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

text:
    Carter v. Stewart.
    Opinion delivered June 13, 1921.
    1. Adverse possession — pkesumption op grant. — Uninterrupted possession for fifty years of land originally belonging to the State, with payment of taxes during the entire period, is sufficient to sustain a presumption of fact that the State made a grant of the land.
    2. Adverse possession — presumption op grant — silence op state RECORDS. — The fact that the State’s land records do not show that any grant was ever made of the tract in controversy is merely negative evidence, and does not overcome the presumption of a grant from fifty years’ uninterrupted possession of the land and payment of all taxes thereon during that period.
    3. Adverse possession — pasturing cattle and cutting timber.— Where defendant? and their privies had beep in actual possession of a 40-acre tract of land adjoining the forty acres in controversy, claiming the entire 80-acre tract as their homestead, though all of the improvements were on the -40-acre tract not in controversy, the continuous use of the disputed tract, which was swamp land, for cutting firewood and for pasturing cattle is actual possession of the tract in controversy.
    4. Adverse possession — constructive possession. — Where the grantee under a deed by one without record title goes into actual possession of part of the land described in the deed, his possession gives him constructive possession of the remainder.
    5. Adverse possession — constructive possession — exception.—The exception to the rule that possession of a parcel of land under a deed conveying an additional tract is constructive possession of the latter tract, namely, where the deed covers separate tracts owned by different owners, is limited to cases where the different owners are different private individuals, and does not apply where the legal title to the additional tract was in the State, the source of title to both tracts.
    6. Adverse possession — presumption op grant. — The presumption of fact of a State grant arising from long-continued possession of land and payment of taxes assessed thereon is not in conflict with the rule that the .State is not estopped by the unauthorized act of its tax officer in listing the land for taxation, since the State can, by rebutting the presumption, recover the land, regardless of such unauthorized act.
    Appeal from Phillips Chancery Court; A. L. Hutch-ins, Chancellor;
    affirmed.
    STATEMENT OE FACTS.
    Edna W. Carter instituted an action of ejectment in the circuit court against Oscar Stewart and Mary Jeter Stewart to recover 40 acres of land situated in Phillips County, Arkansas. She alleged that the land was granted by the United States to the State of Arkansas on August 14, 1858, under an act of Congress commonly known as the Swamp Land Grant. She further alleged that she obtained a patent to said land from the Commissioner of State Lands .on the 6th day of June, 1917, and under it she has title to said lands and is entitled to the possession of the same.

      The defendants asserted title to the land in themselves and moved to transfer the ease to equity, which was done.
    On the 26th day of April, 1873, S. D. Thomas conveyed by warranty deed to Benjamin Jeter, 80 acres of land in Phillips County, Arkansas. The deed conveyed the 40 acres in controversy and another 40-acre tract adjoining it. The deed of S. D. Thomas and wife to Benjamin Jeter is dated April 26, 1873, and was acknowledged on the same day. It was duly filed for record in the clerk’s office on the 1st day of August, 1873. The consideration recited in the deed is the sum of $600, the receipt of which is acknowledged.
    J. ft. Fielder was a witness for the defendants. According to his testimony, S. D. Thomas was his stepfather. He did not know how Thomas acquired title to the land in question, but stated that he was satisfied he thought he had a title to it, or he would never have executed a deed to Jeter to the land. The land was then situated in Monroe County, and some years ago many of the deed records of that county for that time were burned in a fire. The defendants are both negroes and are husband and wife. Gertha Jeter Stewart is the daughter of Ben Jeter. Ben Jeter lived on the land and paid the taxes on it until he died. Since that time Gertha Jeter Stewart has lived on the land and paid the taxes on it. Witness helped Thomas to clear some of the land about three years before he sold it to Jeter. Mr. Thomas is now dead, and witness does not know where his old land papers are. Thomas commenced clearing the place for a home. Between 25 and 30 acres are now cleared, but the cleared land is not on the tract in controversy.
    According to the testimony of Gertha Jeter Stewart, she was the only heir at law of her father. Her father commenced to pay taxes on the land in 1874 and paid taxes continually until he died. She was residing with her father when he died and continued to reside on the land with her mother until she died in 1912. They continued to pay taxes on the land until 1912. Since that time the witness has paid the taxes on the land. In other words, the Jeters have paid the taxes on the land since they bought it down to the time the case was heard in the chancery court on September 25,1920. The cleared land and the dwelling house is on the 40-acre tract adjoining the 40 acres in controversy. The Jeters built a six-room house and cleared and cultivated between 25 and 30 acres of land on the 40 acres adjoining the 40 acres in controversy. Since they obtained the deed from Thomas, they have regarded the 80-acre tract embraced in the deed as their homestead. They have continuously cut firewood from the 40 acres in controversy and have used it for a pasture. It is low, swampy ground, and none of it has been put into cultivation. The Jeters have been cutting timber ever since they have been on the land, and they have cut off all the oak and hickory timber, so that there is no timber on the land except some gum timber. The record shows that G-ertha Jeter Stewart is 59 years old, and that she is erroneously sued as Mary Jeter Stewart; J. E. Fielder is somewhat older.
    A clerk in the State land office testified that he had examined the records kept in the State land office carefully, and that the records do not show any conveyance of the land to any one prior to the, deed that was made to Edna W. Carter on June 6,1917. The original patent of the United States to the State of Arkansas for said lands is shown by the records of the State land office. It is dated August 14,1858.
    The chancellor found the issues in favor of the defendants, and a decree was entered of record dismissing the complaint of the plaintiff for want of equity. To reverse that decree, the plaintiff has duly prosecuted this appeal.

      A. D. Whitehead and E. L. Carter, for appellant.
    The testimony shows that the land was wild, unoccupied and unimproved. There never has been any adverse actual possession, and the only use it was put to is cutting timber and wood. 'Cutting timber and gathering wood from wild land does not constitute actual or adverse possession, neither does the payment of taxes. 81 Ark. 258; 68 Id. 551. The case of Carter v. Goodson, 114 Ark. 62, is not a similar case on the facts. Grants in the country are not presumed from the government, except in cases of very ancient possession, running back to colonial days.
    The records of the State Land Office clearly show that the land had been patented by the United States to the State of Arkansas and by the State to appellant in 1917. But the rule that a person who takes possession of' a part of a tract under cover of title thereby obtains possession of the entire tract is subject to one important exception which applies in this case. An adjoining* tract was sold by the sheriff and tax deed issued to S. D. Thomas in November, 1869. Defendant’s possession of the southeast quarter could not be construed to extend to the southwest quarter of the southeast quarter of section 30. 83 Ark. 377; 98 Id. 367; 81 Id. 141; 104 S. W. 191.
    Defendant had never improved the land,'nor put any of it in cultivation, nor fenced any of it.' Their sole claim is based on the payment of taxes, but for those they may be reimbursed under Kirby’s Digest, §§ 7180-1. The State is responsible for the unauthorized acts of its officers in putting these lands on the tax books and collecting taxes thereon. Nor can laches be imputed to the State, and the statutes of limitation do not run against her. 115 U. S. 408; 95 Ark. 70. The land belonged to the State from the time of swamp land grant in 1858 until June, 1917, when it was conveyed to appellant, and the decree was erroneous and should be reversed.

      R. B. Campbell and W. H. Pemberton, for appellees.
    After fifty years’ possession of the land, peaceable and uninterrupted, and clearing it and making improvements and payment of taxes, a grant from the State will be presumed. 114 Ark. 62; 135 Id. 232, 353-369.
   Hart, J.

(after stating the facts). The principal question raised by the appeal in this case is whether fifty years’ peaceable and uninterrupted possession of the land in controversy in the defendants and those under whom they claim, together with the payment of taxes during all that time, affords sufficient ground to presume a grant from the State to the lands in question. The chancellor held under the facts and circumstances adduced in evidence that he had the right to presume and find that a patent had been formerly issued by the State to the land in question under the authority of Garter v. Goodson, 114 Ark. 62, and State v. Taylor, 135 Ark. 232. See, also, Wallace v. Hill, 135 Ark. 353.

In the case of Carter v. Goodson, supra, the court held that where appellee and her grantors had held possession of land for fifty years, improving the same and paying taxes thereon, a finding by the court that a grant of the land had been made by the State to appellee’s grantors was justified. The court further held that the presumption of a grant from continued and uninterrupted possession is one of fact for the court or jury trying the case.

It is claimed that the facts in the case at bar do not bring it within the principles decided in that case. It is pointed out by counsel that the notations or marks on the State land records in that case tended to show that the land had been sold by the State, while no such inference can be drawn from the State land records in the present ease. For instance, the letter “S” was written on the original plat in the land office, and it was shown that it was the practice to place the letter “S” there when the State had sold the land. The establishment of the fact or circumstance, however, was not controlling in that case. This is shown by'the decision of the court and the authorities cited in the subsequent case of State v. Taylor, supra. In that case the court clearly recognized that where the possession of land has continued uninterrupted for a great length .of time a presumption arises as against the State and claimants nnder it that a grant from the State has duly accompanied the first possession and con-séqnently avoids -any subsequent patent. It was there settled that a patent to land in eases of peaceable and uninterrupted possession of many years, together with the payment of taxes, may be presumed to have been formerly issued. We there pointed out from the decisions of other States that the courts have been constantly in the habit of presuming grants from the State upon the uninterrupted and peaceable possession of the lands for many years. The presumption springs from a lapse of time, the probable- loss of evidence and motives of public policy in settling titles and quieting possession.

Under its sovereign power, a State imposes the burden upon all its citizens to pay taxes on the property owned by them for the purpose of supporting the government. It is the duty of the officers of the State to place the land in the State on the tax books for that purpose as soon as the State has parted with its title to them. Hence where the State has for a long time demanded and collected taxes on property and the property owner has acquiesced therein by paying the taxes, there arises a presumption that there was a legal liability to nay the taxes, and this furnishes a strong circumstance from which a court may infer a grant from the State. Of course, from the very nature of the thing the person or persons paying the taxes must be in the uninterrupted and continued possession of the land in order to warrant-the court in finding a grant from the State. In such eases the possession of the adverse claimants could have had a legal inception, and the doctrine of presumption of a grant from the State under such circumstances is recognized in many cases.

In such cases the fact of the claimant not producing the patent may have been owing to the general practice of the country at the time to take a conveyance of land without requiring all previous title deeds, or the failure to record deeds. Indeed, where a large grant of land from the State has’been divided between the children of the grantee, the original patent must remain in the hands of only one of them and might have been lost without the fault of the others.

The facts in the present case show that Thomas commenced to clear the 80 acres of land which he subsequently conveyed to Jeter in about 1870. According to the testimony of his son-indaw, he intended to make it his home. He conveyed the land to Jeter in 1873. At the time Thomas conveyed the land to. Jeter, it was situated in Monroe County, -but was subsequently annexed to Phillips County, where it is now situated. Thomas is dead, and the deed records of Monroe County for the year in which Thomas conveyed to Jeter have been burned. Jeter is also dead. He left surviving him his widow and one child, who continued to reside on the land until the widow died. The daughter then continued to reside on the land until the present time. The Jeters commenced to pay taxes on the land from the time Thomas executed the deed to Ben Jeter in 1873, until the case was heard in September, 1920, in the chancery court. Of course, if Thomas and Jeter had lived, or if the deed records in Monroe County had not been destroyed, evidence might have been' produced to show a grant from the State to Thomas. The fact that the State land records do not show such a grant does not repel or overcome, as a matter of law, the presumption of a grant. Such omission may be regarded as negative testimony only.

But it is insisted that there has been no possession by the Jeters of the land in question. It is true that the house and cleared land are all on the adjoining 40 acres which was also embraced in the deed from Thomas to Ben Jeter, but the evidence shows that Thomas intended to have the whole 80 acres for his homestead, and that the Jeters did claim the whole 80 acres as their homestead. The evidence shows that the 40-acre tract in controversy is low, marshy land, and for that reason was not cleared and put into cultivation. During all these years, however, the Jeters have cut their firewood from it and have used it to pasture their cattle. In fact, they have cut all the valuable oak and hickory timber off of it, and there is no timber left on it now except a small quantity of gum. These acts were not of a fitful and disconnected character, but they were continued and uninterrupted for nearly 50 years. Therefore, the chancellor was justified in holding that they held such actual possession of the 40-acre tract in controversy as was practical under the circumstances.

Moreover, it is well settled that where- the grantee under a deed by one without record title goes into actual possession of part of the land described in the deed, his possession gives him constructive possession of the remainder.

It is claimed, however, that the facts in this case bring it under the exception to that well known rule as declared in St. L., I. M. & S. Ry. Co. v. Moore, 83 Ark. 377, and other cases of like character. In that case the court said that where one takes possession of one of two adjoining tracts of land under a deed, conveying both tracts to him, if the actual title to the two tracts are in different persons, his actual possession of one tract will not give him constructive possession of the other so as to oust the owner of that tract. The reason is that the possession of one tract would be no-notice to the owner of the other tract that his land was claimed adversely. The court said further that, if the law were otherwise, one by buying a small tract and taking a deed conveying adjacent unimproved lands, might, by taking possession of the small tract, become constructively in the possession of all of the land within the calls of his deed without any visible act to notify the owners of such adverse claim.

In the application of the exception to the present ease, counsel point to the fact that the legal title to one of the 40-acre tracts was in Thomas, and that the legal title to the 40-acre tract in controversy was in the State, at the time Thomas conveyed both tracts to Jeter. Now the State is. the source of all land titles in this State, and the general rule announced above would illy serve its purpose and would really be worth nothing, if the exception could be applied to cases like the present one. The exception to the rule is applied in cases where different individuals claim and hold the legal title to the lands. We hold that it has no application when the facts are like those in the present case.

Finally, it is again contended that the rule laid down overturns tire well-settled rule that the State in its sovereign capacity is not estopped to assert a claim to its own property by the unauthorized acts of its .officers. Hence it is claimed that the act of the officers in placing the land on the tax books was unauthorized.! and the State is not estopped by such unauthorized act. That principle, however, has no place under the facts as disclosed by the record. If the plaintiff had introduced evidence tending to oppose or repel the presumption of a grant from the State arising from the peaceable and uninterrupted possession of the Jeters and Thomas under whom they claimed for over fifty years, then it could not be said that the State, or its subsequent grantee would be estopped from claiming title to the land by reason of the said officers placing the land on the tax books. But, as has already been pointed out, the plaintiff has introduced no testimony tending to rebut the presumption of a grant except the fact that the records of the State land office do not show such a grant. We have already seen that this does not, as a matter of law, .overcome the presumption of a grant as found by the chancellor. Consequently, the estoppel of the State from the unauthorized acts of its officers does not arise in the case. If the findings of the chancellor was correct, the State had already granted the land to Thomas, and the land was rightfully placed on the tax books.

It is true, as said in Oaksmith’s Lessee v. Johnston, 92 U. S. 343, that in this country there can be seldom occasion to invoke the doctrine of presumption of a grant from the Government or the State except in’ cases of ancient possessions. But it is equally true that, where the facts justify it, this rule of presumption is a safe one and has a salutary effect; and the doctrine serves a reasonable and necessary purpose.

It follows that the decree must be affirmed.

McCulloch, C. J.

(dissenting). There is nothing in

this case to show that the defendants ever had possession, either actual or constructive, of the' lands in controversy. Fitful acts of possession, such as cutting timber or grazing stock, do not constitute continuous actual possession so as to put the real owner on notice or to ripen into title by adverse possession. Scott v. Mills, 49 Ark. 266; Driver v. Martin, 68 Ark. 551; Connerly v. Dickinson, 81 Ark. 258; Earle Improvement Co. v. Chatfield, 81 Ark. 296. In the case last cited the court said: “The disconnected acts of cutting timber would indicate oft-repéated trespasses upon the land, but they were not sufficient, in cur opinion, to show such continuous and notorious occupation and domination over the land as would indicate to the true owner an unmistakable intention by another to own and exclusively appropriate the.land.”

Nor was there constructive possession by reason of the defendants being in actual possession of an adjoining tract of land under a deed which constituted color of title to both tracts. Under the doctrine announced by this court in several cases, beginning with the case of Haggart v. Rainey, 73 Ark. 344, there is no constructive possession for the reason, as stated by Judge Riddick in the ease of St. Louis, I. M. & S. Ry. Co. v. Moore, 83 Ark. 377, that “the possession of the tract is no notice to the owner of the other tract that the land is claimed adversely.” The majority say in their opinion that this doctrine does not apply to a case where the legal title' is in the State. I am unable to see why it would not apply if the statute .of limitations could run against the State under any circumstances, but, as the statute of limitations does not run against the State, I fail to see why, under those circumstances, the defendants could be said to have had possession so as to raise the presumption that the title had passed from the State.

If there is a presumption at all of a grant from the State, the only ground upon which it can be based is that the defendants have continuously paid taxes on the land under color of title for a long period of time. The land being wild and unoccupied, this would constitute adverse possession so as to ripen into title by limitation as against private owners, but, since the legal title remained in the State up to a very recent date, and since the statute of limitation does not run against the State, it can not successfully be pleaded against the State’s grantee within seven years of the date of the grant.

The three cases cited by the majority as supporting their conclusion that the presumption of a grant from the State is raised do not, in my opinion, support their views, as the facts of those cases are altogether different from the facts of the present case. In Garter v. Goodson, 114 Ark. 62, there was a confusion in the records of the State Land Commissioner, sufficient to raise a doubt whether or not the lands had been conveyed by the State, and this confusion was made the basis of the conclusion announced in that case that a presumption of grant would be indulged in favor of the occupant of the land. The same state of facts substantially existed in the case of State v. Taylor, and the decision was based on the same ground. In Wallace v. Hill, 135 Ark. 353, there was a right of redemption in the occupants, who were the former owners, and who held over after the sale of the land to the State for overdue taxes, and this court held that the continuous payment of taxes, coupled with possession, was sufficient to raise the presumption that the land had been redeemed through regular channels.

In the present case there is no evidence at all of any confusion in the records in the State Land Office. The undisputed evidence is that, according to those records, there had never been any grant by the State. Without actual possession of the land and without any evidence whatever of a grant, I do not think that the payment of taxes under color of title is sufficient to raise the presumption of the grant by the State in the face of a perfectly clear record which, fails to show any defects in the State’s title. It seems to me that under the circumstances of this case the following language of the late Justice Field in the case of Oaksmith’s Lessee v. Jotmston, 92 U. S. 343, very appropriately announces the only conclusion which ought to be reached on this subject:

“But in this country, at the present day, there can seldom he occasion to invoke the presumption of a grant from the government, except in cases of very ancient possessions running back to colonial days, as, since the commencement of the present century, a record has been preserved of all grants of the government, and of the various preliminary steps up to their issue; and provision is made by law for the introduction of copies of the record when the originals are lost.”

Mr. Justice Smith concurs in this dissent.


source: Caselaw Access Project

author: Smith, J.

license: Public Domain

text:
    Russell v. Barnhart Mercantile Company.
    Opinion delivered June 13, 1921.
    1. Sales — failure to give shipping directions — waiver.—Where a buyer, suing for breach of a contract of sale,-failed to give shipping directions within sixty days as agreed, and the seller subsequently set aside and stored (the goods, insisting that the buyer take them, this did not constitute a waiver of the buyer’s breach in failing to order the goods shipped, and the court properly directed a verdict in favor, of the seller.
    2. Garnishment — allowance op interest to dependant. — A judgment allowing defendant 6 per cent, interest on the total sum of money impounded by garnishment was proper, where the garnishment was discharged.
    Appeal from Jefferson Circuit Court; W. B. Sorrells, Judge;
    affirmed.

      B.o'well & Alexander, for appellant.
    The court erred in giving a peremptory instruction for appellee. There is only one disputed fact in the case, and that in reference to the amount of damages which appellant alleged he sustained by reason of the failure of appellee to deliver the peanuts.

      No slipping’ instructions were given prior to tie expiration of tie sixty days provided for in the contract, but tie contract called for shipment at “buyer’s option within sixty days,” and tie failure of tie buyer to exercise bis option is equivalent to a demand for delivery on tie last day. 35 Cye. 582.
    Appellee elected to treat tie contract as still in force and weighed up tie peanuts, invoiced them to appellant and stored them in its warehouse and sent the invoice to appellant. This action of appellee was acquiesced in by appellant and operated as a complete transfer of title to tie peanuts from appellee to appellant. 35 Oye. 315. Under tie facts and proof it was error to direct a verdict for appellee. 24 R. C. L. 94. There were no^ disputed facts for submission to a jury. Tie action of appellee in weighing tie peanuts, storing them in its warehouse and invoicing them to appellant, constituted a mere extension of time in which shipment might be ordered and gave appellee no right to impose other restrictions or additional obligations upon appellant to secure delivery. The failure of appel-lee to ship the peanuts when ordered out prior to November 1, 1919, constituted a breach of the contract by appellee, and it was error to instruct a verdict. Judgment should be entered here for appellant for $527.73 and interest at six per cent, from' October 29, 1919.

      Crawford & Hooker, for appellee.
    There was no waiver on part of appellee, as the testimony shows it complied strictly with the rules of the Peanut Cleaners and Shellers Association in weighing up the peanuts and invoicing them out to appellant, and appellant’s failure to pay was a breach of contract on his part, which appellee has never waived. A waiver to be binding must either operate as an estoppel or be supported by a valuable consideration. 72 Arle. 529; 29 A. & E. Enc. Law (2 ed.) 1097. There was no waiver by appellee. 102 Ark. 442. See, also, 88 Ark. 491; 22 Id. 258; 38 Id. 174.

      Where there is a mutual contract for the performance of successive acts, the refusal upon one side to perform will justify the other party in treating the contract as rescinded. 38 Ark. 174; 78 Id. 336; 64 Id. 228; 65 Id. 320.
   Smith, J.

Appellant is a merchandise broker engaged in business in the city of Pine Bluff. Appellee is a corporation engaged in the business of selling edible nuts, with places of business in Petersburg, Virginia, and St. Louis, Missouri.

Through the St. Louis office, on July 7, 1919, appellant ordered six hundred sacks of fancy hand-picked peanuts, and this order was evidenced by a written sales contract. In this contract the following provisions appear :

‘‘Time of Shipment. Buyer’s option within sixty days.
“Terms of Sale, Net Cash. SD B-L attached F. O. B. Petersburg, Va.
“Quantity Grade and Description Price 600 Sax Magnolia Fancies 11
“Endorsed on Face: ‘Shipment in 60 days as wanted.’ ”

It was further provided that “All contracts subject to rules and regulations of the National Peanut Cleaners and Shellers Association.”

It' is not disputed that appellant failed — although frequently requested — to order shipment of peanuts within the sixty days from the date of the contract. An extended correspondence in regard to the peanuts occurred, and a number of telegrams were exchanged. On September 29, 1919, appellee wrote appellant the following letter:

“We weighed up on the 27th inst. the 600 bags of Magnolias we had booked for you and stored these goods on our second floor, also rendering you an invoice covering this purchase. We must have shipping instructions on these goods before November 1, as we will need our room for new crop after this date. It will be necessary for us to charge you 3 cents per bag per month storage on these 600 bags to comply with rules of the association. We shall expect for you to remit us covering this purchase within ten days from the date of invoice. This will comply with the terms of purchase.”

It appears to be undisputed that in weighing up and invoicing the peanuts, and in charging the price thereof to appellant’s account, appellee was acting within its rights under the rules and regulations of the National Peanut Cleaners and Shelters Association. Later appellee drew on appellant, with invoices attached, for the price of the peanuts, but the draft was not protected and was returned unpaid. Appellant appears, at all times, to have admitted his obligation to accept and pay for the peanuts. He had difficulty in disposing of them without sustaining a loss, and he asked indulgence in the way of furnishing shipping orders for the peanuts, although appellee continued to insist on these directions being given. There was correspondence1, by letter and by telegram, in regard to a proposed resale of the peanuts for appellant’s account, but the parties were unable to agree on the price at which they might be resold.

As the time for the new >crop of peanuts to move came on appellee became more insistent in its demands for payment of the purchase price of the peanuts, and several letters of a peremptory character were sent, in which appellant was advised that if remittance was not made forthwith the peanuts would be sold for appellant’s account at the best price obtainable. During all this time the quotations on peanuts were under the sales price, yet appellant, at all times, professed his intention to comply with Ms contract.

On October 25, 1919, appellant sent the following shipping instructions to appellee:

“SMp to ourselves c-o Jno. H. Poston Warehouse, Inc., at Memphis, Tenn., via rail. Terms: Draft through Bank of Commerce & Trust Co., Memphis, Tenn. Mail invoice to us at Pine Bluff, Ark., 300 sx. Magnolia Peanuts 11c and storage.
“Remarks: Examine carefully for worms or webs before skipping.”

In response to tkis telegram appellee wired appellant as follows:

“Letter received; will not make shipment Memphis car fancies until you remit us covering’ our invoice September twenty-seventh; also storage and insurance; terms were net cash ten days from date of invoice; account 'been standing thirty days; wire immediately if you are sending New York Exchange or not.”

On October 29 appellant sent the following telegram:

“We decline to remit for peanuts. Ship both cars to Memphis, include storage and insurance in drafts. Mr. Russell was absent from office yesterday.”

On October 30 appellee sent the following telegram:

“Telegram received; we decline to make shipment until you pay our invoice and charges; will sell goods immediately best price possible.”
On the same day appellant wired as follow's: “Replying we renew demand for shipment; if you sell peanuts, you will do so at your own peril.”
To this telegram the following reply was received: “Telegram rec’d; we demand cash before making shipment; ultimatum.” •

Thereafter several telegrams and letters passed between the parties, and appellant offered to file a bond for a thousand dollars to insure prompt payment of draft covering invoices and all charges, but appellee continued to refuse to ship until receipt of exchange for the full amount of the invoices and charges.

•In the meantime the price of peanuts commenced to advance, and appellant brought suit for breach of contract and prayed judgment for .the difference between the contract price and the market quotations of the peanuts. There w!as a trial before a jury, which terminated in an instructed.verdict for appellee, from which is this appeal.

Appellant admits that he did not comply with the contract by furnishing shipping directions within sixty days, but he says this breach was waived when appel-lee weighed up and stored away the peanuts for his account, that this act of appellee operated as a complete transfer of the title to the peanuts, and that thereafter appellee should have shipped them in accordance with his directions. Appellant further contends that invoicing and storing the peanuts was a mere extension of time in which shipment might be ordered, and that he had the right to order shipment made pursuant to the terms of tire original contract, towit: with draft at-taached to the 'bill of lading issued by the railroad over which shipment had been ordered made.

We think the court properly directed a verdict in this case. - The undisputed testimony shows that appel-lee waived none of its rights under the contract, that it at all times offered to perform and insisted on performance.

Under the contract and rules of the National Peanut Cleaners and Shelters Association, it was appellant’s duty to furnish shipping directions within sixty days from the date of the contract, and if this was not done appellee had the right to invoice and store away the peanuts for the purchaser’s account and to demand payment within ten days after invoicing the peanuts to the purchaser. Appellant failed to furnish shipping directions, or to honor draft with invoice attached. He was, therefore, in default and had no right to demand shipment after the sixty days under the terms which were available for sixty days or until peanuts had been stored and invoiced. In other words, appellant attempted on October 25 to avail himself of a right which his contract required him to exercise within sixty days after July 7, 1919, or before the peanuts had been invoiced or stored. Appellee was guilty of no waiver which gave appellant this right, and the verdict was therefore properly directed in appellee’s favor.

Appellant prayed judgment in Ms complaint for $1,130.31 with six per cent, interest from the date of the filing of the complaint until paid, and for a writ of garnishment against the Hammett Grocery Company and C. M. Ferguson & Son to impound any funds in their hands belonging to appellee.

The garnishees, C. M. Ferguson & Son and the Hammett Grocery Company, filed answers, stating that the3r had in their hands and possession the sum of $649.44 and $949.32, respectively. The court gave judgment for interest at six per cent, on the amount of money in the hands of the garnishees, towit: $1,598.76, from the date of the garnishments until paid.

Appellant insists, upon the authority of the case of Brown v. Yukon National Bank, 138 Ark. 210, that it was error to render judgment against appellant for interest on the total amount in the garnishees’ hands — the amount sued for and the costs being the basis for computing the interest. In the case cited the facts were that the sum garnished bore no fair proportion to the sum sued for. The sum sued for was $210, and the 'Sum garnished was $2,303.50. The costs in the case amounted to only $20. After a recitation of these facts we held that interest should have been computed only on the $230, the amount of the debt and costs.

Here, however, neither garnishee owed the amount claimed by appellant. It required the sum due by both to equal the sum sued for, and we think no error was committed in rendering- judgment for interest on the total sum impounded.


text:
    School District of Newport v. J. R. Holden Land & Lumber Company.
    Opinion delivered June 13, 1921.
    1. Deeds — conditions subsequent. — Restrictions in a deed as to the estate granted are presumed not to constitute conditions subsequent, which are not favored in law and must he clearly shown by the words of the deed.
    2. Lost instrument — burden op proof. — In a suit to quiet title where plaintiff claimed under an alleged lost deed which defendants admitted having executed, the burden was on defendants to show that the deed contained a condition subsequent claimed by them.
    8. Lost instruments — evidence.—In a suit to quiet title, based on an admittedly lost deed, the chancellor’s finding that the deed from defendants to plaintiff contained a condition subsequent held not supported by the evidence.
    Appeal from Jackson Chancery Court; L. F. Reeder, Chancellor;
    reversed.

      Boyce & Mack, for appellant.
    1. From the pleadings and evidence it appears fully that appellant took possession of the land under an oral gift; that the terms of the gift had Been fully complied with, and that the school district was in possession and claimed to be the owner since it first took possession in 1916, and had been in actual, open, notorious, exclusive and adverse possession, claiming to be the owner against all the world, and the district’s claim had ripened into a perfect title when the suit was commenced. 33 Ark. 155. Possession of land during the full period of limitation, under circumstances as would make a valid defense, amounts to investiture of title, which may be actually asserted in all respects as effectually as if acquired by deed. 34 Ark. 534-40. Possession for the statutory period not only bars the remedy of the holder of the paper title, but extinguishes his title and vests a fee simple title in the adverse occupant. 1 Cyc. 1135.
    Trespass may start the statute of limitaions. 74 Ark. 302-5; 51 Id. 231-271. Claim of ownership need not exist at the time of entry. 2 C. J., p. 129, § 217; lb., pp. 133-4. A tenant may hold adversely to his landlord. 1 R. C. L., p. 747; 114 Ark. 376. •
    The fact of appellant’s adverse possession and its claim of ownership for the full period of limitation, and appellee’s knowledge thereof, has been established beyond question, and the decree is against the clear preponderance of the evidence. The rule is that there must be proof, not only of the existence of a deed, but that its loss must be proved before secondary evidence of its contents is admissible, and the same character of evidence and degree of evidence are required to prove the loss as is required to prove the existence of a deed. 25 Cyc., pp. 1625-7.
    2. Title by. adverse possession is sufficient to found an action to quiet title. 1 Cyc. 1138; 32 Id. 1330; 5 E. C. L. 650; 9 L. E. A. 772; 46 L. E. A. (N. S.) 499; 94 Am. Dec. 722; 92 Ark. 289; 83 Id. 534. The chancellor erred in quieting title on the condition named in the decree.

      Gustave Jones, for appellee.
    ■Appellant has wholly failed to establish its right to specific performance in any particular. Specific execution of a contract, where there has been part performance, will not be decreed unless the contract be clear and unambiguous, and it must be proved with a reasonable degree of certainty. 63 Ark.'100; 82 Id. 33, 43; 135 Id. 586, 591.
    A chancellor’s findings of facts will not be disturbed on appeal unless against the clear preponderance of the testimony. 120 Ark. 323; 122 Id. 600. See, also, 98 Id. 328; 126 Id. 46. The question of adverse possession being one of fact, the court’s finding will not be disturbed on appeal. 84 Ark. 140.
   Smith, J.

Appellant school district brought this suit to quiet its title to a certain block in the city of Newport. It alleged it was in possession of the block, and was occupying it for school purposes* — one of the public school buildings being located thereon. It was- alleged that a deed to the land had been executed, and thereafter appellant entered into the possession of the block and built an expensive and valuable school-building thereon. That this deed had never been delivered and had never been recorded.

The 'answer admitted the execution of the deed, and alleged that the deed had been delivered. The answer further alleged that the block was donated to the appellant school district, and that the deed contained a condition subsequent to the following effect: Upon the 'condition that said district erect a brick school building and maintain a public school on said premises, to be equipped and have the same facilities and the same length of term as was conducted by said district in the main city of Newport, and that said block was conveyed with the condition that said premises should be so used, and that, upon failure to build, maintain and construct such a school, the land should revert to the grantor.

There is no question about the execution of the deed. The question is, what its terms and conditions were, 'and there is irreconcilable conflict in the testimony of a number of witnesses. These witnesses testified about a transaction then about fourteen years old, and much of this conflict can be ascribed to infirmities of memory.

On behalf of appellant district the following persons testified: S. R. Phillips, Tom J. Gregg, T. P. Umsted, H. O. Walker, E. L. Boyce, P. H. Van Dyke, A. L. Best, J. F. Parish, R. F. Drummond, W. T. Parish, and Charles Myer. The witnesses on behalf of appellee were: W. D. McLain, Gustave Jones and J. R. Holden.

The land in question was owned by McLain and Holden. It was a part of an addition to the town of Newport which had just been platted as an addition, and it is quite obvious that they were anxious tO' have a schoolhouse built in this addition. They executed a deed for the land on April 26, 1906, to the McLain & Holden Land & Lumber Company, a corporation, whose stock was owned ahnost entirely by themselves. The name of this corporation was later changed to J. R. Holden Land & Lumber Company. ' Shortly after the execution of this deed to the corporation by Holden and McLain, the corporation executed the deed in question to- the school district. The deed was executed on behalf of the corporation by Holden as president and McLain as secretary.

The minutes of the meeting of the school board held on January 27,1906, were read in evidence. At this meeting the following resolution was adopted:

“Whereas, said W. D. McLain and J. R. Holden propose to donate to the Newport Special School District of Newport, Arkansas, said block designated number eighteen, provided said district construct and supply a school building thereon, therefore, be it resolved that said offer of W. D. McLain and J. R. Holden be and the same is hereby accepted upon the conditions of said offer. Resolved, further, that the building committee of the board of directors of said special school district be and it is hereby designated to provide for and construct and supply a school building upon said block designated eighteen on said quarter section.
“On roll call, voted, J. M. Jones, ‘yes;’ C. West, ‘yes;’ R. P. Drummond, ‘yes;’ Charles Meyer, ‘yes,;’ W. R. Thompson, ‘yes;’ and Gustave Jones, ‘yes;’ carried. ’ ’

The roll call shows that all of the directors present voted for the resolution, and included in this number was Mr. Gustave Jones. The minutes of the school board further recite that McLain was present at this meeting and presented a petition enlarging the boundaries of the school district.

Thus it appears, that two of the three witnesses for appellee were present when the resolution was adopted. At a later meeting of the board held on February 24 McLain was employed to assist in the construction of the school building.

According to the testimony of McLain, Holden and Jones, the deed contained the condition subsequent that the property should revert to the grantors if the grantee ceased to maintain a white school on the block conveyed.

It is quite clear that the gentlemen who so testified have that recollection of the transaction, and Mr. Jones testified that he was the only lawyer on the school board, and that he was for that reason requested to' write the deed, and that he wrote it, and that it recited an agreement on the part of the district to put up a s-ohoolhouse and maintain a school there for white people for an -equal length of time and with equal facilities with reference to teachers and equipment as the Walnut Street school, this latter being the principal school in Newport, and that the deed recited that the lot was to be used for school purposes only, and when it ceased so to be used was to revert to the grantors.

It was the- purpose of the- district to conduct a white school on the land conveyed, and that purpose has since been followed. But it is a different matter to say that the deed incorporated a recital of that purpose- as a condition subsequent.

The only writing on the subject offered in evidence is the resolution of the- board set out above. This resolution was prepared and adopted at a meeting attended 'by both McLain and Jones. It purports to set out the condition on which the donation was to be made. The donation had not then been made. It had been proposed, and one of the men who proposed it was- present when the board determined whether the donation would be accepted. The resolution of acceptance recited the condition upon which the donation was proposed, and that recital is that the district should construct and -supply a school building thereon. This condition was- met, -and, whatever may have been the idea of any of the participating parties as to the subsequent use the district would make of the land, we think the testimony does not show that there was written into the deed any condition not contained in the resolution of acceptance.

The deed was not produced, and the testimony is conflicting as to its loss. A strong affirmative- showing on the part of the district was made that the deed was never delivered. It is also insisted on behalf of the district that the deed was shown to have been in the hands- of McLain after the controversy arose over its recitals. It is fair to McLain to say, however, that, while he made statements about the deed, leaving the impression that he knew where the deed was, he furnished the explanation that bis statement bad been made under a misapprehension of tbe facts — it being bis impression that tbe deed bad been found by tbe secretary of tbe school board ■among tbe papers belonging to tbe district, when it bad not been so found. There was also testimony to tbe effect that Holden, one of tbe parties who executed tbe deed, bad made admissions in regard to its provisions which were in conflict with bis contention and testimony at tbe trial.

If tbe deed itself was before ns for construction, there would be a presumption that tbe restrictions of tbe estate granted did not constitute a condition subsequent. In tbe case of Bain v. Parker, 77 Art. 170, the court said: “Conditions subsequent that defeat tbe estate conveyed by tbe deed are not favored in law. Tbe words of tbe deed must clearly show a condition subsequent, or tbe courts will take it that none was intended; and when tbe terms of tbe grant- will admit of any other reasonable interpretation, they will not be held to create an estate on condition. Now, if we treat the deed as containing tbe words referred to, there are still no words of condition in tbe deed, and no words indicating that tbe estate should be forfeited if tbe road was not completed at tbe date named. These words then import nothing- more than a covenant which, upon tbe acceptance of the deed by tbe grantee, became binding upon him, and for the breach of which tbe grantor may recover damages suffered thereby, but tbe deed .remains valid.” (Citing cases).

So here we think it fair to say that, tbe execution ■of tbe deed being admitted, tbe burden is upon tbe grantors to show that it contained a condition subsequent.

In addition to tbe testimony set out above, tbe district makes the most unequivocal showing that tbe deed was not to contain a condition subsequent, and that tbe terms of tbe donation were met when tbe schoolhouse was built.

Tbe gentlemen named as having testified on behalf of tbe district either were tbe directors thereof at tbe time of tlie donation or succeeded others in office, and all gave testimony tending strongly to support the district’s contention.

Meyer, who voted for the resolution accepting the donation, testified that no conditions were discussed/other than that the land was donated to the school district to be used for school purposes and to erect a schoolhouse on. The minutes of the school hoard show that this witness was unusually attentive to his duties, and that he rarely missed a meeting of the hoard. He testified that no' deed was ever delivered to the hoard. Mr. Drummond, who also voted for the donation resolution at the meeting of the school board, testified that the only condition he remembers anything about was that the land was to he donated to the school district, and the hoard was to erect a building on it.

The court entered a decree divesting the title out of the corporation and vesting it in the school district “so long, and only so long, as the same is used for school purposes, and for white children only.” It was 'also ordered that each party pay half of the costs, and both parties have appealed.

Without setting out in further detail the testimony of the various witnesses, we announce our conclusion to be that the finding of the chancellor is contrary to the preponderance of the evidence, and that the only condition of the donation was that the school district should construct and supply a schoolhouse, and that, if this was a condition, instead of a covenant, it was a condition precedent, which was performed when the district erected the schoolhouse, and that the title to the land immediately vested in the district upon the happening of that event.

The decree of the court below is therefore reversed and the cause will be remanded with directions to enter a decree quieting the title of the school district in accordance with this opinion.


author: Humphreys, J. Hart, J. Humphreys, J.

text:
    Massey v. Kissire.
    Opinion delivered June 13, 1921.
    1. • Deeds — incapacity of GRANtok. — A deed and contract conveying all of his property^ real and personal, executed by a father, who had recently suffered a paralytic stroke, to one of his sons for a nominal consideration named and the son’s agreement to support the father during his life and to give the other two sons such part of the property as the grantee wished held invalid as executed by the father while incapable of transacting business.
    2. APPEA'L AND ERROR — APPELLANT’S ABSTRACT, WHEN CURED. — Rule 9, requiring appellants to abstract the pleadings, is intended to get the issues presented before -the Supreme Court, and this purpose is accomplished where appellee supplied all the evidence omitted from appellant’s abstract necessary to enable the court to determine the case upon the merits.
    3. Appeal and error — omitted evidence not shown by affidavits. —Affidavits are inadmissible on appeal to show that evidence heard at the trial was omitted from the transcript.
    4. Appeal and error — presumption as to transcript. — A transcript filed in a case in the Supreme Court will be presumed to be a true and perfect copy of the record, if properly certified by the clerk.
    B. Appeal and error — sufficiency of certificate to transcript.— The clerk’s certificate to a transcript in a chancery case on appeal to the Supreme Court that it contains all the testimony on file in the clerk’s office was complete and sufficient, unless there was a conflict between the certificate and the decree.
    6. Appeal and error — decree conflicting with certificate.— Where there is a conflict between the decree of the court and the certificate of the clerk as to the evidence upon which the cause was heard, the decree will control.
    7. Appeal and error — conflict between decree and certificate.— There is no conflict between a decree reciting that the case was heard upon the “proofs” and the clerk’s certificate to the transcript certifying that it contained all the testimony on file in his office.
    8. Appeal and error — procedure where transcript incomplete.— Where a transcript is complete on its face, if oral evidence was heard in the trial and not incorporated in the transcript, appel-lee was privileged to suggest a diminution of the record and to request time to obtain a nunc pro tunc order showing that oral evidence was heard, not in the transcript, whereupon he would be entitled to an affirmance unless appellant brought the oral evidence into the record.
    Appeal from Conway Chancery Court; Jordan Sellers, Chancellor;
    reversed.
    J. W. Johnston, for appellant.
    The decree is contrary to the weight of the evidence. H. C. Kissire, the father, was insane and mentally incapable of making the contract and deed, and there was fraud and wrongful intention on part of appellee. There were confidential relations between appellee and his father, and- undue influence was used such as to avoid the contract and deed, and both should be canceled. 40 Ark. 28; 102 Id. 232; 9 Cyc. 456; 161 S. W. 532; 69 L. E. A. 393; 86 N. E. 568; 26 Ark. 604; 15 Id. 555; 123 Id. 134.
    ' J. Allen Eades, for appellee.
    Independent advice is not necessary to the validity of a deed in this State. 128 Ark. 143. Old age, physical infirmity and partial eclipse of the mind does not prevent one from making a valid will or deed, if the party knew and understood what he was doing and comprehended his acts. 49 Arlr. 472. The presumption is that the father was sane when he made the transfer, and the burden was on appellant to show insanity. 70 Ark. 166. The chancellor’s finding is sustained by a clear preponderance of the testimony.
   Humphreys, J.

On the 10th day of March, 1920, ap-pellee, H. L. Kissire, instituted suit in the Conway Chancery Court to compel the Citizens’ Bank of Morrilton to cash a check for $3,578.49, drawn in his favor by his father, H. C. Kissire, against his father’s checking account in said bank.

The Citizens’ Bank of Morritlon interposed the defense that H. C. Kissire was insane, and, on that account, incapacitated to issue the check.

On the 19th day of April, 1920, appellant, W. O. Massey, the duly appointed guardian of H. C. Kissire, instituted suit against the appellee, H. L. Kissire, in the same court, to cancel a contract and deed of date February 24, 1920, purporting to have been executed by H. C. Kissire to H. L. Kissire, transferring and conveying all Ms personal property and real estate, upon the ground that IT. C. Kissire was insane at the time the 'contract and deed were executed.

Appellee, H. L. Kissire, filed an answer, admitting the execution of the instruments, and alleging that, at the time of the execution of them, his father, H. C. Kissire, was of sound mind.

The causes were consolidated and submitted to the court upon the pleadings and evidence, which resulted in a decree sustaining the validity of the contract and deed, and vesting all the property, both personal and real, of H. C. Kissire in H. L. Kissire, from which decree is this appeal.

The record reflects that H. C. Kissire was stricken in the late summer or early fall of 1919 with paralysis; that he never transacted any business after that time except to execute the contract and deed on February 24, 1920, transferring all his property to his son, IT. L. Kis-sire, and to sign his name in order to cash a stamp at the postoffice. The deed in question conveyed lots 1, 2 and 3, in block 8, Brown’s Addition to the town of Morrilton, Arkansas, which constituted H. C. Kissire’s 'home, to his son, IT. L. Kissire, for a recited consideration of $25 in cash, support for the balance of his life, and love 'and affection. The contract, in substance, transferred all the personal property of H. C. Kissire to his son, H. L. Kis-sire, consisting of a bank account of $3,578.49, $700 in bonds and stamps, and a few other items of personal property, for a recited consideration of love, and affection, $25 in cash, and support and burial expenses, and such assistance as IT. L. Kissire might desire to render his other two sons, Oliver and Melvin, and to furnish Oliver and Melvin a home as long as' they conducted themselves in a manly way and were not abusive to H. L. Kissire or his wife. The contract contained a proviso to the effect that, should' H. L. Kissire fail to furnish H. C. Kissire support, or fail to render assistance to Oliver and Melvin as agreed upon, such failure should abrogate tlie contract, in wliicb event tbe casb consideration of $25 should be paid back and snck property as was remaining turned back to H. C. Kissire, except the lands conveyed by deed. H. L. Kissire was thirty-fonr years of age and almost blind, and resided in the home of H. C. Kissire, with the other two sons who were also blind at the time the instruments aforesaid were executed.

On behalf of appellant, T. J. Kissire, a brother of H. C. Kissire, W. 0. Massey, the duly appointed guardian of H. C. Kissire, Mrs. Addie Crook, a neighbor, and M. H. Dean, county and probate judge of said county, testified that H. C. Kissire was mentally incapacitated to transact business at the time he executed the contract and deed. T. J. Kissire stated that he had visited H. 0. Kissire frequently after he suffered the paralytic stroke until the early days of March, 1920; that his mental and physical condition was “pretty sorry,” and that, during the entire period, he was incapable of transacting business; that he was incapable of understanding the nature of a contract or a conveyance of any kind. Mrs. Addie Crook stated that she had seen him, during the period he had lived near her, from one to three times a day; that she had heard him talk, and was of the opinion that he was unfit to transact business of any kind during the entire time. W. 0. Massey testified that H. C. Kissire had not been able to transact any business since his misfortune in the late summer of 1919; that he came to the bank the latter part of August, 1920, in company with his son and W. J. King. The following interrogatory and answer appears in the evidence of W. 0. Massey:

“Q. What did he say to you at that time, if anything, about his business at the bank?”
“A. He came into the bank and said he come to- see about his business. Wanted to see about $116 worth of cotton. I asked him about it, and he kept talking about cotton, and I told him we had no record of a deposit of that kind, and I asked his son what the old man meant by it, and he said he did not know, and the old man said something about coming to the 'Bank of Morrilton to see about his account, and I told him I had been over there and looted after that, that his account was square with the Bank of Morrilton, but they had $100 bond over there, and I got the bond and had it put away for him. Then his mind flashed a little bit, and he said something about the boys had pretended to take care of him, and stood awhile and did not say anything more for a few minutes. I went and got his account and told him the amount he had on deposit, and also told him that the interest due on his account at that time would amount to about $150, but he did not seem to realize the amount he had to his credit. His mind seemed to be on, and he kept asldng about, some cotton, $116 worth of cotton. Then he turned around and went out and said, ‘ Take care of my money until I call for it.7 That was all.”

Judge M. H. Dean testified that he saw H. C. Kissire often during the fall of 1919, and later visited him at his home and tried to engage him in conversation; that he became convinced, from his visits and conversations, that H. C. Kissire was not capable of transacting business or protecting his interests; that he saw him during the latter part of January and through February, 1920, and found him wholly incapable of transacting business; that, on March 12, 1920, H. C. Kissire’s mind was a blank on what one might ask him; that, on one occasion, in February, he tried to talk with him on business matters ; that he could not talk intelligently, and denied that he owned his home upon which he was residing at the time, and which belonged to him.

On behalf of appellee, he, Oliver. Kissire, Melvin Kis-sire, Oma Kissire and J. A. Eades, wlm prepared the contract and deed and took the acknowledgment of H. C. Kissire to the deed and the acknowledgments of both of the parties to the contract, all testified that the contents of the instruments were suggested by H. C. Kissire himself, and that his mind was clear and mental condition good at the time he executed the instruments; that he understood the nature and effect of both instruments. TI. L. Kissire, in describing the general condition of his father’s mind, said that “part of the time he talked with good sense, and part rambling.” He said, however, that, on the day he executed the instruments, his mind was clear.

After a careful reading and consideration of the evidence. we are convinced that H. C. Kissire was not capable of comprehending the nature and effect of the contract and deed executed by him to his son on the 24th day of February, 1920. The son, to whom he conveyed the property, was almost blind. The provision made for his two younger sons, who were blind and in a way helpless', was dependent in a large measure upon the will of H. L. Kissire and his wife. Considering the condition of himself, that of his two younger sons, as well as the affliction of the son to whom he conveyed all the property, the contract, in its very nature, was an improvident one. When the nature of the contract is considered in the light of the evidence of disinterested witnesses, who had ample opportunity to judge of the mental capacity of H. C. Kissire from association and conversation, we think the great weight or preponderance of the evidence supports the view that II. C. Kissire was incapable of transacting business when he executed the deed and contract in question. The chancellor’s finding was contrary to the weight of the evidence, and, for that reason, the decree is reversed and the cause remanded with instructions to cancel the contract and deed.

Hart, J.

(dissenting). It seems to me that the case of Turpin v. Beach, 88 Ark. 604, is against rather than in favor of the majority opinion. In that case the decree recited that the case was heard upon the pleadings and the depositions of three named witnesses and other evidence. The clerk certified that the transcript contained a true and compared transcript of all the pleadings, papers, files and entries of proceedings in the action. There were certain exhibits which had not been attached to the depositions as required by statute. The court said that the statute intended greater certainty in proving the exhibits which were held tq be independent evidence, and that the words, '‘other evidence,” should be taken to refer to them. This is an application to the well known doctrine of ejusdem generis. The record recites that the case was heard on the depositions and other evidence, meaning other evidence of like character.

In the present case the record recites that it was heard upon the pleadings and proof. The word "proof” is broad enough to include oral as well as written evidence. The certificate of the clerk is that the "foregoing record contains all testimony on file in my office in the case.” There is nothing to indicate that the oral testimony was ordered to be reduced to writing and filed. The clerk is careful to certify that the transcript only contains the testimony on file. If oral testimony was heard, it would not be on file and therefore is not included in the transcript.

'Counsel for appellee called our attention to this matter before the case was heard and asserted that the case was heard partly on oral evidence. I think that the burden was on appellant to correct the record, so as to show that the case was not heard on oral evidence, if that was a fact. The affidavits introduced by appellee were not introduced to contradict the record or to correct it here. They were introduced merely to show good faith on the part of appellee. They have not been controverted, and so it seems certain then that the case was heard partly on oral evidence. If such was the case. I think the ends of justice would have been better served by allowing a correction of it to have been made in the chancery court, and that the hearing of the case should have been continued in this court until there was an opportunity to apply for a correction of the record in the court below so as to make it speak definitely on the question of whether the case was heard partly on oral evidence. If the court thought it was the duty of ap-pellee to do this, it should have so declared and have given him an opportunity to do so. This is especially true when we take into consideration that appellee had a finding of fact in his favor by the chancellor. Family arrangements are. favorites of the law and should not be disturbed when fairly made. In Pate v. Johnson, 15 Ark. 275, tbe court said that amicable and family settlements are to be encouraged, and, when fairly made, strong reasons must exist to warrant interference on the part of a court of equity. This doctrine was applied in a much later case where there was a conveyance made by a daughter to the father which the court said was not a donation to the father, nor, strictly speaking, a sale and purchase, but was more in the nature of a family settlement. Giers v. Hudson, 102 Ark. 232.

In the case at bar all the parties concerned were practically blind except appellee, and he was partly so, The family seem to have had that sensitiveness peculiar to blind people and wished to seclude themselves from the world and to' live together as one family. The deed was executed pursuant to this family agreeement, and .all the family wished it to stand. It may be that the omitted evidence would have abundantly established the correctness of the finding of the chancellor, 'and I think that the opportunity should have at least been given appellee to make application in the court below to amend the record so as to show with certainty that the case was heard partly on oral evidence.

Therefore, I respectfully dissent.

Humphreys, J.

(on rehearing). Our attention is again called to the fact that we took no notice in the original opinion of the suggestion of appellee that appellant had not complied with rule 9 in reference to abstracting the pleadings. It is urgently insisted that ap-pellee is entitled to an affirmance of the decree of the chancery court because appellant failed to abstract any of the pleadings, in keeping with the rule, and omitted entirely to abstract appellee’s answer and demurrer to appellant’s bill. The purpose of the rule invoked is to get the issues presented in the trial court clearly before this court. This purpose was accomplished by appellee supplying all the evidence necessary, omitted from appellant’s abstract, to place the cas.e fairly before this court. The reason we did not refer in the original opinion to this insistence of appellee was because it was stated by appellee that he would “make such additional abstract of the testimony as will place the case fairly before the court.” Appellee did this in such way that the real issue in the case became apparent and enabled this court, with the issue thus defined, to determine the ease upon its merits.

Appellee suggested in his original brief that the transcript did not contain all the evidence heard by the trial court, and insisted then, and strenuously insists now, that he was entitled to an affirmance of the decree under the well-known presumption that the evidence omitted was sufficient to sustain the decree. On motion for rehearing, appellee supports his suggestion that evidence heard in the trial was omitted from the transcript by filing affidavits to that effect. These affidavits add nothing to the original suggestion, because incorrect or incomplete transcripts can not be corrected by affidavit. Memphis Land & Timber Co. v. Bd. Dir. of St. Francis Levee Dist., 70 Ark. 409. The presumption must be indulged that a transcript of a case filed in this court contains a true and perfect copy of the record, if properly certified by the clerk. Upon the suggestion that the record in this ease was incomplete, we examined the certificate of the clerk and the decree of the court. That part of the clerk’s certificate relating to the evidence incorporated in the transcript is that the “foregoing record contains all testimony on file in my office, in the cases,” properly styling them. The contention is made that the certificate is insufficient because it «ays that the evidence on file in the clerk’s office is the evidence incorporated in the transcript. This is the only evidence that could be incorporated in the transcript. It would be improper to incorporate in the transcript evidence not appearing in the record of the case. This certificate is therefore complete, unless there was a conflict between the certificate and the decree of the court. Certificates in substantial conformity with, this certificate were held to he complete in the cases of Turpin v. Beach, 88 Ark. 604, and Kampman v. Kampmam, 98 Ark. 328. This court is committed to the doctrine that where there is a conflict between the decree of the court and the certificate of the clerk, as to the evidence upon which the case was heard, the decree will control. Weaver-Dowdy Co. v. Brewer, 129 Ark. 193. In the instant case, the decree of the court recites that the case was heard upon the “proofs.” The proofs upon which the case was heard, according to the decree, may have been the identical proofs incorporated in the transcript and certified by the clerk. There is not necessarily any conflict between the decree of the court and the certificate of the clerk, so the transcript on its face is complete. This court ruled, in case of Turpin v. Beach, supra, that, where the decree recited that the cause was heard upon “the depositions of three witnesses, and other evidence,” and no other evidence appeared in the transcript except exhibits that were attached to the three depositions, no conflict existed between the decree of the court and the certificate of the clerk, for the reason that the words, “and other evidence,” could be construed as relating to the exhibits.

As the transcript in this case on its face is complete, and oral evidence was heard in the trial court, not incorporated in the transcript, appellee was privileged to suggest a diminution of the record and to request time to obtain a nunc pro tunc order showing that the case was heard upon oral evidence not incorporated in the transcript. After obtaining a correction of the record to that effect, then he would have been entitled to an affirmance of the decree, unless appellant, upon request, had been able to complete the record by bringing the oral evidence into the transcript by proper proceedings.

After a thorough consideration of the other grounds suggested in the motion for rehearing, we adhere t'o the conclusions reached as announced in the former opinion.

Mr. Justice Hart dissents.


author: Humphreys, J.

text:
    Forrester v. Locke.
    Opinion delivered June 13, 1921.
    1. Sales — breach op warranty. — Where cotton sold with warranty of quality was shipped to the buyer with hill of lading attached to the draft for the purchase price, and the buyer had no opportunity of inspection until after payment of the draft and freight, acceptance of part of the cotton as complying with the contract did not constitute an acceptance of the entire shipment nor bar an action for breach of warranty as to the rest of the cotton.
    2. Trial — question for jury. — Whether plaintiffs . constituted a partnership or a corporation, held under the evidence to be a question for the jury.
    3. Commerce — purchase op cotton for delivery in state. — The purchase of cotton in the -State for delivery within the State^ the drafts for the purchase price being paid by local banks, did not constitute interstate commerce, though the final payment of the purchase price was made in another State.
    4. Appeal and error — issues in lower court. — Where plaintiffs suing as partners alleged that they were doing business in this State, and no issue was made in the trial court as to the particular transaction being an interstate one, and there is no evidence in the record changing the nature of such allegations in the complaint, plaintiffs were bound by the allegations of the complaint and the evidence in their support.
    5. Corporations — parties. — Individuals composing a partnership are not authorized to bring a suit on a contract entered into by a corporation not made a party to the action.
    6. Evidence — hearsay.—Testimony of the manager of a company’s branch office that an officer of the company told him that the company was a partnership and not a corporation was hearsay and inadmissible.
    7. Evidence — testimony based on booh entries. — In an action by a buyer of cotton for breach of warranty of quality, testimony as to the sale by the buyer of the defective cotton and the expenses incurred in such sale, deduced from the buyer’s books not kept by the witness and relating to an .account between the buyer and third persons to whom the cotton was sold, and not to transactions between the parties, was inadmissible.
    8. Evidence — custom.—Testimony as to the seller’s custom in selling cotton was inadmissible where there was a contract between the parties respecting the sale of the cotton, as the contract, and not the custom, must control.
    9. Sales — BREACH op waRranty — measure op damages. — The measure of damages for breach of a seller’s warranty of the quality of cotton was the difference between the market value of the defective cotton at the time its condition was discovered and the contract price.
    Appeal from Sebastian Circuit Court, Fort Smith District; John Brissolara, Judge;
    reversed.

      James B. McDonough, for appellants.
    1. The general rule is that the vendee of personal property is entitled to recover from the vendor the difference between the fair market value of the goods and the contract price, provided the article is not as good as the quality represented in the contract. 121 Ark. 150. Here was but one sale. The contract was an entirety. If plaintiff had any remedy at all, he was entitled to recover only the difference between the fair market value of the entire lot of cottoii and the contract price, provided the cotton was not merchantable. 121 Ark. 150. Plaintiffs can not recover, because they kept the whole lot after discovering forty-four “hollies” therein. They had the right to accept or decline; they accepted, and, hence, no recovery.
    2. The court erred in directing a verdict for plaintiffs on the issue of whether or not S.’B. Locke & Company was a foreign corporation.
    3. The court erred in its instructions given for plaintiff and in refusing those asked by defendants. It was error also to take the issue from the jury and direct a verdict. 136 Ark.' 135; 113 Id. 190; 82 Id. 86.
    4. Where an unimpeached witness testifies directly and positively to a fact and is not contradicted, and there is no circumstance from which an inference against the fact testified to by the witness can be drawn, the fact may be taken as established and a verdict directed on such evidence, but the rule is subject to many exceptions, and where the witness is interested in the result of the suit, or facts shown that might bias his testimony, the case should go to a jury. 113 Ark. 190; 82 Id. (86; citing 58 Hun (N. Y.) 121; 92 Id. 491; 42 Ala. 431; 64 Conn. 55; 101 Ind. 503; 6 Enc. PI. & Pr. 696; 100 N. W. 256; 102 N. Y. 93; 118 Ark. 128; 124 Id. 490. See, also, 129 Ark. 369; 139 Id. 236.
    5. If the business transacted by S. B. Locke & Company, a corporation of the State of Oklahoma, either directly .or indirectly, the paintiif could not recover. 136 Ark. 52; 141 Id. 38; 233 IT. S. 16; 246 Id. 500.
    6. It was error to permit W. R. Locke t° give hearsay testimony as to the existence of a partnership. Hearsay testimony is not admissible. 10 Ark. 638; 16 Id. 628; 22 Id. 477; 103 Id. 522; 79 Id. 204; 186 S. W. 302.
    7. It was clearly erroneous for the witness, J. M. Locke, to testify as to the contents 'and recitals and other matters in the books of S. B. Locke & Company, which were in Muskogee, there being no showing that the books could not be produced. 121 Ark. 150; 2 Id. 397; 57 Id. 257; 117 Id. 442 ; 79 Id. 338; 72 Id. 275; 134 Ark. 284. Even if the books had been in the courtroom, it would be necessary to prove that they were properly kept, and that the entries were made at the time of the transactions. 65 Ark. 316; 57 Id. 402. The complaint was not sworn to. The answer denied the indebtedness. 113 Ark. 417. It was error to admit this hearsay testimony. 152 Pac. 468. Even a record is not admissible unless the original is shown to be lost. 11 S. W. 410. The loss of a contract must be proved before oral evidence may be admitted. 116 Ark. 268.
    The abstract of an assignment of a patent is inadmissible. 208 Fed. 145. Freight bills are secondary evidence and inadmissible. 166 Pac. 96. Secondary evidence of the contents of a writing is not admissible unless it is shown that the original can not be produced. 160 N. W. 15; 190 S. W. 959; 140 N. W. 1006; 71 Atl. Rep. 263. See, also, 229 Ill. 272; 120 Fed. 925; 55 S. C. 214; 77 Ark. 244. The original must be shown to be lost before copy can be introduced, 122 Cal. 358; 55 Pac. 132; 45 S. E. 443; 9i8 Ill. App. 352; 55 Ind. 194; 135 Mo. 608; 60 Pao. 270, 207; 148 Ala. 659; 41 So. 411. Copies may be excluded where it is not .shown that the originals could not be obtained. 72 Ark 47; 109 Iowa 25; 67 Kan. 787; 40 S. W. 743; 94 Id. 173.
    Parol evidence of a written instrument is inadmissible where the instrument itself can be produced. 174 Ky. 665; 192 S. W. 853; 99 Atl. 619. Entries in books are not admissible until- it is shown that the books are correctly kept and contemporaneous with the facts recorded. 65 Ark. 316; 57 Id. 402. The exhibits were not verified, and the complaint contains no verified account, and the evidence does not fall within the rule. 51 Ark. 368; 103 Id. 522; 12 Ark. 775. It was error to permit J. M. Locke to testify as to the contents of these books. Ill Ark. 593; 94 Id. 183.
    8. It was error to admit evidence as to interest on the eight bales of cotton and as to the storage and handling charges on them and also the thirty-six bales.
    9. It was error to refuse the peremptory instruction and in refusing instructions 2 and 3, asked by defendants.

      Hill & Filshugh, for appellees.
    1. The evidence shows that hollies were not merchantable cotton, and without an express warranty this action could be maintained. 113 Ark. 169; 78 Id. 327. The law of this case is well settled. The shipment was an interstate one. 87 Ark. 562; 113 Id. 118; 187 IT. 'S. 617. Transactions of interstate commerce are not within the statute prohibiting a foreign corporation doing business in the State. 85 Ark. 278; 113 Id. 505; 136 Ark. 52; 141 Id. 38.
    2. There was no error in admitting testimony nor in the instructions given and refused.
   Humphreys, J.

This is a suit by appellees against appellants, in the circuit court of Sebastian County, Port Smith District, for damages on an alleged implied warranty as to the quality of forty-four bales of cotton, in-eluded in a purchase and sale of 188 bales of cotton. It was alleged, in substance, that appellees, an Oklahoma partnership, maintained an office in Fort Smith, Arkansas, for the transaction of a general cotton business in Arkansas, and, during the cotton season of 1919', purchased. 188 bales of merchantable cotton, according to custom, for delivery at Fort Smith, at an agreed price of 36 cents per pound; that there were 44 bales of unmer-chantable or “bollie” cotton included in the shipments, which occasioned a total loss of $4,383.91 to appellees.

Appellants interposed two defenses — the first being that appellees were not a partnership, but a foreign corporation engaged in the business of buying and selling cotton in the State of Arkansas, in violation of act No. 313 of the Acts of 1907 of said State; and the second being that the cotton was sold and purchased without regard to grade, at an average price of 36 cents for the entire lot, including the “bollie” cotton.

The cause was submitted upon the pleadings, exhibits thereto, the evidence and instructions of the court, which resulted in a verdict and judgment against appellants in the sum of $3,846.53, from which an appeal has been duly prosecuted to this court.

The facts reveale by the record, in so far as necessary to determine the vital questions on this appeal, are, in substance, as follows: S. B. Locke & Company, an Oklahoma corporation composed of S. B. Locke, J. M. Locke and J. C. Fahnestock, was organized on May 29, 1913, for the purpose- of conducting a general cotton business, with its main office at Muskogee, Oklahoma, and a branch office at Fort Smith. W. B. Locke, an uncle of J. M. Locke, was manager of the organization, and H. B. Hunt, bookkeeper of the branch office -at Fort Smith, after 1917, and they had been retained in those positions and paid for their services from the Muskogee office with cheeks of S. B. Locke & Company. Neither W. B. Locke nor H. B. Hunt filed the articles of incorporation in the office of the Secretary of this State, as required by law before commencing business, or during the time the corporation continued business in Arkansas. J. M. Locke, the vice-president and secretary of the corporation, also testified that he did not file the articles of said incorporation' in this State. W. R. Locke testified that S. B. Locke was president, J. M. Locke, vice-president and treasurer, and W. P. Gowen, secretary of the corporation. When first asked whether S. B. Locke & Company was a corporation or partnership, he stated that it was a partnership for about two years before he bought the cotton in question from appellants. He was then shown the articles of incorporation, and stated that it was a corporation in Oklahoma, but a partnership in Arkansas. Being interrogated further upon this point, he made the .following answers:

Q. Then you do not know whether you were dealing as a corporation or a partnership?
A. I know what I have done.
Q. That is all you know about it?
A. That is all.
Q. Then you did not know of your own knowledge Whether you. were dealing as a partnership or as a corporation?
A. No, sir; I did not know. I just knew I was buying cotton.

Later, and on cross-examination, over the objection and exception of appellants, W. R. Locke stated that J. M. Locke told him S. B. Locke & Company became a partnership about two years before the cotton in question was bought.

J. M. Locke testified that, on October 10, 1918, the corporation became dormant, and the business was conducted by S. B. Locke & Company as a partnership, being composed of S. B. Locke, J. M. Locke and W. P. Cowen. He produced an authenticated certificate of the partnership, appearing on the register of the district clerk in Muskogee, which is a,s follows:

“This is to certify that the partnership of S. B. Locke & Company doing business in the-city of Muskogee, Muskogee County, Oklahoma, is composed of S. B. Locke, J. M. Locke, and W. P. Cowen, and that each of said partners’ postoffice and residence is Muskogee, Muskogee County, Oklahoma.
“Dated this 10th day of September, 1919.
“S. B. Locke & Company,
“By S. B. Locke,
J. M. Locke,
W. P. Cowen.”

The certificate was filed with the register October 16, 1919. He further testified that the cotton business in the branch office at Port Smith was conducted by the partnership of S. B. Locke & Company, and that the money invested was the money of said partnership, and ■that the drafts drawn for the cotton in question were paid by the partnership, and denied that any of the business conducted since the 10th day of October, 1918, in Arkansas, was conducted by the corporation of S. B. Locke & Company. Letter heads and other exhibits introduced each carried the name of S. B. Locke & Company, and also the individual names of S. B. Locke, J. M. Locke and W. P. Cowen.

The contract for the sale and purchase of the cotton in question w|as made on December 13, 1919', between W. R. Locke, representing S. B. Locke & Company, and Charles E. Forrester, representing himself and the- other appellants. The contract was oral.

W. R. Locke testified that, as the representative of S. B. Locke & Company, he purchased from Charles E. Forrester, representing himself and others, 188 bales of merchantable cotton, situated at Waldron, Arkansas, to be shipped and delivered to his company at Fort Smith, Arkansas; that it was agreed the cotton should contain no “hollies” or “dogs;” — “bullies” being descriptive of cotton taken by machinery from the bolls before they opened, and “dogs’ descriptive of cotton which had fallen on the ground and been damaged in the field.

Charles E. Forrester testified that, representing himself and others, he sold to W. R. Locke, as the representative of S. B. Locke & Company, the entire lot of 188 bales of cotton, “hog round,” delivery f. o. h. Wal-dron after it had been inspected by. Heard, the representative of S. B. Locke & Company.

The cotton was billed out in several shipments, and the bills of lading, bearing the word “hog,” were attached to drafts and mailed to S. B. Locke & Company at Fort Smith, Arkansas. The drafts were approved in the Fort Smith office and paid through the Fort Smith banks, and then sent through the Muskogee banks to S. B. Locke & Company at Muskogee, who made final payment. The entire 188 bales arrived in Fort Smith at the same time, early in January, 1920. The freight was paid, and, according to the evidence of appellees, upon examination it was discovered that there were forty four bales of “hollies” contained in the shipments. Ap-pellees disposed of 144- bales of the shipment, and, in the latter part of January, offered to return the forty-four bales of “hollies” to Charles E. Forrester, upon repayment of the purchase price of 36 cents per pound. For-rester refused to accept the “hollies” and return the purchase price. Appellees disposed of the “hollies” in June at 16 cents a pound, deducted all expenses for handling same from the amount and instituted this suit against appellants for the difference between the net amount received for the “hollies” and the contract price of 36 cents per pound paid for it.

In' the course of trial, appellants offered to prove that, during the cotton season of 1919, Charles E. For-rester’s custom was to sell his cotton in lots, “hog round” and the court, over the objection of appellants, refused to admit evidence of that character.

J. M. Locke was permitted to testify in relation to the damages, over the objection and exception of appellants, to the sale of the “hollies” by his office in his absence, and to the items of expense attached to the handling of same, from a statement made by him from the books of S. B. Locke & Company, in. tbe Muskogee office, without showing that the books were properly kept or that the books were kept by him.

Appellants’ first contention is that appellees' can not recover because the undisputed evidence shows that, after the cotton was examined in Fort Smith and the discovery made.that the shipments contained forty-four bales of “hollies,” it accepted 144 bales of the cotton, wlhich, on account of the indivisibility of the contract, ■constituted an acceptance of the entire lot of cotton. We can not agree with learned counsel for appellants in this contention, because, under appellees’ version of the contract, payment of freight and the contract price of the cotton was to be made before an opportunity was given to inspect it. After paying the freight and the purchase price of the cotton and receiving same, the only remedy available to appellees was to sue for damage on account of the inferiority of any or all the cotton upon the implied warranty that it all should be merchantable, and, under appellees’ version of the contract, no opportunity was given them to inspect and elect before receiving same. ■.

Appellants’ next contention is that the court erred in refusing to submit the question of whether S. B. Locke & Company was a foreign corporation at the time the contract was entered into for the purchase of the cotton with appellants, without first having filed its articles of incorporation in the office of the Secretary of State, in the manner required by act No. 313 of the Acts of 1907, of the General Assembly of the State of Arkansas. Appellants requested the court in two instructions, numbers 2 and 3, to submit this question to the jury. Appel-lees specifically objected to the instructions on the ground that the undisputed testimony showed that appellees ' were not a corporation, but were a partnership at the time they entered into the contract in question. The court refused to give either of these instructions, and, in effect, by so refusing, took that issue of fact from the jury. The evidence of appellants tended to show that, after the organization of the corporation in Oklahoma, it opened an office in Fort Smith and transacted a general cotton business for a number of years in violation of the Arkansas laws; that, up to and including the time the contract in question was made, there had been no change in the management of the business; that the manager and bookkeeper were paid in the same manner for théir services during the entire time with checks issued in the Oklahoma office by S. B. Locke & Company. The manager, "W. It. Locke1, first testified that S. B. Locke & Company were a partnership, and, afterward, that it was a corporation in Oklahoma and a partnership in Arkansas. Later, he testified that he did not know whether it was doing business in Arkansas as a corporation or as a partnership. No change was made after the organization of the corporation in Oklahoma in the letter heads. They did not indicate whether S. B. Locke & Company was a corporation or a partnership. The offices were ■ maintained throughout in the same place. J. M. Locke testified that the corporation became dormant and was supplanted by a partnership on the 10th day of October, 1918. The certificate evidencing the partnership was dated September 10, 1919, sworn to September 16, 1919, and filed in the office of the district clerk on October 16, 1919. The certificate on its face showed that S. B. Locke & Company were doing business as a partnership in the city of Muskogee. There is nothing in the face of it to indicate that the partnership assumed control of the ¡corporation’s business outside of that city. In fact, the only evidence in the record to the effect that S. B. Locke & Company at Fort Smith was conducting its business as a partnership was that of J. M. Locke, who is an appellee and a plaintiff in this action, and he did not make any explanation why the corporation became dormant, and, without dissolution, permitted its activities to be prosecuted by a partnership composed of practically the same parties composing the corporation. In addition, it appeared that the Lockes who composed the corporation were related. W. B. Locke was an uncle of J. M. Locke, and S. B. Locke, the latter’s son. It is true that J. M. Locke swore positively that the business at Fort Smith was a partnership business at the time the contract was made; but, not only was he an interested party, but his evidence is in effect disputed by that of W. E. Locke, as well as by other facts and 'circumstances heretofore referred to. In this state of the record, it can not be said that the undisputed evidence showed that S. B. Locke & Company was a partnership at the time it purchased the cotton in question. Skillern v. Baker, 82 Ark. 86; Briggs v. Collins, 113 Ark. 190; Poinsett Lbr. & Mfg. Co. v. Traxler, 118 Ark. 128; Yazoo & Miss. V. Rd. Co. v. Altman, 124 Ark. 490; Furst & Thomas v. Dewberry, 136 Ark. 135. Appellees insist, however, that, even though appellee was a foreign corporation when it entered into the contract in question, it pertained to an interstate transaction. If this contention be correct, then any foreign corporation may open an office in this State, purchase its goods out of the State for shipment into the State and sell its commodities for shipments to points out of the State, and in that way evade the statutes of the State, requiring foreign corporations doing business in this State to file their articles of incorporation w,ith the Secretary of State. We can not subscribe to that doctrine. Again, it is alleged in the complaint in this case that S. B. Locke & Company was doing business in this State. No issue was made in the trial court that this particular business was an interstate transaction. There is no evidence in the record changing the nature of that allegation in the complaint. We think appellees are hound by the allegations of the complaint •and the evidence adduced in support thereof. Moreover, a complete answer to appellees’ position is that this suit was brought by them as individuals composing a partnership, and the corporation was not made a party by them.

Appellants also insist that the court erred in permitting W. E. Locke to give hearsay testimony to the effect that S. B. Locke & Company was a partnership at the time the contract in question was entered into. He was permitted to say that J. M. Locke had so informed him. We think 'the evidence clearly hearsay and inadmissible.

Appellants also insist that the court erred in permitting J. M. Locke to testify to the sale of the “bollies,” when not present, from the records made on the books in the Muskogee office, and to testify what expenses were incurred in the sale thereof, from a statement he made up by reference to the books. The record does not show that the books were kept by J. M. Locke or that the book account related to transactions between J. M. Locke and appellants. The book entries from which the statement was made related to an account between S. 'B. Locke & Company and third parties to whom the “bollies” were sold. We think this evidence inadmissible.

Appellants also contend that the court erred in excluding evidence to the effect that Charles E. Forrester’s custom was to sell his cotton in lots “hog round.” It is admitted by both appellants and appellees that there was a contract with reference to the sale and purchase of this cotton. The contract, and not the custom, must control. The court did not err in excluding that character of evidence.

Appellants’ last insistence is that the measure of damages laid down by the court was incorrect. The measure of damages adopted by the court permitted the jury to deduct the net amount received by appellees for the forty-four bales of “bollies” from the contract price of 36 cents per pound. The evidence shows the “bollies” were received in the early part of January and not sold by appellees until the month of June following. The correct measure of damages was the difference between the market value of the “bollies” at the time it was discovered that the shipment contained this inferior cotton and the contract price. No evidence was introduced to meet this rule.

For the errors indicated, the judgment is reversed and the cause remanded for a new trial.