land be ask- the effect that he was in jail at Batesville ed them to sign a mortgage to show that they from July 23 to 31, 1911. The physician were in good faith and not trifling with him. who attended him testified that he was inThey did not want to sign the mortgage be- sane from malarial ferer, and he didn't know cause at that time they had not fully de from what other cause. Witness heard that termined whether they wanted the restau- he had drunk considerable. If he had, that rant, having seen it but once. They wanted would affect his mind. He could hardly to see other places, and Bidell said, “Sign speak English at that time. When his wife the mortgage anyway.” It was not to guar-would ask him anything he could understand antee the price of the restaurant, but only
her. Witness thought the condition of his to guarantee good faith on their part. The mind was caused by malaria and work, but mortgage was signed in blank.
that it might have been from whisky, as wit“He said that by putting the mortgage in the ness heard afterwards that he had drank a bank he could draw it out, and if we didn't buy good deal. When he was released, in about the restaurant he had something else for us; 10 days, his condition had improved. that the paper had no value. He said he asked for the mortgage because any one could talk to
Another witness testified that appellant him without having any money or any inten
was never mentally right after he was retion of buying, and he wanted to avoid that. leased from jail until he left for Springfield, Then he took the papers to put them in the and was not mentally capable of transacting Green County Bank, and stated that neither of us could get them out without the signatures of business when he left Batesville for Springeach of us."
field. He could not speak English very much. Mrs. Delolme further testified:
He drank whisky a good deal after he was "I met a man by the name of George Phil. released from jail. It was witness' opinion, lips, who, told me that he had overheard from her knowledge of the Delolmes, and as our conversation, and that Bidell was trying to to their knowledge of the English language beat me out of my mortgage. I then told and customs, that it would have been an easy Bidell I wanted my mortgage. He told me it was too late; the bank had closed. He said matter to have persuaded them into a busiI had signed the mortgage and had the restau- ness transaction, or to have frightened them rant, and that I could do what I wanted to. We by threats as to the state law. did not assume anything at the time we signed the mortgage and note. I asked them twice to
The sheriff of the county testified that Dereturn the mortgage and pote before we took lolme was placed in jail for insanity on the the restaurant. They told me I had signed, 23d of July, and released on the 31st. When and I must buy the restaurant. I did not know he was placed in jail he was insane to such the law of Missouri. My busband and I had not been in the United States quite six years.
an extent that they claimed he was dangerMr. Delolme scarcely understood English, and ous. They released him when Mrs. Delolme didn't speak it at all. He was sick from June thought she could take care of him. The until September, and his mind was affected from sheriff was informed that he drank a good the illness, and I don't think he was able to transact business at the time we went to deal before he was placed in jail. Springfield. He didn't understand the transac- Ernest Neill testified that in November, tion, only from what I told him, and I told bim 1911, be met a man by the name of Cowden, that it was an affair of that kind, and I'am sure that if he had known that it was as I from Springfield, Mo. He brought witness found out, he would not have signed it. They an abstract to bring down to date on certain asked it to show our good faith, and he signed lands. Witness found that the description it because I told him to. It is my opinion be in a certain deed of trust executed to N. A. didn't understand the nature of the transaction. Mr. Bidell came to see us during the course of Williams by Mr. and Mrs. Delolme was inthe first 30 days after the transaction, and correct. Witness prepared an additional brought us a paper and said that it was my deed of trust and note, and later sent them mortgage; that I had to sign it in the place of the first; that it was not properly made. to Cowden, who was to have them executed, I told him that I didn't want to sign anything; and witness was to sell the note at Batesville, if possible. Cowden informed witness cisions of this court. Other cases, in addi. arter that that he could not get the paper tion to the ones there cited, where the prinsigned, and asked that witness return the ab- | ciples controlling here are recognized, are stract, which witness refused to do because found in the brief of counsel for appellee. they had not paid him for his trouble. He In the case of English v. North, supra, we charged the same to Bidell, and the same re again approved the four tests laid down in mained unpaid.
Matlock v. Reppy, 47 Ark. 164, 14 S. W. 516, The court rendered judgment for the and which have since been so often quoted in amount of the note in suit, with interest, re- opinions of this court. These tests are as folformed the deed so as to correct the descrip- lows: (a) Was the fraud material to the contion of the land intended to be embraced in tract? Did it relate to some matter of in. the deed of trust, declared the judgment a ducement to the making of the contract? lien on the land, found that Mrs. Delolme (b) Did it work an injury? (c) Was the relahad not released her dower therein, and or- tive position of the parties such and their dered that if the judgment was not paid, the means of information such that one must land be sold to satisfy the same. From that necessarily be presumed to contract upon the decree this appeal has been duly prosecuted. faith reposed in the statements of the other?
Sam M. Casey, of Batesville, for appellant. (d) Did the injured party rely upon the McCaleb & Reeder, of Batesville, for appel. he have the right to rely upon them?
fraudulent statements of the other, and did lees, cited, among others, the following cases: Bank of Monette v. Hale, 104 Ark, 388, 149
 When these four tests are applied to S. W. 845; Brown v. Le May, 101 Ark. 95, the facts of this record, it cannot be said, 141 S. W. 759; Ryan v. Batchelor, 95 Ark. even conceding that the testimony on behalf 375, 129 S. W. 787; First Nat. Bank v. Peo- of appellant is true, that he is entitled to the ple's Nat. Bank, 97 Ark. 15, 132 S. W. 1008;
relief sought. For, if appellee Bidell's alJurratt v. Langston, 99 Ark, 438, 138 S. W. leged representation as to the value of the 1003; McDonald v. Smith, 95 Ark. 523, 130 restaurant business was false, appellant had S. W. 515; Arkadelphia Lumber Co. v. Thorn- no right to rely upon such representation, ton, 83 Ark. 404, 104 S. W. 169; Carwell v. for the reason that appellant and his wife Dennis, 101 Ark. 603, 143 S. W. 135; Joseph embraced the opportunity that was given v. Baker, 95 Ark. 150, 128 S. W. 864; Cherry them to visit the restaurant and to see for v. Brizzolara, 89 Ark. 309, 116 s. W. 668, themselves, and to inquire of others who 21 L. R. A. (N. S.) 508; Delaney v. Jackson, might know, as to the value of the business. 95 Ark. 131, 128 S. W. 859; Webster v. Car- After inspecting the restaurant and remainter, 99 Ark. 458, 138 S. W. 1006.
ing there long enough to ascertain the char
acter of its business, appellant and his wife WOOD, J. (after stating the facts as
had no right to rely upon Bidell's representaabove).  The facts are fully set forth in tion as to its value, even if such representathe statement, and it is unnecessary to dis- tion was false and made for the purpose of cuss them in detail. We are of the opinion defrauding. The undisputed fact, as shown that the finding of the chancellor was not from the testimony, is that they had an opclearly against the preponderance of the evi- portunity, for something like a week or 10 dence, and his decree will therefore be af- days, to examine the restaurant before they firmed.
purchased the same. During this time they The appellant and his wife, in their cross- had the opportunity to inquire of those who complaint, sought to have the note and deed must have known as to the value of the of trust sued on canceled and set aside as a equipment and furniture, and of the value cloud on their title. They alleged that this of Williams' restaurant business. Even if should be done on account of the fraudulent it be conceded, therefore, that the statements representation of Bidell and Williams in re of Bidell as to the value of the business of gard to the value of the restaurant, and as the restaurant were false and fraudulent, apto the note and deed of trust in controversy pellant and his wife, as already stated, had being executed as a guaranty of good faith no right to rely upon the same, and they on the part of the Delolmes, and that same could not have the relief of cancellation was to be deposited in the bank in escrow; sought by them under tests (c) and (d) supra. that these representations were all false and
 But we need not pursue this matter fraudulent, and that Williams and Bidell further. We are of the opinion that the testook advantage of their ignorance to perpe- timony would warrant a finding that neither trate this fraud upon them.
Bidell nor Williams made any false represen This court has often, and in some very tation as to the value of the restaurant busirecent decisions, announced the rule of law ness. This finding is included in the general applicable to cases where a cancellation of finding of the trial court in favor of appelwritten contracts is sought on account of lees; and such finding is clearly not against alleged fraudulent misrepresentations. The the preponderance of the testimony. The most recent case on the subject is that of same may be said as to other alleged misrepreEnglish v. North, 166 S. W. 577, where we sentations on the part of Bidell and Williams, quoted from some, and cited many other, de- which appellant and his wife contended en
titled them to have their note and deed of, the additional premium paid. Repeated cortrust canceled.
respondence was pursued between plaintiff It could serve no useful purpose to discuss and defendants with reference to the transthe testimony in relation to these alleged action. The correspondence is set forth in misrepresentations in detail (arguendo). As the complaint in this action as part of the to whether or not they were made, and statement of facts, and shows that defendwhether or not they were fraudulent, were ants were insisting that the additional premipurely issues of fact, upon which the finding um be not charged, for the reason that it of the chancery court was not clearly against would cause them to lose the patronage of the preponderance of the evidence.
that customer, and that plaintiff continued to Its decree is accordingly affirmed. insist upon the collection of the premium
or the cancellation of the policy.
The policy was issued on December 22, PHENIX INS. CO. OF HARTFORD,
1911, and reported to the plaintiff shortly CONN., v. A. B. BANKS & CO.
thereafter, and the insured property was (No. 106.)
damaged by fire which occurred on June 9, (Supreme Court of Arkansas. July 13, 1914.) 1912, while the policy was in force. The comINSURANCE (8 83*)-AGENTS–VIOLATION OF pany made good the indemnity on account of INSTRUCTION-MEASURE OF DAMAGES. the damage by fire, and this is an action in
Where an insurance company's agents fail- stituted by plaintiff against defendants as ed to comply with the company's demand that its agents to recover the amount plaintiff was they either cancel a policy or collect an additional premium, and such demand continued for required to pay to the assured under the poliseveral months and until a loss occurred nearly cy, and it is alleged in the complaint that the six months after issuance of the policy, and defendants wrongfully failed and refused to where the company knew during such time that carry out the instructions of plaintiff as the policy was outstanding and made no conditional demand for its cancellation, the lia- their principal, and thereby caused loss to bility of the agents was limited to the amount plaintiff in the sum paid out under the policy. of the additional premium, and they were not The allegations of the complaint, after setting liable for the sum paid by the company in settlement of the loss.
forth the facts as hereinbefore recited and [Ed. Note.-For. other cases, see Insurance,
the correspondence between the parties, are Cent. Dig. $S 107–110; Dec. Dig. g 83.*] as follows: Appeal from Circuit Court, Pulaski Coun- given said defendants by and on behalf of said
"Notwithstanding the repeated instructions ty; Guy Fulk, Judge.
plaintiff, as aforesaid, said defendants negliAction by the Phænix Insurance Company gently, wrongfully, and willfully failed to obey of Hartford, Conn., against A. B. Banks & the same, and, believing that for them to deCo. From judgment sustaining demurrer to mium for said waiver of subrogation would
mand or insist on any additional charge or prethe complaint in so far as it sought to re mean the loss of that business, said defendants cover damages in excess of $30, plaintiff ap- wholly failed to use due diligence to collect or peals. Affirmed.
demand any such additional charge or premium,
and for purposes of their own, and in utter disW. L. & D. D. Terry, of Little Rock, for regard of such instructions, negligently, wrong; appellant. Wynne & Harrison, of Fordyce, fully, and willfully failed to collect or demand
any such additional charge or premium, or to for appellee.
indorse any such upon such policy, or cancel
said policy, and thereby left said plaintiff bound MCCULLOCH, C. J. The plaintiff, Phænix upon şaid risk until said property was destroyInsurance Company of Hartford, Conn., has ed and damaged by fire on June 9, 1912, when
plaintiff would not have been bound thereon had been doing a general fire insurance business said defendants obeyed said instructions or perin the state of Arkansas, and defendants formed with due diligence their duty in the were its local agents at Fordyce, Ark., with premises.” authority to countersign, issue, and deliver The defendants offered to confess judgment policies and contracts of insurance subject in the sum of $30, the amount of the addito the approval and instructions of the plain- tional premium demanded, and demurred to tiff.
the complaint in so far as it sought to recovDefendants issued to the Arkansas Lumber er damages in excess of that amount. The Company a policy of fire insurance in plain-court sustained the demurrer, and rendered tiff company, and delivered same with an in- final judgment, from which the plaintiff has dorsement thereon waiving, in favor of a appealed. certain railway company, a provision in the The complaint undoubtedly states a case policy referred to as the subrogation clause of wrongful act on the part of the defendWhen the issuance of the policy with the in- ants as agents of the plaintiff which caused dorsement thereon was reported to plaintiff, injury; but the only question involved in it wrote to defendants, as its agents, demand-this case is as to what hall be the measure ing that an additional premium of $30 be of the recovery. paid by reason of the indorsement of said The trial judge decided that the amount waiver on the policy, and that the policy be of the lost additional premium sought to be canceled unless the additional premium be collected was the measure of recovery, and paid. The policy was not canceled, nor was in this we think he was clearly correct. *For other cases see same topic and section NUMBER in Dec. Dis. & Am. Dig. Key-No. Series & Rep'r Indexes
It will be noted that the complaint does was the proximate cause of the loss to the not state a case where the agent refused company under the policy, which it would to comply with an unequivocal demand or have canceled if it had known the facts, and instruction for cancellation of the policy, nor that the agent was liable. a case where the policy was wrongfully is. We have a very different case before us in sued or permitted to continue on a prohibit the present one. This was not a prohibited ed risk; but the facts stated in the com- risk, and it was one which the plaintiff, not plaint are that the plaintiff demanded of the only was perfectly willing to carry, but redefendants that the additional premium of peatedly expressed its willingness to do so in $30 be collected, or that the policy be cancel the correspondence. ed. This demand continued over a period of By merely insisting on the collection of the sėveral months and until the fire occurred, additional premium under those circumnearly six months after the policy was is stances, it would be carrying the rule of sued. The plaintiff knew, according to the measuring damages beyond that which was allegations of the complaint, that the policy reasonably within the anticipation of the parwas still outstanding, and had never made an ties to hold that the agent is responsible for unconditional demand for its cancellation, a loss by fire which occurred during the conbut merely insisted upon the collection of the tinued existence of the policy. additional premium.
In other words, the Mr. Ostrander states the rule applicable point of controversy between the plaintiff and as follows: defendants was concerning the collection of
“Where the risk is of a class that a company the premium and the violated instructions is accustomed to write, but which it has ac
cepted at a lower rate of premium than should related to that point only. It is true, ac- have been paid, having been misled as to its cording to the allegations of the complaît, true character by the representations of the there was a demand that the policy be can
agent, the measure of the agent's liability on celed unless the premium should be paid, the sum which the insurer will be required to
the destruction of the property by fire is not but that was only for the purpose of forcing pay claimant in settlement of the loss, but such the collection of the premium. Plaintiff did sum as expressed the difference between the prenot desire the cancellation of the policy; if mium actually paid and such premium as might
fairly have been demanded on a correct repreit had, it could easily have insisted upon im- sentation of the hazard.” Ostrander Fire Îns. mediate cancellation, as it had the right to (2d Ed.) 180. do; but, with the knowledge that the agent We are of the opinion that the court took had neither collected the premium nor can- the right view of the law applicable to the celed the policy, it continued to couple to-facts stated in the complaint, and that the gether the alternative demand for the col- demurrer was properly sustained. lection of the premium or the cancellation of Judgment affirmed. the policy.
It is argued that the plaintiff was entitled to show that, if the demand for the premium
WESTERN UNION TELEGRAPH CO. v. had been insisted upon, the assured would
FRANKLIN. (No. 46.) have refused to pay, and would have forfeited the policy, and that thereby the risk would (Supreme Court of Arkansas. June 15, 1914.) have been avoided. The answer to that is 1. TELEGRAPHS AND TELEPHONES (8 36*)_REthat, if cancellation had been sought, the
CEIPT AND ACCEPTANCE OF MESSAGE-MES
SAGES WHICH MAY BE REFUSED. more direct method would have been adopted
A telegraph company may refuse to send a of merely demanding unconditional cancel message which is obscene, slanderous, blasphelation of the policy.
mous, profane, indecent, or the like. · Learned counsel for plaintiff rely upon the
[Ed. Note.-For other cases, see Telegraphs case of State Ins. Co. v. Jamison, 79 Iowa, Dig. & 36.* ]
and Telephones, Cent. Dig. 88 26, 31, 32, Dec. 245, 44 N. W. 371, as sustaining their position. That case, however, announces a very differ- 2. TELEGRAPHS AND TELEPHONES (8 36*)_RE
CEIPT AND ACCEPTANCE OF MESSAGE-MES-. ent principle, and one which has no applica SAGES WHICH MAY BE REFUSED. tion whatever to the facts of the present case. A message tendered to a railroad and teleIn that case the defendant, an insurance graph agent for transmission to his superior of
ficer, reading: "Please advise why you cannot agent, issued policy, but wrongfully or negli- get a civil answer out of your agent here. If gently withheld from the company a report you ask him anything he has to curse you out”which would have contained matter that af
was neither slanderous, profane, or indecent, forded ground for cancellation. In other
and was entitled to be transmitted. words, the matter contained in the withheld and Telephones, Cent. Dig. 88 26, 31, 32; Dec.
(Ed. Note.-For other cases, see Telegraphs report made the risk a prohibited one. The Dig. § 36.*] plaintiff offered to prove that if the report 3. TELEGRAPHS AND TELEPHONES (8 78*)_REhad been made, disclosing that information, CEIPT AND ACCEPTANCE OF MESSAGE-MESthe policy would have been canceled, and the SAGES WHICH MAY BE REFUSED. court held that the proof should have been
That the purpose of the sender of a teleadmitted, and that it would have established graph message refused by the company's agent
was to report the conduct of the agent to his the fact that the wrongful act of the agent superior did not affect the right to recover the
*For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep'r Indexes