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rant, and appellee was put under arrest, and | tion which he has himself procured to be inon the 27th of March, 1913, the cause was stituted. Such is the rule as announced in heard by the justice of the peace, and the the cases cited to support Mr. Bishop's stateappellee was discharged. Appellee was the ment of the law (subdivision 3 of section constable of the township where the fight oc- 1010), unless as a result of the prosecution, curred, and his father was one of the jus- so instituted, the full measure of the punishtices of the peace of that township, and ment provided by law is assessed against the there was a distant relationship between ap- defendant, or where the penalty is an exact pellee and Mr. Henderson. This plea was and fixed one. Provision is made, however, submitted to a jury, and both justices of the under the statute by which any one who had peace gave testimony in support of it, and committed an offense less than a felony Mr. Henderson stated that appellee "pleaded may plead guilty. Sections 2497-2502, Kirguilty to his statement." At this trial, the by's Digest. These sections provide that any state asked the following instruction, which person who has committed a misdemeanor was refused: "If you believe from the evi- may submit a statement of the facts condence in this case that the alleged trial of stituting a charge of said offense to a justhe defendant in the justice court was a col- tice of the peace of the township in which lusive affair, or was done in bad faith, for the offense occurred, and the justice is then the purpose of avoiding a trial on an indict- required to enter the substance of this statement by the grand jury, and that said de- ment on his docket and to read the same to fendant was discharged without paying a the offender, and enter his plea thereon, and fine, by reason of collusion, or in bad faith, if a plea of guilty is entered the justice is then you are instructed that the law does then required to issue a warrant of arrest. not recognize his plea of former acquittal, Then, to ascertain the gravity of the offense, as sufficient to avoid trial on the indictment the justice is required to subpoena the perreturned by the grand jury." The state filed son maltreated, and such other witnesses as a demurrer to the plea of former acquittal, are necessary to give a clear understanding and exceptions were saved to the court's of the circumstances of the case; and "said action in overruling it. The jury returned justice of the peace shall immediately after a verdict of not guilty, and the state has the examination of said witnesses render appealed. judgment against said offender fixing and specifying the punishment of said offender and for all costs incurred as in the procedure in other cases of misdemeanor." And such judgment is made a bar to another prosecution for the same offense. The sections just cited were construed in the case of Crowder v. State, 69 Ark. 330, 63 S. W. 669, and it was there said: "In our view of it, these statutes were enacted for the purpose of preventing frauds upon the laws in the cases of misdemeanors, and are not restrictions upon the jurisdiction generally of justices of the peace to hear and determine cases less than felony, but rather are wholesome provisions, regulating the manner of entering pleas of guilty and restricting the validity of such pleas to the township in which the offense is committed, and providing the necessary statements of the plea, and other matters of mere procedure named therein."

J. S. Utley, of Benton, E. H. Vance, Jr., of Malvern, and Wm. L. Moose, Atty. Gen., for the State. J. C. Ross, of Malvern, for appellee.

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SMITH, J. (after stating the facts above). [1, 2] The instruction set out in the statement of facts is the law, and should be given in any case, where the evidence is sufficient to raise the issue of collusion. In the case of State v. Caldwell, 70 Ark. 74, 66 S. W. 150, it was said: "Bishop says: "If one procures himself to be prosecuted for an offense which he has committed, thinking to get off with a slight punishment, and to bar any further prosecution carried on in good faith-if the proceeding is really managed by himself, either directly, or through the agency of another-he is, while thus holding his fate in his own hand, in no jeopardy. The plaintiff state is no party in fact, but only such in name; the judge indeed is imposed upon, yet in point of law adjudicates nothing. The judgment is therefore a nullity, and is no bar to a real prosecution.' 1 Bishop, Cr. Law, p. 1010; McFarland v. State, 68 Wis. 400 [32 N. W. 226, 60 Am. Rep. 867]; Watkins v. State, 68 Ind. 427, 34 Am. Rep. 273; and numerous authorities there cited."

* * *

For one to avail himself of this statute, he must comply with its terms, and when he has done so he may plead the judgment of the court as a former conviction. These sections contemplate the infliction of some punishment and the rendition of judgment for the costs as an incident thereto. They do not contemplate the ordinary trial, as the defendant's plea of guilty is entered on the docket before the witnesses are subpoenaed, and the evidence is heard to "ascertain the gravity of the offense." One cannot, therefore, plead former acquittal as a result of a prosecution had under these sections. Appellee can have no immunity from pros

We think the demurrer should have been sustained, and that the issue of former acquittal should not have been submitted to the jury. It appears from the quotation from the Caldwell Case, supra, that one is ecution, under the indictment returned

justice of the peace. If the prosecution before the justice of the peace was not had under these sections 2497-2502, Kirby's Digest, then the judgment is void because appellee himself instituted the prosecution and the maximum punishment provided by law was not imposed.

The judgment will be reversed, and the cause remanded, with directions to the court to sustain the demurrer, and for a trial of the cause upon its merits, as no imprisonment can be imposed upon appellee as a part of the sentence, if he should be convicted.

LITTLE et al. v. ARKANSAS NAT. BANK.
(No. 305.)
(Supreme Court of Arkansas. May 4, 1914.)
1. BILLS AND NOTES (§ 356*) DISCOUNT
BONA FIDE PURCHASER.

The rule that a bank, by discounting a note and crediting the amount to the indorser's account, does not become a purchaser for value, does not apply where the bank purchases notes before maturity, without knowledge of their invalidity, and pays out the proceeds on the indorser's checks within a short time after the discount, and before either of the notes

matured.

[Ed. Note.-For other cases, see Bills and Notes, Cent. Dig. § 908; Dec. Dig. § 356.*] 2. TRIAL (§ 260*)-INSTRUCTIONS-REQUESTED CHARGE-MODIFICATION.

Where the court charged as to what constitutes bona fide holder of commercial paper, it did not err in striking from a requested charge a similar statement.

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[Ed. Note.-For other cases, see Trial, Cent. Dig. 88 651-659; Dec. Dig. § 260.*] 3. BILLS AND NOTES (§ 339*) — DISCOUNT BY BANK-DUTY TO INQUIRE.

-

Where a bank purchased certain notes before maturity in the usual course of business, it was under no obligation to inquire or investigate as to their consideration, but was entitled to assume that the notes were legal and valid obligations of the party executing them, unless it had notice or knowledge to the contrary.

The court below, on the former trial, struck out the allegations of the answer concerning the consideration for the notes, leaving in the answer only the allegations of payment of the notes by the school district, and on that issue a verdict was returned in favor of the bank. Upon the appeal from the judgment rendered upon that verdict it was held that the notes given for the insurance pre8mium were invalid, because the policies were wagering contracts, and as such against public policy. Upon the remand of this case it was shown without dispute that the notes were executed for the consideration recited in the answer. The evidence upon the part of the bank, however, was to the effect that the notes were discounted at the rate of 8 per cent. per annum, and the proceeds of the notes thus discounted were placed to the

credit of the account of Gunter with the

[Ed. Note.-For other cases, see Bills and Notes, Cent. Dig. §§ 821-823; Dec. Dig. 339.*]

SMITH, J. Upon the former appeal of this case (105 Ark. 281, 152 S. W. 281), the appellant here being the appellant then, the following statement of facts was made, in the opinion then delivered: "Appellants executed to one J. O. Gunter two negotiable promissory notes, each for the sum of $837.10, due and payable three and six months, respectively, after date, and Gunter assigned the notes to appellee, a banking corporation doing business in the city of Fayetteville, Ark. Appellee instituted this action to recover of appellants the amount of the two notes, with interest. Appellants, for defense to the action, pleaded want of valid consideration for the execution of the notes sued on, alleging that Gunter was the soliciting agent for a certain life insurance company;

that the notes were executed to him for the first annual premium on life insurance policies issued by said company on the lives of 18 young men, the amount of the several pol icies of insurance to be payable on the death of the young men to the Special School District of Rogers, Benton county, Ark.; that neither the school district, nor any of these appellants, had an insurable interest in the lives of the men mentioned in the policies; and that said insurance contracts were void, and, consequently, the said notes given for premiums were without legal consideration. It is further alleged that appellee had full notice of the above-stated facts when it purchased the notes from Gunter, and was therefore not an innocent purchaser for value."

4. APPEAL AND ERROR (§ 1195*)-DECISION ON

PRIOR APPEAL-LAW OF CASE.

A determination on a prior appeal that the invalidity of certain notes given for premiums on wagering insurance contracts was not available as against a bona fide purchaser of the notes for value before maturity was the law of the case on retrial.

[Ed. Note.-For other cases, see Appeal and Error, Cent. Dig. §§ 4661-4665; Dec. Dig. 8 1195.*]

Appeal from Circuit Court, Benton Coun- bank, and that Gunter at the time drew a ty; J. S. Maples, Judge. small check against this deposit, and very soon afterwards drew a check in favor of the insurance company for its portion of the premium, which was about 70 per cent. of the face of the notes. Gunter testified that he advised the president of the bank what the consideration was, and that the bank had full knowledge of the transaction before the notes were purchased; but that state

Action by the Arkansas National Bank against J. F. Little and others. Judgment for plaintiff, and defendants appeal. Affirmed.

See, also, 105 Ark. 281, 152 S. W. 281.

Dick Rice and Jeff R. Rice, both of Bentonville, for appellants. B. R. Davidson, of Fayetteville, for appellee.

heard by the justice of the peace, and the appellee was discharged. Appellee was the constable of the township where the fight occurred, and his father was one of the justices of the peace of that township, and there was a distant relationship between appellee and Mr. Henderson. This plea was submitted to a jury, and both justices of the peace gave testimony in support of it, and Mr. Henderson stated that appellee "pleaded guilty to his statement." At this trial, the state asked the following instruction, which was refused: "If you believe from the evidence in this case that the alleged trial of the defendant in the justice court was a collusive affair, or was done in bad faith, for the purpose of avoiding a trial on an indictment by the grand jury, and that said defendant was discharged without paying a fine, by reason of collusion, or in bad faith, then you are instructed that the law does not recognize his plea of former acquittal, 1 as sufficient to avoid trial on the indictment returned by the grand jury." The state filed a demurrer to the plea of former acquittal, and exceptions were saved to the court's action in overruling it. The jury returned a verdict of not guilty, and the state has appealed.

rant, and appellee was put under arrest, and | tion which he has himself procured to be inon the 27th of March, 1913, the cause was stituted. Such is the rule as announced in the cases cited to support Mr. Bishop's statement of the law (subdivision 3 of section 1010), unless as a result of the prosecution, so instituted, the full measure of the punishment provided by law is assessed against the defendant, or where the penalty is an exact and fixed one. Provision is made, however, under the statute by which any one who had committed an offense less than a felony may plead guilty. Sections 2497-2502, Kirby's Digest. These sections provide that any person who has committed a misdemeanor may submit a statement of the facts constituting a charge of said offense to a justice of the peace of the township in which the offense occurred, and the justice is then required to enter the substance of this statement on his docket and to read the same to the offender, and enter his plea thereon, and if a plea of guilty is entered the justice is then required to issue a warrant of arrest. Then, to ascertain the gravity of the offense, the justice is required to subpoena the person maltreated, and such other witnesses as are necessary to give a clear understanding of the circumstances of the case; and "said justice of the peace shall immediately after the examination of said witnesses render judgment against said offender fixing and specifying the punishment of said offender and for all costs incurred as in the procedure in other cases of misdemeanor." And such judgment is made a bar to another prosecution for the same offense. The sections just cited were construed in the case of Crowder v. State, 69 Ark. 330, 63 S. W. 669, and it was there said: "In our view of it, these statutes were enacted for the purpose of preventing frauds upon the laws in the cases of misdemeanors, and are not restrictions upon the jurisdiction generally of justices of the peace to hear and determine cases less than felony, but rather are wholesome provisions, regulating the manner of entering pleas of guilty and restricting the validity of such pleas to the township in which the offense is committed, and providing the necessary statements of the plea, and other matters of mere procedure named therein."

J. S. Utley, of Benton, E. H. Vance, Jr., of Malvern, and Wm. L. Moose, Atty. Gen., for the State. J. C. Ross, of Malvern, for appellee.

SMITH, J. (after stating the facts as above). [1, 2] The instruction set out in the statement of facts is the law, and should be given in any case, where the evidence is sufficient to raise the issue of collusion. In the case of State v. Caldwell, 70 Ark. 74, 66 S. W. 150, it was said: "Bishop says: 'If one procures himself to be prosecuted for an offense which he has committed, thinking to get off with a slight punishment, and to bar any further prosecution carried on in good faith-if the proceeding is really managed by himself, either directly, or through the agency of another-he is, while thus holding his fate in his own hand, in no jeopardy. The plaintiff state is no party in fact, but only such in name; the judge indeed is imposed upon, yet in point of law adjudicates nothing. * The judgment is therefore a nullity, and is no bar to a real prosecution.' 1 Bishop, Cr. Law, p. 1010; McFarland v. State, 68 Wis. 400 [32 N. W. 226, 60 Am. Rep. 867]; Watkins v. State, 68 Ind. 427, 34 Am. Rep. 273; and numerous authorities there cited."

*

We think the demurrer should have been sustained, and that the issue of former acquittal should not have been submitted to the jury. It appears from the quotation from the Caldwell Case, supra, that one is

For one to avail himself of this statute, he must comply with its terms, and when he has done so he may plead the judgment of the court as a former conviction. These sections contemplate the infliction of some punishment and the rendition of judgment for the costs as an incident thereto. They do not contemplate the ordinary trial, as the defendant's plea of guilty is entered on the docket before the witnesses are subpoenaed, and the evidence is heard to "ascertain the gravity of the offense." One cannot, therefore, plead former acquittal as a result of a prosecution had under these sections.

Appellee can have no immunity from prosecution, under the indictment returned

justice of the peace. If the prosecution before the justice of the peace was not had under these sections 2497-2502, Kirby's Digest, then the judgment is void because appellee himself instituted the prosecution and the maximum punishment provided by law was not imposed.

SMITH, J. Upon the former appeal of this case (105 Ark. 281, 152 S. W. 281), the appellant here being the appellant then, the following statement of facts was made, in the opinion then delivered: "Appellants executed to one J. O. Gunter two negotiable promissory notes, each for the sum of $837.10, due and payable three and six months, respectively, after date, and Gunter assigned the notes to appellee, a banking corporation doing business in the city of Fayetteville, Ark. Appellee instituted this action to recover of appellants the amount of the two notes, with interest. Appellants, for defense. to the action, pleaded want of valid consideration for the execution of the notes sued on, alleging that Gunter was the soliciting that the notes were executed to him for the agent for a certain life insurance company; first annual premium on life insurance policies issued by said company on the lives of 18 young men, the amount of the several pol icies of insurance to be payable on the death of the young men to the Special School District of Rogers, Benton county, Ark.; that neither the school district, nor any of these appellants, had an insurable interest in the lives of the men mentioned in the policies; and that said insurance contracts were void,

2. TRIAL (8 260*)-INSTRUCTIONS-REQUESTED and, consequently, the said notes given for CHARGE-MODIFICATION. premiums were without legal consideration. It is further alleged that appellee had full notice of the above-stated facts when it purchased the notes from Gunter, and was therefore not an innocent purchaser for value."

Where the court charged as to what constitutes bona fide holder of commercial paper, it did not err in striking from a requested charge a similar statement.

The judgment will be reversed, and the cause remanded, with directions to the court to sustain the demurrer, and for a trial of the cause upon its merits, as no imprisonment can be imposed upon appellee as a part of the sentence, if he should be convicted.

LITTLE et al. v. ARKANSAS NAT. BANK.
(No. 305.)
(Supreme Court of Arkansas. May 4, 1914.)
1. BILLS AND NOTES (§ 356*) DISCOUNT
BONA FIDE PURCHASER.
The rule that a bank, by discounting a
note and crediting the amount to the indorser's
account, does not become a purchaser for val-
ue, does not apply where the bank purchases
notes before maturity, without knowledge of
their invalidity, and pays out the proceeds on
the indorser's checks within a short time after
the discount, and before either of the notes

matured.

[Ed. Note.-For other cases, see Bills and Notes, Cent. Dig. § 908; Dec. Dig. § 356.*]

[Ed. Note.-For other cases, see Trial, Cent. Dig. 8 651-659; Dec. Dig. § 260.*]

3. BILLS AND NOTES (§ 339*) — DISCOUNT BY BANK-DUTY TO INQUIRE.

The court below, on the former trial, struck

Where a bank purchased certain notes be-out the allegations of the answer concerning fore maturity in the usual course of business, it was under no obligation to inquire or investigate as to their consideration, but was entitled to assume that the notes were legal and valid obligations of the party executing them, unless it had notice or knowledge to the contrary.

the consideration for the notes, leaving in the answer only the allegations of payment of the notes by the school district, and on that issue a verdict was returned in favor of the bank. Upon the appeal from the judgment rendered upon that verdict it was held that the notes given for the insurance premium were invalid, because the policies were wagering contracts, and as such against public policy. Upon the remand of this case it was shown without dispute that the notes were executed for the consideration recited in the answer. The evidence upon the part of the bank, however, was to the effect that the notes were discounted at the rate of 8

per cent. per annum, and the proceeds of the notes thus discounted were placed to the

credit of the account of Gunter with the

[Ed. Note. For other cases, see Bills and Notes, Cent. Dig. §§ 821-823; Dec. Dig. § 339.*]

4. APPEAL AND Error (§ 1195*)-DECISION ON

PRIOR APPEAL-LAW OF CASE.

A determination on a prior appeal that the invalidity of certain notes given for premiums on wagering insurance contracts was not available as against a bona fide purchaser of the notes for value before maturity was the law of the case on retrial.

[Ed. Note.-For other cases, see Appeal and Error, Cent. Dig. §§ 4661-4665; Dec. Dig. 8 1195.*]

Appeal from Circuit Court, Benton Coun- bank, and that Gunter at the time drew a ty; J. S. Maples, Judge. small check against this deposit, and very soon afterwards drew a check in favor of the insurance company for its portion of the premium, which was about 70 per cent. of the face of the notes. Gunter testified that he advised the president of the bank what the consideration was, and that the bank had full knowledge of the transaction before the notes were purchased; but that state

Action by the Arkansas National Bank against J. F. Little and others. Judgment for plaintiff, and defendants appeal. Affirmed.

See, also, 105 Ark. 281, 152 S. W. 281.
Dick Rice and Jeff R. Rice, both of Ben-
tonville, for appellants. B. R. Davidson, of
Fayetteville, for appellee.

ment was flatly contradicted, and the jury | not required to investigate as to the considhas seen fit to accept the statement of the president of the bank.

eration for what the notes were given, and has the right to assume that they are legal and valid obligations of the party executing the notes, unless he has notice or knowledge to the contrary."

[1] Appellants insist that a verdict should have been directed in their favor, and in support of this position they cite cases holding that when a bank simply discounts a note and credits the amount thereof to the indorser's account, without paying to him any value for it, the transaction does not constitute the bank a purchaser for value of the note. This appears to be a correct statement of the law; but this issue does not appear to have been raised in the court below, and no specific instruction to that effect was asked. Moreover, it appears to us it would have been abstract, had it been given. There is a very close question of fact as to whether or not the officers of the bank knew what the consideration of the notes was before purchasing them; but there appears to be no real question that the bank paid full value for the notes, and that within a short time, and before the maturity of the notes, or either of them, Gunter drew checks against this deposit for the larger part of it, and all of it may have been so withdrawn, so far as the proof shows to the contrary. But, of course, the fact that it paid value for the notes would not entitle the bank to collect them from the maker, if it was not an innocent purchaser for value before maturity. That question appears to have been fairly submitted to the jury, although an instruction numbered 5, asked by appellants, which might well have been given to the jury, was amended by striking out the latter part of it.

We think this instruction was not an improper one. In the case of Winship v. Merchants' Bank, 42 Ark. 22, certain negotiable promissory notes were taken by an agent to himself for debts due his principal, and before their maturity they were transferred to a bank as security for advances made to the agent; the bank making the advances on them before maturity, in good faith, in the usual course of business, and without notice of the principal's equity. The principal sued the bank for the amount of the notes, and in the opinion in that case it was said: "Counsel for appellants contends that the bank, having received the notes merely by way of security for a debt, is not entitled to be protected as a bona fide holder. Our reply to this is that the notes were in form negotiable, that they were transferred to the bank before maturity, that the bank received them in good faith and in the usual course of business, and is consequently unaffected by equities of which it had no knowledge. The facts that Camp was the payee of the notes, and that they were in his possession, were prima facie evidence that they were his property; and without notice to the contrary the bank had a right so to treat them, and was under no obligation to inquire whether they were held by him as agent or as owner." So here, if the bank had no knowledge or notice, it was under no duty to inquire what the consideration for the notes was.

[2] Appellants strongly complain that the action of the court in not giving the fifth instruction as requested was error which calls for reversal of the case. The portion of the instruction stricken out was to the effect that the bank must have purchased the notes without notice or knowledge of their infirmity, or of circumstances which would have put it upon inquiry, and which, if followed up, would have led to the knowledge of the facts. But the court gave the following instruction: "The court instructs the jury that, before one can become bona fide and innocent holder of commercial paper, it must appear that it was acquired without notice or knowledge of defenses, or circumstances which would put him on inquiry that such defenses existed." The instruction given embodied substantially the statement of law contained in the part of the fifth instruction which was stricken out, and we think no prejudice resulted to appellants on that account.

[3] Appellants complain of the action of the court in giving the following instruction: "No. 2. I charge you that the notes sued on are commercial paper under the law, and are so transferred under the payee, and when offered for sale by the payee before they are

Other instructions told the jury that if the bank knew what the consideration was, or had notice of such circumstances as should have put it upon inquiry, it was not an innocent purchaser, and there was no conflict between the instructions. This instruction numbered 2 only dealt with the right of a bank to purchase commercial paper where it has no notice or knowledge of any infirmity in it, and it correctly declares the law with reference to the purchase of such paper. This instruction does not undertake to deal with the question of the burden of proof, and of the bank's duty to show that it was in fact an innocent purchaser.

[4] Appellants further insist that a verdict should have been directed in their favor, for the reason that the notes sued upon are void under section 3690 of Kirby's Digest, and that, whenever a statute declares a note or other contract void, they are and must be so in the hands of every holder We need not discuss the application of that section of the Digest to the facts of this case, for the reason that the law of this case, on that question, was settled in the opinion on the former appeal, where it was said:

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