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unless an affidavit were filed that the party
so sued was in fact a nonresident. This
statute had been construed as requiring an
affirmative, positive recital of nonresidence.
It could not have been made upon informa-
tion or belief, however trustworthy such in-
formation may have appeared to be.
But
formation may have appeared to be.
the act in question has made it possible to
secure such service where one has made
diligent inquiry which results in the infor-
mation and belief that the defendant is a non-
resident of the state, and where an affida-
vit to that effect is made, it is now possible

Appeal from Marion Chancery Court; to procure the issuance of a warning order; Ben F. McMahan, Chancellor.

Action by Bessie Willard against Elige Willard. From a judgment for defendant, plaintiff appeals. Reversed and remanded. J. C. Floyd and Williams & Seawel, all of Yellville, for appellant. J. H. Black, of Yellville, for appellee.

SMITH, J. Appellant, who was the plaintiff below, alleged in her complaint the existence of statutory grounds for a divorce. The complaint also alleged that:

"Defendant is now a nonresident of the state of Arkansas, his post office address being West Plains, Missouri."

There was an affidavit for a warning order, in which it was stated that the defendant was a nonresident of the state of Ar

kansas. A motion to quash the warning order and proof of publication was filed which for cause stated:

"That the affidavit of the plaintiff upon which the warning order is based is insufficient, in that it states that the defendant is a nonresident of the state, when, under the new Practice Act of March 30, 1915, the statute specifies that the plaintiff shall state in his affidavit that he has made diligent inquiry, and from the best of his information and belief the defendant is a nonresident of the state."

The court declared the law to be that the affidavit for the warning order did not substantially conform to the requirements of section 4 of Act No. 290 of the Acts of the General Assembly of 1915 (Acts 1915, p. 1081), and dismissed the complaint, when plaintiff elected to stand upon the affidavit made. This act amends section 6055 of Kirby's Digest to read as follows:

*

*

(3d)

*

"Where it appears by the affidavit of the plaintiff, filed in the clerk's office at or after the commencement of the action, that he had made diligent inquiry, and that it is his information and belief that the defendant is (2d) a nonresident of this state; * (4th) * * *; (5th) (6th) * or, where either of the last two mentioned facts is stated in the return by the proper officer of a summons against the defendant, the clerk shall make and file with the papers in the case, an order warning such defendant to appear in the action within thirty days from the time of making the order.":

whereas before the passage of the act it would have been possible to do so in the event only of a positive and affirmative allegation that the defendant was a nonresident. In the case of Bauer v. Brown, 129 Ark. 129, 194 S. W. 1026, it was said:

"The purpose of amending section 6055 of Kirby's Digest was to require plaintiffs, before making an affidavit as to the nonresidence of the defendant, to make a diligent inquiry to such an extent that he can say upon information and belief that the defendant is a nonresident of the state. Section 6055 of Kirby's Digest did not require a diligent inquiry as to the whereabouts of the defendant, and the practice grew up of swearing to the affidavit more as a matter of form than as a matter of fact. Under the amendment to that section, one cannot make an affidavit that will support a warning order until he has first made a diligent inquiry as to the whereabouts of the defendant. It is contended that Fred Brown is an honest negro and acted upon the advice of white friends in procuring service in his divorce suit. This can avail him nothing. That statutes providing for constructive service must be complied with, is conceded by learned counsel for appellants. This court is of opinion that the requirements of such statutes cannot be avoided through the advice of others. A plaintiff can no longer guess as to the whereabouts of the defendant and procure a warning order upon the formal affidavit based on the guess. Before making the affidavit he must make diligent inquiry as to the whereabouts of the defendant and must gain information upon which he can base an honest belief that the defendant is a nonresident. Anything less than this will amount to a fraud in procuring the judgment, unless it develops that the defendant was at the time a nonresident of the state."

But the language of that opinion must be considered in connection with the facts there recited. That was a proceeding to set aside a decree of divorce upon the ground that fraud had been practiced upon the court in procuring the decree for divorce. Service had been had by the publication of a warning order the issuance of which was procured by an affidavit in which affiant recited "that he had made inquiry and to the best of his information appellee (the defendant) was a nonresident of the state." The testimony showed that affiant had not made diligent inquiry to ascertain the whereabouts of the defendant, and that the statement to that effect was Prior to the passage of this act one could false, and it was further shown that the denot procure the issuance of a warning order fendant was not a nonresident of the state of as substituted service against a nonresident | Arkansas. The trial court held that a fraud

*

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

had been practiced upon it in procuring the decree and vacated it, and that action was affirmed by this court. The point there decided was that a fraud had in fact been practiced upon the trial court, for the reason that the affidavit made to procure the issuance of the warning order was in fact false, in that diligent inquiry had not been made to ascertain the whereabouts of the defendant.

Many states appear to have provisions in their statutes more or less similar to the act of 1915, supra, and the courts of those states, in construing them, appear to have generally held that an affidavit for a warning order is insufficient which does not recite the facts alleged to constitute diligence in ascertaining the whereabouts of the defendant. Those cases say the affiant cannot, by his affidavit, decide whether he has exercised diligence, and that it does not suffice that he state the ultimate fact that he has exercised diligence, but that the affidavit must state the probative facts showing the diligence used rather than the ultimate fact that diligence has been used. See note to the case of Grigsby v. Wopschall, 37 L. R. A. (N. S.) 210. But that is not the point here involved. The suit in the instant case is not brought against one whose whereabouts are unknown and there was no attempt to procure the issuance of a warning order upon the ground that after diligent inquiry had been made the affiant has obtained information and honestly believes that the defendant was a nonresident of the state; and we need not, therefore, here decide whether under a case presenting those facts we would construe our statute as similar statutes have

been construed in other states.

It will be observed that in the case of Bauer v. Brown, supra, the defendant was not in fact a nonresident of the state, and we there said that the affiant had no right to make an affidavit as a matter of form rather than as a matter of fact, and that he could not guess as to the whereabouts of the defendant and

procure a warning order upon a formal affidavit based on the guess. And so say we here. It would be a fraud upon the court here, as it was there, for an affiant to make a false affidavit to procure the issuance of a warning order; but it would be no more a fraud to allege that he had made diligent inquiry when he had not done so than it would be to allege that the defendant was a nonresident when such was not the case. The

affidavit must recite the truth so far as thẹ truth is known; and, if the affiant does not know the facts, he must make diligent effort to ascertain them, and he cannot then make it unless this effort results in the acquisition of information which leads to an honest belief in the truth of the facts stated in the affidavit. But if the affiant possesses positive, definite, and certain information of the truth of the matter alleged, it would be a work of supererogation to require him to make inquiry about a fact already known, and we think the act set out above was not intended to deprive the affiant of the right to make an affidavit the truth of which rests upon his own knowledge. He need not inquire to ascertain the truth of a fact which he already knows, and, so far from it being any part of the legislative intent to deprive an affiant of the right to make an affidavit based upon actual knowledge, which he possesses, we think the Legislature intended to permit this affidavit to be made even though he did not possess personal knowledge upon the subject, provided, as the act states, he shall have first made diligent inquiry which has led to the acquisition of information upon which he bases an honest belief in the fact recited. Prior to this act of 1915 an affidavit based upon diligent inquiry, information, and belief was not sufficient. It was essential that the affidavit for a warning order should affirmatively recite that the defendant was a nonresident of the state. The act liberalizes the law in this respect, and makes it possible to secure service on warning orders based upon affidavits made upon diligent inquiry, information, and belief as to the residence of the defendant.

But, as stated in Bauer v. Brown, supra, it does not permit the affiant to hazard a guess

or to make the affidavit at all, in the absence of personal knowledge, without having made the diligent inquiry required by the statute.

It is not contended here that any fraud was being practiced or attempted upon the court below, as it is not denied that the deWe

fendant resided in West Plains, Mo. think the affidavit is sufficient, as it unequivocally states the fact to be that the defendant is a nonresident of the state.

We conclude, therefore, that the court erred in quashing the affidavit, and the judgment will therefore be reversed, and the cause remanded for further proceedings.

1

Ark.)

(134 Ark. 351)

BAKER-MATTHEWS MFG. CO. v. GRAYLING LUMBER CO.

BAKER-MATTHEWS MFG. CO. v. GRAY-
LING LUMBER CO. (No. 1.)
(Supreme Court of Arkansas. May 27, 1918.)
1. LIMITATION OF ACTIONS 13-PLEADING
-ESTOPPEL.

Where defendant, in negotiations with plaintiff looking to settlement of claim, wrongfully induced plaintiff to believe that an amicable adjustment of the claim would be made without suit, and so induced plaintiff to refrain from instituting action in time to prevent the statutory bar from attaching, defendant was estopped from setting up as a defense the statute of limitations.

2. CORPORATIONS 445-SALES OF PROPERTY -CHOSES IN ACTION-RIGHT TO SUE..

Where one corporation on dissolution, being ignorant of a trespass entitling it to damages, sold all its property and rights connected with land to another corporation, the purchasing corporation could sue to recover damages for the trespass, although it did not own the property at the time of the trespass.

3. ASSIGNMENTS 120-EQUITABLE ASSIGNMENTS-RIGHTS OF ASSIGNEE.

An equitable assignee can sue at law in the name of the assignor, and that remedy is such

an adequate one that a court of equity will not assume jurisdiction merely because the assignee does not hold the legal title.

4. ASSIGNMENTS 120-EQUITABLE ASSIGNMENTS-RIGHTS OF ASSIGNEE.

Where corporation on dissolution assigned all its rights to certain land to another corporation, the purchasing corporation could not after dissolution maintain suit in the name of the selling corporation and had no remedy at law, so that it could maintain suit in equity to recover damages for a trespass committed before the sale.

5. LIMITATION OF ACTIONS 165-BAR OF ACTION-EQUITY SUIT-REMEDY AT LAW. Suit in equity to recover damages for a trespass cannot be maintained merely on the ground that defendant prevented the institution of the action until after the bar of the statute of limitations attached, since estoppel thereby arising could have been pleaded in an action at law. Appeal from Desha Chancery Court; Z. T. Wood, Chancellor.

1021

pellee to believe that the claim would be paid without any necessity for a suit, and thereby induced appellee to refrain from commencing an action until the bar of the statute of limitations had attached.

The jurisdiction of the court of equity was invoked on the ground that there was no adequate remedy at law to escape the statute bar. There was a demurrer to the complaint, which the court overruled, and appellant also filed a motion to transfer the cause to the circuit court, which motion was overruled. Appellant filed an answer denying that appellee was the owner of the tract of land on which the timber stood, and denying that appellant cut the timber, or authorized its agents to do so. The answer also contained a plea of the statute of limitations. The cause was heard upon the depositions of the witnesses, and the court found in favor of appellee for recovery of the sum of $1,833, and rendered a decree accordingly.

The facts of the case, according to the testimony adduced, are as follows: The tract of land on which the timber is said to have been cut by appellant was originally the property of Desha Land & Timber Company, a foreign corporation, and in February, 1911, negotiations were commenced between that corporation and appellee for the sale of that tract and other tracts of land in the same locality. The negotiations between the two corporations resulted in an agreement for the sale of all the lands of the Desha Land & Timber Company in that locality to appellee prior to July of that year, but the deed was not executed until September 8, 1911, when the Desha Land & Timber Company executed a deed of conveyance to appellee conveying this tract and all other tracts in that locality owned by the first-named corporation. Shortly thereafter Desha Land & Timber Company surrendered its charter in the state of its domicile and ceased to do business. During the negotiations the quantity, quality, and value of timber on the land was carefully estimated by employés of appellee in order to appraise the market value of the land, which was chiefly valuable on account of the timber, and the estimates thus made formed the basis of the purchase price agreed on by appellee with Desha Land & Timber Company. McCULLOCH, C. J. Appellee instituted When the sale was consummated by the this action against appellant in the chancery execution of the deed neither of the parties court of Desha county to recover the value was aware of the fact that large quantities of timber alleged to have been cut by appel- of the timber had, in the meantime, been relant on a certain tract of land in that county. moved by trespassers. The timber was cut It is alleged in the complaint that the tres- by appellant's employés in the latter part of pass was committed in July, 1911, but that June and the early part of July, 1911. The appellee did not become aware of it until proof adduced by appellee shows that the March 22, 1913, and that thereupon appellee timber taken from the land amounted to entered into correspondence with appellant 533,250 feet, and was of a market value of looking to a settlement of the claim, and $6 per 1,000 feet, making a total valuation of that appellant by its written statements con- $3,199.50, the amount claimed by appellee in cerning the settlement led the agents of ap- this action. The proof adduced by appel

Action by the Grayling Lumber Company against the Baker-Matthews Manufacturing Company. Judgment for plaintiff, and defendant appeals. Affirmed.

E. E. Hopson, of Arkansas City, and J. W. & J. W. House, Jr., of Little Rock, for appellant. Jack Bernhardt, of Arkansas City, and Samuel Frauenthal, of Little Rock, for appellee.

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

lant tended to show that only about 200,000 feet of timber was cut, and that it was of very poor quality, not worth more than $2.50 per thousand. It is not contended that the preponderance of the evidence is against the finding of the chancellor as to the amount of recovery.

It is insisted, however, that the plaintiff is not entitled to recover for the trespass for the reason that it was not the owner of the lands and timber at the time the trespass was committed, that the claim was barred by the statute of limitations before the commencement of the action, and also that the action was improperly brought in the chancery court, and that the court erred in refusing to transfer the cause to the law court for trial.

[1] The evidence is sufficient to justify the finding that appellant, in its negotiations with appellee looking to a settlement of the claim, wrongfully induced the agents of appellee to believe that an amicable adjustment of the claim would be made without suit, and that appellee was thereby induced to refrain from instituting an action in time to prevent the statute bar from attaching. It is a well-recognized principle in the law that a débtor may be estopped by his own conduct from setting up as a defense the statute of limitations, and this rule has often been applied where the debtor has misled the creditor and induced him to refrain from bringing an action within the statutory period. The rule is correctly stated in 17 R. C. L. p. 884, as follows:

"A debtor has frequently been held to be estopped from relying on the statute as a defense where, by acts of a fraudulent character, he has misled the creditor and induced him to refrain from bringing suit within the statutory period. And if a defendant intentionally or negligently misleads a plaintiff by his misrepresentations, and causes him to delay suing until the statutory bar has fallen, the defendant will be estopped from pleading the statute of limitations. And the prevailing view seems to be that the doctrine of estoppel applies where the creditor, before the debt is barred, is lulled into security by the oral promises of the debtor that he will not avail himself of the statute of limitations, and suit is delayed by reason thereof. It is not necessary that the debtor should intend to mislead, but, if his declarations are such as are calculated to mislead the creditor, who acts upon them in good faith, an estoppel will be created."

the evidence shows that the Desha Land & Timber Company, in anticipation of the surrender of its charter rights, sold out and transferred to appellee all of its rights here concerning the lands owned by that company, and that appellee became the successor of the other corporation, and succeeded to the rights of the other corporation concerning the property here. The debts of the old corporation were presumably paid in full; there being no showing in this case to the contrary, and the assets passed to the stockholders. Those stockholders received stock in appellee corporation in payment of the consideration for the sale of the timber lands, and the undisputed testimony shows that they intended to pass to appellee all of the rights of the old corporation and its stockholders. Such was the necessary effect of the transaction. 2 Cook on Corporations, § 641.

[3] That being true, appellee had the right to maintain an action for the enforcement of those rights, even though the sale was consummated subsequent to the trespass. The Desha Land & Timber Company surrendered its charter and passed out of existence before the commencement of this suit, and for that reason could not be joined as a party to the action. But the deed of conveyance, which was the only written evidence of the transaction, did not purport to convey the right of action against the trespassers, and there is therefore no written evidence of the transfer so as to constitute a transfer of the legal title to the cause of action. Only the equitable title was transferred, which did not carry with it the right to maintain an action at law in the name of the assignee. Wilson v. Bowden, 26 Ark. 151. An equitable assignee can, however, sue at law in the name of the assignor, and that remedy is such an adequate one that a court of equity will not assume jurisdiction merely because the assignee does not hold the legal title. 3 Pomeroy's Equity Jurisprudence, § 1271; Hayward v. Andrews, 106 U. S. 672, 1 Sup. Ct. 544, 27 L. Ed. 271; New York Guaranty Co. v. Memphis Water Co., 107 U. S. 205, 2 Sup. Ct. 279, 27 L. Ed. 484; Hayes v. Hayes, 45 N. J. Eq. 461, 17 Atl. 634; Hayes v. Berdan, 47 N. J. Eq. 567, 21 Atl. 339. This doctrine, with its limitations, is clearly stated by the Supreme Court of the United States in Hay

Many cases are cited in support of the ward v. Andrews, supra, as follows: above text.

[2] The undisputed testimony establishes unable to assert in a court of law the legal "If the assignee of the chose in action is the fact that, though the sale by the Desha right of the assignor, which in equity is vested Land & Timber Company to appellee was not in him, then the jurisdiction of a court of chanconsummated until after the trespass was cery may be invoked. because it is the proper forum for the enforcement of equitable intercommitted by appellant and the timber re-ests, and because there is no adequate rememoved, the effect of the sale as consummated was to transfer to appellee all of the rights of the other corporation here in Arkansas connected with the land as it stood at the time the negotiations were begun, and that such was the intention of the parties

dy at law; but when, on the other hand, the equitable title is not involved in the litigation, pose of enforcing the legal right of his assignand the remedy is sought merely for the puror, there is no ground for an appeal to equity, because by an action at law in the name of the vindicated, and the wrong done by the denial assignor the disputed right may be perfectly

In the later case cited above the same and the court erred in directing a verdict of court said:

"We have lately decided, after full consideration of the authorities, that an assignee of a chose in action on which a complete and adequate remedy exists at law cannot, merely because his interest is an equitable one, bring a suit in equity for the recovery of the demand. * * * He must bring an action at law in the name of the assignor to his own use. This is true of all legal demands standing in the name of a trustee, and held for the benefit of cestuis que trust."

The subject was very thoroughly discussed by Judge Gray in delivering the opinion of the Supreme Judicial Court of Massachusetts in the case of Walker v. Brooks, 125 Mass. 241, where the following rule was stated, which, we think, sustains the jurisdiction of the court of equity in the case now before us: "But a court of equity will not entertain a bill by the assignee of a strictly legal right, merely upon the ground that he cannot bring an action at law in his own name, nor unless it appears that the assignor prohibits and prevents such an action from being brought in his name, or that an action so brought would not afford the assignee an adequate remedy."

[4, 5] The facts of the present case are that the assignor of appellee's equitable title, the Desha Land & Timber Company, had no legal existence, and therefore a suit could not be maintained in its name. Its charter was, as before stated, surrendered, and it passed out of legal existence, and that occurred before either that corporation or appellee was aware of the right of action for the trespass committed by appellant. There was therefore no legal remedy at law for the enforcement of the right acquired by appellee at the time the discovery of the right of action was first made, and a court of equity is the only forum open to appellee for the enforcement of the right. Upon that ground alone we sustain the jurisdiction of the chancery court in this case. It could not be sustained on the ground merely that appellant prevented the institution of the action until after the bar of the statute of limitations had attached; for the estoppel which arose from that account could have been pleaded in an action at law. Chase v. Carney, 60 Ark. 491, 31 S. W. 43; Bailey v. Gloyer, 21 Wall. 342, 22 L. Ed. 636; Rosenthal v. Walker, 111 U. S. 185, 4 Sup. Ct. 382, 28 L.

Ed. 395.

It follows, therefore, from what we have said, that the decree of the chancellor was correct, and the same is affirmed.

(135 Ark. 164)

BURTON v. STATE. (No. 14.) (Supreme Court of Arkansas. May 27, 1918.) CRIMINAL LAW 753(3) DIRECTION OF VERDICT.

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guilty.

J. M. Jackson, Judge.
Appeal from Circuit Court, White County;

Harry Burton was convicted of violating Acts 1917, p. 41, as to shipment of intoxicating liquors, etc., and appeals. Reversed and

remanded.

lant. Jno. D. Arbuckle, Atty. Gen., and T. Brundidge & Neelly, of Searcy, for appelW. Campbell, Asst. Atty. Gen., for the State.

HUMPHREYS, J. On the 15th day of October, 1917, information was filed by the deputy prosecuting attorney of White county in a magistrate's court against appellant, coholic liquors into White county, Ark., on charging him with shipping and bringing alor about the 11th day of October, 1917. On the same date and at the same time, in the same court, the deputy prosecuting attorney filed information against appellant, charging him with unlawfully bringing and causing to be brought alcoholic liquors into the state of Arkansas, on or about the 11th day of October, 1917. Appellant pleaded not guilty to each charge, and at his request the causes were tried together. Appellant was convicted on both charges, from which judgment of conviction he appealed to the circuit court. It appears that the causes were tried as a consolidated case in the circuit court before a jury upon the affidavits filed in the magistrate's court and the testimony of witnesses. At the conclusion of the evidence, the court instructed the jury to find the defendant guilty, and, in response to the court's peremptory instruction, the jury returned the following verdict:

"We, the jury, find the defendant guilty as hundred dollars. I. R. Pence, Foreman." charged and place the fine of ($400) four

A judgment was rendered against the appellant in accordance with the verdict, from which verdict and judgment an appeal has been prosecuted to this court.

The

Appellant is charged with a violation of the liquor laws under Act 13, Acts 1917, of the General Assembly of Arkansas. punishment imposed for a violation under said act is found in section 19 thereof, which is as follows:

lating any of the provisions of this Act, except "That any person, firm or corporation viootherwise expressly provided herein, shall upon conviction be fined not less than one hundred dollars, and not more than one thousand dollars, for each offense, and may be confined not less than thirty days nor more than ninety days, in the county jail."

It is insisted by appellant and conceded by the Attorney General that the trial court erred in directing a verdict of guilty for the reason that the trial court is without power In a prosecution under Acts 1917, p. 41, as to peremptorily instruct a verdict of guilty to unlawful shipping of liquor, etc., the punishment imposed by section 19 of said act, being where the crime charged is punishable by fine or imprisonment or both, is for the jury, fine or imprisonment, or by both. The inFor other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

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