author: Wood, J. McCulloch, C. J.,

text:
    Arkmo Lumber Company v. Cantrell.
    Opinion delivered June 18, 1923.
    1. Evidence — parol evidence rule — application.—The rule which excludes parol evidence for the purpose of varying a written contract is confined to the parties to the contract, and does not preclude a stranger to it from introducing such evidence.
    2. Principal and agent — agency established how. — While the declarations of an alleged agent would not be competent to prove his agency, and his assumption of agency would not be sufficient to- establish it, his testimony that he was an agent and as to his authority was competent.

      3. Evidence — self-serving declarations.— Self-serving declarations of defendant’s intestate were incompetent as evidence in defendant’s behalf.
    4. Mechanic’s lien — authentication of claim against decedent. —'Crawford & Moses’ Dig-., § 103, relating to the mode of authenticating claims of a corporation against decedent’s estates, has no application to a suit in equity to enforce a material-man’s lien against an estate, the right to which the plaintiff acquired during the life of the decedent.
    5. Mechanic’s lien — notice by subcontractor. — One who furnished materials for buildings .on lands of defendant’s testator under contract with such intestate’s agent is not a subcontractor within Crawford & Moses’ Dig., § 6935, and was not required to give to the testator’s executrix the ten days’ notice specified in Crawford & Moses’ Digest, § 7917.
    6. Mechanic’s lien — description of land or building. — Under Crawford & Moses’ Digest, §§ 6906, 6922, providing the method of filing a mechanic’s or materialman’s lien, held where one claiming a materialman’s lien asked to have his lien on the debt- or’s entire plantation, consisting of 1,380 acres, without describing the particular land or building on which the lien is sought to be established, the claim is too indefinite.
    7. Principal and agent — unauthorized act — liability of agent. —A tenant on decedent’s farm who falsely represented that he had authority to bind decedent in purchasing the materials for which a materialman’s lien is claimed thereby rendered himself personally liable for such materials.
    8. Principal and agent — evidence of authority. — In an action against one who, without authority, assumed to act as the agent of another, a written contract between such assumed agent and his principal is admissible to show that he had no such authority.
    9. Frauds, statute of — contradicting written contract by parol. — A lease contract for the period of five years, required by the statute of frauds* to be in writing, cannot be contradicted, modified or changed by a subsequent oral contract.
    10. Frauds, statute of — parol agreement changing contract.— Where a landlord and tenant embodied a contract as to repairs and improvements in a five-year lease of lands required by the statute of frauds to be in writing, they could not modify or change such contract by a parol agreement.
    Appeal from Jefferson Chancery Court; John M. Elliott, Chancellor;
    affirmed.

      Coleman & Gantt, Gray & Morris and Frauenthal &• Johnson, for appellants.
    There was a valid verbal contract entered into after the execution of the lease, whereby Scroggin was authorized by McClung to purchase materials and make the repairs on the McClung farm, instead of the landlord making them, as he agreed to do, which contract was virtually performed by Scroggin. Proof of such contract violated no rule of evidence. 10 R. C. L. 1033, § 225; 6 R. C. L. 922, § 306; 56 Am. St. Rep. 656; 113 Ark. 15; 85 Ark. 605; 225 S.W. (Ark.) 294.. This is true notwithstanding provision that no verbal contract for repairs should be binding on lessor; that there should be no liability against him for repairs unless by his . written authority therefor. Bishop on Contracts, §§ 776, 667; 62 Miss. 113; 113 Ky. 7, 67 S. W. 40, 101 Am. St. Rep. 345. Yerbal contract not within statute of frauds, having been performed by Scroggin. While Scroggin’s testimony about the subsequent verbal agreement may be inadmissible against executrix of McClung’s estate (§ 4144, C. & M. Digest) in support of his claim, it would nevertheless be competent on behalf of appellant. The chancellor’s findings are clearly against the preponderance of the testimony. The court erred in not sustaining appellant’s motion to quash all depositions taken on behalf of appellee, administratrix. 107 Ark. 153; 9 N. E. 283; 40 Pac. 954; 29 Ga. 82; 16 Gray (Mass.) 161. These seven depositions taken at the instance of appellee all purported to give conversations with deceased, J. H. McClung, in reference to his business affairs with Scroggin, in Scroggin’s absence. Strait’s deposition was also inadmissible. Deposition of Scroggin and Wood of conversations witli deceased relative to his relations with Scroggin were admissible, being to declarations of decedent against interest. 93.Ark. 214; 120 S. W. (Mo.) 755; 110 S.W. (Ky.) 382; 97 Ark. 574; 51 Ark. 530; 45 Ark. 481; 123 Ark. 226. The court also erred in dismissing cross-complaint of appellant Scroggin against appellee as administratrix. Sees. 1194, 1195, C. & M. .Digest; 134 Ark. 311; 135 Ark. 53; j 1198, C. & M. Digest, also § 1204. Notice of filing lien was properly given. 93 Ark. 279. Even though, the improvement and repairs bad been made after the date when the written contract went into effect, which is not the case, the verbal agreement subsequently .made having been performed by Scroggin, the doctrine of estoppel would apply. 69 Ark. 513; 52 Ark. 207; 106 Pac. (Okla.) 839.

      Johnson & Frauenthal, for appellant Scroggin.
    It was not necessary to file a verified claim against the administratrix in order to foreclose or enforce a mechanic’s lien against property owned by decedent. It is like a mortgage in this regard. 32 Ark. 397; 32 Ark. 407; 28 Ark. 506; 30 Ark. 135; 32 Ark. 443; 59 Fed. 722. An affidavit was made to the account of the Arkmo Lumber Go., in perfecting its lien in conformity to § 6922, O. & M. Digest. 90 Ark. 340; 97 Ark. 296. Appellant lumber company had nothing to do with the written lease contract. It sold the materials to Scroggin, and could prove by him that he was the agent of Me Clung, and, as such, bought the materials. 10 R. C. L. 120, § 213; 93 Ala. 70; note 17 L. E. A. 272; 8 Ann. Cas. 347; 31 Ark. 411. If Scroggin was not the agent of MeClung in the purchase of the materials, or exceeded his authority, then he is personally liable to the lumber company. 92 Ark. 535; 2 Ark. 338; 48 Ark. 188; 21 R. C. L. 914, § 93. The judgment should be affirmed against Scroggin if this court holds he was not the agent of the lumber company in purchasing the‘materials.

      Moore, Smith> Moore, & Trieber, for appellee.
    All the testimony of appellant tending to show a verbal or oral agreement by McOlung authorizing Scrog-gins to have repairs or improvements made at McClurg’s expense. The lease contract was required 'by the statute of frauds to be in writing, and no alleged verbal or oral modifications of it could be valid. 106 Pac. (Okla.) 839; 73 Atl. (Conn.) 752; 60 N. E. (Ind.> 139; 33 S. E. (Ga.) 28; 158 Pac. (Kan.) 13; 57 N. Y. 646; 50 Mo. App. 275; 181 N. W. (Wis.) 214; 133 Pac. (Col.) 623; 1 Beacli on Contracts, § 577; Browne on Statute of Frauds, ,§ 411; 29 Am. and Eng. Ene. of Law, 824. In none of the four Arkansas cases cited by appellant was involved the question of the right to verbally modify after its execution a written contract required by the statute of frauds to be in writing’. Counsel attempt to avoid the effect of our position by arguing that the repairs and improvements claimed to have been made by Scroggin constitute a part performance that will take the so-called verbal contract of modification out of the statute of frauds, but such part performance, in order to do this, must be referable solely to the contract. 75 Ark. 526; 63 Ark. 100. The rule attempted to be invoked by counsel for Arkmo Lbr. Co. in its supplemental brief is not applicable to facts of this case, its contention is refuted by language of 10 R. C. L. 1021; 30 N. Y. Supp. 1040. Scroggin was not authorized by McClung, as his agent or otherwise, to make improvements or repairing, or purchase materials therefor, and appellant lumber company is not entitled to any lien for materials furnished. C. & M. Digest, § 6906. Arkmo Lumber Co. in furnishing materials could at most have been no more than subcontractor, and could not fix a lien, not having given the required ten days’ notice. C. & M. Digest, §§ 6935, 6917. It was an issue of fact as to whether or not McClung modified the lease contracts by authorizing Scroggin to make repairs and improvements to be paid for by him. The testimony of Dr. Green and Mrs. Cantrell as to McClung’s exclamations and statement, when bills for repairs presented, were to the res gestae. 3 Wigmore on Evidence, 1747. His belief at the time is a circumstance to be taken into consideration in determining the question of fact at issue. 2 Enc. of Evidence, 296, 333-4, 385; 100 Ark. 269; 66 Ark. 500. Decedent’s statements as testified to by Strait not self-serving declaration. 10 R. C. L. 983; 23 N. E. 271. Arkmo Lumber Co. did not comply with requirement of the statute for fixing lien by filing a correct account in time, with description of the land to be charged with lien. C. & M. Digest, § 6922; 119 Ark. 43. Neither appellant probated his claim, as law requires. C. & M. Digest, §§ 106, 101; 69 Ark. 62. Arkmo Lumber Co., not having complied with the statute for fixing a lien, could only be a general creditor, and, having failed to comply with § 106, C. & M. Digest, is not entitled to judgment at all. Scroggin cannot set up a counterclaim barred by statute of nonclaim in defense of a suit by administra-trix.

      Frauenthal & Johnson, Coleman & Gantt and Gray S Morris, in reply.
    Property was sufficiently described to comply with requirements of § 6922, C. & M. Digest, for fixing lien. 27 Cyc. 159, note 90; 3 A. S. JR. 262; 45 A. S. E. 218; 29 Pac. 1090. Account properly probated. 97 Ark. 296. The itemized account attached to Scroggin’s answer and cross-complaint was verified and proof sufficient of the claim. It is singular that appellee’s counsel say nothing about the validity of an independent verbal agreement, as we claim, but spend all their force insisting that we are trying to modify a written lease contract by subsequent parol agreement. The answer raised no question relative to the improvements or the sufficient description of the land upon which improvements located. 27 Cyc. 159; 18 R. C. L. 948, § 84; 20 Enc. of Law, 422; 14 Ann. Cas. 688. Mechanic’s lien law liberally construed. 49 Ark. 475; 51 Ark. 302; 133 Ark. 366; '54 Ark. 93; 129 Ark. 59; 63 Ark. 367. Affidavit to Arkmo Lumber Company’s account a substantial compliance with verification for probate of claims against estate.
   Wood, J.

This action was instituted in the Jefferson Chancery Court by the Arkmo Lumber Company, hereafter sailed company, against the appellee, as executrix of the estate of J. II. McClung, deceased, to recover from the estate upon an account in the sum of $992.75, for lumber and material furnished McClung at the request of his alleged agent, D. H. Scroggin. The company alleged that the material furnished was used in the construction of certain tenant houses and barns and improvements situated on the lands of MoClung, which are described in the complaint, consisting of 1,380 acres in Jefferson County, Arkansas. The company alleged that within three months after the account became due it filed in the office of the clerk of the circuit court the account, duly verified, together with a description of the property upon which the lien was claimed, after giving ten days’ notice in writing to D. H. Scroggin, agent, of such claim. The company prayed for judgment and that a lien be declared on the lands described, and that, unless the judgment be satisfied, the lands be sold, etc.

The company filed a supplemental complaint against the appellee in which it reiterated the allegations in its original complaint. It moved to have Scroggin made a party, which was done. The company, in its complaint against Scroggin, alleged that, in the year 1919, Scrog-gin was in the possession of the lands of MoClung, and represented that he had authority to purchase the material for making the repairs and improvements on the lands; that the company furnished the material at Scrog-gin’s request, and had taken necessary steps to establish its lien. It prayed in the alternative that, if it were determined that Scroggin was not the agent of McClung and not authorized by him to purchase the lumber, it have judgment against Scroggin for the amount of its claim, with interest.

The appellee answered, denying that the estate of her father, J. H. McClung, deceased, was indebted to the company. She denied that the company furnished any materials at the request or upon the authority of Mc-Clung or of Scroggin. She denied that Scroggin was the agent of, or that he had authority from, MoClung to order materials as set forth in the complaint, and denied that the alleged materials were actually used, or entered into the construction of improvements situated on the lands of McClnng. She denied all other material allegations ©f the complaint. By way of cross-complaint, the appellee averred that the alleged agent, Scroggin, was a tenant of McClnng, and that he falsely represented to the company that he had authority to purchase material and make the account on which the company’s action is based. She alleged that the action could not be determined without the presence of Scroggin, and prayed that he be made a party, and that if, upon final hearing, judgment should be rendered against the estate of McClung, it have judgment over against Scroggin.

Scroggin answered the appellee’s cross-complaint against him, and admitted that he was the tenant of Mc-Clung. He denied all other material' allegations, and set up, by way of cross-complaint against the appellee, that the estate of McClung was indebted to him in the sum of $1,428, with interest, for labor and material in repairs and improvements which he placed upon the lands of McClung under his authority and direction. Scroggin attached to his cross-complaint an itemized account, duly verified, for which he prayed judgment against the appellee as executrix of the McClung estate. The appellee denied the allegations of Scroggin’s cross-complaint.

The appellee moved to nonsuit the claim of the company on the ground that the same had not been duly authenticated and presented to the appellee, but, if so, then appellee averred that the company had not taken the necessary steps to entitle it to judgment and a lien on the lands under the statute.

There was introduced in evidence a “rent contract” entered into in March, 1918, between J. H. McClung, party of the first part, and D. Ii. Scroggin, party of the second part, by the terms of which McClung leased to Scroggin certain lands, including'the lands described in the complaint, except certain small tracts that were then under leases to other parties. The lease was for a term of five years, beginning January 1, 1919, and ending He-oember 31,1923. The consideration for the lease was the sum of $7.50 per acre for all lands then cleared or that might he cleared by consent of the parties. The consideration was to be evidenced by notes for one-fourtli of the annual rent, to be paid October first and fifteenth and November first and fifteenth of each respective year.

The lease, among other provisions, contained the following: “It is further mutually agreed by and between the parties hereto that the said party of the second part shall not have the right to construct any buildings or repairs or additions to any buildings or structures on said premises at the cost of the party of the first part, without his written consent first procured; and it is further agreed that the party of the first part shall not be responsible for any repairs, structures or improvements placed on said premises without such written consent, and that the cost thereof so incurred without such written consent shall be paid by the party of the second part, it being specifically agreed and understood between the parties hereto that the said party of the first part shall be liable only, in respect to repairs and improvements, for such repairs as he may himself desire to make and construct upon said premises and to the dwelling houses, which matter is left entirely to his own discretion, and for «uch other repairs as he may hereafter assume to pay for in writing, it being further agreed that no verbal contract for repairs shall be binding upon or create a liability against the party of the first part therefor.”

There was a further provision that a failure upon the part of Scroggin to comply with all the terms of the contract should, at the option of MeClung, constitute a breach and termination of the contract, in which event, if MeClung so elected, he could have the work and labor provided for in the contract done, and the cost thereof should constitute liquidated damages to be paid by Scrog-gin, in addition to the rents as provided for in the contract in the year in which the breach should occur; and, in case of a breach., McClnng' had the right to take immediate possession of the lands without process of law.

Notwithstanding this written lease, the appellants contend that it was the understanding between Scroggin and MeClung, at the time the written lease was executed, that MoClung was to place the premises in a good state of repair by .rebuilding such houses and barns as were necessary, and repairing and re-roofing all old barns and houses, so that the buildings on the leased premises would be in good condition and in good repair at the time Scroggin was to take possession on the first day of January, 1919; that, pursuant to this understanding between them, MoClung, who was in very poor health and therefore personally unable to supervise the tentative improvements which he contemplated before delivering the possession to Scroggin, entered into an independent verbal agreement with Scroggin in the fall of 1919, by which he authorized Scroggin, as his agent, to purchase the necessary material from the company and make the improvements' contemplated, to pay for the work, and, when it was completed, to send MeClung an itemized statement; and that MoClung agreed he would send a check to cover the amount thus expended for him by Scroggin.

On the other hand, the appellee contends that no such verbal agreement was entered into by MeClung and Scroggin, and that .Scroggin therefore was not the agent of MoClung, and had no authority to purchase the material from the company that went into the improvements.

1. This presents the first question in the case. It could 'serve no useful purpose to set out in detail the testimony that was adduced on this issue. Suffice it to say we have reached the conclusion that, if the oral testimony adduced by the appellants to sustain this issue is competent, then a decided preponderance of the competent testimony proves that Scroggin was authorized by MeClung to purchase the material from the company and to make the improvements on bis lands; that Mc-Clung constituted Scroggin bis agent for that purpose. We have held in several cases that the rule which excludes parol evidence for the purpose of varying a written contract is confined to the parties to the contract, and does not preclude a stranger to it from introducing such evidence. Talbot v. Williams, 31 Ark. 411; Gates & Bro. v. Steele, 48 Ark. 539; Barfield Mercantile Co. v. Connery, 150 .Ark. 428. In addition see Allen v. Roulan, 8 Ann. Cases, 347;. 10 R. C. L. p. 1020, § 213, and cases' cited.

Now the company was an entire stranger to the written contract between McClung and Scroggin. The company’s right to recover did not depend upon that contract. The company proved by Scroggin and seven other witnesses, whose testimony we do not feel at liberty to discredit, that McClung authorized and directed Scroggin to purchase the material for making repairs and improvements on his land. While the declarations of Scroggin would not he competent to prove his agency, and bis assumption of agency would not he sufficient to establish it, yet his testimony that be was the agent of McClung to make the improvements was competent testimony. The testimony of certain witnesses introduced on behalf of the appellee as to the statements of McClung at and after the time that bills were presented to him for the material purchased, and as to the contract between himself and Scroggin for repairs and improvements, and as to the effect of the presentation of the bills on his health, in the absence of any duly authorized representative of the company, was incompetent. These statements were not res gestae; they were not declarations against interest, but, on the contrary, were self-serving. This testimony was purely hearsay and incompetent. Hence we reach the conclusion that the company is entitled to recover from the estate of McClung, provided it has complied with the law for establishing its claim against such estate.

McCIung died in 1919. After Ms death, the account of the company against his e'state for the materials purchased was presented to his executrix on the 11th of September, 1919, and was disallowed by her. The demand against the estate of McCIung was not properly authenticated to establish the claim in favor of the company as a general creditor of the estate. ' The company is a corporation, and the statute requires that, in case of a debt due a corporation, the cashier- or treasurer shall make the affidavit for the verification of the claim. The affidavit here was substantially in the form required by the statute, but it was made by one H. M. Euart, and it is not recited therein, and not otherwise proved, that he was the cashier or treasurer of the company. Secs. 101 and 103, C. & M. Digest; Wilkerson v. Eades, 97 Ark. 296; Kaufmam v. Redwine, 97 Ark. 546; Saunders v. Rudd, 21 Ark. 519.

However, the company contends that, inasmuch as it was seeking the satisfaction of its demand, not as a general creditor out of the general assets of the estate, but by virtue of a lien for materials furnished for making improvements on specific property, it was unnecessary to make the authenticating affidavit required by §§ 101 and 103, supra, and that a compliance with § 6922, supra, would be sufficient.

This court has held that these sections of our administration laws which relate to the authentication of demands against estates before suits are brought refer alone to suits against executors and administrators, as such, to subject the general assets of estates to payment of debts; that, in an action to foreclose a mortgage executed by a decedent, it is unnecessary to probate the claim against his estate, and hence the authenticating affidavit is not required before filing a bill to foreclose the mortgage. Hall v. Denckla, 28 Ark. 506; Nicholls v. Barrett, 30 Ark. 135; Simms v. Richardson & May, 32 Ark. 297; McClure v. Owens, 32 Ark. 443. See also Edwards v. Hill, 59 Fed. 722. The same rule and principle, by analogy, is applicable to any action asserting an original, specific and absolute charge on land. The authentication and presentation of such, claims to the administrator or executor of an estate for allowance and payment through the probate court are not prerequisite to the maintenance of an action for the enforcement of a specific lien, the right to which the plaintiff acquired during the life of the decedent. It follows that the death of McOlung did not have the effect to deprive the company of its right to establish and enforce its lien against his estate, and that it mould do so, provided it complied with the requirements of the statute for perfecting its lien. In addition to the above authorities, see Richardson v. Hickman, 32 Ark. 407; Barber v. Peay, 31 Ark. 392.

Section 6922, C. & M. Digest, reads as follows: “It shall be the duty' of every person who wishes to avail himself of this act to file with the clerk of the circuit court of the county in which the building, erection or other improvement to be charged with the lien is situated, and within ninety days after the things aforesaid shall have been furnished or the work or labor done or performed, a just and true account of the demand due or owing to him, after allowing all credits, and containing a correct description of the property to be charged with said lien, verified by affidavit.”

The company filed an account in the clerk’s office of Jefferson County showing the description of the lumber, the amount furnished and the price thereof, amounting to the sum of $992.75. This account is designated “a mechanic’s lien in favor of the company against the property of J. H. MsClung, deceased, Bessie Cantrell, administratrix.” The account was verified by the affidavit of H. M. Euart, who stated that he,was.the duly authorized agent of the company, and knew, of his own personal knowledge, the facts set forth in his affidavit. He stated that the lumber and materials in the account were furnished within ninety days prior to the date of the filing of the account and were used in the erection and repair of the following buildings and improvements on land situated in Jefferson County (describing the land), the whole tract, hut not the improvements. He stated that the account was a just and true account of the materials furnished, and the demand due, after allowing all credits, amounting to the balance claimed, and that the description of the lands set forth was a correct description of the property to be charged with the mechanic’s lien. The record also shows that the company filed in the office of the circuit clerk of Jefferson County a notice to D. H. Scroggin, as agent of J. H. McClung, and Bessie Cantrell, as administratrix of the estate of McClung (and which was served on D. H. Scroggin but not on appellee), that the company had a claim for a mechanic’s lien against the following described property (describing generally the lands and the buildings located thereon), for the sum of $992.75 for materials furnished by the company to McClung, which material, the notice recites, was furnished for use in the construction and repair of the said buildings located upon the above described property, and the notice concludes: “You are hereby notified that, after ten days from date hereof, the Arkmo Lumber Company will file with the clerk of the circuit court of said county a just and true account of said demand, after allowing all credits, verified by affidavit.”

The appellee contends that the above proceedings were not a sufficient compliance with the statute for the perfecting of the company’s lien against the lands described in the claim for a lien, which are the same as those described in the complaint; that the same is defective as a lien because it fails to describe the specific improvements into which the materials entered, and the specific acre of ground upon which the improvements were situated.

This court, in the case of Conway Lumber Co. v. Hardin, 119 Ark. 43, held that there must be a substantial observance of the statutory requirements in order to perfect a lieu under the mechanic’s lien law. But the same case holds that a literal compliance with the statute is not required. The company furnished material, according to the proof of this record, under contract directly with Scroggin, the agent of MeClung. The company was therefore not a subcontractor under the statute (§ 6935, Crawford & Moses’ Digest), and was not required to give to the appellee, the executrix of the estate of MeClung, the ten days’ notice specified in § 7917, Crawford & Moses’ Digest. Leifer Mfg. Co. v. Gross, 93 Ark. 277.

The statute (§ 6906, C. & M.) provides that, upon complying with the provisions of the act, the parties mentioned shall have “a lien upon such building, erection or improvement, and upon the land belonging to such owner or proprietor on which the same are situated, to the extent of one acre.” It will be observed that the claim for a lien filed only describes the lands according to the government subdivisions constituting the MeClung plantation, consisting of 1,380 acres, more or less. It does not describe any particular tract or acre on which the buildings are situated, nor any particular building or buildings upon which the lien is sought to be established. A majority of the court have reached the conclusion that, while the mechanics’ lien law should be liberally construed with a view to advancing the remedy, nevertheless the account or claim for a lien is too vague and indefinite, since it does not describe the particular land or the particular buildings upon which the lien is sought to be established, and it does not, therefore, comply with §§ 6906 and 6922, Crawford & Moses’ Digest. Bedsole v. Peters, 79 Ala. 133; Montgomery Iron Works v. Darman, 78 Ala. 218; Ransom v. Sheehan, 78 Mo. 668; Wright v. Berdsley, 69 Mo. 548; Williams v. Porter, 51 Mo. 441.

The majority does not mean to say that either the acre of land on which the lien is sought, or the building thereon, must necessarily be described in any particular form. All that is essential is that the acre of land or the building be designated in sucli language as will afford information concerning the situation of the property to he charged with the lien. Of course, if the building be described so as to properly designate its location, this is sufficient, for the statute itself fixes the quantity of land to be charged.

The writer, however, is of the opinion that the correct rule, supported by the better reason as well as the weight of authority, is announced in 27 Cyc. 159, as follows: “As a general rule the fact that the claim or statement describes more land than is subject to the lien does not defeat the lien as to the land properly subject thereto, if there is no fraudulent intent and no one is injured thereby; and, where the tract on which the improvement is erected is of greater area than the statute allows to be subjected to the lien, a claim or statement describing the entire tract is sufficient, and it is not necessary to specifically describe a portion thereof which is of the permitted area, as in such case it is for the court to decide what portion of the land is to be subjected to the lien.” See many cases cited in note to text. A majority of the court therefore has reached the conclusion that, as between the company and the estate of McClung, the company is not entitled to recover. The writer, however, is of the opinion that the company has established its claim for a lien; that the particular acre and the particular buildings could have been delineated by the testimony at the hearing.

2. While the company is not entitled to recover from the estate of McClung, it does not follow that it cannot recover from Scroggin. The company alleges in its complaint against Scroggin that he falsely represented to the company that he had authority from Mc-Clung to purchase the lumber; and materials for which a lien is claimed. Scroggin denies that he falsely represented that he was the agent of McClung, and avers that he was the dulv authorized agent of McClung to purchase the materials in controversy. It is conceded therefore that Scroggin purchased of the company the material in controversy. The testimony of Scoggin on this issue was to the effect that he was the agent of McClung, and had authority to, and did, purchase the materials as such agent, and the testimony of seven witnesses tended to corroborate his testimony, which, as we have seen, was sufficient to establish that fact as between the company and McClung, because the appellee, as executrix of the McClung estate, could not use the written contract between McClung and Scroggin to rebut such testimony. It was incompetent for that purpose because it was 'in the nature of self-serving evidence, and the company was not privy to it, nor bound by it. But in the action between the company and Scroggin the contract between Scroggin and McClung is competent to rebut the testimony of Scroggin. Scroggin admitted that he executed this contract, and, as we construe the contract, it forbids Scroggin from acting as the agent of McClung in making the repairs and improvements on the McClung planta^ tion, unless authority to act as such agent was given by McClung in writing. The contract in the action between the company and Scroggin was in the nature of a declaration or admission against his interest, and it was entirely competent for the purpose of controverting the testimony of Scroggin and proving that he did not have the authority he claimed to have to purchase the materials in controversy as the agent of McClung.

A majority of the court therefore are convinced-that a preponderance of the evidence proves that Scrog-gin did not purchase the materials of the company as the agent of McClung. Scroggin therefore was liable to the company, and the trial court ruled correctly in so holding.

3. This, brings us, in the last place, to the question as to whether or not Scroggin is entitled to recover on his cross-complaint against the estate of McClung. Scroggin alleged that he had expended for materials and labor in making repairs and improvements on the Mc-Clung plantation the sum of $1,428.89. The appellee de-niecl liability, and in defense of this claim of Scroggin set up the written contract, supra, between McClung and Scroggin, and .contends that to permit Scroggin to establish his claim by oral testimony is to contravene the familiar rule that oral testimony cannot be introduced to contradict, add to, or modify the terms of a written contract. The lease contract was for five years, and therefore within the statute of frauds, § 4862, subdiv, 5, C. & M. Digest. A contract which the statute of frauds requires to be in writing cannot be contradicted, modified or changed by a subsequent oral contract. "We have often ruled that parties to a written contract may abandon the same by subsequent parol agreement, or they may rescind it in part or m toto, by substituting a new agreement therefor. Thompson v. Short, 157 Ark. 314; Caldwell v. Dunn, 156 Ark. 126, and cases there cited.

Scroggin invokes the doctrine of these cases to justify the introduction of parol testimony to prove that he and McClung, after the written contract was executed, entered into an oral contract by which McClung authorized him to make the repairs and improvements upon which the claim is based. But an examination of the above cases will show that the doctrine therein announced was concerning contracts which, to be valid, were not required to be in writing. The law is aptly stated in the case of Boyd v. Big Tree Ranch Co., 133 Pac. (Cal.) 623-624, as follows: “Were it possible to make an oral modification of a contract which, by the statute of frauds, is required to be in writing, and enforce such oral modification, the door would be open for the perpetration .of such frauds as the statute seeks to prevent. If the contract is in writing, though not required to be, as where the subject-matter is not within the statute of frauds, it may of course be changed by new subsequent agreement in writing.” Bonicamp v. Starbuck, 106 Pac. (Okla.) 839; Augusta So. Ry. Co. v. Smith, 33 S. E. (Ga.) 28-29; 1 Beach on Contracts, § 577; Browne on Statute of Frauds, § 411; 29 A. & E. Ency. of Law, and other authorities cited in appellee’s brief.

McClung and Scroggin could have entered into a valid parol contract for the repairs and improvements on the McClung plantation, but they did not elect to do so. They chose to embody the' contracts as to repairs and improvements in the written contract of lease. Having thus made it a part of the written contract of lease, they could not afterwards take it out and substitute a new parol contract as to the improvements without modifying the written lease contract, which the statute of frauds required to be in writing. The contract was executed in March, 1918, and took effect in January, 1919. Scroggin made the improvements and repairs after he took possession under his written contract. These repairs and improvements grew out of his relation to McClung as a tenant, and were referable to the written contract. This lease contract could not rest partly in writing and partly in parol. It had to be in writing, • and, if the provisions as to the repairs and improvements were taken out, it would have the effect of destroying the mutuality of the entire contract, for it could not be said that the parties would have entered into the contract but for these provisions. The provisions of the contract as to the repairs and improvements leave no doubt that it was the intention of McClung that, after the contract took effect, no improvements could be made upon the plantation by Scroggin except such as were made by his written consent.

A majority of the court therefore are convinced that Scroggin has not established his claim against the estate of McClung* bv anv competent testimony, and the trial court ruled correctly in so holding,’. The decree is therefore i.n all things correct, and it is affirmed.

McCulloch, C. J.,

(dissenting). I agree with the majority in all that is said with respect to the claim of the lumber company against the estate of McClung. The company established its claim by abundant proof, but lost its claim by failing to verify it in accordance with the statute, and lost its lien by failing to sufficiently describe the property in filing the claim.

This being true, I fail to find any just grounds for sustaining the decree in favor of the lumber company against Scroggin. The only reason stated in the opinion of the majority is that the contract between Scroggin and McClung- was “in the nature of a declaration or admission against interest,” and for that reason the majority are convinced “that a preponderance of the evidence proves.that Scroggin did not purchase the material of the company as the agent of McClung.” How can this be true in the face of the conclusion of the majority on the issue between the company and the McClung estate that “a decided preponderance of the competent testimony proves that Scroggin was authorized by McCluüg to purchase the material from the company and to make the improvement on the land?” The testimony is precisely the same, except that the majority does not consider the contract between Scroggin and McClung in determining tire issue beween the company and Mc-Clung’s estate, but does consider it on the issue between the company and Scroggin. I do not think that the contract has any probative force at all in determining the issue whether or not McClung subsequent^ authorized Scroggin, as his agent, to purchase the material from the company. With the incompetent testimony as to McClung’s declaration excluded from the consideration (the majority hold it to be incompetent), the testimony is undisputed that McClung did authorize Scroggin to make the purchases as his agent. Besides the testimony on this subject of Scroggin and his brother, there were five disinterested witnesses who testified that the}’were present and heard McClung direct Scroggins, as his agent, to purchase the material from the company to repair the houses on the farm. This is not disputed. The only theory upon which the company could have held Scroggin liable for the price of the material was that he assumed to act under authority as- McClung’s agent, which, did not exist. Dale v. Donaldson Lumber Co., 48 Ark. 188. But the complete answer to this is that Scrog-gin -was in fact authorized 'by McClung to purchase the material, and the company had a valid claim against McClung’s estate and a lien on the land, hut lost both the claim and the lien by its own negligence in failing to comply with the statutes with reference to enforcing the same.

It also seems clear to me that Scroggin is entitled-to recover on his claim against McClung’s estate, and that his claim is established by undisputed testimony. But the majority decide that Scroggin is barred from recovery by the statute of frauds. This conclusion is, I think, against the great weight of authority on the subject, which is to the effect that a new oral agreement, the subject-matter of which is not within the statute (such an agreement as merely relates to the method or time of performance of a prior written contract), is not void under the statute because it is a modification of a former written contract between the same parties. Murray v. Boyd, 165 Ky. 625; Rank v. Garvey, 66 Neb. 767; Stamey v. Hemple, 173 Fed. 61; Hurlburt v. Fitzpatrick, 176 Mass. 287; Norton v. Simond, 124 Mass. 19; Cumming v. Arnold, 3 Metc. (Mass.) 486; Gault v. Brown, 48 N. H. 183; Richardson v. Cooper, 25 Me. 450; Negley v. Jeffers, 28 Ohio St. 90; Knibs v. Jones, 44 Md. 396; Raffensberger v. Cullison, 28 Pa. St. 426.

In the present case the new oral contract is not only one not within the statute of frauds, but the material part of it relates to matters not covered in the original contract. ; It will be seen from a perusal of the original contract that it binds neither party to the making of repairs. It is entirely negative in this respect, and merely provides that the lessor (McClung) should not be bound except upon his consent in writing. Now the new oral contract was independent of the old contract, in that it was an agreement on the part of McClung to make cer tain repairs, the consideration being the benefit to his own farm. It was not a modification of the old contract except as to the provision abont the written consent of the lessor, for the old contract, as before stated, did not require either party to make repairs.

If any other reasons were needed to support Scrog-gin’s right to recover, it is found in the fact that Scrog-gin actually performed the new agreement with respect to making repairs, and in doing so expended the sum of money which he seeks to recover. The authorities are to the effect that, even where the contract is held to be within the statute, performance takes it out of the operation of the statute. 25 R. C. L. p. 711; Conley v. Johnson, 69 Ark. 513; note to Bonicamp v. Starbuck, L. R. A. 1917-B p. 164; Thompson v. Poor, 147 N. Y. 402.

My conclusion therefore is that Scroggin should recover from the McClung estate the amount of his claim, and that he is not liable to the lumber company.


source: Caselaw Access Project

author: Wood, J.

license: Public Domain

text:
    Kelley Trust Company v. Zenor.
    Opinion delivered June 18, 1923.
    1. Deeds — consideration—subsequent acts. — A valuable consideration for a deed may foe other 'than the actual payment of money, and may consist of acts to be done after the conveyance.
    2. Vendor and purchaser — vendor's lien — nonperformance of condition. — While a vendor’s lien will not arise to secure the performance of certain acts, the nonperformance of which would make a claim for unliquidated damages, yet where a deed recites the future performance of certain acts as part consideration, and that for nonperformance thereof a sum. certain shall be paid, a vendor’s lien therefor may be enforced upon failure of performance of such acts.
    3. Contracts — breach—defense.—One who undertook to maintain a glass factory continuously, employing a certain number of men, cannot excuse his nonperformance by reason of his difficulty in securing a working scale of wages from the labor union.

      Appeal from Sebastian Chancery Court,-Fort Smith District; J. V. Bourland, Chancellor;
    reversed.

      Geo. F. Youmans and Pryor & Miles, -for appellant.
    Appellees procured a donation of a site worth $7,000 for a glass factory, the Business Men’s Club paying $3,000 and appellant giving remainder of value of site conveyed, all conditioned on the erection and operation of a factory of designated capacity thereon by ap-pellees, and a vendor’s lien was retained for the price of the site to compel a performance of the condition. The change in the deed,-after its execution, by the secretary of the Business Men’s Club, would not affect its provisions. 113 Ark. 289. Not entitled to relief on account of act of God or inevitable accident. 6 R. C. L. sec. 367. Appellees failed to'perform the condition of the -contract, and appellant was entitled to foreclose lien for purchase money. Provision' retaining lien not one for penalty or forfeiture. 93 Ark. 371. Was one for liquidated damages, 122 Ark. 235. The consideration expressed for the location and operation of the factory was ,a valuable consideration. 162 TJ. S. 40, L. ed. 960. Appellees got a conveyance of the lands, and failed to pay therefor in money or by location and operation of the factory. 99 Ark. 438. There was no sufficient reason for appellees’ failure to perform contract that would relieve them from paying for the land. 93 Ark. 447. Doctrine of 93 Ark. 371 supported also -by 14 Ala. 169, 48 Am. Dec. 93. A provision for payment of land in cotton does not impair vendor’s lien. 6 Am. Rep. 707. Written agreement fixes the amount of the lien herein which would be liquidated damages if factory not operated.

      Joseph R. Brown and James B. McDonough, for ap-pellees.
    93 Ark. 371, cited by appellants, has no bearing on question involved here. 162 IJ. S. 40 is hardly in point, and 122 Ark. 235 is not applicable to the facts of the case. Appellees complied substantially with the terms of the Kelley Trust Company deed, although they were not bound thereby. They knew nothing about its terms till it was rescinded, .and from then during the one year it had to run the plant was operated five months. The war excused the operation of factory and performance during 191.7. 25 Ark. 138; 148 Ark. 132; 190 N. Y. 539, 83 N. E. 1122. The plant operated 52 weeks by June 1, 1922. The chancellor found the contract had been substantially complied with. 65 W. Ya. 531; 64 S. E. 836; 84 Mo. 263; 13 Mo. 191. Substantial compliance is sufficient. 5 Ark. 596; 97 Ark. 278; 131 Ark. 481. Each case must depend on its own facts in determining whether a stipulated sum is a penalty .or forfeiture, as the chancellor held here, or liquidated damages. 112 Ark. 126. The secretary of the Business Men’s Club was justified in making the change correcting the deed to conform to the terms of the contract made. “Equity regards that as done which ought to be done.” 21 'O. J. 202; 121 Ark. 550; 91 Ark. 468; 2 C. J. 202. Under doctrine of equitable estoppel, two people may find themselves charged with all the consequences of agency as to third persons. 2 C. J. 461; 96 Ark. 350. Appellee relied on Gill’s, said secretary’s, representations. 2 C. J. 465. This reliance entitled Zenor to a conveyance in accordance with the contract made with the Business Men’s Club, and he was entitled to proceed as he did, considering that as done which ought to be done. The court held the stipulation in the deed a provision for a penalty, and its finding is not against the clear preponderance of the testimony. 44 Ark. 216; 27 Ark. 200; 95 Ark. 523; 106 Ark. 123; 149 Ark. 670. Appellant, by the construction and operation of a glass plant by appellees, secured all the benefits, and is not entitled to relief. It is undisputed that appellees invested $150,000 in the plant, and because it only employed 125 instead of 150 men it would be nothing but a forfeiture to allow appellant' to recover back the property. Forfeitures are not favored in equity. 142 Ark. '539. Equity should not enforce sucli a penalty. 132 Ark. 473; 59 Ark. 66; 235 Pa. 443, 84 Atl. 427; 64 S. E. (W. Va.) 836., If appellant has any remedy it is an action at law for damages. S3 N. E. (Ill.) 1072; S. W. (Ky.) 631. Conditions are not favored in contracts of this kind. 200 N. Y. 224, 93 .S. E. 516. Conditions subsequent are not favored. 77 Ark. 168; 113 Ark. 92.

      Geo F. Youmans and Pryor & Miles, in reply.
    Appellees, of course, were bound by the terms of the deed. Inability to procure tybor no excuse for failure to perform contract. 93 Ark. 447. No substantial performance of contract by appellees. 43 Minn. 357, 45 N. W. 845, 9 L. R. A. 52;'124 Wis. 84, 102 N. W. 356; 4 Words & Phrases, 751. Contract does not constitute a condition subsequent nor involve a forfeiture. 70 N. Y. 303; 177 Pac. 138,13 Wyo. 37; 109 Va. 676, 64 S. E. 982; 2'Words & Phrases, 1402; 1, Words & Phrases (2d S.) 865. No forfeiture. 10 Pa. Co. Ct. 8. 565; 105 S. W. (Tex.) 366; 3 Words & Phrases, 2893; 2 Words & Phrases (2d S.) 611.
   Wood, J.

The Kelley Trust Company (hereafter, for convenience, called appellant) is ¡an Arkansas corporation, with its principal place ¡of business in Fort Smith, Arkansas. Harry E. Kelley is its president, and owiis a majority of its stock. On the first of May, 1917, the appellant executed to one C. P. Zenor, Sr., his heirs and assigns, a warranty deed to block-38, Midland Heights Addition to the city of Port Smith, Arkansas. The consideration named in the deed was $7,000. The deed contained the usual clauses and covenants, and in addition the following:

“Three thousand dollars of the above mentioned consideration is paid in cash by the Business Men’s Club of Fort Smith, Arkansas, and the receipt thereof is hereby acknowledged. The remaining four thousand dollars is to be paid by the said C. P. Zenor, Sr., by the erection, maintenance and operation, bn said real es-tale, until January 3, 192.1, of a glass factory, having a daily pay-roll of not less Ilian six hundred dollars, and employing- not less than one hundred fifty men; the meaning and intent hereof being that said real estate is donated to said C. P. Zenor, Sr., his heirs and assigns, upon condition that said C. P. Zenor, Sr., his heirs and assigns, erect, maintain and operate on said real estate, during the period above indicated, a glass factory having a daily pay-roll . of not less than six hundred dollars, and employing not less than one. hundred and fifty men, a lien being hereby retained on said real estate to secure performance of said conditions. “And in the event said C. P. Zenor, Sr., his heirs and assigns, should fail to erect and put in operation on said real estate, within eight months from this date, a glass factory having a daily pay-roll of not less than six hundred dollars and emplo}dng not less than one hundred fifty men, or in the event that C. P. Zenor, Sr., his heirs and assigns, after erecting and putting such glass factory in operation, should be or become at anytime during the period aforesaid unable to continue operating the -same, or should suspend operation thereof for four months at any time during said period, or should, for four months at any time during said period, fail to operate such factory on -a -scale requiring a daily pay-roll of not less than six hundred dollars and the employment of not less than one hundred fifty men, then in any such event said C. P. Zenor, Sr., his heirs and assigns, shall become and be considered indebted to the said Kelley Trust Company, its successors and assigns, in said sum of seven, thousand dollars, 4/7 for said company and 3/7 for said Business Men’s Club, and the lien herein reserved on said real estate may be foreclosed for such indebtedness. And in the event said Kelley Trust Company should become the purchaser of said real estate in said foreclosure proceedings, it shall hold the title thereto in trust, 4/7 for said compa^ and 3/7 for said Business Men’s Club.”

TMs action was instituted by the appellant to foreclose its vendor’s lien. It set up in its complaint the deed, and alleged, in substance, that Zenor had failed to comply with the conditions above set forth, and that, by reason of such default, he was indebted to the appellant in the sum of $7,000, 4/7 for the appellant and 3/7 for the Business Men’s Club. It prayed for judgment for $7,000, and that a lien be declared upon the lots described in the complaint, and that the same be subjected to the satisfaction of the judgment. .

The Model Window Class Company appeared and made itself a party defendant -to the action, and it and Zenor and his wife answered, alleging, in substance, that the obligations of the contract under which the deed was executed to Zenor had been fully complied with. The trial court, after hearing the testimony in the cause, found the issues in favor of the defendants, and entered a decree dismissing the complaint for want of equity, from which is this appeal.

The facts are substantially as follows: Zenor, who had been interested in the operation of a glass factory outside of the State, came to Fort Smith to locate a glass factory. One R. S. Robinson and his associates had developed what is known as the Kibler Gas Field in Crawford County, near Fort Smith. Harry Kelley and the appellant were large landowners in the city of Fort Smith, and had about three hundred acres of land in what is. known as Midland Heights Addition to the city of Fort Smith, in which was situated block 38, 'containing 35 city lots 50x140 feet, located on both the lines of the Frisco and the Missouri Pacific railways, bn .the highest point of ground between the cities of Fort Smith and Van Burén, and only a short distance from the interurban line connecting the two cities. The Business Men’s Club, as its name implies, was a civic organization in the city -of Fort Smith for the promotion of the prosperity of the city. Its president was B. I). Crane and its secretary was Ray Gill. When Zenor came to Fort Smith, the club offered him a free site for his glass factory, and sites were shown him by Robinson, but he was not pleased with these. Whereupon Robinson showed him other sites, and among them block 38, which he se’ected. This block was on the market for $7,000. The club had the sum of. $3,000 which it desired to donate towards securing- a free factor}- site for Zenor’s glass plant. Kelley owned about 200 acres of land adjoining block 38, which he proposed to sell for homes to employees who worked permanently in some factory located on block 38. Robinson asked Kelley if he would not donate $4,000, the balance of the market price of block 38. Kelley had already contributed five per cent, of $20,000 which had been raised by the club for the purpose of locating- factories in the city, and had pledged himself to pa}*- five per cent, of $20,000 more. This donation and pledge had been made just before Robinson approached him, and therefore he declined to contribute the $4,000 more to the club. However, he informed Robinson of the terms on which he would sell block 38, which terms are as already set forth in the deed. Before this deed was executed on the 31st day of March, 3917, Zenor and the club had entered into the following- contract, to-wit: “O. P. Zenor, Sr., and -associates agree, whether as individuals or as stockholders, or through the medium of a corporation to be organized, to erect a plant at Port Smith, Arkansas, on the. property hereinafter described, for the purpose of making- window glass and kindred products, said plant to cost not less than $75,000, and to be in operation and employ at least 125 laborers, by the 15th day of December, 1917. The Business Men’s Club of Port Smith, Arkansas, agrees that when said C. P. Zenor and associates have complied, with the terms of the agreement on their part to be performed, it will convey, by proper warranty deed, to such person or. persons as the said C. P. Zenor may designate. block 38, Midland Heights Addition to the city of Port. Smith, Arkansas, provided that said deed shall recito that, if the said C. P. Zenor and associates, or a corporation to he organized, does not continue to operate said plant for a period of three years, employing, during operating periods, an average of 125 laborers, the title to the property above mentioned .shall revert to the grantor who conveys said property by means of the aforesaid deed.”

This agreement was signed by Zenor, and by Crane as president of the club. Zenor organized the Model Window Class Company, a corporation, of which he was general manager. Robinson, who was a director of the Business Men’s Club and present at its meeting, and who wias largely instrumental in bringing about the negotiations between the club and Zenor, and between the club and Kelley, told Kelley that Zenor had said that he would build a plant a great deal bigger than they had agreed upon, and that he was going to double the men and double the pay-roll; that he was going to operate the plant practically the whole year. Kelley told Robinson that he was mistaken about the benefits that the glass company would be to the town, and was reluctant to sell the property, but finally said, “I will sell the property to the Business Men’s Club for $3,000 provided certain conditions are put in that deed as to how this plant is to be operated.”

The appellant executed the deed, as already mentioned, on the first of May, 1917, and delivered the same to the secretary of the Business Men’s Club. In the meantime, after the execution of the agreement between the club and Zenor, the construction of the glass plant had been parried on and the factory began operation before the 15th of December, 1917. It was some time after the deed wa,s delivered to the secretary of the club before he succeeded in delivering the deed to Zenor. After the deed had been delivered to Zenor, he returned it once or twice. The deed was in the office of the club until about the day it was recorded, which was the latter part of 1919. Zenor said to the secretary of the dub that if he would add to the agreement a note at the bottom reciting that the deed should read “125” instead of “150” and instead of “all times,” “during operating period an average of” he would accept the deed and record it. The original contract called for 150 men. The interlinea-tions were made in the contract in 1919, and Zenor stated that he would accept it if the secretary of the club would put that in, which he did. No member of the appellant was there at the time, and the secretary of the club did not notify any member of the appellant that he was going’ to make the changes in the contract. There was never any resolution of the board of directors authorizing the -secretary of the club to malee the interlineations in the agreement that he did make after the same had been signed by Zenor .-and the president of the club. Zenor simpty stated to the secretary that if he would make the changes in the contract as indicated, he (Zenor) would accept the deed as written.

Harry Kelley testified, among other things, that he had given land to other factories and donated money to them, and they had failed to comply with the representations with reference to continuous operation. He could not definitely ascertain the amount to which he had been damaged, and, if such a factory as was represented to him by Gill and Robinson would be built and operated by Zenor were not in fact 'built -and operated as specified in his deed, he figured from his past experiences that his damages would be the amount of $4,000 that he was donating, which he placed in the deed as liquidated damages in case the conditions of the deed were not complied with by the grantee. During the year 1918 he did not pay any attention to whether the factory was complying with the terms of the deed, because the country was at war. After the World War was over he began to look into the question as to whether or not Zenor and the Model Window Glass Company were going to comply with the terms of the deed. He did not keep close track of them in 1919. In 1920 the factory operated until the 17th of May, and never, again operated that year. He bad tenant houses close to tbe glass plant and found no tenants. Tbe plant bad been shut down through long periods. Since the execution of tbe deed be had sold only two lots out of approximately two hundred acres. He had never seen tbe contract between the club and Zenor until be called Zenor’s attention to tbe fact that he had not complied with the terms of the deed. This was after January 1, 1921. He was not a member of the board of directors of the club, and knew nothing of its transaction with Zenor. The deed was executed by him in accordance with the understanding with Robinson, and delivered to the secretary of the club.

Leigh Kelley, vice-president of the appellant, testified that he was not a director of the club at the time the agreement between tbe club and Zenor was executed. He was familiar with the terms of the deed, but did not know that there was any agreement between the club and Zenor.

Zenor testified that they began the construction of the plant about the first, of May, 1917, and began to operate it in December, 1917. In tbe construction of tbe plant they hired about 145 men daily. He and bis associates had invested about $22S,000 at tbe time bis testimony was taken. During tbe years 1917, ’18, ’19 and ’20 tbe appellant did not complain that be and bis associates’ bad not complied with tbe terms of tbe deed. The appellant, did complain in 1921. Zenor made tbe contract with tbe club, and never at any time bad any conversation with any representative of the appellant until after it raised objection. Witness did not know that tbe appellant was associated with tbe transaction in any way until be went to get tbe deed and contract. After be read tbe deed be returned it to the secretary of tbe club and refused to accept it, because it did not conform to the contract be bad entered into with the club. The secretary assured him that everything would be satisfactory, and be thou accepted tbe deed and placed it on record. They started operating the plant in jJecem-ber, 1917, and finished in 1918, operating eighteen weeks. In 1918-1919 they operated twelve weeks — had operated just 52 weeks in three years. In 1918 his operations were interfered with by the government, and this interference ended on December 7, 1918. They did not operate the plant at all in 1920, because they did not have any labor and could not get it. They did not operate from-1920 to January 15, 1921, because the union labor organization would not let them. The plant was closed down from May 22, 1920, and did not start up again for a period of eighteen months. During the period when the plant was closed down in 1918 he did not employ 125 men, or 150 either, and did not have a pay-roll amounting to six hundred dollars. The most men he ever employed at any time was 146. Ordinarily 128 men would be employed in his plant. During all the period that he was closed down ho was trying to get a working scale from the union. Operating periods were fixed by the union. There was testimony tending to prove that prior to 1917 it was customary to run glass plants about eight or nine months in each year, sometimes ten.

1. The consideration of the appellant’s deed' to Zenor was $7,000, $3,000 of which was to be paid in cash, which was paid, and the remaining $4,000 was to be liquidated by complying with the conditions expressed in the deed. The undisputed testimony shows that these conditions have not been complied with. The testimony of Zenor himself conclusively proves that the conditions specified have not been fulfilled by him or his associates.

In Stanley v. Schwalby, 162 U. S. 256-257, it is said: “A valuable consideration may be other than the actual payment of money, and may consist of acts to be done after the conveyance.” The testimony of Kelley shows clearly that the acts specified by appellant to be done by the grantee in its deed, in lieu of the $4,000' which was the balance of the consideration named, were estimated by him to be worth at least that sum, and that, in designating tliese acts, it was Ms intent that, npon a failure upon the part of the grantee to perform them, the grantee should pay to him the sum of $4,000. It. occurs to us that the testimony of Kelley and the recitals set forth in the deed prove that a failure to perform the conditions would result in damages to appellant in the balance of the purchase money unpaid fixed as the liquidated sum of such damages. The damages, in their nature, were uncertain and not easily estimated, but nevertheless would at least be equal to the sum of $4,000, and that sum was specifically named by him to cover his damages, in addition to the cash consideration of $3,000, making the whole purchase money $7,000, for which sum the appellant reserved a lien on the land conveyed. See Nevada County Bank v. Sullivan, 122 Ark. 235.

This court has several times ruled that a vendor’s lien will not arise to secure the performance of an act the nonperformance of which would make a claim for unliquidated damages. Harris v. Hanie, 37 Ark. 348; Bell v. Pelt, 51 Ark. 433; Salyers v. Smith, 67 Ark. 526; Cox v. Smith, 93 Ark. 371. But this is not that sort of an action. On the contrary, it is an action to recover a liquidated sum which the deed specifies may be recovered in case certain acts are not performed, which sum was named and clearly considered and intended by the parties to the deed as part of the purchase money. The case at bar, under the allegations of the complaint and the testimony adduced in support thereof, is brought clearly within the doctrine announced in Cox v. Smith, supra, -where we said: “If this sum stipulated to be paid in the event of the nonperformance of the contract on bis part shall be considered in the nature of damages, then it must be held to be liquidated damages, for which he is liable. * * * But this is not a claim for unliquh dated- damages; it is a debt for unpaid purchase money, the amount of which is definitely fixed. And where such debt for' the purchase money may be paid in work or services, the vendor’s lien therefor does exist, and may be enforced if such, work is not done or the services rendered.” Citing Young v. Harris, 36 Ark. 162, and Nix v. Draughon, 54 Ark. 340. See also Winters v. Fain, 47 Ark. 493; Tupy v. Kocourek, 66 Ark. 433.

In Jarratt v. Langston, 99 Ark. 438, we said: “It has been held by this court that, if land is sold for a price or consideration not named, which it is agreed may be paid in the note of a third party, or in personal services, the vendor’s lien therefor exists and may be enforced if the note is not delivered or the' services rendered.” Since we have concluded that this -should be treated as an action to enforce a vendor’s lien for the purchase money, what we have already said disposes of all the contentions made by learned counsel for the ap-pellees to sustain the decree of the trial court, except that the appellees were excused from complying with the conditions expressed in the deed requiring certain >acts to be performed in lieu of the payment of the unpaid purchase money by reason of untoward circumstances over which they had no control, caused by the World War and labor unions. The proof shows 'that the appellant waived the performance of the terms- of the contract, which were made impossible by the war. The other hardships alleged as excuses for nonperformance cannot -avail the appellees, according to the doctrine announced by this court in Ingham Lbr. Co. v. Ingersoll, 93 Ark. 447. The appellees hold the -title and possession to this land under the deed of appellant, and they must pay the purchase price.

No issue is made in this record between the appel-lees -and the Business Men’-s Club of Fort Smith, and hence it would not be germane here to discuss the effect of the agreement between the club and Zenor. It follows, from what we have.;said, that the court erred in dismissing the appellant’s complaint for want of equity. For this error the judgment is reversed, and the cause is remanded, with directions to enter a decree in appellant’s favor for the sum of $4,000, with interest from tlie date of tlie institution of this suit, and that the ¡same be declared a lien upon the real estate described in its complaint, and for such other proceeding’s, according to law and not inconsistent with this opinion, as may he necessary to enforce such decree.


author: Hart, J.,

text:
    Grismore v. Utley.
    Opinion delivered June 18, 1923.
    1. Vendor and purchaser — fraudulent representation. — Where a vendor or his agent makes a' representation of a fact which has nothing to do with opinion and is peculiarly within the knowledge of the person making it, the purchaser, receiving it has a right to rely upon its truthfulness, though the means of ascertaining its falsity were fully open to him, as it does not lie in the mouth of the declarant to say that it was folly in the purchaser to believe him.
    2. Vendor and purchaser — fraud—burden of proof. — A purchaser has the burden of showing that his purchase was induced by false representations.
    3. Vendor and purchaser — fraudulent representation — ma-' teriality. — In a sale of land for $8,000, a misrepresentation that the land was not in a drainage district was material if the land was in a drainage district, and subject to a liability therein of more than $2,000.
    Appeal from Poinsett Chancery Court; Archer Wheatley, Chancellor;
    affirmed.
    STATEMENT OE FACTS.
    Appellants brought this suit in equity against appel-lees to foreclose a deed of trust given for the purchase price of 160 acres of land in Cross County, Ark.
    Appellees filed a cross-complaint, asking for a rescission of the contract for the purchase of the land, on the ground that it was procured by false representations, and also asked to recover a portion of the purchase price of the land which they had already paid.
    Gr. T. Carey and V. T. Utley entered into a contract with W. L. Brennan, the woods superintendent of the Grismore-Hyman Company, to purchase from that company 160 acres of land for the sum of $8,000. Carey and Utley were witnesses for themselves. According to their testimony, they purchased the land de scribed in the complaint for $8,000, paying' $2,000 in cash on January 10, 1920, and giving their notes for the balance of the purchase price, and a deed of trust on tli e land in question to secure the payment thereof. The negotiations and the contract were made with "W. L. Brennan. They asked Brennan whether or not the land was in a drainage district, and Brennan told them that it was not. They told Brennan that they owned a piece of land in another county which was in a drainage district and that they “had tlieir stomachs full of drainage district.” They said they would not buy the land at all if it was in a drainage - district. Brennan assured them that he had an abstract and had examined it, and knew that the land was not in a drainage district. Carey had known Brennan for five or six years, and relied on his statements. They subsequently learned that the land was in a drainage district, and that the assessment of betterments against it amounted to $4,800, and the estimated amount which would have to be paid for the construction of the ditch, and which was a charge against the land, amounted to $2,087.04.
    W. L. Brennan was a witness for appellant.
    He ad-' mitted making the contract for them, but denied having told Dr. Utley and Mr. Carey that the land was not in a drainage district. On the other hand, he told them that there had been a survey for a drainage ditch about a half of a mile west of the land, but that, in his opinion, the land was drained by a slough on each side of it, and that he could not see why it would be assessed for the construction of a drainage ditch. Fred Grismore testified that Dr. Utley and Mr. Carey both asked him for an extension of time on the first note given for the purchase • price of the land when it fell due. He gave them the extension of time, and never heard them charge that Brennan had made any false representations about the drainage ditch until some time in the fall of 1921, a short time before the present suit was brought. He stated that the parties became dissatisfied with their purchase because the value of the land depreciated 50 per cent, after they had entered into the contract in question.
    The cashier for the G-rismor e-Hyman Company also testified that he notified Dr. Utley and Mr. Carey that' the first land note was due, and they told him that they would take it up a little later on.
    The chancellor found the issues in favor of appel-lees, and entered a decree canceling the contract for the sale of the land and rendering judgment in favor of ap-'pellees against appellants for $2,380, the sum that they had already paid towards the purchase price of the land.' The case is here on appeal.
    Appellant pro se.

    There can be no fraud without intention to deceive, though the motive is immaterial. Kerr on Fraud, 3. 7. Where means and sources of knowledge are equally open to each, one party has no right to place reliance upon the statements of the others. 11 Ark. 58; 26 Ark. 28; 31 Ark. 170; 46 Ark. 245; 46 Ark. 337; 47 Ark. 148. To justify a rescission of the contract on the allegation of fraud, the proof must be clear and satisfactory. 11 Ark. 378; 23 Ark. 176. To avoid a contract, the misrepresentations must be knowingly and fraudulently made concerning some material fact, otherwise it affords no ground for rescission. 125 U. S. 247; 19 Ark. 522; 31 Ark. 170; 46 Ark. 337; 82 Ark. 20; Pomeroy, § 878. The representation that the property was not in a drainage district is not the kind of a representation that would justify a rescission of the contract, because the theory of the right to construct a drainage ditch is based upon special benefits accruing to the particular lands. 9 R. C. L. 6534. Note 26, L. R. A. (N. S.) 975.

      Gaulney & Dudley, for appellees.
    Appellees were induced to buy the lands by the false and fraudulent representation that they were not situated in a drainage district, and had the right to have that contract rescinded and their notes for purchase money canceled. Yeates v. Pryor, 11 Ark. 66. Appel-lees had the right to and did rely upon the fraudulent statements. 47 Ark. 164. Brennan, the joint owner of the lands, assured the appellees, when they inquired if the lands were in a drainage district and stated they would not purchase lands included in a drainage district, that they were not situated in any such district, and appellees were induced to purchase on this false and fraudulent representation. The means of information as to the particular fact about the lands was not the same, and appellants should have known it, and are bound by the representations. 71 Ark. 91; 142 Ark. 189; 112 Ark. 489; 101 Ark. 95. Appellees even proposed that if appellants would pay the estimated amount of drainage taxes against the lands they would carry out the contract of purchase, but this they refused to do.
   Hart, J.,

(after stating the facts). The chancellor found that W. L. Brennan, the duly authorized agent of the Crismore-Hyman Company, falsely represented to appellees that the land in question was not in a drainage district, and that this false representation was a material inducement to appellees in making the contract for the purchase of the land.

It is first contended that appellees should be denied relief because they did not examine the records to see whether or not the land purchased by them was in a drainage district. It would be inequitable to say to one who, in good faith, has relied upon the express declaration of another that the land he owned was not in a drainage district, that he might have learned its falsity by going to the county seat and examining the records. The obligation of ordinary good faith precludes the vendor from seeking shelter under such a claim. The vendor is in no position to assert that, because the record of drainage districts was open to inspection, the representations were immaterial. It is enough that the purchaser believed the statement, that inquiry was necessary to discover the truth, and that he executed the contract on the strength of the representation.

As said in Gammill v. Johnson, 47 Ark. 335, “when the representation is made of a fact that has nothing to do with opinion, and is peculiarly within the knowledge of the person making it, the one receiving it has the absolute right to rely upon its truthfulness, though the means of ascertaining its falsity were fully open .to him. It does not lie in the mouth of the declarant to say it was folly in the other party to believe him.” To the same effect see Evatt v. Hudson, 97 Ark. 265, and Bennett v. Farabough, 154 Ark. 193.

In the latter case the court recognized that a false representation that the land was not in a drainage district would be a ground for the rescission of the contract for the sale of the land, but denied the purchaser relief on the ground that the testimony did not warrant it.

In the case at bar it is not denied that Brennan was the duly authorized agent for the sale of the land and had the authority to make the representation that the land was not in a drainage district, if in fact he did make such representation. Appellants contend, however, that Brennan made no such representation, and this presented a question of fact for the chancery court. The burden was upon the appellees to show that they were induced to purchase the land by false and fraudulent representations of appellants or their agent. Grayling Lumber Co. v. Ebbitt, 134 Ark. 175, and English v. North, 112 Ark. 489.

To sustain the burden, Mr. Carey and Dr. Utley both testified in ’ positive terms that they did not wish to purchase any land in a drainage district, and expressly told Brennan that their experience was such that they would not, under any consideration, purchase land in a drainage district. Brennan assured them- that he had examined the abstract and knew that the land was not in a drainage district. It turned out that the land was in a drainage' district, and that the assessment of benefits amounted to over $4,000, and it was estimated that it would take about one-half of this to construct the drainage ditch.

This was a material matter to he considered in the purchase price of a tract of land sold for $8,000. It was the assertion of a positive fact by Brennan, and appel-lees iyere justified in relying upon it. It is true that Brennan denied having made the representation, and that he is corroborated to some extent by Grismore and by the cashier, who both testified that Carey and Utley had come to them separately and asked for an extension of the time of payment of the first land note, on account of the financial depression which had spread over the country since the contract for the purchase of the land.

The chancellor believed the testimony of appellees on this-point, and his finding is warranted by their testimony. Therefore the decree will be affirmed.


text:
    Valley Lumber Company v. Westmoreland Brothers.
    Opinion delivered June 18, 1923.
    1. Railroads — liability for damages by fire. — Crawford & Moses’ Digest, § 8569, making railroad companies liable for the destruction of or injury to property caused by fire resulting from the operation of such railroads, is valid.
    2. Railroads — definition.—The term “railroad”' in Crawford & Moses’ Digest, § 8569, refers only to railroads that are operated 'by corporations, companies or individuals as common carriers.
    3. Negligence — loss by fire. — In the absence of a statute, a private owner of property on whose premises a fire is accidentally started, or who sets out fire on his own premises for a lawful purpose, is not liable for the damages caused thereby unless the fire was started or allowed to spread through negligence.

      Appeal from Nevada Circuit Court; George B. Hay-nie, Judge;
    reversed.

      Gaughan & Sifford and B. P. Hamby, for appellant.
    Tlie statute, C. & M. Digest, § 8569, fixing a liability against railroads for damages caused by fire from operation of trains, only applies to railroads operated as common carriers and' not to corporations or persons operating railroads in connection witli their industrial business or enterprises. Our court expressed doubt as to validity of this statute with respect to persons other than chartered railroad corporations. By. v. Shore, 89 Arle 423. Held .classification of such roads, carriers, for such regulation not unreasonable. 186 Fed. 139. If statute applicable to railroads not common carriers it is unconstitutional. Court erred in refusing to allow defendant to plead gross contributory negligence on part of plaintiff. Defendant’s proper instruction No. 5 on this point was erroneously refused by the court. 121 Ark. 585. Court erred in refusing to give defendant’s requested instruction No. 9. 132 Ark. 257. Section 85, C. & M. Digest, not applicable because of the contractual relationship between the parties. 97 Ark. 287; note 16 A. L. R. 304; 54 Pac. 553. 13 N. E. (Mass.) 370, construes a similar statute. Court erred in its instructions relative to question of notice posted by defendant and in giving No. 2. 145 Ark. 306; 23 Ark. 735; 58 Ark. 84; 58 Ark. 446. Verdict of the jury is contrary to the evidence, and excessive.

      Tompkins, McBae & Tompkins, for appellees.
    The agreement relieving the appellant from liability for damage to staves by fire was made after the fire destroyed the staves herein. The statute is constitutional. 89 Ark. 418; 16 Ann. Cas. 939, note. All parties liable at common law 'absolutely for damage caused by fire escaping from their premises. 3 L. R. A. 350; 165 TJ. S. 1; 11 R. C. L. 940; note 21 L. R. A. 255. It is true this common-law rule was never followed in this State, but the statute reenacting it is valid. No improper elassifi-cation by this statute. 49 Ark. 291; 58 Ark 407. Classification reasonable. 127' U. S. 205; 170 U. S. 283; 60 R. A. 308; 68 L. R. A. 622; 14 L. R. A. (N. S.) 418; '175 U. S. 348; Am. Cas. 1918-A, 627 (IncL). State reserved authority to amend charters, and could have provided for this liability. 87 Ark. 587. The evidence fully sustains the verdict, and the court properly refused to give defendant’s requested instruction No. 9. Clark v. Ry., cited by appellant, is an authority against rather than for its position. There was no contractual rela- ’ tion that would defeat a recovery under statute. Case of 97 Ark. 287 not in point. 142 Ark. 41; 101 Ark. 75. ISTo abuse of discretion to refuse to allow appellant to amend its answer. 120 Ark. 595; 104 Ark. 276. Jury ' was properly instructed on question relative to the notices.

      Gcmghcm & Sifford and R. P. Hamby, in reply.
    The statute cannot be upheld under police power of the State. 18 L. R. A. 440. The rule of law in force prior to passage of statute should apply in this case, under which negligence was a prerequisite to recovery. There was a contractual relation between the parties. 60 Ark. 333. In 142 Ark. 41 the question of relationship óf the parties was not undisputed, as herein.
   Wood, J.

Westmoreland Brothers, hereafter called appellees, were a partnership engaged in the manufacture of staves in Nevada County. The Arkadelphia Milling Company had advanced money to the appellees on the staves manufactured by them. The Valley Lumber Company, hereafter called the appellant, is a domestic corporation which operated a sawmill at Reeder, in Ouachita County, Arkansas, and it operated a logging road extending from its mill into Nevada County. The appellant was not a common carrier and did not maintain any published tariffs, but handled- shipments of freight by special contract with the shippers. The ap-pellees entered into an agreement with the manager of the appellant that the appellees would put their staves along appellant’s right-of-way, on which a spur track was afterwards located. The appellees began to place their staves on this right-of-way some time in September or October, 1919. On account of nnnsnal conditions the appellant was unable to haul them out at that time, and because of unfavorable logging conditions appellant abandoned operations on its spur until August, 1920. About ten days after it started operating again the staves were destroyed by fire.

In December, 1921, appellees instituted this action against the appellant. They alleged, in substance, that the appellant, in operating its locomotive and engine over its line of railroad in Nevada County, set out fire which resulted in the burning of 76,400 staves stacked along the right-of-way of appellant, to appellees’ damage in the sum of $6,122, for which they prayed judgment.

The appellant, in its answer, denied that it had destroyed the staves of the appellees; denied that the staves were stacked along its right-of-way with the knowledge and consent of the appellant. The appellant alleged that the appellees were relying on § 8569 of Crawford & Moses’ Digest, which is set out at length in its answer, and set up that the appellant was not liable under this section of the statute, for the reason that to apply the statute would have the effect of depriving it of its property without due process of law and to deny it equal protection of the law. Appellant denied that the fire was caused by the carelessness of its agents or servants. It denied that the appellees were damaged as alleged in their complaint.

The testimony on behalf of the appellees tended to prove that the staves in controversy, which had been placed by the appellees on appellant’s right-of-way, with the knowledge and consent of appellant, were destroyed by fire set out by a locomotive that was being operated by employees of the appellant. The court, at the request of the appellees, in instruction No. 1, in substance told the jury that, if the appellees placed their staves upon- appellant’s right-of-way with the consent of the appellant and under an agreement -with appellant that it was to transport the same to Reeder, and if the staves were destroyed by fire set out by a locomotive of appellant, the appellant would be liable. The court refused to grant appellant’s prayer for instruction No. 7, which, in effect, told the jury that the appellees would not be entitled to recover unless the appellant was guilty of negligence in regard to the equipment or operation of the locomotive. The trial resulted in a judgment in favor of the appellees, from which is this appeal.

The first question for our consideration is whether or not the appellant is liable under § 8569 of C. & M. Digest, which is as follows: “All corporations, companies or persons, engaged in operating any railroad wholly or partly in this State, shall be liable for the destruction of, or injury to, any property, real or personal, which may be caused by fire, or result from any locomotive, engine, machinery, train, car, or other thing used upon said railroad, or in the operation thereof, or which may result from, or be caused by, any employee, agent or servant of such corporation, company or person, upon or in the operation of such railroad, and the owner of any such property, real or personal, which may be destroyed or injured, may recover all such damage to said property by suit in any court in the county where the damage occurred, having jurisdiction of the amount of such damage, and, upon the trial of any such action or suit for such damage, it shall not be lawful for the defendant in such suit or action to plead or prove as a defense thereto that the fire which caused such injury was not the result of negligence or carelessness upon the part of such defendant, its employees, agents or servants; but in all such actions it shall only be necessary for the owner of such property so injured to prove that the fire which caused or resulted in the injury originated or was caused by the operation of such railroad, or resulted from the acts of the employees, agents or servants of such defendant, and if the plaintiff recover in such suit or action, lie shall also recover a reasonable attorney’s fee, to be ascertained from the evidence in the case by the court or jury trying the same. Provided, that the penalty prescribed by this section shall apply only when such employee, agent or servant is in the discharge of his duty as such.”

This statute was upheld as to railroad corporations in the case of St. Louis & S. F. Ry. Co. v. Shore, 89 Ark 418. See also Evins v. St. Louis & S. F. Rd. Co., 104 Ark. 79; Kansas City So. Ry. Co. v. Harris, 105 Ark. 374; Cairo, T. & S. Rd. Co. v. Brooks, 112 Ark. 298; St. Louis, I. M. & S. Ry. Co. v. Ross, 120 Ark. 595; Union S. & F. Co. v. St. Louis, I. M. & S. Ry. Co., 121 Ark. 585, and exhaustive note to St. Louis & S. F. Rd. Co. v. Shore, supra, 16 A. & E. Ann. Cases, 941. Learned counsel for appellant contend 'that the statute was held valid as to railroad corporations because they are chartered as common carriers for hire, and have certain privileges by virtue of their charter, such as eminent domain, etc.; that the statute is unconstitutional and void when applied to corporations, companies and persons which own and operate railroads, not as common carriers, but in connection with the industrial business or enterprises for which they are incorporated, or which they conduct as unincorporated companies, or. as individuals. Counsel for appellant are correct in this contention.

In St. Louis & S. F. Rd. Co. v. Shore, supra, wo followed the doctrine announced in St. Louis & S. F. R. Co. v. Matthews, 165 U. S. 1. The Supreme Court of the United States in that case had under review a statute of Missouri which made eacli railroad corporation owning or operating a railroad in that State responsible in damages to every person or corporation whose property might be injured or destroyed by fire communicated directly or indirectly by locomotive engines in use upon the railroad owned or operated by such, railroad corporation. The act defined the term “railroad corporation” to mean “all corporations, companies and individuals now owning or operating, or which may hereafter own or operate, any railroad in this State.” The Supreme Court of the United States, in a learned and exhaustive opinion by Mr. Justice Cray, held that the act was a valid exercise of the legislative power, and did not deprive the railroad company of its property without due process of law, or deny to it the equal protection of the law. The acts of Parliament and the statutes of various States are reviewed in which railroads are made liable for the destruction of property caused by their locomotives. The authorities and the reasoning of the court show that the doctrine upon which such statutes are declared valid is that railroad corporations are common carriers, which, under their charter powers, have the right of eminent domain, that is, the right to take the lands of others for the purpose of operating a railroad in the transportation of freight and passengers for the profit of the railroad corporation. Because of this unusual privilege, as well as the dangerous character of the agency which they operate, they can be justly classified and made to bear the burdens of the extraordinary risks to which they subject the property of others.

As was said in Grissell v. Housatonic Rd., 54 Conn. 561-462, one of the cases quoted by Mr. Justice Gray, in St. Louis & S. F. Rd. Co. v. Matthews, supra: “It it confined to them, because they alone have the privilege of taking a narrow . strip of land from each owner, without his consent, along the route selected for the track, and of traversing the same at all hours of the day and night, and at all seasons, whether wet or dry, with locomotive engines that scatter fire along the margin of the land not' taken, thereby subjecting all combustible property to extraordinary hazard of loss, and that, too, for the sole profit of the corporation.”

The term “railroad” used in our statute refers to railroads that are operated by corporations, companies or individuals as common carriers in the State of Arkansas. A legislative classification which makes corporations, companies or individuals operating any locomotive, engine, etc., upon railroads that are operated as common carriers absolutely liable for destruction of property by fire is just and reasonable. Because the operation of their railroad is devoted in part, at least, to the use of the public, and the manner of its use so nearly approximates the operation of chartered railroads as to' bring them within the same classification.

It will be observed that the statute makes such corporations, companies or individuals liable for the destruction of property by fire caused by any employee, agent or servant of such corporation, company or individual, upon or in the operation of such railroad, and that, in actions by the owner for damage, it is only necessary for him to prove that the fire which caused or resulted in the injury originated or was caused by the operation of such railroad, or resulted from the acts of the employees, agents or servants of such defendant. The act makes it unnecessary, in such cases, for the plaintiff to prove negligence on the part of the defendant, and makes it unlawful for the defendant to set up negligence in the defense. The general rule in this country, as well as in England, now is that, in the absence of a statute, a private owner of property on whose premises a fire is accidentally started, or who sets out fire on his own premises for a lawful purpose, is not liable for the damages caused thereby to the property of another, unless the fire was started, or allowed to spread, through negligence. See McNally v. Colwell, 91 Mich. 527, 30 Am. St. Rep. 494, case note 501; Weitzman v. Barber Asphalt Co., 123 Am. St. Rep. 560, case note 576; 11 R. C. L. 940, and numerous authorities cited in note 6.

It is well established that the Legislature, in the exercise of the police power of the State in the regulation and control of the use of dangerous agencies which may cause the destruction of property, may classify corporations, companies and individuals who own and use such agencies and impose upon them certain liabilities and restrictions. Such legislation is valid so long as the classification is not arbitrary, unreasonable and discriminatory. The dangerous character of steam and'the use of locomotives by railroad corporations chartered as such, or corporations, companies or individuals operating railroads as common carriers, though not chartered, places them all in the category where they may be classified and subjected to such special legislation as that provided in § 8569, supra. St. Louis & S. F. Rd. Co. v. Shore, supra; Pittsburgh, etc., Ry. Co. v. Chappell, 183 Ind. 141, Ann. Cases, 1918-A, 627, and note; Tullis v. Lake Erie & W. Rd. Co., 175 U. S. 348 ; Missouri Pac. Ry. Co. v. Mackay, 127 U. S. 205.

But it occurs to us that the act under review, if applied to corporations, companies or persons whieh only operate a railroad in connection with their business or- industrial enterprises, and not as a railroad corporation, or as a common carrier, would be unreasonable, discriminatory, arbitrary, and therefore invalid. Corporations, companies or individuals operating locomotives and trains over railroads which are not chartered, or which do not operate their railroads as common carriers, cannot be classified as railroad corporations, and do not come within the purview of this statute. As we have seen, this statute was leveled wholly at railroad corporations, or corporations, companies or individuals operating railroads as common carriers. Corporations, companies or persons which do not have the charter powers of railroad corporations, or which do not operate their railroads as common carriers, cannot be embraced in the same class with railroad corporations or common carriers by railroads, because they do not have the same ■ privileges and burdens under tlie law and do not operate their railroads under the same conditions. See Presson v. Vail Cooperage Co., 155 Ark. 424. We do not perceive why such corporations, companies or persons could or -should be subjected to greater liabilities than hundreds -of other corporations, companies and individuals which in the prosecution of their business use fire, steam, and other dangerous agencies, but who, under the general rule of law, are only made liable for the damages caused through their negligence.

It follows from what we have said that the court erred in granting appellee’s prayer for instruction No. 1 and in refusing appellant’s prayer for instruction No. *7. The cause was therefore sent to the jury upon an erroneous theory. We find no other reversible errors in the record. For the errors indicated the judgment is reversed, and the cause is remanded for a new trial.

Mr. Justice Hart dissents.