text:
    Eureka Oil Company v. Mooney.
    Opinion delivered April 6, 1925.
    1. Master and servant — application of res ipsa loquitur doctrine. — In an action for the death of an employee, whose duty it was to go out on 'a plank over a pool of oil to clean the intake pipe, where the proof was merely that his hody was found in the pool, there being no eye witnesses, held that the doctrine of res ipsa loquitur is not applicable, and the burden was on the plaintiff to show such facts and circumstances as tend to show, not as a matter of speculation or conjecture, but as an inference reasonably deducible from the testimony, that defendant had been guilty of negligence which was the proximate cause of deceased’s death.
    2. Master and servant — death of servant — jury question. — Evidence that the death of plaintiff’s decedent resulted from defendant’s negligence, held sufficient to go to the jury.
    3. Master and servant — assumed risk — instruction.—An instruction that, though a servant assumes the risks ordinarily incident to his employment, he does not assume risks of injury from the negligence of the master unless he knows of such negligence and appreciates the danger arising therefrom, held objectionable as relieving the servant of the risk of obvious danger.
    4. Death — pecuniary loss. — In an action for the death of a minor servant, evidence held to show damages to his parent- by way of pecuniary loss, but no damages for deceased’s conscious pain and suffering.
    Appeal from Saline Circuit C-onrt; Thomas E. Toler, Judge;
    reversed.

      Powell, Smead <& Knox, for appellant.

      J. W. Westbrooh and W. R. Bonham, for appellee.
   Smith, J.

Cleo Mooney, appellee’s intestate, was employed as a pumper at one of the oil wells of the appellant company, in Union County. A dam had been constructed by appellant across a ravine, and, as the oil flowed from the well, it ran down this ravine to a dam -and formed a pool. The pool was about thirty feet across at the lower end, and was about two feet deep.

A plank about seven or eight feet long was used as a walkway from the dam out into the pool to an intake pipe of a suction pump. One end of the plank rested on the dam and the other rested on a cross-piece nailed to two stobs which, had been driven into the ground in the pool, and about three feet from the dam. The plank was about a foot wide, and was not fastened at either end, and extended out over the cross-piece on which it rested out into the pool. There was testimony that the plank was loose and unsteady, and that, if one stepped beyond the cross-piece, the plank would tilt.

The pool filled about every thirty minutes, and, when filled, the plank was about two inches above the oil. The intake pipe was down in the pool, covered with oil. It frequently became clogged with silt and debris, and therefore required the constant attention of the pumper. It was necessary to keep it clean, so that the pump would be kept working, otherwise the oil would flow over the dam. The well did not flow constantly, and therefore had to be .swabbed. It would then throw oil about twenty feet high and continue flowing for two or three hours, when it had to be swabbed again.

Appellee’s intestate was a boy eighteen years old, but he was as large as a full-grown man. He was employed one day, and continued to work during the night following, and negligence is predicated upon the failure of the appellant company to warn him of the dangers incident to the employment, it being alleged that deceased was inexperienced in the work in which he was engaged.

Mr. Mooney, the appellee, who was deceased’s father, testified that he was at the pool about ten o’clock p. m. before deceased was found dead in the pool at five o ’clock the next morning. Mr. Mooney testified that, just 'before he left the place where his son was at work, he saw his son go out on the plank walkway and get down on his hands and knees to olean the suction or intake pipe, and that, as his son raised up and started back to the dam, he staggered and came near falling, and at that time he could smell the fumes of the oil.

About midnight deceased went to another oil well where some workmen ¡were engaged and borrowed a hammer and cold chisel, presumably for the purpose of doing some work on the suction pump. No witness testified that deceased was seen alive after that time.

The next morning about five o’clock Mr. Mooney went down to the pool, and, not seeing his son, reported the fact to appellant’s foreman, and the two went back to the pool to search for the body. Mr. Mooney walked out on the walkway and felt around in the oil with a stick, and soon found the body of his son, his feet being next to the walkway and his head farther out in the pool.

Mr. Mooney brought suit, as the administrator of his son’s estate, to recover damages for the pain and suffering endured by his son, and also for the loss of contributions made to him by his son out of his wages. There was a verdict for the estate in the sum of $500 and for the father for $2,500, and judgment was rendered accordingly.

For the reversal of the judgment it is insisted, (1), that there is no proof that the death of appellee’s decedent was caused by any negligence of appellant; (2), that, even if appellee’s theory of the cause of death was established, decedent assumed the risk of the danger which resulted in his death; (3), that there was no proof of damage; and (4), that error was committed in instructing the jury.

In support of its first assignment of error appellant insists that the cause of death is purely a matter of speculation and conjecture, and that the testimony did not warrant the submission of the question of its negligence to the jury.

Appellee’s first answer to this insistence is that the doctrine of res ipsa loquitur applies, and that, under the case made, the burden was on appellant to account for the injury and to excuse the presumption of its negligence.

It may be said that the case was not submitted to the ■ jury on the theory that the doctrine of res ipsa loquitur applies, and we do not think that it does apply. Arkansas Light & Power Co. v. Jackson, 166 Ark. 633, and cases there cited. The burden was therefore on appellee to show such facts and circumstances as that — not as a matter of speculation or conjecture 'but as an inference fairly and reasonably deduoible from the testimony— appellant bad been guilty of some negligence -which was the proximate cause of deceased’s death. It is a close question whether the evidence is legally sufficient for this purpose or not, but we have concluded that the testimony was sufficient to send the question of appellant’s negligence being the proximate cause of deceased’s death to the jury.

, Deceased was eighteen years old, and he lost his life before he had performed one full day’s labor. He had previously worked in the oil fields, but he had never before been engaged in work similar to that in which he was employed at the time of his death. There was testimony that, as the oil came from the well, it emitted dangerous fumes, which the pumper had to inhale while clearing the intake pipe, since, while so engaged, he had to get down on his hands and knees on the plank walkway to reach down in the pool, and in such manner as to cause his face to come almost in contact with the oil. The testimony on the part of the appellant was to the effect that, while the oil did emit fumes when it first came out of the ground, these fumes were immediately dissipated and no fumes were thrown off by the oil in the pool.

It is the theory of appellant that deceased was murdered and thrown into the pool of oil for the purpose, possibly, of robbery. This was the theory of the case first accepted, and a man suspected of the crime was arrested, but the charge was dismissed, and the party suspected testified as a witness for appellee at the trial.

In support of the theory that the deceased was robbed, the testimony of an X-ray expert and a physician •was offered, to the effect that deceased’s skull had been fractured and no oil was found in his lungs. In refutation of this theory, another physician testified that, in his opinion, deceased’s skull was not fractured, although he admitted that his examination was not sufficiently thorough for him to he sure. Deceased had on his person, when found, a watch and $25.33 in money.

For the reversal of the judgment it is first insisted that there is no proof that decedent’s death was caused by any negligence of appellant, and that, if appellee’s theory of the cause of death was established, decedent assumed the risk.

As we have said, the case is a close one on the facts whether the testimony is legally sufficient to support the finding that decedent’s death was caused by any negligence on the part of appellant. As was said in the case of. St. L. I. M. & S. R. Co. v. Hempfling, 107 Ark. 476, the jury have no right to guess, without proof, what the probable cause of decedent’s death was, but it was there also said: “The law is well settled that, where there are no eye-witnesses to the injury and the cause thereof is not established by affirmative or direct proof, then all the facts established iby the circumstances must be such as to justify an inference on the part of the jury that the negligent conditions alleged produced the injury complained of. Where such is the case, the jury are not left in the domain of speculation, but they have circumstances upon which, as reasonable minds, they may ground their conclusions. Negligence that is the proximate cause may be shown by circumstantial evidence as well as by direct proof.”

Viewed in the light most favorable to appellee, the testimony may be further summarized as follows: Deceased was only eighteen years old, and had only one-day’s experience in the work he was engaged to do by appellant. This work brought his face in close contact with the pool of oil, which may have emitted fumes having a deleterious effect, of which deceased was not warned, and which rendered more dangerous the unfastened plank on which his duties were performed. There was no testimony that he had quarreled with anyone, and he was not robbed, for his money and watch were on his person. His body was found at the place where his duties would have called him. -So we have concluded that it was not mere speculation or conjecture for the jury to have found that deceased came to his death while engaged in the discharge of his employment, and that he had not been given the warning which a boy of deceased’s age and /inexperience should have had. Appellant admits that no warning was given, but contends that none was necessary.

These were, of course, disputed questions of fact. The testimony on behalf of appellant was to the effect that no fumes were exhaled from the oil pool. That deceased was in appearance and in experience a full-grown man. That there were no dangers incident to the employment which were not open and obvious, if the duties of the employment were discharged with any degree of care. That the walk extended only three feet in the pool, and, if there were any dangers, they were so simple, open and obvious that any one would see and appreciate them.

Over appellant’s objection the court gave an instruction numbered 2, reading as follows: “You are instructed that, while a servant assumes ¡all the risk of injury ordinarily incident to the employment in which he is engaged, he does not assume the risk of injury from the negligence of the master for whom he works, unless he knows of such negligence, and appreciates the danger arising therefrom.”

Specific objections were made to .this instruction on the grounds (l), .that it failed to require deceased to exercise ordinary care for his own safety; (2), that it relieved deceased of the risks that were open and obvious.

As to the first objection it may be said that other instructions fully and correctly declared the law in regard to the duty to exercise ordinary care for one’s own safety, and the instruction does not purport to deal with that issue. . But we think-the second-objection was well taken, under the facts of this case. ■

We*'have no way of knowing , on what charge of negligence the jury’s verdict was based, but; under the instruction set o-ut -above, deceased was • relieved from the assumption of its risk, whatever it may have been, unless there was a finding that he was aware of such negligence and appreciated the danger arising therefrom.

The law in regard to the duty of the master to warn an inexperienced servant, and in regard to the assumption of risks by such servants, is nowhere. stated any clearer than in the case of Emma Cotton Seed Co. v. Hale, 56 Ark. 216, where it was said: “If, however, the servant, by reason of his youth and inexperience, is not aware of or does not appreciate the danger incident to the work he is employed to do or to the place he is engaged to occupy, he does not assume the risks of his employment until the master apprises him of the dangers; It would be a breach of duty on the part of the master to expose a servant of this character, even with his consent, to such dangers, without first giving him such instructions and caution as would, in the judgment of men of ordinary minds, understanding and prudence, be sufficient to enable him to appreciate the dangers, and the necessity for the exercise of due care and caution, and to do the work safely, with proper care,on his part. For a breach of his duty the master is bound to indemnify such servant against the consequences. He cannot escape this liability by delegating the duty to instruct or inform to another person. But, if such servant receives the information and caution from any source, and accepts the place and undertakes the work, he assumes the risks ordinarily incident thereto, and cannot thereafter recover for. injuries because the place was not safe. As to such work or place and its dangers, he would then be placed on the footing of an adult, and could not, on account of infancy, be relieved of the consequences of such risks.” •

The jury'may here have found only that appellant was negligent in not having a safer walkway, and, if this were true, the instruction is erroneous because it permits the jury to find that deceased had not assumed the risk of that danger unless it was also found that he knew and appreciated that danger, whereas such danger as existed on that account was obvious and patent to a person of the age and possessing tlie intelligence which deceased was shown to possess. Nothing could be simpler than the danger of falling off a plank, and it was therefore error to submit to the jury the question whether deceased had assumed that risk.

In the case of Royal v. White Oil Corporation, 160 Ark. 467, the plaintiff sued to recover damages for personal injuries received in consequence of the slipping of a plank on which he was standing while engaged in looking in a water tank to see if it was full of water. A verdict was directed for the defendant, and, in affirming that judgment, we said: “The duty of the master to exercise ordinary care to provide reasonably safe tools and appliances for his servants has no application where the tools are common tools in ordinary use and the servant possesses ordinary intelligence and knowledge of their use and construction. Railway Company v. Kelton, 55 Ark. 483; Marcum v. Three States Lbr. Co., 88 Ark. 28; and Fordyce Lumber Co. v. Lynn, 108 Ark. 377.”

It is true deceased had only been employed one day, but the danger from the work — such as there was — was immediately obvious and patent, unless, indeed, this danger was enhanced by the fumes from the oil. Any other danger was so obvious and patent that it was error to submit the question of deceased’s knowledge and appreciation of it.

It is insisted that there was no testimony upon which to base the finding that appellant had sustained a loss of contributions from the deceased, his son. But we think this question was properly submitted to the jury. Appellee testified that deceased quit school to earn money to assist in defraying the expenses of his mother, who was an invalid, and that deceased gave appellee all of his earnings, which amounted to $5 per day, except only so much as was necessary to defray deceased’s personal expenses.

Appellant also insists that there was no testimony upon which to base the verdict for conscious pain and suffering, and we think this assignment is well taken. As we have said, the pool of oil was only two feet deep, and deceased was only a few feet from the dam, and, unless he was asphyxiated or sustained a fractured skull by striking* his head on the walkway or one of the stobs supporting it, it is difficult to surmise how he died. But, even though he drowned, there was no testimony that he suffered consciously before expiring, as was the case in St. L. I. M. & S. R. Co. v. Stamps, 84 Ark. 241, where a judgment was sustained for pain and suffering in favor of the estate of a man who died by drowning.

For the error indicated in instruction numbered 2, and in submitting the question of the right to recover for conscious pain and suffering, the judgment is reversed, and the cause will be remanded for a new trial.


source: Caselaw Access Project

author: HtjmphREys, J.

license: Public Domain

text:
    Missouri Pacific Railroad Company v. Kinslow.
    Opinion delivered April 6, 1925.
    1. Continuance — absent witness — diligence.—Diligence in proving the attendance as witness of an absent employee is not shown by defendant where the witness has not been subpoenaed but was merely instructed to be present.
    2. Continúan ce — discretion of court. — Overruling an application for a continuance on account of the absence of a witness from the State was not an abuse of discretion where diligence was not shown in procuring hi® attendance and a statement as to what he would prove was admitted and treated as evidence.
    3. MASTER AND SERVANT — ASSUMED RISK — SUFFICIENCY OF EVIDENCE. — A finding that plaintiff did not assume the risk of being injured in operating a ripsaw held sustained, though the evidence was conflicting.
    4. Master and servant — negligence of master — jury question. —Whether a ripsaw was equipped with a proper guard held for the jury.
    5. Trial — repetition of instructions. — Refusal to give an instruction on a subject covered by another instruction which was given held no error.
    Appeal from Pope Circuit Court; J. T. Bullock, Judge;
    affirmed.

      Thomas B. Pryor and Vincent M. Miles, for appellant. . ■ ■ '

      WardS Caudle, for appellee.
   HtjmphREys, J.

Appellee, whose hand was permanently injured while operating a ripsaw for' appellant in its machine shops in North Little Rock, brought this suit, by his next friend, in the circuit court of Pope County, to recover damages for the injury, alleging that it occurred through the negligence of appellant in failing to warn appellee of the dangers incident to operating the machine, and in not having' it equipped with the proper guard to prevent the .saw from catching the timber he was sawing and kicking it back toward him.

Appellant filed an answer denying the material allegations of negligence, and, by way of further defenses, pleading contributory negligence and assumption of the risk by appellee.

The cause was submitted to the jury upon the pleadings, the testimony introduced by the parties, and instructions of the court, resulting in a verdict and consequent judgment for appellee in the sum of $500, from which is this appeal.

Appellant first contends for a reversal of the judgment because the trial court refused to continue the cause until the next term of court, on account of the absence of D. C. Nichols, assistant foreman in the shops, by whom it expected to prove that appellee had not only been warned of the dangers incident to operating the machine, but had been instructed not to operate same. Also that the machine was properly equipped. This witness had not been subpoenaed, but had been instructed ¡by the railroad officials to be present, and would have been had he not had trouble with his family and skipped out to Texas. It was stated in the affidavit for continuance that witness could be located and his presence obtained or his deposition taken by the next term of court. The facts to which he would have testified, if present, were set out fully in the motion for continuancé^ and the attorney for appellee admitted that witness would testify to the statements contained in the affidavit, if present. His statement was read to the jury and treated as evidence in the case. Learned connsel for- appellant argues that prejudice resulted' to his client because he was compelled to reduce Nichols’ testimony to writing before the trial without having had an opportunity to converse with him. No showing is made that he could not have conversed with him during the pendency of the suit, and no showing is made that the testimony would have been different from the statement contained in the motion for a continuance. We do not think sufficient diligence was shown to obtain the presence of the witness, and do not think the trial court abused its discretion in overruling the motion to continue the cause.

Appellant next contends for a reversal of the judgment upon the alleged ground that appellee operated the ripsaw without the guard, and knew and appreciated the dangers of doing so. This alleged ground is not supported by the undisputed testimony. Appellee was twenty years of age, and was working as an apprentice in the shops. He had never had any experience in operating a ripsaw before he undertook to operate the one in question. It was a circular saw, which came in through a square table. It revolved toward the operator, and, when in motion, moved very rapidly. Testimony was introduced tending to show that the operation of the ripsaw was dangerous. The foreman testified that he never permitted an apprentice to operate a ripsaw until he had been in the shop six months, on account of the danger incident to the operation thereof. Appellee had not been in the shop that long at the time the injury occurred. Appellee testified, in substance, that he was instructed by D. G. Nichols, the assistant foreman, on the occasion when he was injured, to make six mallets with handles; that, in order to make the handles, it was necessary to rip them out of blocks which had been provided for the purpose; that, while engaged in this work, the piece of timber which he had passed through the ripsaw was caught by the saw and thrown back toward him, which hit and injured his hand; that he had never worked in the shop before, and had never been called upon to pay any particular attention to the ripsaw; that Mr. Nichols nor any one else had given him any instructions how to run it; that no one had ever told him that it was dangerous to operate the machine, and that no one had ever talked to him about it at all. It is true that, on cross-examination, he said that he knew the guard should be over the saw, and that he thought that it was over the saw when he was operating same, but he afterwards stated that he did not realize the danger incident to operating it without pulling the guard over the saw, and that he was not certain whether the guard was over it at the time. It is also true that, while in the hospital on account of the injury, he signed a purported statement to the effect that the injury resulted from his own negligence, and that the railroad was not to blame for it, but he denied that he made such a statement to the claim agent, claiming that the statement he made was exactly like his testimony before the jury. William Westphall, a witness for appellee, testified that he owned and operated a ripsaw of the same kind as the one upon which appellee was injured, and that, in order to keep short timber from turning and catching in the saw and being hurled back toward the operator, a thin strip of iron or guard was placed up behind the saw.

The testimony introduced in behalf of appellant was contradictory on all material points to- that introduced by appellee.

We cannot say as a matter of law that, because appellee’s evidence was conflicting, and that because he made a purported statement to the claim agent different from his testimony before the jury, his testimony must be disregarded. On the contrary, we must conclude that the jury accepted as true the portions of his testimony most favorable to his cause of action. Viewing the testimony introduced by appellee in this favorable light, there is sufficient legal testimony of a substantial character in the record to support the verdict and judgment.

Appellant next contends for a reversal of tlie judgment because the court gave instruction No. 4, submitting the issue to the jury as to whether or not the machine was equipped with the proper guard. The testimony of William Westphall, set out above, together with the undisputed evidence that the mallet handle was kicked back by the saw, warranted the submission of that issue to the jury.

The last contention of appellant for a reversal of the judgment is that the court erred in refusing to give its requested instruction No. 8 to the jury, which is as follows :

“If you believe that Kinslow was operating the saw as a volunteer, and not under the directions of his foreman to do this work, but at the request of some fellow-servant, who so directed him, then he assumed the risk of his injury, and your verdict must be for the defendant.” This instruction was covered by instruction No. 14, given at the request of appellant.

No error appearing, the judgment is affirmed.


author: Humphreys, J.

text:
    Harper v. Thurlow.
    Opinion delivered April 6, 1925.
    1. Specific performance — sufficiency of whiting. — Specific performance of a contract for the sale and purchase of realty will be decreed if the several writings relating- to the transaction disclose, without resorting to extrinsic evidence, the parties to the contract, the subject-matter and the terms and conditions of the sale.
    2. Vendor and purchaser — sufficiency of description. — Correspondence between a vendor and purchaser, when read together, held to describe the land sufficiently.
    3. Vendor and purchaser — acceptance of offer.' — Letters between a vendor and purchaser held to show an unconditional acceptance of the vendor’s offer before its withdrawal.
    4. Evidence — presumption from mailing letter. — Proof that plaintiif mailed a letter to defendant raises a presumption that the addressee received it.

      5. Vendor and purchaser — acceptance op offer — evidence.—A finding of the trial court that a vendor had not received the purchaser’s unconditional letter of acceptance held contrary to the preponderance of the testimony.
    6. Specific performance — -parties.—Though one of the plaintiffs was not entitled to a decree of specific performance because he was not a party to the contract sought to be enforced, this wall not prevent relief from being granted to the other plaintiff who was a party to- the contract.
    7. Specific performance — interest of vendor’s wife. — Though the vendor’s • wife refused to- join in his deed to the -purchaser, this will not prevent relief from being granted to the latter where he expressed a willingness to accept a deed without the vendor’s wife joining in it.
    8. Specific performance — sale of homestead. — The defense that specific performance of a land sale of a homestead cannot be enforced if the wife refuses -to join in the deed was waived ■ where -such defense was neither pleaded nor proved.
    Appeal from Saline Chancery Court ; Jethro P. Henderson, Chancellor;
    reversed.

      Saye & Saye, for appellant.

      J. B. Milham, for appellee.
   Humphreys, J.

This is a suit to obtain specific performance of an alleged contract for the sale and purchase of the Ey2 of the N'W^ of section 26, township, 1 south, range 14 west, in Saline County, Arkansas. The contract, if made, was entered into by correspondence between one of the appellants, J. C. Harper, and appel-lee, M. J. Thnrlow. M. J. Thnrlow owned the land, and, at the time of the correspondence, -resided in Toledo, Ohio, and appellee at or near Bryant, Arkansas. The correspondence between the parties constituting the alleged contract is as follows:

“Cleveland, Ohio, Nov. 6, 1922. “Mr. J. C. Harper, Bryant, Ark.
“Dear sir: I saw your inquiry regarding the land I own near Bryant. In answer will say that if you want the place you can have it on the following terms: Price, $2,100, cash or terms. Would sell same on land contract $500 down, and $160 every six months, giving deed to same when four payments have been made. That would give you deed when $1,140 is paid. "Would then make mortgage for the balance. In that way you would have five years to pay for same. Will accept 6 per cent, per year as interest on the balance unpaid, paying the interest every six months. In that way it will get less each time. My address is 16 Victoria Apts., 21st and Monroe Streets, Toledo, Ohio. “M. J. Thurlow.”
“Bryant, Ark., Dee. 21, 1922.
“Mr. M. J. Thurlow,
“Dear sir: In reply to your letter of Nov. 6 in regard to your land at Bryant, will say that I think you are a little high in your price. Other land is only bringing $20 per acre. All ’round here realty is a good bit,off to what it was, as well as all other things in country. Let me hear just what is the best you will do on the terms you mentioned in your letter, and I will see what I can do.
“Tours truly,
“J. C. HARPER.”
“Little Bock, Ark., Feb; 7, 1923.
“Mr. M. J. Thurlow,
“341 West Del. Ave., Toledo, Ohio.
“Dear sir: I have found a purchaser for your land, who has turned over to me $10 to bind the trade, and he asked me to have you send an abstract so that he can examine the title. He understands that, in accordance with your letter of November 6, 1922, the price of the land is to be $2,100, to be paid as follows: $500 cash and $160 every six months thereafter until paid in full, the deferred payments to bear interest at the rate of 6 per cent, per annum. He further understands that you will give him a. deed when he has paid in $1,100 altogether. Please prepare deed and send it with draft attached to some bank in Little Bock, with instructions as to when to deliver the deed. It is my understanding that the land is as follows: East one-half (E]4) northwest quarter (NW%), section twenty-six, township, one (1), south of range fourteen (14) west.
“Yours very truly,
“J. C1. Harper.”
“Toledo, Ohio, Feb. 15, 1923. “Mr. J. 0. Harper, Bryant, Ark.
“Dear sir: I am in receipt of yonr letter of recent date, stating you had found a buyer for me, but you did not state who the buyer was. You also state that you have accepted a deposit from the prospective buyer to bind the bargain. I was under the impression that you were the one who wanted the land, and presumed that, in all probability, you wanted to make a farm of the place on which to raise crops. However, that part would not make any difference to me. The terms I made for yon last November were to sell to you on a contract, the deed to be signed and sent to you when you 'had paid $1,100. That means just the same as depositing the deed in a bank, for you would have your contract recorded, and that contract would call for a deed when the $1,100 is paid. It would be necessary for me to know who the prospective buyer is in order to make the proper contract, as his name would be entered thereon and signed by he and his wife (if married). The abstract would go forward to the England Loan Company of Little Rock, as that is the only bank I know there. It would be necessary to give them a receipt for same. I will do nothing further until I hear from you again. Yours truly,
“M. J. Thuklow, “341 W. Delaware, Toledo, Ohio.”
“Feb. 26,1923.
“Mr. M. J. Thurlow, Toledo, Ohio.
“Dear sir: Your letter of the 15th instant rec’d, and in reply will say that I will buy the1 land on the terms you mention, of $500 cash and $160 every six months, with interest at six per cent., until the $2,100 is paid, you to deliver deed to me when four payments have been made, or when you have rec’d $1,140. You can make contract to J. C. Harper (single), and send all papers to the England National Bank at Little Rock, and if, upon examination by my attorney, are found to be 0:. K., contract will be signed and the $500 paid at once.
“Yours truly,
“J. 'C. Harper.”
“Bryant, Ark., 5-19-23.
“Mr. M. J. Thurlow,
“Dear sir: On Feb. 26, 1923, I sent yon a letter accepting yonr offer on yonr land at Bryant, and have not had any reply from yon. I would like to hear from yon by return mail, what yon intend to do, as I am still waiting on yon for a reply. Would thank yon very much if yon would let me know.
“Yours truly,
“J. C. Harper, “Address Bryant.’’
“Toledo, Ohio, May 26, 1923.
“Mr. J. C. Harper,
“Bryant, Ark.
“Dear sir: Just received yonr letter, and in answer would say that' I was under the impression that I answered your last letter long ago, telling yon that I was unable to complete the deal, as another party has made a better offer, and Mrs. Thurlow was not willing to attach her signature to the proposition I made to you.
“Yours truly,
“M. J. Thurlow.”

After the institution of the suit a settlement was attempted through correspondence, but, as it was not effected, it is unnecessary to incorporate the letters which passed between the parties and lawyers relative thereto. It appears in the correspondence relative to the settlement that J. A. Shipton, the other appellant, was interested in the purchase of the land with J. C. Harper.

The trial court dismissed appellant’s bill for the want of equity, from which decree an appeal has beeu duly prosecuted to this court.

Appellants contend for a reversal of the decree upon the ground that the letters contained every necessary element and essential of a contract for the sale and purchase of real estate. Appellee contends, however, that the letters did not contain several necessary elements of an enforceable contract for the sale and purchase of land, viz., that the letters did not sufficiently, describe the land and did not .show an unconditional acceptance of the offer made by appellee.

The rule is that specific performance of a contract for the sale and purchase of real estate will be decreed if the several writings relating to the transaction disclose, without resorting to extrinsic evidence, the parties, to the contract, the subject-matter, and the terms and conditions of the sale. St. L. I. M. & S. R. Co. v. Beidler, 45 Ark. 1.

The letters, when read in aid of each other, sufficiently describe the land. The letter of November 6,1922, refers to the land owned by appellee near Bryant. The letter of December 21,1922, refers to it in the same way. The letter of February 7, 1923, described the land by government calls, and the subsequent letters did not indicate that the land was incorrectly described. The description of the land was certain and specific.

The letters also show an unconditional acceptance of the offer before it was withdrawn. Appellee suggests that Harper’s reply on December 21, 1922, to Thurlow’s offer on November 6, 1922, was a rejection of the offer, but we do not so interpret it. It was an attempt on his part to get a better proposition, but was not a refusal to accept the offer. Harper’s next letter, of date February 7, 19:23, and Thurlow’s answer thereto, of date February 15, 1923, clearly show that neither one of them treated Harper’s letter of December 21, 1922, as a termination of the offer, but, on the contrary, as a continuation thereof. In saying that the letters show an unconditional acceptance of the offer, we aré not unmindful that appel-lee testified that he had not received Harper’s letter of acceptance dated February 26,1923. The letter referred to is an unequivocal acceptance of the offer, and we think the learned trial court erred in finding that the letter was not received by appellee. J. C. Harper testified that he mailed the letter to Thurlow, and produced a carbon copy thereof. This raised a presumption that appellee received it. Appellee did not deny receiving such a letter in Ms reply to Harper’s letter of date May 19, 1923. Harper wrote Mm on that date that he had written and accepted his offer on February 26, 1923, to which Thur-low responded on May 26, 1923, that he was under the impression that he had answered his (appellant’s) last letter long ago. The effect of this response was to'admit that he had received the letter accepting his offer, which he had answered long ago, and in which he had told said appellant he could not carry out the deal because another party had offered him more, and Mrsl Thurlow was not ■willing to carry out the original offer. As stated before, he did not deny receiving the acceptance, or contend that Harper had failed to accept the offer within a reasonable time, but put his refusal to carry out his proposition on the ground that, in the meantime, he had received a better offer.

The finding of the trial court to the effect that the offer was not accepted was contrary to the weight of the evidence.

The suggestion of appellee that J. A. Shipton was not a party to the contract, and for that reason not entitled to a decree for specific performance, cannot prevent J. C. Harper, under the general prayer of the bill and the testimony in the case, from obtaining specific performance of the contract appellee made with him.

Neither can the suggestion of appellee, to the effect that the record does not reflect what interest Mrs. Thur-low has in the land, prevent relief being granted to Harper under his contract. The letters reveal that appellee owned the land, and appellant, J. C. Harper, has expressed a willingness to accept a specific performance of the contract without his wife joining in the execution of the deed therefor. The record reflects that appellee was residing in Toledo, Ohio, and, if he ever impressed a homestead right on the land and had not abandoned it, it was incumbent on him to interpose this as a defense, and not upon appellant to allege and prove that it was not his homestead.

On account of the error indicated the decree is reversed, and the cause remanded with directions to the trial court to enter a decree for specific performance of the contract.


author: McCulloch,. C. J.

text:
    Myers v. State.
    Opinion delivered April 13, 1925.
    1. Banks and banking — receiving deposits in insolvent bank— indictment. — Where a-n indictment of a hank president for receiving a deposit while the hank was insolvent alleged that the check deposited was one circulating as ¡money but did not mention the name of the depositor, it will not be presumed that the payee of the check made the deposit. •
    2. Indictment and information — intendment.—Nothing can be taken by intendment in an indictment; on the contrary, the material elements of an offense must be stated with reasonable certainty.
    3. Indictment and information — statutory offenses. — To the general rule that it is sufficient to charge a statutory offense in the language of the statute there is an exception in oases where a more particular statement of the facts is necessary to set forth the offense with requisite certainty.
    4. Banks and banking — insolvency—receipt of deposits. — In an indictment of a hank president for assenting to the receipt of a deposit in an insolvent hank, it is necessary to describe the deposit and name the depositor.
    Appeal from. Polk Circuit Court; B. E. Isbell, , Jugde;
    reversed.

      Norwood S Alley, for appellant.

      H. W. Applegate, Attorney General, and John L. Carter, Assistant, for appellee.
   McCulloch,. C. J.

Appellant was convicted of the crime of assenting’ to the receipt of deposits in an insolvent bank, the indictment (omitting caption) reading as follows:'“The said D: E. Myers, in the county and State aforesaid, on the 16th day of October, 1923, being then and there president of the 'Bank of Hatfield,, a banking corporation, doing business at Hatfield, Arkansas, did unlawfully, knowingly and feloniously permit, connive at and assent to tlio receipt on deposit in said Bank of Hatfield a certain cheek circulating as money, given by the T. M. Dover Mercantile Company, a corporation, in favor of the Watkins Lumber & Mercantile Company, a corporation, in the sum of $1,818.60, and of the value of $1,818.60, and said check being drawn on said Bank of Hatfield, and deposited in the said Bank of Hatfield, the said D. E. Myers then and there well knowing said bank to be insolvent and in availing condition, against the peace and dignity of the state of Arkansas.” There was a demurrer to the indictment on the ground that it was defective in failing to state the name of the person or corporation from whom the deposit was received. The court overruled the demurrer, and, as before stated, the trial on the indictment resulted in appellant’s conviction. The ruling of the court on the demurrer constitutes the principal assignment of error on this appeal.

The statute under whicli the indictment was preferred reads as follows:

“It shall be a crime for any president, director, manager, cashier or other officer or employee of any bank, or member of a firm, after having had knowledge of the fact that it is insolvent, or in a failing condition, to assent to the reception of any deposits or the creation of any debts by it. And if any such officer, employee, member of firm or individual shall knowingly receive a deposit or cause a debt to be created, or assent thereto, or in any manner is accessory to such crime, he shall be guilty of a felony, and, upon conviction, shall be punished by imprisonment in the penitentiary for not less than one year.” Crawford & Moses’ Digest, § 697.

It will be observed that the indictment does not diréctly mention the name of the depositor, but it is contended by the Attorney General that the language is sufficient to indicate by necessary inference that the payee of the check which was deposited was the depositor thereof. We do not agree with this contention, for the fact that an ordinary check is deposited in a hank does not imply that the deposit was made by the payee. The language of the indictment in fact negatives this inference by the affirmative statement that the check was one which circulates as money. No presumption can therefore be indulged that the payee of the check deposited it. Nothing can be taken by intendment in an indictment, but, on the contrary, the material elements of an offense must be stated with reasonable certainty. State v. Lester, 94 Ark. 242.

The next question arising is whether or not it is essential in an indictment for this offense that the name of the depositor should be stated. The offense attempted to be charged in the indictment is purely a statutory one, and the general rule is that it is sufficient to charge a statutory offense in the language of the statute which declares it. But we have consistently adhered to an exception to this general rule in cases where a more particular statement of the facts is necessary to set forth the offense with requisite certainty. State v. Graham, 38 Ark. 519; Boles v. State, 58 Ark. 35; St. Louis-San Francisco Ry. Co. v. State, 68 Ark. 251; Holland v. State, 111 Ark. 214; Clevenger v. State, 136 Ark. 46; State v. Western Union Tel. Co., 160 Ark. 444. The present instance falls, we think, within the exception to the general rule. It is not sufficient merely to charge in the language of the statute that the accused assented to the reception of the deposit after having had knowledge of the fact that the bank was insolvent. In order to put the accused on defense, the kind of deposit should be described and the name of the depositor should be stated. It is unnecessary to determine in this case whether or not each deposit constitutes a separate offense, but we are of the opinion that the indictment should apprise the accused of the name of the depositor, so as to put him upon notice of the particular charge which he is called on to meet.

The indictment in this ease is therefore insufficient, and the judgment is reversed and the cause remanded, with directions to sustain the demurrer.


author: McCulloch, C. J.

text:
    Bowers v. Mitchell.
    Opinion delivered April 13, 1925.
    1. MORTGAGES — ABSOLUTE DEED AS MORTGAGE — REDEMPTION.—Where a husband and wife, as tenants by entireties, executed a deed, absolute in form but intended as a mortgage, to another, and such grantee .reconveyed it as a gift to the wife, with no intention of extinguishing the debt, the husband, upon, the wife’s death, was entitled to redeem from the mortgage by paying the mortgage debt.
    2. Mortgages! — redemption—parties.—Where a husband and wife, as tenants by the entireties, executed an absolute deed to land as security for a deibt, and the grantee reoonveyed the land to the wife as a gift and not intending to extinguish the debt, and, upon the wife’s death, her heirs conveyed the land to a third person, the husband is entitled to redeem the land from the latter by paying to him the balance of the debt.
    Appeal from Arkansas Chancery Court, Southern District; John M. Elliott, Chancellor;
    affirmed.

      BottsS O’Daniel, for appellant.

      Gibson & Burnett and John W. Moncrief, for appel-lee.
   McCulloch, C. J.

Appellant instituted this action seeking to have a deed in absolute form, executed by himself and his wife, Maude M. Bowers, to the latter’s brother, Z. C. Mitchell, declared to be a mortgage. The property in controversy, which was conveyed by the deed referred to, is a lot in the town of DeWitt, and appellant and his wife, Maude M. Bowers, held title to the lot under a deed which conveyed it to them as tenants by the entireties with the right of survivorship. Appellant and his wife built a house on the lot and occupied it as their home. Before they completed the building they executed the deed in question to Z. C. Mitchell, on March 4, 1911, for the expressed consideration of $400'. It is undisputed that appellant and his wife received this sum from Mitchell and used it, together with other funds, in completing the building and other improvements on the lot. It is contended, however, by appellant that the deed was intended as a mortgage and not as an absolute conveyance. Mitchell reconveyed the lot to Mrs. Bowers by deed executed in May, 1916, and Mrs. Bowers died about two years later. Appellant testified that he never ascertained that the deed was made to his wife alone until after the latter’s death. They left no children, and the estate of Mrs. Bowers fell to her mother and collateral heirs, subject to appellant’s curtesy rights.That, ¡at least, is the effect, if the conveyance ho Mitchell was intended as an absolute deed instead of a mortgage, but it is contended by ¡appellant that he is entitled to treat the property ¡as being held by him and his wife -as tenants by entireties, notwithstanding the fact that the legal title was reconveyed by Mitchell to Mrs. 'Bowers. Appellant and his wife continued to occupy the premises up to the time of the latter ’¡s death, and appellant has continued to occupy the property since his wife’s -death.

After the death of Mrs. Bowers, appellee, P. H. Snarr, purchased the property from Mrs. Bowers’ mother and collateral heirs, paying the sum of $1,200 therefor. Appellant alleges that he repaid the debt to Mitchell prior to the reconveyance by the latter to Mrs. Bowers; that he gave directions for Mitchell to make the deed of reconveyance to him and his wife so that they could hold it as theretofore as tenants by the entire-ties, but that the deed was executed to Mrs. Bowers in disregard of his instructions.

Appellant’s testimony tends to establish his contention, not only with respect to the deed being a mortgage, but also to the effect that he had paid the debt in full and had also paid the taxes on the property.

Appellees denied that the deed was intended to be' a mortgage or that the debt had been paid. Mitchell claimed that he bought the property from appellant and his wife for the sum of $400 in consideration for the conveyance, that there was no loan of money, and that the amount had not been repaid to him. He testified that his reconveyance of the property to Mrs. Bowers, who was his sister, was made solely as a gift to her, with the distinct agreement and understanding that appellant was not to share in the benefits of the reconveyance.

The testimony was conflicting, and, on the final hearing, the chancellor found that the deed to Mitchell was intended as a mortgage, but that only the sum of $100 had been paid to Mitchell on the 'debt, and there w¡as a decree in favor of appellee Snarr declaring a lien in his favoy for the amount of the balance of the debt, with interest. Both parties have appealed.

We are of the opinion that the testimony supports the trial court in al of its findings of fact. Without narrating all the facts and circumstances in detail, it is sufficient to say that the deed to Mitchell was intended as a mortgage to secure a loan of $400. Much of the testimony adduced by appellant in support of his contention that he had repaid the debt in full is hearsay and therefore incompetent, but, when the legal testimony is considered, we cannot say that the finding of the chancellor that only $100 was paid on the debt is against the preponderance of the evidence.

tt j.s further contended by counsel for appellant that the reconveyance by Mitchell to Mrs. Bowers operated as an extinguishment of the mortgage debt, and that the deed should be declared to be a mortgage fully satisfied, and that appellant should be restored to his original rights as tenant by the entirety, with right of survivor-ship to the whole estate upon the death of his wife. Counsel rely on the general proposition stated by the authorities that a reconveyance in fee of mortgaged property by the mortgagee to the mortgagor extinguishes the lien of the mortgage and operates as a discharge of the debt. 47 Cyc. 1405. The statement of the general rule is undoubtedly sound, but it is not without its exceptions and limitations. A reconveyance to one of the mortgagors is not necessarily an extinguishment of the mortgage debt, and, in the present case, the evidence shows that there was no intention to extinguish the debt, but that the deed was made solely as a gift to Mrs. Bowers. The original deed operated prima facie as an absolute transmission of the title in fee simple from appellant and Ms wife to Mitchell and from the latter to appellant’s wife. Notwithstanding the fact that the deeds show an absolute conveyance of the title, appellant, as one of the mortgagors, is permitted, under settled principles of equity, to show that the conveyance absolute in form was actually intended as a mortgage. But, in order to avail himself of the benefit of these principles, he is required to do equity by restoring the consideration for which the deed was executed. Bryan v. Hobbs, 72 Ark. 635.

Appellee Snarr, under his chain of conveyances from Mitchell, succeeded to all the rights of the latter as the original mortgagee, and the trial court, as a court of equity, properly required appellant to pay the original mortgage debt as a condition upon which he could obtain a redemption from the mortgage. The effect would have been the same if the deed had been a mortgage deed'in form as well as in fact and the debt had been transferred from Mitchell to Mrs. Bowers. This would not have operated as an extinguishment of the debt, and, in order to secure redemption, appellant would have had to pay the mortgage debt; therefore, in order to secure a decree declaring the absolute deed to be a mortgage, he must pay the debt.

We find that the decree was correct, and the same is, upon ¡both appeals, affirmed. It is so ordered.


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

text:
    Arkansas Cotton Growers’ Co-operative Association v. Brown.
    Opinion delivered April 13, 1925.
    1. AGRICULTURE — CO-OPERATIVE ASSOCIATIONS — CONTRACTS. — Acts 1921. p. 153, authorizing’ the organization of associations for co-opemtdve marketing of farm products, (by § 6, subdiv. g) impowers such associations to make contracts for sale and future' delivery of agricultural products.

      2. CORPORATIONS — by-laws.—The by-laws of a corporation evidence the contract between it and its members or stockholders, and govern transactions between them.
    3. Agricultural — co-operative associations — sales for future delivery. — The contract of a memjber with a co-operative marketing association authorizing the association to “resell” cotton sold to it ¡by its members held to authorize the association to make contracts for the sale land future delivery of cotton, such sales being authorized by the statute and by-lawts of the association and in conformity to the usages of the cotton trade.
    4. Agricultural — co-operative associations — sales for future delivery. — Acts 1921, ip. 153, in so far as it exempted members of a co-operative marketing association from individual liability for the debts of the association, did not restrict the power of the association to contract for the sale and future delivery of cotton.
    5. Gaming — sale for future delivery. — A contract of sale for future delivery of cotton which the seller expects to acquire by purchase, though speculative, is not a gambling contract.
    6. Agriculture — validity of plan of marketing association.— Though the plan of a conoperative marketing association organized under Acts 1921, p. 153, to effect the orderly marketing of the cotton crop throughout the year, instead of dumping it during the short gathering season, may result in loss to the association by reason of mistakes of judgment in the sale of cotton for future delivery, this does not render this plan illegal or improvident.
    7. Agriculture — marketing association — breach of contract.— Refusal of a member of a co-operative marketing association, organized under Aots 1921, p. 153, to deliver all of his cotton to association, pursuant to his contract with it, held a breach of such contract.
    8. Equity — jurisdiction—Equity has jurisdiction to grant relief where legal remedies are inadequate.
    9. Injunction — enforcement of contract with marketing association. — Acts 1921, p. 153, § 17, providing that, in the event of a breach of a marketing contract by a member, this association shall be entitled to an injunction and to a decree of specific performance, is not unconstitutional as enlarging the jurisdiction of chancery.
    Appeal from Pulaski Chancery Court; John E. Mar-tineau, Chancellor;
    reversed.

      Sapiro, Levy & Hayes, Moore, Smith, Moore & Trie-her, and Cl'ayton & GoTm, for appellant.

      T. M. Méhaffy and J. W. House, Jr., for appellee.
   McCulloch,, C. J.

The Gleneral Assembly of 1921 enacted a statute authorizing the organization of associations, as bodies corporate, to promote and regulate co-operative marketing of farm products. Acts 1921, p. 153. The design of the statute is fully stated in the caption, which reads as follows: “An act to promote, foster and encourage the intelligent and orderly marketing of agricultural products through co-operation, and to eliminate speculation and waste; and to make the distribution of agricultural products as direct as can be efficiently done between producer and consumer; and to stabilize the marketing problems of agricultural products.” The statute seems to be in a form which has become standard, and has been enacted in many of the States, the enactment of such legislation being manifestly prompted by the universal urge to promote prosperity in agricultural pursuits. There has been much discussion of the plan in the decisions of the courts of the various States where it has been adopted, and the general view expressed is that the statute should be liberally construed in order to carry out the design in its broadest scope.

The statute authorizes the organization of corporations to carry on the business of marketing the farm products of their members, and declares that associations thus formed ‘ ‘ shall be deemed non-profit, inasmuch as they are not organized to make profits for themselves, as such, or for their members, as such, but only for their members as producers.” Such an association is prohibited from handling the agricultural products of any non-member. The pertinent clauses of the section defining the powers of an association are as follows:

“ (a). To engage in any activity in connection with the marketing, selling, harvesting, preserving, drying, processing, canning, packing, ginning, compressing, storing, handling or utilization of any agricultural products produced or delivered to it by its members; or the manufacturing or marketing of the by-products thereof; or in connection with, the purchase, hiring, or use by its members of supplies, machinery, or equipment; or in the financing of any such activities; or in any one or more of the activities specified in this section. No. association, however, shall handle the agricultural products of any non-member.
“(b). To borrow money, and to make advances to members.
“(c). To act as the agent or representative of any member or members in any of the above-mentioned activities. * * *
“(g). To do each and everything necessary, suitable or proper for the accomplishment of any one of the purposes or the attainment of any one or more of the objects herein enumerated, or conducive to or expedient for the interest or benefit of the association; and to contract accordingly; and, in addition, to exercise and possess all powers, rights and privileges necessary or incidental to the purposes for which the association is organized, or to the activities in which it is engaged; land, in addition, any other rights, powers and privileges granted by the laws of this State to ordinary corporations, except such as are inconsistent with the express provisions of this act; and to do any such thing anywhere.”

Appellant is an association organized pursuant to the terms of the statute referred to, and articles of incorporation were adopted as prescribed by the statute. One of the provisions of the articles of incorporation reads as follows:

“To do each and every thing necessary, suitable or proper, in the judgment of the directors of the association, anywhere throughout the world, for the accomplishment of any of the purposes or the attainment of any one or more of the objects herein enumerated, or which shall, at any time, appear conducive to or expedient for the interests or benefits of the association and the members thereof., and to contract accordingly.”

By-laws were adopted which, contain the following pertinent provisions :

“ Section 4. To make and enter into agreements with spinners,-buyers or others for the sale, marketing or consignment of ,the cotton grown by members of the association or the products therefrom.
“Section 5. To carry out the marketing contracts of the association and growers in every way advantageous to the association representing the growers collectively. ’ ’

Contracts were entered into between appellant association and its members, beginning with the year 1922 and continuing from year to year, as new members could be secured. The contract with all the members was of the same form, and provided that the association should buy, and the member, who was designated as the grower, should sell and deliver to the association, all of the cotton “produced or acquired by or for him in Arkansas” during the period of five years. The first series of contracts, and the one under which the association dealt with appellee, specified the years 1922, 1923, 1924, 1925 and 1926. The first section of the contract reads as follows:

“Arkansas Cotton Growers’ Co-operative Association Marketing Agreement.
“The Arkansas Cotton Growers’ Co-operative Association, a non-profit association, with its principal office at Little Rock, hereinafter called the association, first party, and the undersigned grower, second party, agree:
“1. The grower is a member of the association, and is helping to carry out the express aims of the association for co-operative marketing, for minimizing speculation and waste, and for stabilizing cotton markets in the interest of the grower and the public, through this and similar organizations undertaken by other growers.”

The contract provided that the contracting member, or grower; should not sell cotton to any one except the association, and that all cotton should b.e delivered, immediately after picking and ginning, to a public warehouse for tlie order of the association, and that the warehouse receipts should be delivered to the association, as well as the bills of lading when shipped. Other provisions of the contract read as follows:

“5. The association shall pool or mingle the cotton of the grower with cotton of a like variety, grade and staple delivered by other growers. The association shall classify the cotton, and its classification shall be conclusive. Each pool shall be for a full season.
“6. The association agrees to resell such cotton, together with cotton of like variety, grade and staple, delivered by other growers under similar contracts, at the best prices obtainable by it under market conditions, and to pay over the net amount received therefrom (less freight, insurance and interest), as payment in full to the grower and growers named in contracts similar hereto, according to the cotton delivered by each of them, after deducting therefrom, within the discretion of the association, the costs of maintaining the association, and costs of handling, grading and marketing such cotton; and of reserves for credits and other general purposes (said reserves not to exceed two per cent, of the gross resale price). The annual surplus from such deductions must be prorated among the growers delivering cotton in that year on the basis of deliveries.
“7. The grower agrees that the association may handle, in its discretion, some of the cotton in one way and some in another; but the net proceeds of all cotton of like quality, grade and staple, less charges, costs and advances, shall be divided ratably among the growers in proportion to their deliveries to each pool, payments to be made from time to time until all accounts of each pool are settled.
‘ ‘ 8. The association may sell the said cotton within or without this State, directly to spinners or exporters, or otherwise, at such times and upon such conditions and terms as it may deem profitable, fair and advantageous to the growers; and it may sell all or any part of the cotton to or through any agency, now established or to be hereafter established, for the cooperative marketing of the cotton of growers in other States throughout the United States, under such conditions as will serve the joint interest of the growers and the public; and any proportionate expenses connected therewith shall be deemed marketing costs under paragraph 6.”

The domicile and place of business of appellant association is at Little Rock, where its operations have been carried on. The association secured a large number of members, who contracted to deliver cotton, and has been functioning in accordance with the statute and the terms of its by-laws since the time of its organization.

Appellee is a farmer in Pulaski County, and became a member of the association in the year 1922, and entered into the form of contract above referred to. He had on hand a considerable quantity of cotton of the crop of 1921, and this was delivered to the association for sale.

Appellee instituted this action against appellant in the chancery court of Pulaski County, alleging that appellant had wrongfully and negligently and without his approval sold sixty-four bales of his cotton at less than the market price, causing injury to him in the sum of $4,949, and he prayed for a recovery of that sum as damages. He further alleged that appellant association had wrongfully and without legal or contractual authority adopted the plan of selling cotton for future delivery, and was persisting in said plan, in violation of its contract, and prayed for a cancellation of his contract with appellant.

In the answer, appellant denied that it had been guilty of any negligence or misconduct in the sale of appellee’s cotton, or that it had in any manner broken the contract, but, in a cross-complaint against appellee, it is conceded that a plan of operation had been adopted whereby contracts were entered into with buyers for future sales and deliveries of specified Muds and quantifies of cotton, but it ,was denied that this method of doing business was in conflict, either with the statute authorizing the organization of the corporation or with the contract entered into between the corporation and appellee and its other members. In the cross-complaint it is alleged that appellee had produced thirty-six bales of cotton, twenty-seven of which had been delivered to the association under appellee’s contract, but that he had refused to deliver the other nine bales, and was about to sell the same to other parties, in violation of his contract. The prayer of the cross-complaint was that appellee be enjoined from disposing of the cotton otherwise than by delivering it to appellant under his contract, and that appellee be required, by decree of the court, to specifically perform his contract. On the hearing of the cause the court found against appellee on his claim for damages, and refused to grant him relief by canceling the contract. No appeal has been prosecuted from that part of the decree. The court also denied relief to appellant, and dismissed its cross-complaint for want of equity, and an appeal has been prosecuted to this court from that part of the decree.

The questions presented on the appeal are therefore whether the contract has been broken, and, if so, by whom, and, if broken by appellee, whether or not appellant is entitled to equitable relief by injunction and by specific performance of the contract. The decision of the case fiurns primarily on the question whether or not appellant is authorized, under its contract with the mem-Ders, to enter into contracts with buyers for the sale and furture delivery of cotton.

It is undisputed that appellant claims the right to make such contracts as a part of its plan, and that it has entered into such contracts with buyers in some instances for the sale of cotton before it was actually delivered to appellant by the members. If these contracts for future delivery are unauthorized, then such acts on the part of the association constituted breaches of its contract with members, and the association is not entitled to compel-performance on the part of its members.

The party to a contract who commits the first breach is the wrongdoer, and thereby absolves the other party from performance. This is elemental. We proceed, then, to determine whether or not the contract between appellant and its members authorized sales of cotton for future delivery.

The evidence adduced in the case shows that sales made by appellant were for stipulated prices above the New York Cotton Exchange quotations on the day thereafter named by the sellers, who had the privilege, at any time before the first day of the stipulated month governing the quotations, to call the date of the sale and thereby fix the price. It seems that -this method of sale is designated in trade parlance as sales “on call,” and the price is fixed by the price of cotton on the New York Cotton Exchange on the -day on which the call is made, plus a stipulated price, or basis, above the staple and grade upon which the prices are based on the New York Exchange.

We think there is scarcely any doubt that the statute authorizes contracts for sale and future delivery of commodities. Indeed, we do not understand that counsel for appellee seriously contend that no such authority is found in the statute. Subdivision g of § 6 appears to confer ample authority upon the association for the “accomplishment of any of the purposes or the attainment of any one or more of the objects herein enumerated, * * * and to contract accordingly.”' It calls for no excessive degree of liberality in the construction of the statute to hold that this provision authorizes the association to do all the things enumerated in the statute, and also to enter into contracts for the doing of the same. In other words, it contains, not only authority to sell the products committed to its control, but to enter into executory contracts for such sales. There is no other way, it seems to us, to interpret the language, “to contract accordingly,” and any other interpretation would render the language meaningless. Nor can there be any doubt that appellant’s articles of incorporation and its by-laws authorize executory contracts for sale of commodities. One of the subdivisions of the articles of incorporation, which is hereinbefore quoted, is in almost the precise language of the statute authorizing the corporation to do all the things necessary “and to contract accordingly, ’ ’ and one of the sections of the by-laws here-inbefore quoted expressly authorizes the association to “enter into agreements with spinners, buyers or others for the sale, marketing or consignment of the cotton grown by members of the association.” Now, when we come to interpret the language of the contract itself between the association and the members, we should do so in the light of the statute which authorizes it, and the articles >of incorporation and the by-laws which govern the operation of the association. In fact, it is settled law that the by-laws of a corporation evidence the contract between it and its members or stockholders and govern the transactions between them. The contract between the association and its members does not expressly confer the power to make an executory contract with purchasers for future delivery, neither does it prohibit such a contract. It authorizes the association to “resell such cotton, together with cotton of like variety, grade and staple, delivered by other growers under similar contract, at the best prices obtainable by it under market conditions.” The only fair interpretation to be given to this language is that it was meant to' authorize sales of cotton in the manner authorized by the statute and by the by-laws of the association. Any other interpretation would be a very restricted one and would not evince the liberality with which we should view remedial operations of this kind, which are wholly for the benefit of the members of the association. Moreover, we should interpret the meaning of the word “resell” in the light of general customs of trade and business with reference to the sale of the commodity dealt with, and the proof. is overwhelming that the general method of doing business in the cotton trade is to contract for sale and future delivery and upon terms generally the same as adopted by appellant. The proof in the case is that the business of selling cotton in quantities throughout the season cannot be carried on in any other way, for manufacturers of cotton products nearly always prefer to buy on future delivery. It is proved also, and not denied, that the producers of cotton and the manufacturers do not deal directly with each other, and that the necessities of the trade require the interme-diation of merchants and brokers, between whom contracts for sale and future delivery are customary. In order for a marketing association to do business and carry out the purposes for which it is organized, it must, to more or less extent, conform to the usages of trade and to ordinary business methods. It is an old adage that • “it takes two make a trade,” and, in order for sellers to find purchasers, they must conform, to some extent, with the wishes of the latter in the method of carrying on negotiations and in consummating sales. It is fair to assume that the word “resell” in the contract was used with reference to these methods of doing business in the cotton trade, and, as the general method was to sell for future delivery, we should interpret the language of the contract as conferring authority upon the association to conform to those usages. Good reasons are stated in the evidence why the spinners and other manufacturers of cotton products prefer to buy cotton on contracts for future delivery and why sellers of cotton are compelled, in order to do business successfully, to conform to those preferences and methods established by the buyers. The manufacturers want to know in advance when and where they will get cotton of the desired staple and grade, and, even before cotton is gathered and ready for delivery, they find it necessary t.o make terms for a supply. And those engaged in selling cotton, in order to hold the trade of their customers, must conform to those preferences and must provide the desired way of supplying the cotton. In no other way, the evidence shows, can the business be successfully operated. The inference is therefore strong that the parties, in framing the language of the contract before us, intended to give the association the authority to conform to those usages of trade and to make sales in the manner customary to the usual trade. Other courts, in interpreting this contract, have held that it authorizes sales for future delivery. Kansas Wheat Growers’ Assn. v. Schulte, 113 Kan. 672, 216, p. 311; Northern Wisconsin Co-op. Tobacco Pool v. Bekkedal, 182 Wis. 571; 197 N. W. 936. No cases holding to the contrary are cited.

One of the arguments made against this interpretation of the contract, and the one which seems to have largely influenced the chancellor, is that there is possibility of a breach of such a contract on the part of the association by reason of inability to make delivery of cotton under such a contract, thereby incurring liability for a breach, and that the statute contains an express provision that the members shall not be liable for the debts of the association in excess of the sums remaining unpaid on membership fees or subscriptions to capital stock. The argument is that, since the association is non-profit bearing and the members are not liable for debts, there is necessarily no authority to incur obligations which might result in liability for damages. This argument, we think, flies right in the face of the statute itself, which expressly authorizes the association to do all the things that are enumerated in the statute, including the selling of commodities, and to contract therefor. It is our duty to‘ reconcile these provisions of the statute, and, in doing so, we must assume that the lawmakers, by exempting the members from individual liability, did not intend to restrict the power of the association to make contracts. The lawmakers, in framing this statute, did so upon the theory that the association would perforin its contracts, and not break them, so as to incur liability, and authority was granted for creating an expense fund, out of which incidental losses and expenses might be paid.

In interpreting the statute and the contract we are not dealing with the question of abuse of power by the association, but with the question of extent of power to be properly exercised, and, in solving the question, we must assume that the lawmakers intended to confer a power to be rightly exercised. If the power is abused b/ the officers and agents controlling the management of the association, then there is ample remedy in the courts for the correction of such abuses.

Again, it is argued that contracts of sale for future delivery constitute gambling transactions,, ;and, being unlawful, it is not to be presumed that the' lawmakers intended to authorize such acts or that the parties intended to contract therefor. The answer to this argument is that contracts of this character do not constitute gambling transactions. They contain no element of wager. The ordinary form of contract for sale of cotton on future delivery, as disclosed by the evidence, is as follows: The seller holds or expects, by purchase or otherwise, to acquire for sale a quantity of cotton of a given grade and staple, and he finds a purchaser with whom he makes terms of sale. This occurs, for instance, in September or October, and he enters into a contract for the sale of a given number of bales of that grade and staple, the price to be fixed according to the quotations for December delivery on the New York Cotton Exchange, on any day thereafter, to be named by the seller. This is termed a sale “on call,” and the seller has the right, under the contract, to “call” the sale on any day he chooses prior to the final day of delivery on December contracts. The Cotton Exchange quotations are based solely on cotton of a single grade and staple, that is to say, middling cotton, % inch staple. If the cotton to be sold and delivered is above or below that grade and staple, the parties agree on a price above or below the Exchange quotations, so as to cover the difference between the price of the Exchange quotations and the price of the higher or lower grade of the cotton which is the subject-matter of . the sale. The contract stipulates the quantity and the grade and staple of the cotton to be delivered, and, if it is of better grade than that quoted on the Exchange, the parties agree upon the difference. That- is termed the “basis.” As an illustration:' If the parties agree that the cotton delivered is worth 200 points, or two cents per pound, more than the kind of cotton quoted on the Exchange, they agree upon that much advance price above the quotations on the day the sale is called by the seller. Now, there is an element of uncertainty as to the fluctuations of the market between the date of the contract and the date of delivery on December contracts, and it involves, to a more or less extent, a matter of speculation as to whether the seller will obtain the price ivhich he hopes to get for his cotton, but, as before stated, there is no element of wager in the contract. The choice' is with the seller to determine, before the final day of delivery, when he will “call,” and thereby fix the price definitely according to the Exchange quotations. The result would be the same if he held his cotton without obligation to sell, hoping to get a higher price on a later date, and he thereby takes a chance of the market declining. There is that much element of speculation in all business transactions where there is a chance of a decline or advance in the market. The seller of any commodity may, with propriety, exercise his judgment ?,». to the best time to sell, and 'he does not lay himself open to any implication of wagering. A farmer with a' bale of cotton or a load of wheat or potatoes, hoping to obtain" the highest price for his product, may be uncertain as to the best time to sell, and may, in indulging that hope, postpone the sale to a future date, and yet he is not engaging in a wager. The 'same may 'be said with reference to the fluctuations in the basis upon which sales are made. On account of weather conditions, there may ¡be fluctuations in .the basis upon which cotton is sold, so that the margin of difference between the fluctuations on the Exchange and the market value of the particular grade and staple of cotton which is the subject-matter of the sale may widen, so that the seller, under the contract, would get less for 'his cotton than he would have gotten if he had waited until the day of delivery to fix the basis. But, as before stated, this is not a wager, even though it contains ¡an element ¡of uncertainty. Cotton is sold by producers indirectly to the manufacturers solely on grade and staple. There is a demand for the different kinds of grades and staples because some kinds are used for one purpose in the manufacture of products, and some for another. Sometimes there is a shortage of certain grades and staples and an excess of others, and, in consequence, the scarcity of the one grade advances the price abnormally, and there is a corresponding decline in the other grades and staples which are more abundant. In other words, the price of one grade and staple of cotton may advance and another be at the same time on the decline. This is not the case in regard to Exchange quotations, for they are, as before stated, all based on a single grade and staple. All of these uncertainties are taken into account in selling cotton, and the business necessarily involves that much element of speculation. This kind of a transaction must not be confused with the business of dealing in futures, for, in the latter case, no actual delivery of the cotton is in contemplation of the parties. The one character of transaction is legitimate, though it involves an element of uncertainty, whilst the other is purely a wager based on the advance or decline of cotton, without the parties intending actually to sell and deliver. The distinction has been clearly recognized and stated by this court and bv the Supreme Court of the United States. This court, in passing upon the question of the validity of contracts for future delivery, said: “But this is not what is commonly known as dealing in futures. This phrase has acquired the signification of a mere speculation upon chances, where the grain, cotton or stock dealt in exist only in imagination, and where no delivery is contemplated, but the parties expect to settle upon the difference in the market. ’ ’ Fortenbury v. State, 47 Ark. 188. The Supreme Court of the United States, in declaring the validity of a sale for future delivery, said: “And the fact that, at the time of making a contract for future delivery, the party binding himself to sell has not the goods in his possession and has no means of obtaining them for delivery, otherwise than by purchasing them after the contract is made, does not invalidate the contract.” Clews v. Jamison. 182 U. S. 461.

Attention is also called to the fact, shown by the evidence, that appellant lost heavily on one of its contracts for future delivery, on account of inability to make delivery in accordance with the contract, thereby incurring liability for damages, and this is urged as a reason why that kind of business is too hazardous to .justify the association in indulging in it. In September, 1923, the association contracted to sell to certain buyers in the east 500 bales of cotton of a certain grade and staple on the basis of 225 points on December quotations, subject to the seller’s call, and, on account of failure to get from its members. enough cotton of that kind, the association was able to deliver only 350 bales. Cotton advanced rapidly, and the association suffered damage in the sum of about $6,000 on account of breach of the contract. There was another transaction of like character on which the association suffered a loss of $250. It is explained by witnesses that this occurred on account of the sudden and rapid depreciation in the grade of cotton, caused by bad weather, and that for that reason less of the required grades was obtained, and the association did not receive a sufficient quantity of cotton to comply with the contract. The conditions were exceptional, and the same result may or may not occur again. The exercise of better judgment and more careful and frequent estimates of the condition of the crop during the gathering season may serve to obviate or to minimize the extent of such results. ' At any rate, that is one of the incidents of the business, and it is the duty of those in charge of the management of the association to do all that can be done to prevent such loss. The fact that this loss did occur does not characterize the business as being so hazardous as to bring it within the denunciation of wrongdoing, or characterize the general plan as unsuccessful. If the management is poor, the remedy is with the members of the association themselves, who have it within their power to change the management, or, if the managing officers and agents are derelict in their duties, and, by neglect or otherwise, cause loss to the association, they can be held accountable. Occasional losses are incident to any business, for no scheme is so perfect as to absolutely avoid them. Where the losses occur merely as an incident of the business and not as the result of .negligence on the part of the managing officers and agents, such losses, to that extent, reduce the net returns from the sale of cotton and lessen the benefits enjoyed by the members. The plan, of course, contemplates the selection of officers and agents who are men of experience in the business and of good judgment, so that losses may not occur,- or, at least, that the danger may be minimized. The general plan must not be denounced as illegal or improvident merely because mistakes of judgment may have occurred or possibly may occur again in the future. The plan may or may not be perfect. It is scarcely possible to devise a business plan of mathematical exactness or which affords absolute immunity from misadventure and loss, and the question of completeness of the plan is not involved in this controversy. Manifestly it has been designed by those who are, or should be, well informed as to the nature of the business so as to bring the best results. At any rate, it was designed to work for the benefit of farmers wlio prodace cotton and other agricultural products, and those who go into it do so voluntarily. There are inherent difficulties in the marketing of cotton which should he obviated, if possible. This plan contemplates the orderly marketing of cotton throughout the whole year, instead of forcing it on the market during the short gathering season, thereby preventing what is termed “dumping.” It is well known that, when the gathering season begins, the price of cotton is established, and is generally fairly well stabilized for a time, until the cotton is open and is gathered and goes to market with such rapidity that the market is overstocked, and a decline in the price results, until the crop is all marketed by the farmer and gets into the hands of speculators or legitimate dealers in cotton, and then it advances, but the farmer gets no benefit from the advance. As a general rule, farmers are in debt to a more or less extent when the gathering season comes on, and they are unable, acting alone, to hold their cotton for better prices. Under the plan of this association, the producers group themselves together, money is borrowed by the association and advanced to the members on their cotton, at a low rate of interest, and the sale of the product is distributed throughout the whole year instead of being dumped on the market during a short period. The effort to bring about better results is at least to be commended.

Our conclusion is that the plan is not illegal and not beyond the scope of the contract, hence it cannot be stricken down by the judgment of a court. This leads to the conclusion that no breach of the contract was committed by the association, but that, on the contrary, appellee broke the contract by refusing- to deliver all of his cotton in compliance therewith.

This brings us to the question whether or not the remedy sought by appellant is available. It is contended that the chancery court does not possess jurisdiction to prevent a breach by injunction and thereby compel specific performance of the contract. The statute creating the association contains an express provision for such relief, but it is contended that this statute constitutes an attempt to enlarge the jurisdiction of the court, which is beyond the power of the lawmakers. We do not agree to this view, for it has always been within the jurisdiction of courts of equity to grant relief where legal remedies are inadequate, and it is evident that, by reason of the peculiarity of the co-operative marketing plan, any legal remedy would be wholly inadequate. The only remedy at law would be a suit to recover damages, but this remedy is inadequate, for the reaso~i that the recovery of damages for a failure to deliver cotton would not repair the injury done if a substantial number of the members should refuse to deliver cotton. This would thwart the whole scheme and render it abortive. In that event the amount of damages recovered and distributed among the persistent members would not compensate ~or the loss caused by the failure to obtain the better price which it is expected will result from co-operative marketing. The statute making this equitable remedy a'v~aila~bie is not an enlargement of the jurisdiction of the chancery court, for it merely brings the remedy within the jurisdiction of the court as it existed prior to the adoption of our Constitution. Marvel v. State, 127 Ark. 595. There are cases cited in the brief of appellant which support the view that the chancery `court has jurisdiction to grant the relief pre'scriibed by the statute.

The decree of the chancery court is therefore reversed, and the cause remanded with directions to enter a decree in favor of appellant for the relief prayed for.

Hart and Humphreys, JJ., dissent, not because the-plan is illegal, bnt that the transaction is beyond the scope of the contract.

SUPPLEMENTAL OPINION.

McCulloch, C. J.

¡We are ashed by attorneys

representing other interests than those of the parties to the present litigation — interests which will likely be involved in subsequent litigation — to withdraw from the opinion the paragraph which states as applicable to the present case, the elemental principle that the “party to a contract who commit the first breach is the wrongdoer and thereby absolves the other party from performance.”

It is urged that this application of the principle is unnecessary to a decision of the case and should be withdrawn so as not to .affect future litigation in which its application may be invoked.

Upon reconsideration we have concluded to grant the request and confine the decision to the effect that appellant has not, in its methods of business,- broken the contract by transcending its powers under the statute, or under its articles of association, or under its contracts with members, and that it is entitled to the relief prayed for in its cross-complaint.

       The following oases are cited in appellant’s brief: Oregon Growers’ Co-op. Ass’n. v. Lentz, 107 Ore. 561; Kansas Wheat Growers’ Ass’n. v. Schulte, 113 Kan. 672; Tobacco Growers’ Ass’n. v. Jones, 185 N. C. 275; Texas Farm, Bureau Cotton Ass’n. v. Stovall, (Tex.) 253 S. W. 1101; Washington Cranberry Growers’ Ass’n. v. Moore, 117 Wash. 430; Brown v. Staple Cotton Growers’ Co-op. Ass’n., 132 Miss. 859; Northern Wis. Tobacco Pool v. Bekkedole, 197 N. W. (Wis.) 936; Hollingsworth v. Texas Hay Ass’n, 246 W. (Texas.) 1068, (Rep.).