author: Hart, J.,

text:
    Jewel Coal & Mining Company v. Whitner.
    Opinion delivered February 8, 1926.
    1. Master and servant—assumed risk—question for jury.— While the appreciation of danger is often inferred from a knowledge of the conditions on the part of a servant, he will not be held to have assumed the risk as matter of law if his knowledge is not such as necessary to make him appreciate the danger.
    2. Master and servant—assumed risk—jury question.—Under the evidence, held that it was not error to refuse to declare as a matter of law that plaintiff, who was injured while driving a mule-car in a coal mine, assumed the risk of injury from a protruding rock.
    3. New trial—newly discovered evidence.—A motion for new trial for newly discovered evidence addresses itself to the sound discretion of the trial court, and a denial thereof will not call for a reversal where proper diligence was not employed to obtain such evidence at the trial.
    Appeal from Logan Circuit Court, Northern District; James Cochran, Judge;
    affirmed.
    statement op pacts.
    Austin Whitner sued the Jewel Coal & Mining Company to recover damages for personal injuries received by him in the defendant’s coal mine by reason of its negligence in failing to furnish, him with a safe place in which to work.
    The defendant answered denying negligence on its part, and pleaded contributory negligence and assumption of risk on the part of the plaintiff.
    The Jewel Coal & Mining Company is a domestic corporation engaged in mining coal, and Austin Whitner was driving a mule-car in its mine at the time he was hurt. He went to work for the defendant on November 15, 1923, and got hurt on the third day thereafter while he was driving a mule hitched to some coal-cars. He was sitting in the middle of the front end of the first car, and, as he came out of the entry, he looked over his left shoulder to see if there was a car off of the track or anything else wrong. As he turned his head back, a rock which was protruding over the track caught his hip and pulled him off the car. He hollered to the mule to stop, and finally pulled himself out from between the rock and the coal-car. His right arm was hurt in the bend of the elbow, and his back was severely bruised. He could not work any at all for several weeks, land at the time of the trial, which was in September, 1924, he could only do about half as much work as he could before the injury. He was receiving $7.50 per day at the time he was injured. The rock that caught the plaintiff was protruding over the track, on which the coal-cars were being hauled, and came over about half-way or to the middle of the track. It was impossible for the plaintiff to be out of the way of the rock when riding in the center of the front car, where it was his duty to ride. The above is the version of the circumstances attending the injury and resulting from it as testified to by the plaintiff. Another witness testified that, the rock at the place in question ■protruded over the track to some extent, but he did not know how far. The track is about twenty inches wide, and the coal-cars are' wider than the track.
    According to the testimony for the defendant, the rock in question did not protrude over the track, and, if the defendant had been sitting in the middle of the front end of the front car, where it was his duty to sit while driving, he would not have been hurt. If a car jumped the track or anything else went wrong, it was the duty of the driver to stop the mule and find cut what was the matter. It was his duty to look forward all the time.
    The mine foreman was a witness for the defendant. According to his testimony, the plaintiff admitted to him, right after the accident happened, that he had no business turning around to see if anything had, gone wrong with the cars, and stated further that it was his own fault that the accident happened. Other testimony will be stated or referred to in the opinion.
    The jury returned a verdict in favor of the plaintiff for $200, and from the judgment rendered the defendant has duly prosecuted an appeal to this court.

      White & White, for appellant,

      Rhyne Blair, for appellee.
   Hart, J.,

(after stating the facts). The principal reliance of the defendant for reversal of the judgment is that the court erred in refusing to direct a verdict in its favor. In the first place, it is insisted that there wias no negligence on the part of the defendant. Counsel for the defendant point to the fact that several witnesses testified that the rock in question did not protrude over the car track, and that, if the plaintiff had been sitting in the middle of the front end of the front car, he would not have been injured. It is inferable from other evidence on the part of the defendant that the plaintiff turned to look over his left shoulder to see if anything was wrong with any of the train of cars on which he was riding, and that he, in turning, displaced the lumps of coal upon which he was sitting and thereby caused himself to fall and sustain the injuries for which he is now suing.

Under the settled rules of this court it is not our duty to weigh testimony on any given point at issue; but we must take the verdict of the jury as settling the facts, if there is any testimony of a substantial character to sustain it. In the case at bar, on the question of negligence, the plaintiff testified that he was not guilty of negligence in looking back to see if anything was wrong with any of the coal cars, and that, in doing so, his hip was canght in a rock which protruded over the track, and in this way he was dragged from the car and severely injured. The plaintiff further testified that he was sitting in the middle of the front end of the front car, where it was his duty to sit while driving, ,and that he had fixed his seat so that coal would not topple off and cause him to fall when he should look back. His testimony as to the rock protruding over the track to a certain extent was corroborated by the testimony of another witness. This evidence, if believed by the jury, was sufficient to warrant it in finding that the defendant was guilty of negligence.

It is earnestly insisted, however, by counsel for the defendant, that the court should declare as ia matter of law that the plaintiff assumed the risk, and therefore was not entitled to recover.

It is true, as contended by counsel, where the danger is so obvious that knowledge of it and appreciation thereof should be imputed to the servant, the court should declare as a matter of law that he is not entitled to recover against the master. It is equally well settled that assumption of risk is not predicable from knowledge of the conditions alone. While the "appreciation of the danger is often inferred from complete knowledge on the part of the servant, yet, if the knowledge possessed by the servant is not such as to necessarily malm him appreciate the danger of his work, his action for injuries will not be barred. Brackett v. Queen, 162 Ark. 525.

In the application of these settled principles of law to the facts in the case at bar, we do not think it can be said as a matter of law that the plaintiff knew of and appreciated the dangerous condition of the entry, and thereby assumed the risk. Of course, under the evidence for the defendant, the jury might have found that the position of the rock protruding over the track was apparent to the plaintiff, and as a man of ordinary intelligence he must have observed and realized the danger. It was shown by the witnesses for the defendant that the plaintiff had gone along all the entries the day before he commenced driving in order to familiarize himself with them, and the plaintiff himself admitted that he had driven one trip along the entry in question before he was injured. The jury might have found against him on the question of assumption of risk under this evidence; but it cannot be said as a matter of law that it .was undisputed. The primary purpose of the plaintiff in going along the entries was to familiarize himself with conditions generally, so as to enable himself to better discharge his duties as driver of a coal-car. He was not required to make an inspection to see if rocks protruded over the tracks, making it dangerous for him to drive there. He might have noticed the rough surface of the rocks, and yet not have realized that one of them protruded so far over the tracks that it would be dangerous for him to turn around to see if anything had happened to one of the oars attached to the train he was driving. Then too the fact that the plaintiff had made one trip along there before he was hurt is not conclusive evidence that he knew the dangerous condition of the place. His duties as driver might have required him to turn his head in the other direction while passing the rock in question, and it thereby escaped his notice. Then too he might have been sitting on the right side of the front end of the front car, and on this account did not see the rock and appreciate the danger therefrom. The fact that he was negligent in riding on the right-hand side of the car on the first trip would not preclude him from recovering on the ground of assumption of risk,' or of contributory negligence. The result of our views is that, when the evidence is considered in the light most favorable to the plaintiff, it cannot be said that the court erred in refusing to direct a verdict for the defendant. . ,

The next ground for a reversal of the judgment is that the circuit court erred in not granting him a new trial on the ground of newly discovered evidence. On this point the defendant introduced affidavits of two of its servants, who stated that, after the plaintiff was injured, and before be left tbe mine, be told them that be was sitting on tbe left-band corner of tbe car on a lump of coal; that be turned to look back to see wbat was wrong with one of tbe -cars, and that tbe lump of coal on which be was sitting rolled and threw him off of tbe car, and that be fell between tbe car and the wall of tbe entry, and in that way got squeezed. Tbe record shows that tbe trial did not take place in tbe circuit court until nearly a yéar after the injury occurred. The two newly discovered witnesses were fellow-servants of tbe plaintiff, and, if a full and complete investigation bad been made, it is probable that tbe newly discovered evidence would have been obtained at the trial. It is true that tbe witnesses said that they had agreed not to tell any one because they did not want to -be witnesses; but at the same time it is reasonable to presume that, if a proper investigation bad been made, they would have told wbat they knew.

Tbe motion for a new trial addressed itself to tbe sound discretion of tbe trial court, and, under tbe ruling in Arkadelphia Lumber Co. v. Posey, 74 Ark. 377, it can not be said that tbe circuit -court erred in refusing to grant -a new trial on the ground of newly discovered evidence.

Therefore tbe judgment will be affirmed.


source: Caselaw Access Project

license: Public Domain

text:
    Royal Roofing Company v. Goss.
    Opinion delivered February 8, 1926.
    1. Sales—terms op sale in invoice.—-Where goods sold were accepted by the purchaser without objection, and there was no . previous agreement as to the price, it will be presumed that the purchaser .agreed to the terms in the invoice.
    2. Sales—price—acceptance op goods.—A purchaser accepting goods without a previous agreement as to the price will be bound by the terms of the invoice, though he had been a customer of the' shipper for several years and thought the goods had been -shipped according to the shipper’s previous custom.

      Appeal from. Polk Circuit Court; B. E. Isbell, Judge;
    reversed.
    STATEMENT BY THE COURT.
    The Royal Roofing Company sued J. B. Goss before a justice of the peace to recover $88.50, a balance due for roofing. There was a judgment for the defendant in the justice court, and the plaintiff appealed to the circuit court.
    The Royal Roofing Company is a corporation engaged in selling roofing at wholesale at St. Louis, Mo., and B. M. Schulein is its treasurer. According to his testimony, while at Port Smith, Ark., in the early part of September, 1922, he called J. B. Goss over the telephone at his store in Mena, Ark., and solicited from him an order for roofing. He quoted prices to Goss and told him that the freight would be f. o. b. St. Louis, but that he would allow 20 cents per cwt. on the freight. While they were discussing the freight, they were disconnected, and the witness was unable to get reconnected with Goss. On his return to >St. Louis, he mailed to Goss an invoice of the roofing in accordance with his quotation to Goss, and in the lower left-hand corner of the invoice was a notation of the number of pounds of the freight, together with an allowance of 20 cts. per cwt. on it. This invoice was mailed out on the 8th day of September, 1922, from St. Louis, and in due course .of mail should have reached Goss at Mena, Ark., on the next day. The roofing was received a week or ten days later. In January, 1923, the plaintiff received a letter from Goss inclosing a check for the price -of the roofing as per invoice, and a deduction in the amount of freight from St. Louis to Port Sinith, Ark. Goss claimed that the contract was that he was to be charged with freight only from Port Smith to Mena, and that this was in accordance with their previous dealings. The plaintiff answered this letter claiming that the roofing was sold f. o. b. St. Louis, Mo., and that it had only agreed to allow 20 cts. per cwt. on the freight.

      According to the testimony of J. B. Goss, he accepted the price of the roofing quoted over the telephone from Port Smith 'by B. M. Schulein for the plaintiff, bnt told him that he would not accept the offer of 20 cts. a cwt. freight allowance. Goss reminded him that he had been buying goods from the plaintiff as if they were shipped f. o. b. Port Smith, Ark. Schulein told him that the 20 cts. per cwt. allowance f. o. b. St. Louis would not make much difference. Goss told Schulein that he would not accept the goods in that way, and Schulein hung up the receiver. Goss thought that he was mad, and hung up' the receiver himself. He admitted getting the invoice in due course of mail, and paid the freight when the g-oods arrived eight or ten days later. He had been trading with the plaintiff for several years, and it was their custom for him to pay all the freight, and when the goods were paid for he would receive a credit on the freight from St. Louis to Port Smith. In other words, he would pay for the goods as if they were shipped to him f. o. b. Port Smith, instead of St. Louis. On this account he did not notice the notation on the invoice that he was only to be allowed 20 cts. per cwt. on this shipment.
    The jury returned a verdict in favor of-the defendant, and from the 'judgment rendered the plaintiff has duly prosecuted an appeal to this court.

      Pipkin '<£ Frederick, for appellant.

      Norwood & Alley, for appellee.
   Hart, J.,

(after stating the facts). Counsel for the plaintiff rely for a reversal of the judgment on the ground that the court erred in refusing to direct a verdict in its favor. In this contention we think counsel are correct. According to the defendant’s own testimony, no contract for the purchase and sale of the roofing was made over the telephone because they were disconnected while they were negotiating about the allowance to be given the defendant on the freight. On the one hand, the plaintiff was insisting on the defendant taking the goods f. o. b. St. Louis, Mb., with an allowance of 20 cts. per cwt. on the freight. On the other hand, the defendant was insisting on the freight allowance as if the goods were shipped to him f. o. b. Bort Smith, Ark., instead of f. o. b. St. Louis, Mo. So it will be seen that, according to the defendant’s own testimony, no completed contract was made over the telephone. On his return to 'St. Louis, the agent of the plaintiff sent to the defendant an invoice of the goods with a notation -on it that an allowance of 20 cts. on the cwt. would be made. The defendant received the goods without objection, under this invoice. The minds of the parties not having met prior to the time the invoice was received and the property delivered under its terms at Mena, Ark., it was the duty of the defendant to refuse to accept the roofing unless he was willing to pay according to the terms stated in the invoice. Having received the property and sold it, he became liable to pay for it according to the terms of the invoice. The title to the roofing being in the plaintiff until it was received by the defendant, the conduct of the defendant in retaining it would create in law a presumption of the acceptance of plaintiff’s proposition to sell according to the terms in the invoice. This holding is in accordance with the rule laid down in Markstein Brothers Millinery Co. v. J. A. White & Co., 151 Ark. p. 1, and Cage v. Black, 97 Ark. 613.

In the case first cited, appellees, through a commercial salesman, made an open order to appellant for hats. Appellant received the order, and, after making a selection of hats, shipped same to appellees with an invoice of the hats. In the envelope with the invoice was a notice that no goods would be accepted for return unless within five days after the receipt of the goods. Appellees accepted the hats, but defended a suit for the purchase price on the ground that the purchase was made upon the condition that the unused hats might be returned and credit therefor given on the bill. The court said that, when appellees found out that the hats had not been shipped upon this condition, they should have either returned the entire number of hats, or, if they decided to keep them, they must pay for them. Because appellees did not exercise their right to return the hats within the five days as stipulated in the notice sent with the invoice, it was held that their obligation to pay became complete and binding after the expiration of five days.

In the application of this principle to the case at bar, the defendant should have refused to receive the roofing when he found out that it contained a stipulation about the allowance of freight which he had not agreed to and which he was not willing to accept. Having received the roofing under the conditions expressed in the invoice, he became liable to the plaintiff for the price according to its stipulations.

But it is contended that he did not notice the stipulation as to the allowance for the' freight because he had been a customer of the plaintiff for several years and thought that the goods had been shipped according to their custom, which was that he was to pay for them as if they were shipped f. o. b. Fort Smith, instead of f. o. b. St. Louis.

In the first place, it may be said that this was no excuse under the rule above announced. In that case the purchaser of the goods sent in an order to be accepted by the seller, and the seller shipped the goods with an invoice containing a condition added by him. It was held that the purchaser was bound by the knowledge of this condition as expressed in the invoice. The fact that the defendant in the case at bar had been purchasing goods with a different freight allowance would not excuse him from accepting goods under a different contract. Moreover, his own testimony shows that, in their telephone conversation about the purchase of the roofing, the plaintiff was demanding a change with respect to the freight, and was insisting upon shipping the roofing with the freight allowance as expressed in the invoice. This was sufficient to have put the defendant upon notice when he received the invoice of the roofing, and he can not excuse himself from failing to read it on account of a prior custom between him and the plaintiff with regard to the freight. Besides this, the notation about the allowance in the reduction of the freight was on the invoice at the same place where the number of pounds of freight was given, and the whole bill did not amount to more than five items and the whole invoice did not take up a whole page of ordinary bill paper. The defendant did not exercise his right to return the roofing, and his obligation to pay for it according to the terms of the invoice became binding after he received it and converted it to his own use.

The judgment'of the circuit court is therefore reversed, and the cause remanded for a new trial.


author: Smith, J.

text:
    Letzkus v. Nothwang.
    Opinion delivered Feruary 8, 1926.
    Wills—repugnant condition.—Where a will devised land in fee simple but provided that the devisee should not incumber or sell any part thereof for the period of ten years, the attempt to deprive the estate of its alienability is void for repugnancy.
    Appeal from Pulaski Chancery Court; John E. Martineau, Chancellor;
    affirmed.

      T. E. Helm, for appellant.

      Lee Miles, for appellee.
   Smith, J.

Jacob Frederick Nothwang died testate, and by his will devised his entire estate, real and personal, to his two sons, David Henry and Frederick. The testator was a widower at the time of his death, and the two sons named were his sole heirs-at-law.

By paragraph 1 of the will certain lots in North Little Rock were given to David Henry, together with certain personal property, and by paragraph 2 certain other lots in North Little Rock were given to Frederick, together with certain personal property. There is nothing •in either paragraph restricting the estate devised, and, construed by themselves, those paragraphs would give to the devisees named the fee simple title in severalty to the lots devised to them respectively, beyond question.

Paragraph 3 of the will reads as follows : “Any and all other property of which I may die possessed, real, personal and mixed, I give to my said sons David Henry Nothwang and Frederick Nothwang, share and share alike.”

Paragraph 4 reads as follows: “All the property I give to my said sons, as above set out, is given, however, subject to the following express condition, that is, each of my said sons shall hold his respective share herein conveyed to him for the period of ten years before he shall be permitted to mortgage or in any manner incumber or to sell or convey any part thereof, except the cash money which may be remaining belonging to my estate, after the payment of my said debts and funeral expenses, which money shall be paid to my said sons as above provided, as soon as the same can reasonably be done after my death, and with the further understanding that my said sons may have and enjoy the income from my said real estate and Liberty bonds as the same accrues, and with the further direction that, if any of said Liberty bonds mature' during the said ten years, the proceeds from the same shall be loaned on real estate security at the best rate of interest obtainable, and my said sons permitted to have the income from the same during said ten years. At the end of the said ten years, it is my desire that each of my said sons shall have absolute control of the property herein conveyed to him for such uses and purposes as he may see fit. I trust that they may make the best use of this property. ’ ’

The will was duly probated. There are no creditors, and on April 13, 1924, which was after the will had been probated, David Henry died intestate, without issue, never having been married, and leaving as his sole heir-at-law his brother Frederick.

On.November 1, 1924, Frederick contracted to sell to appellant one of the lots devised to him, and a lot devised to Ms deceased brother, on which a down payment was made, and the balance of the purchase money to be paid on approval o.f the title. No objection to the title was made except that 10 years had not expired since the date of the will, and the purchaser, for that reason, questions the right of Frederick to convey.

Suit to compel specific performance was brought, and the sole question raised on this appeal is the effect of paragraph 4 of the will on the right to convey, the ten years not having expired.

In the case of Booe v. Vinson, 104 Ark. 439, a testator had devised his estate to the two persons who, in the absence of a will, would have been his sole heirs-at-law. Each devisee was given $1,200 per annum “for the maintenance of both of them as long as they shall live ’ ’, with the proviso that ‘ ‘ at their death it is my 'desire that what is left, if anything, be used for charitable purposes.”

In construing this will it was held, first, that the devise and bequest to charity named no special beneficiary, and indicated no plan or scheme for carrying out the purpose of the will, and gave to no one the discretion to determine who the beneficiary should be, and upon this finding it was adjudged that the bequest to charity was too vague and indefinite to admit of judicial administration, and was therefore void, and must fail.

It was next contended by the executors of the will in that case that the testator had provided only an income for the lives of the beneficiaries, while on behalf of the beneficiaries it was contended that, the provision Jor charitable purposes being void, the entire estate vested in them.

The court held, in disposing of these contentions, that a testator is presumed to intend to dispose of his entire estate, and that the law favors the vesting of estates, and, in the absence of a contrary intention on the testator’s part appearing from the will, the estate will vest at death, and, if the will is susceptible of a dual construction, by one of which the estate becomes vested and by the other it remains contingent, the construction which vests the estate will be adopted. It was there said: “Nowhere is there anything expressed in the will to indicate that, if it had 'been known to the testator that the gift to charity would fail, he would not have been willing for appellees (the devisees) to have the absolute control and ownership of all the property given to them.” It was held that a fee-simple title vested in the devisees upon the death of the testator.

The testator Nothwang disposed of his entire estate by the will. An executor was named, the provision in that respect being as follows: “I hereby constitute and appoint my friend F. F. Chretien to be my sole executor of my last will, directing my said executor to pay all my just debts and funeral expenses and the legacies hereinafter given out of my estate, and I direct that my said debts and funeral expenses be paid out of the cash money belonging to my estate. After the payment of my said debts and funeral expenses, it is my will and I direct that my property be disposed of as follows”. Thereafter follows the disposition of the estate set out above.

The devise was not to trustees, but was direct to the devisees named, and we think there can be no question but that the title vested in them immediately upon the death of the testator. Necessarily so, for the title could not have been in any one except the devisees after the death of the testator; and the provisions that these devisees should not sell, mortgage or incumber the property devised to them for a period of ten years after the title had vested in them is a condition subsequent, and is void because it is repugnant to the estate conveyed.

At § 684 of Page on Wills, page 808, it is said: ‘ ‘ The law recognizes a certain number of classes of estates in real property, and will not allow the creation of new kinds of estates, nor will it allow a testator to take from existing classes of estates any necessary incident thereto ; accordingly any attempt by will to create a new class of. estate, or to pass a recognized estate without certain necessary incidents, is a nullity. Thus a gift of land in fee, followed by a provision that devisee shall not sell this property during his life, can not be entirely enforced, since the restraint upon alienation is repugnant to the nature of the estate conveyed. In such cases the intention to pass the property, being the paramount intention of testator, is enforced, and the restraint upon alienation is ignored, and held void. Thus, a condition that certain property devised in fee shall not be sold until the oldest of the children reaches the age of twenty-five, and a condition that certain realty devised in fee should not be sold, mortgaged or incumbered for thirty years, was held void. So a restraint on alienation for twenty-five years, and a prohibition to sell or mortgage except to other devisees for ten years after the youngest devisee arrived at age, have' been held void. Still more is a permanent restraint an alienation. Hence attempts to devote realty to permanent uses which are not charitable in their nature are void. ’ ’

In the case of Anderson v. Cary, 36 Ohio State 506, the testator devised his farm to his sons “upon the following conditions: 1. I direct that said sons shall not be allowed to sell and dispose of said farm until the expiration of ten years from the time my son Charles Lincoln arrives at full age, except to one another, nor shall either of my said sons have authority to mortgage or incumber said farm in any manner whatsoever, except in the sale to one another as aforesaid.”

The Supreme Court of Ohio said, in construing the language quoted, as it may be said of the will here under consideration, that no forfeiture was intended of the estate conveyed upon breach of the condition recited, and that there was no indication of any intent on the part of the testator to die intestate as to the property, and that, “instead of giving to his sons an estate in the land less than a fee simple, his intent and purpose was to give them a fee simple, but to eliminate therefrom its inherexit element oí alienability, for a limited period, or to incapacitate Ms devisees, although, sui juris, from disposing of their property for the Same limited period, to wit: until the younger should arrive at thirty-one years of age—each and both of which purposes are repugnant to the nature of the estate devised. By the policy of our laws, it is of the very essence of an estate in fee simple absolute that the owner, who is not under any personal disability imposed by law, may alien it or subject it to the payment of his debts at any and all times; and any attempt to evade or eliminate this element from a fee simple estate, either by deed or by will, must be declared void, and of no force. Hobbs v. Smith, 15 Ohio St. 419. ”

The court then proceeded to say that, while it could not be denied that the owner of an absolute estate in fee simple might, by deed or will, transfer an estate therein less than the whole upon conditions,'the breach of which would terminate the estate granted, or might create a trust whereby the beneficiary could not control the corpus of the trust, or even anticipate its profits, yet, in construing the language quoted, the court said: “The attempt here was to fasten upon the estate devised a limitation repugnant to the estate, which limitation, and not the devise, must be for that reason declared void.”

So here, the will of Nothwang devised a fee simple estate to his sons, which vested upon the testator’s death, and the attempt to deprive this estate of its alienability is void for repugnancy. Davis v. Sparks, 135 Ark. 412; Bernstein v. Bramble, 81 Ark. 480.

The decree of the chancery court confonns to the views here expressed, and it is affirmed.


text:
    Thompson v. B. W. Reeves & Company.
    Opinion delivered February 8, 1926.
    1. Mortgages—future advances—construction.—A mortgagee .may take security in a single instrument for an existing debt and for future advances to be made to the mortgagor; but the intention of the parties to a mortgage at the time of its execution, as expressed by the language used, governs, and this purpose cannot be enlarged by any contemporaneous parol or subsequent agreement that it shall secure any indebtedness other than that referred to in the mortgage.
    2. Appeal and error—failure to bring up evidence—presumption.—Where a decree recites that the case was heard upon oral evidence, which is not brought into the record on appeal, it will be presumed that -such testimony was offered as supported the decree rendered, if any testimony would have supported the decree.
    Appeal from Union Chancery Court, First Division; J. T. Stevens, Chancellor;
    affirmed.

      Poivell, Smeacl & Knox, for appellant.

      J. B. Moore, for appellee.
   Smith, J.

Appellees are the successors of B. W. Reeves, Sr., who had conducted a general mercantile business in the city of El Dorado. Among the other assets taken over by appellees was a note for a thousand dollars, dated October 22, 1917, due November 1, 1918, and -bearing interest at ten per cent, from date until paid, executed by Esau Thompson to the -said B. W. Reeves, Sr., also a deed of trust executed by Thompson and his wife to secure this note and certain other indebtedness. Suit was brought 'by appellees to foreclose this deed of trust, and attached to the complaint which prayed that relief was an itemized statement of the account of Thompson showing all charges and credits and the dates thereof. In the decree of foreclosure, which was rendered September 3, 1924, it was recited that, after hearing the oral testimony, the court found the fact to be that an indebtedness of $572.20; secured by the deed of trust, remained unpaid, and a commissioner was appointed to sell the land mortgaged in satisfaction of this indebtedness.

This appeal is from that decree, and it is insisted that the decree is erroneous upon its face, in that it appears, from the face of the deed of trust, that only a thousand-dollar note was secured thereby, and that it appears, from the exhibit attached to the complaint showing the state of the account, that the note had been paid.

The original of the deed of trust appears to have been lost, and the foreclosure proceedings was based upon the instrument as recorded, and on the margin of the deed record appears this notation: “This mortgage is credited with the sum of $900 paid on March 21, 1922. (■Signed) B. ¡W. Beeves, by H. B. Beeves” (amember of the firm succeeding B. W. Beeves). This notation was attested by the clerk and recorder.

The deed of trust described the note, and was immediately followed by the recital that the maker of the note “being desirous of securing the payment of said sum of money unto the said B. W. Beeves, and in consideration thereof, and in the further consideration of $1000 in hand to the said party of the first part (Thompson), doth hereby grant,” etc.

It was therein recited that “the conditions of this deed are such that in case the said Esau Thompson shall pay the said note or any renewals thereof at the time the same fall due, and all other indebtedness above provided for, then this deed is to be void.”

It is insisted for the reversal of the decree that this instrument shows that only a thousand-dollar note was secured, and that the account between the parties, which was made an exhibit to the complaint, shows affirmatively that the note was paid.

We are unable to agree with learned counsel for appellants in these contentions.

In the case of Patterson v. Ogles, 152 Ark. 395, the court said: ‘ The latest expression of this court on this subject is found in tbe recent case of Wood v. Cole, 122 Ark. 457, where we said: ‘The effect of our cases is that a mortgage to secure future advances, even to the time of the foreclosure of the instrument, is valid; but, if such purpose is intended to be accomplished, that fact must clearly appear from the instrument, and such purpose will not be presumed where the instrument does not contain a general description of the indebtedness secured, so as to put one who examines it on notice that this was its purpose, in order that such person may pursue the inquiry which such knowledge would suggest.’ ”

In the very recent case of First Nat. Bank of Corning v. Corning Bank & Trust Co., 168 Ark. 17, we recognized the right of a mortgagee to take security, in a single instrument, for an existing debt and for future advances to be made the mortgagor, but we said the intention of the parties to a mortgage at the time of its execution, as expressed by the language employed, governs, and this purpose cannot be enlarged by any contemporaneous parol or subsequent agreement that -it should secure any indebtedness other than that referred to in the mortgage.

Applying these tests, we think it appears from the deed of trust itself that it was not the intention of the parties to limit the security of that instrument to the thousand-dollar note there described, but was contemplated by the parties that additional advances would be made which should likewise be secured by the deed of trust.

The first item of the account made an exhibit to the complaint was dated October 22, 1917, and the last advance was made under date of November 25, 1921, the account being like the ordinary account of a farmer with a merchant.

The credit of $900' which was indorsed on the margin of the record of the deed of trust was shown in the account under date of March 21, 1922, and the only remaining item on the account was the interest which had accrued since the date of that payment.

We do not agree with learned counsel for appellants in their interpretation of the marginal indorsement of the deed record. It is not recited there that the $900 payment was credited on the note, but that the mortgage was credited with that sum. Of course, if only the note was secured by the mortgage, then a credit on the mortgage would be a credit on the note. In other words, we interpret the indorsement to mean that the $900 payment was credited on the indebtedness secured by the mortgage, and not necessarily on the note.

But, whether this be true or not, the recital in the decree that the cause was heard on oral evidence is conclusive of this question of fact. This evidence was not preserved, and has not been brought into the present record by bill o'f exceptions or otherwise, and we must therefore presume—and the presumption is conclusive —that such testimony was offered as supported 'the decree rendered if there could have been testimony which would have supported the decree. Such testimony might have been offered. The debtor, in making a payment, may designate the account to which it shall be applied, and, in the absence of such designation, the creditor ¡may make the application, but the application is not irrevocable. After making one application the parties might agree that the credit be changed and otherwise applied. So here the credit of the $900 payment was a matter of bookkeeping which might by consent have been reapplied.

It is not insisted that the decree was rendered for an excessive amount, or that the mortgage was indorsed as having been paid and satisfied, but only that the record does show that the note was paid. But, as we have said, even though the note only was secured by the deed of trust, the oral testimony might have shown that credits originally applied to the note were later, by consent, reapplied to the open account.

The decree of the court below must therefore be affirmed, and it is so ordered.


author: Smith, J.,

text:
    Robertson v. American Investment Company.
    Opinion delivered February 8, 1926.
    1. Bills and notes—indorsement without recourse.—Indorsement of a promissory note without recourse does not indicate that the indorsee takes with notice of any defects, or that he does not take on the credit of the other party or parties to the note, but only that he takes without recourse on the indorser.
    2. Vendor and purchaser—notice op vendor’s lien.—The fact that an express vendor’s lien was not reserved in a conveyance of land did not displace the lien in favor of a subsequent incumbrance where the conveyance showed on its face that certain notes were given in part payment of the land, and inquiry would have revealed the fact that they were not paid.
    3. Vendor and purchaser—constructive notice.—'One who takes a mortgage upon land takes with constructive notice of whatever appears in the conveyances constituting his chain of title, whether such conveyances are of record or not; and if anything appears therein sufficient to put him on inquiry, he is charged with the notice which he would-ffiave received if he had made the inquiry.
    4. Mortgages—surrender op lien—intervening lien.—The holder of a prior mortgage lien on land who surrenders his lien and ■accepts a second mortgage lien thereon takes subject to an intervening lien in favor of a third person.
    Appeal from Logan Chancery Court, Northern District; J. V. Bourland, Chancellor;
    reversed.
    STATEMENT BY THE COURT.
    On ‘September 12,1921, C. H. Plunkett and wife conveyed by deed of that date a tract of land in Logan County, Arkansas, to S. B. Casey. The deed recited that the portion of the unpaid purchase money which was not paid in cash was evidenced by three notes, payable to the order of the grantor, as follows: One note for $250 due November 1,1923; one note for $500 due November 1, 1924; and one note for $500 due November 1, 1925. There was no express reservation of a vendor’s lien to secure the payment of those notes.
    On September 6, 1923, these notes were purchased from Plunkett by Cecil Robertson, and at the time of the purchase were indorsed by Plunkett as “transferred without recourse on me. ’ ’
    On the maturity of these notes Robertson brought this suit to enforce a vendor’s lien against the land in payment for which the notes were given. It was alleged in the complaint filed by Robertson that the American Investment Company, hereinafter referred to as the company, claimed a lien on the land, and that company was made a party defendant.
    ' ' The investment company filed an answer, in which the following facts were set out: That on July 31, 1922, Casey and wife executed to the company a mortgage on the land in question to secure the payment of a note due the company for the sum of $1,200, and on the same day the said Casey and wife also executed to the company a second mortgage for $300, and both of said mortgages were duly filed for record on August 17, 1922, and on August 31,1922, the company assigned the first mortgage and $1,200 note to the Franklin County Savings Bank & Trust Company, of Vermont, hereinafter referred to as the bank. That the loans from the company were obtained with the full knowledge of Plunkett for the purpose of paying a mortgage debt of S. B. Casey to W. M. "Winner of $750, and interest, executed September 12, 1921, for the purpose of paying a prior mortgage on the same land executed by Plunkett to Winner 'before the salS of the land to Casey.
    It was further recited in the company’s answer that Plunkett did not reserve an express vendor’s lien on the land sold Casey, and that the loan was made without knowledge of this lien, and it was alleged that, as the company was an innocent purchaser, its mortgage lien was superior to the equitable vendor’s lien. •
    The deed from Plunkett to 'C'asey was not recorded until August 19, 1922, which was two days after the mortgages to the investment company had been filed for record.
    The bank filed a separate answer adopting the answer, of the mortgage company, and alleging that it was an innocent pur chaser of the $1,200 note and the mortgage securing it.
    The court declared the law to be that the mortgages to the bank and to the company were superior to the vendor’s lien for the purchase money by reason of the fact that the mortgages were recorded prior to the deed, and that, as the said mortgage loans were applied in payment of a prior existing mortgage lien to Winner, the company and the bank were entitled to be subrogated to the rights of the owners of this mortgage. .
    Casey testified that he bought the land in controversy from Plunkett for $2,500, to he paid in part 'by the assumption of a, mortgage from Plunkett to Winner. The deed from Plunkett to Casey does not set out as a part of the consideration the assumption of payment of this mortgage. Witness Casey further testified that out of the proceeds of the loans from the mortgage company he paid the mortgage to Winner and paid $100 of interest to Plunkett, and the balance was used in building a four-room house on the land. Witness testified that he told Plunkett he had applied for the loan, and Plunkett knew that the interest paid him was paid with a part of the proceeds of the loan.
    Plunkett’s testimony was substantially the same as that of Casey, except that he denied knowing that Casey had applied for or had received a loan from the mortgage company until Casey paid him the $100 in interest.
    ' Winner testified that he held a mortgage from Plunkett for a thousand dollars on the land in controversy, and that Plunkett and Casey came to see him about releasing Plunkett and holding Casey for this debt. Witness agreed to do this if the mortgage indebtedness was reduced to $750, and a first lien was given him for that amount, and, when the mortgage indebtedness of Plunkett to witness was reduced to $750, he canceled the mortgage from Plunkett, and took a mortgage from Casey for the amount then due him. The mortgage from Casey was filed for record September 16, 1921, and this mortgage was paid witness with money derived from the loans to Casey by the mortgage company.
    The agent of the mortgage company testified that he had no knowledge of any claim of a lien by Plunkett, and that the loan was made and completed before the company had knowledge of that fact. There was testimony tending to show that the mortgage company had actual knowledge of the vendor’s lien before the sum secured by the mortgage to it was paid over to Casey; but we regard this as unimportant, and do not set this testimony out for reasons which will later appear. Other testimony will be stated in the opinion.

      White & White, for appellant..

      Anthony Sail, for appellee.
   Smith, J.,

(after stating the facts). The fact that the notes sued on by Robertson were indorsed, “without recourse on me”, by Plunkett is unimportant here. A syllabus in the case of Neely v. Black, 80 Ark. 212, reads as follows: “Indorsement of a promissory note without recourse does not indicate that the indorsee takes with notice of any defects, or that he does not take on the credit of the other party or parties to the note, but only that he takes without recourse on the indorser.”

Robertson therefore, by purchasing the purchase-money notes from Plunkett, acquired the equitable vendor ’s lien which Plunkett had.

The fact that an express vendor’s lien was not reserved in the deed is unimportant, because the deed showed on its face that these notes were given in part payment of the land, and any inquiry would have revealed the fact that they were not paid. Union & Planters’ Bank & Trust Co. v. Simmons, 166 Ark. 285.

It is true the mortgages to the mortgage company were placed on record before the.deed from Plunkett to Casey was filed for record, but this is unimportant, because the deed from Plunkett to Casey was in the chain of title under which the mortgage company claims. The title mortgaged was acquired through the deed from Plunkett to Casey.

In the case of Gaines v. Summers, 50 Ark. 322, Mr. Justice Battle said: “A person purchasing an interest in lands ‘takes with constructive notice of whatever appears in the conveyances constituting his chain of title. ’ If anything -appears in such conveyances ‘ sufficient'to put a prudent man on inquiry, which, if prosecuted with ordinary diligence, would lead to actual notice of some right or title in conflict with that he is about to purchase, it is his -duty to make the inquiry, and if he does not make it he is guilty of bad faith or negligence,’ and the law will charg-e him with the actual notice he would have received if he had made it.” (Citing cases). The doctrine of that case has been many times reaffirmed by this court and is settled law.

We think the court was also in error in holding that by subrogation the lien of the mortgage company was superior to the vendor’s lien acquired by plaintiff Robertson. In the first place, the mortgage indebtedness to Winner amounted to only $750, and upon no theory could there be sulbrogation beyond the sum paid to satisfy the mortgage. But it further appears that the mortgage from Plunkett to Winner was canceled when Winner agreed to take a mortgage from Casey in satisfaction o,f the one which he had from Plunkett. The deed from Plunkett to -Casey was dated September 12,1921, and the mortgage from Casey to Winner was also dated September 12, 1921, but necessarily the deed is prior and superior to the mortgage, for the deed conveyed to Casey the title which 'Casey mortgaged to Winner, therefore the vendor’s lien in Plunkett’s favor is superior to the mortgage lien in Winner’s favor.

It is true Winner testified that it was understood this mortgage from Casey was to be a first lien, and that fact was recited in the mortgage from Casey to Winner, but there is no showing whatever that Robertson was aware of or was a party to this understanding. On the contrary, the undisputed testimony is that Robertson had no actual knowledge of this understanding. Such knowledge as Robertson bad was constructive, arising* from the fact that there was a mortgage of record from Casey to Winner, but it is also an undisputed fact that Casey had no title to mortgage except that which he derived through the d'eed to him from Plunkett. Robertson testified, and is corroborated by Plunkett, that he had sold Plunkett other lands upon which he, Robertson, held a vendor’s lien, and that Robertson satisfied this lien in consideration of the transfer to him of the notes herein sued upon.

Robertson was an innocent purchaser of the notes sued on. He had only constructive notice of the existence of the mortgage from Casey to Winner, and the court was therefore in error in not adjudging that the vendor’s lien which Robertson acquired by the purchase of the notes was superior to the mortgages executed to the mortgage company, one of which, as has been said, was assigned to the bank and trust company of Vermont.

The decree of the court below will therefore be reversed, and the cause remanded with directions to enter a decree in conformity to this opinion.


author: Humphreys, J.

text:
    Twin City Pipe Line Company v. Chambless.
    Opinion delivered February 8, 1926.
    Gas—purchase op pipe lines—rates.'—In the operation of the business of a public utility, such as a natural gas company, it must adhere to the rate fixed and applicable to it by the Railroad Commission, which fixed the rate, and the purchase of pipe lines owned by other gas companies whose rates have been fixed at different amounts of said Commission does not modify or change the rates of the purchasing company.
    Appeal from Sebastian Chancery Court, Fort Smith District; J. V. Bourland, Chancellor;
    reversed.

      Daily & Woods, for appellant.
   Humphreys, J.

Appellees, who were domestic consumers of gas along the pipe lines originally owned by the Clear 'Creek Oil & Gas Company and the LaSalle Oil & Gas Company, 'brought this suit in the chancery court of Sebastian County, Fort Smith District, to enjoin appellant, who had purchased the pipe lines in question from the original owners, from charging the flat rates theretofore fixed by the Arkansas Railroad Commission for its rural consumers, and to compel it to supply appellees with g'as at the meter rates to rural consumers fixed by said Commission for the Clear Creek Oil & Gas Company and the LaSalle Oil & Gas Company while they were the owners of said pipe lines.

The issue joined by the pleadings and tried by the court was whether appellant ivas compelled to supply appellees with gas at the rates fixed by the Arkansas Railroad Commission for the Clear Creek Oil & Gas Company and the LaSalle Oil & Gas Company after purchasing from said companies the pipe lines through which appellees had theretofore been served with gas. Upon the record made the trial court ruled that the rates fixed by the Arkansas Railroad Commission for supplying gas by public utility companies to rural consumers attached to the pipe lines owned and operated by the respective utilities, and, for that reason, enjoined appellant from removing the meters along the newly acquired pipe lines and from imposing a flat rate, instead of a meter rate, upon appellees for furnishing gas to them, from which ruling and judgment an appeal has been duly prosecuted to this court.

The undisputed facts revealed by the record necessary to a determination of the only question involved on this appeal are as follows:

All the companies are public utilities engaged in transporting gas through pipe lines from the Crawford County gas field to their respective customers in Van Burén and Fort Smith, and to suburban factory districts. They all furnish gas to rural consumers residing near their pipe lines. Appellant company had furnished its domestic rural consumers gas prior-to November, 1921, at a flat rate of $3 per month in the spring and summer, and $5 per month in the fall and winter. In November, 1921, it complied with, act 124 of the Acts of 1921, by filing* its 'schedule of rates with the Arkansas Railroad Commission, which rates were approved by said Commission, the rates for domestic rural consumers being fixed at the flat rate theretofore charged by appellant. In 1922 the Clear Creek Oil & Cas Company and the LaSalle Oil & Cas Company applied for and obtained a meter rate which each might charge their domestic rural customers, which rate was twenty-five cents per thousand cubic feet of g*as. Meters were installed at the residences for the purpose of measuring the gas actually used by each consumer. In November, 1923, the Clear Creek Oil & Cas Company and the LaSalle Oil & Cas Company sold their pipe lines in Crawford County to appellant. As we understand the record, these pipe lines composed a part only of the physical properties of the selling carriers, and the corporations themselves were not taken over by appellant corporation. In other words, the sale did not work a merger or consolidation of the corporations. After the sale each corporation maintained its own identity and conducted its own business. Immediately after the purchase of said pipe lines by appellant company, it notified the domestic rural consumers of the selling carriers that from and after December 1, 1923, it would charge them the flat rate fixed by the Arkansas Railroad Commission for the gas used by them. A part of the consumers then brought this suit to enjoin appellant from imposing the flat rate upon them, with the result heretofore stated.

The solution of the question must depend upon whether the rate fixed by the Arkansas Railroad Commission is personal to a carrier, running with its franchise, or whether the rate attaches itself to the physical properties of each public utility. The rate, in our opinion, runs ydth the 'franchise or right of each public utility to do business. In the operation of the business of a public utility, it must adhere to the rate fixed and applicable to it until changed by the Arkansas Railroad Commission, which. fixed the original rate. Acts 124, Acts 1921. The purchase of pipe lines owned by other carriers whose rates have been fixed at different amounts by said Commission does not automatically modify or change the rates of a purchasing carrier theretofore fixed by the Commission. The sale and purchase of pipe lines do not. affect the respective rates fixed by the Commission for each public utility. If the domestic consumers along the pipe lines of the selling utilities are not satisfied with the rates fixed for the purchasing utility on account of being exorbitant or unfair, their remedy was to apply to the Arkansas Railroad Commission for a reduction of the rates. Ample provision is made in the law for such procedure. Section 7 of act 124 of the Acts of 1921; sections 20 and 21 of act 124 of the Acts of 1921; Fort Smith Light & Traction Company v. Bourland et at., 160 Ark. 1.

On account of the error indicated the decree is reversed, and the cause is remanded with directions to dismiss appellee’s bill for injunction against the imposition of said rates.


text:
    McCurry v. Griffin.
    Opinion delivered February 8, 1926.
    1. Evidence—hearsay—prejudice.—Where there was a conflict in the evidence as to- whether a partnership existed between the plaintiffs and defendant, testimony that defendant’s agent came to one of the plaintiffs and informed him that defendant had sent him to ascertain whether such plaintiff would buy an interest in a certain business, such testimony was inadmissible as being hearsay, and was prejudicial as, tending to establish the disputed partnership.
    2. Partnership—evidence.—It was not error to permit one of the plaintiffs, in a suit involving the question whether defendant -and plaintiffs were partners, to- testify that he was induced to join defendant in a partnership iby defendant’s promise to go in with him and pay $4,000 into the partnership.

      Appeal .from Sebastian Circuit Court, Greenwood District; John E. 'Tatum, Judge;
    reversed.

      George W. Johnson, for appellant.

      Holland, Holland & Holland, for appellee.
   Humphreys, J.

Appellees, John Griffin and Walter Warner, brought suit against appellant in the circuit court of Sebastian County, Greenwood District, to recover one-third of the rents paid by them on a building in Fort Smith occupied for a short time by the firm of “The Griffin-Warner Flour & Grain Company,” a partnership alleged to have been composed of appellees and appellant. The total rent paid by appellees under the rental contract, to which appellant did not contribute, amounted to $561.25.

Appellant filed an answer, denying that he was a partner in said firm and responsible for any part of the rent paid by appellees for the use of said building.

The cause was submitted to a jury upon the pleadings, testimony, and instructions given by the court, which resulted in a verdict and judgment against appellant, from which is this appeal.

As will be observed from the pleadings, the case turned upon the issue of whether appellant was a member of the partnership which did business under the firm name of “The Griffin-Warner Flour & Grain Company.” The undisputed evidence shows that this firm, whoever constituted its membership, boug'ht out the grain and flour business theretofore owned and operated by Watts & MoCurry. Testimony was adduced by appellees to the effect that appellant was a member of “The Griffin-Warner Flour & Grain Company,” and by appellant that he was not. In the course of the trial the court permitted John Griffin, one of the appellees, to testify, over the objection and exception of appellant, that C. E. Speer came to his place of business at Hackett City, and informed him that appellant had sent him to ascertain whether he, Griffin, would buy an interest in the business of Watts & McCurry. C. E. Speer was a traveling salesman at the time for Watts & McCurry. Griffin also testified that, growing out of his conversation with Speer, he took the matter up with appellant, and that he and appellees entered into a copartnership and purchased said stock and business from Watts & McCurry. The court admitted the conversation between Griffin and Speer for the purpose of showing whether Speer was acting as agent for appellant. The effect of the admission of this evidence under the ruling of the court was to let in a hearsay statement of Speer tending to establish a partnership between appellees and appellant. The statement was inadmissible because hearsay, and was prejudicial because it tended to establish appellee’s claim of partnership.

Appellant also contends that the trial court erred in permitting John Griffin to testify that he was induced to join appellant in purchasing the stock and business of Watts & McCurry by the promise of appellant to go in with him and pay $4,000 into the new business adventure. This inducement, if true, was a circumstance tending to show that appellant became a member of the firm of “The Griffin-Wamer Flour & Grain Company,” which was the real issue in the case. For that reason it was admissible.

Appellant also contends that instruction No. 5 given at the request of appellees is in conflict with instructions Nos. 1, 2, and “B”, which the court gave at his request. We deem it unnecessary to consider this alleged error, as the alleged conflict may not appear in a new trial of the cause.

On account of the error indicated the judgment is reversed, and the cause is remanded for a new trial.


text:
    L. D. Powell Company v. Stockard.
    Opinion delivered February 8, 1926.
    Appeal and error—time op piling bill op exceptions.—Where a purported ibill of exceptions was not filed within the time allowed by the court, it will not be considered a part of the record, nor will an affidavit of appellant’s attorney showing why it was not filed within the time allowed be considered.
    Appeal from Crawford Circuit Court; James Cochran, Judge;
    affirmed.

      E. D. Chastain, for appellant.

      W. II. Neal, for appellee.
   Humphreys, J.

Appellant instituted this suit against appellee in the circuit court of Crawford County to recover $312 with 6 per cent, interest per annum thereon from February 28, 1921, the same being an alleged balance due upon the purchase price of The Encyclopedia of Evidence and The Standard Encyclopedia of Procedure. The suit was based upon a written order executed by appellee to appellant on January 28,1921, agreeing to pay $10 cash and $8 per month until all volumes delivered should be paid for, remaining volumes to be paid for on delivery. A free assistance clause to furnish authorities to appellee upon application with a statement of facts appeared upon the back of the order. The initial payment of $10 was .made, and the volumes then in print were delivered by appellant to appellee.

Appellee filed an answer, denying the material allegations in the complaint and alleging that the order was procured through false pretenses (specifically setting them out) made by the salesman of appellant, and also a failure on appellant’s part to comply with the assistance clause in the contract when called upon to do so. It was alleged that appellee made the initial payment and received the printed volumes of the books before he discovered the fraud which appellant’s ag’ent practiced upon him in the procurement of the order, and before appellant’s refusal to comply with the assistance clause on the reverse side of the contract. Appellee prayed for the return of the initial payment with interest thereon.

Appellant filed a demurrer to the answer and cross-complaint, which was overruled by the court, whereupon it filed an answer to the cross-complaint of appellee.

The cause was then submitted to the jury upon the pleadings, testimony, and instructions of the court, which resulted in a verdict and judgment in favor of appellee for $10, from which is this appeal.

Appellant waived any alleged errors on the face of. the record by .pleading over after its demurrer to appellee’s answer was overruled. It filed an answer to appellee’s cross-complaint and went to trial upon the issues joined.

There are no other alleged errors of which this court can take notice on appeal, as there is no proper bill of exceptions in the case. The purported bill of exceptions appearing in the transcript was not filed within the time allowed by the court to prepare and file same. Appellant was given sixty days in which to prepare and file its bill of exceptions after its motion for a new trial was overruled. The motion for new trial was overruled on July 14, 1924, and the bill of exceptions was not filed until September 30, 1924. There is an affidavit of the attorney for appellant incorporated in the transcript setting forth the reasons why the bill of exceptions was not filed within the time allowed by the court, but this affidavit is not a proper part of the record in the case and cannot be considered by this court on appeal. Memphis Land & Timber Co. v. Bd. Dir. St. Francis Levee Dist., 70 Ark. 409; Hardie v. Bissell, 80 Ark. 74.

For the reasons given'above the .judgment is affirmed.


author: McCulloch, C. J.

text:
    McGraw v. Berry.
    Opinion delivered February 15, 1926.
    1. Judgment—finality.—A decree which declared the title to land to be in the plaintiff and that defendants were liable for coal extracted therefrom toy them was not final, and, though the decree was affirmed by this court, the extent of liability of the several defendants was open for subsequent determination.
    2. Corporations—trespasses—liability of stockholders.—While the stockholders of a coal mining company as such are not liable for trespasses committed by the corporation, yet where they were the active managers of its mining operations, they were joint trespassers with the company in the removal of the coal from another’s land.
    3. Corporations—trespasses—liability of stockholders.—Where stockholders and active managers of a coal mining company sold their stock and ceased to participate in its management, they ceased to be liable for its subsequent acts in removing coal from another’s land.
    4. Trespass—liability of purchaser of coal wrongfully removed. •—-A purchaser of coal wrongfully removed from another’s land will be liable to the latter- for its value.
    5. Trespass—wrongful removal of coal—liability of guardian. —A guardian of minors who signed a lease to a coal company authorizing the removal of coal from land belonging to a third person and accepted a royalty therefor on behalf of his wards, but took no active part in such wrongful removal of coal, was not personally liable therefor.

      6. Mines and minerals—unlawful conversion of coal—damages.—Where coal is unlawfully extracted from another’s premises through honest mistake, the measure of damages is the value of the coal in place in the ground; but where the taking is done wilfully and intentionally, the measure is the value of the ore at the mouth of the mine.
    7. Mines and minerals—conversion of coal—liability.—Where there was no evidence that defendants had any knowledge of plaintiff’s claim to the land from which defendants removed coal prior to the commencement of the suit herein, and none that they were not acting in good faith in contending that they were rightful owners of the coal and had a right to remove it, they will be held liable only for the value of the coal in place in the ground.
    8. Mines and minerals—conversion of coal—measure of damages.—The fact that defendants had an opening for the removal of coal from plaintiff’s land through an adjoining tract owned by defendants cannot be considered in determining the value of the coal wrongfully removed toy them from plaintiff’s land.
    .Appeal from Franklin Chancery Court, Ozark District; J. V. Bourland, Chancellor;
    reversed.

      Warner, Hardin <& Warner, Hays, Priddy é Hays, A. A. McDonald, and Hamilton Moses, for appellant.

      Evans & Evans, for appellee.
   McCulloch, C. J.

This appeal is a continuation of the case which was formerly here on appeal under the same style as above, and the decree then appealed from was affirmed. 152 Ark. 452. It is an action instituted by appellees against appellants, and certain other defendants who have not appealed, to recover a certain tract of land in Franklin County, and for recovery of rents and profits, and the value of coal removed from the land.

Appellants and the other defendants asserted title under a conveyance from one who was claimed to be the original owner of the land, under mineral leases obtained from the grantees of said asserted owner. The original decree formerly appealed from established the title of appellees as against all of the defendants in the action and ordered reference to a master to hear testimony and ascertain the amount and value of the coal removed by the defendants from the land, and also to ascertain the amount and value of rents and profits arising from the use of the surface of the land for farming purposes, and the value of improvements made by one of the defendants.

After hearing testimony, the master found that there had been removed from the lands coal of the quantity of 100,173 tons (which is undisputed), and that it was of the value of twenty-five cents. per ton. The master also apportioned the liability of the defendants, and- the court, after overruling exceptions, rendered a decree in accordance with the findings of the master so far as relates to the quantity of coal removed and its value and the proportion of the liability imposed against the respective parties. The court also approved the report of the master concerning the rents and profits for the use of the surface of the land and the value' of the improvements, except in certain particulars which will be mentioned later.

In order to interpret the effect of the original decree so far as relates to the issue presented on the present appeal, the following portions are to be considered:

“The defendants, Denning Coal Company, M. E. Butts, Elvis Butts, Mrs. Lizzie. Pyle, Henry .Bussell, Truss Bye, guardian for Jay and Annice Bye, minors, and Truss Bye in his own right, are liable to the plaintiff for all coal extracted by said Denning’ Coal Company from said lands within three years next before the institution of this suit, which was on the 9th day of October, 1919, and up to the time of the rendition of this decree, and for all damages and waste committed on said lands within said time in operating said coal mines or otherwise. * * * The defendant, Arkansas Light & Power Company, is liable to the plaintiff herein for all coal mined from his land, recovered by him in this action, which was done or caused by said Arkansas Light & Power Company or authorized or consented to by it since the 9th day of October, 1916, and said defendants, Henry Bussell, Mrs. M. E. Butts, Elvis Butts, Mrs. Lizzie Pyle, Jay Bye, Annice Bye and Truss Bye, are also liable for coal extracted and damage done by said Arkansas Light & Power Company from and to plaintiff’s property. The said defendant Dave McGraw is liable to the plaintiff herein for the rents of said land from the 28th day of January, 1919, the date of the death of Allen H. Berry, and is also liable to the plaintiff for timber and posts cut and removed from said lands since the 9th day of October, 1916. * * * The plaintiff is also entitled to recover from the defendants, Dave McGraw, Henry Bus-sell, D. G. Pendergrass, W. J. Pendergrass, Mrs. M. E. Butts, Elvis Butts, Mrs. Lizzie Pyle, Truss Bye, Jay Bye, Annicé Bye, Denning Coal Company and Arkansas' Light & Power Company, damages for the extraction of coal and for waste and injury committed on the estate of the said plaintiff in said lands as hereinbefore set forth, since the 9th day of October, 1916. * * * In taking proof and stating said account, the master will charge against each of the defendants all waste, damage, removal of coal and timber committed by the particular defendant, or which he or she aided, abetted, consented to, procured or authorized. The defendants, Dave McGraw, D. G. Pendergrass and W. J. Pendergrass, are liable for coal removed and damage done by the Denning Ooal Company which was done with their aid, consent and assistance. The defendants, Mrs. M. E. Butts, Elvis Butts, Mrs. Lizzie Pyle, Truss Bye and Henry Bussell, are liable for all coal removed and for damage done under leases from them. * * * In stating the account, the master will find the value of the coal in place at the time of severance and removal from plaintiff’s land.”

All questions as to the title to the tract of land in controversy (including, of course, the coal embedded therein) were settled by the former decree, which was affirmed here, and we have only to deal now with the question of liability of the respective appellants for the value of the coal removed therefrom.

The controversy as to the title to the land was between appellee on the one part and Henry Bussell and the heirs of Dr. Butts on the- other part. Bussell and Butts purchased the land from Martha J. Boberts, who, according to the original decree, had no title. In December, 1914, Bussell and the widow and heirs at law of Butts executed a mineral lease to appellants Dave McGraw, W. J. Pendergrass and Dave Pendergrass and another person, W. D. Logue by name, who is not a party to this action. These parties had previously acquired a lease on an adjoining tract of land from Ada B our land, and they had also acquired a lease to another adjoining tract from the Western Coal & Mining Company. These parties then formed a corporation, designated as the Denning Coal Company, and assigned the leases to that corporation. They were the managing officers of the corporation, and conducted the mining operations for the corporation. A mine was opened on the Bourland land, and coal, was taken out of .that land, and also from the land in controversy, known as the Berry land', and also from the other leased tracts. They began taking coal from the Berry tract on or about October 9, .1916, and up to June 1, 1918, they removed 25,632 tons of coal from the Berry land, when on that date they sold their stock in the corporation and thereafter had no connection with the operation of the mine. The sale of the stock of the Denning Coal Company made by the above named parties was to persons who are not parties to this action, namely, Mullen, McDowell, Couch and McCain, the last two mentioned being connected with appellant Arkansas Light & Power Company, another corporation. There is a> contention by the appellee that the Arkansas Light & Power Company was also a purchaser of the stock, and that feature of the case will be mentioned later. The mine was operated by the Denning Coal Company under its new management from the time of the purchase on June 1, 1918, until March 31, 1919, and 28,456 tons of coal were removed from the Berry tract. All of the coal thus mined out of the Berry tract during the period just mentioned was purchased by the Arkansas Light & Power Company from the Denning Coal Company under a contract whereby the Light & Power Company was to pur-’ chase all of the coal from the three tracts, namely, the Beurland tract, Western Coal & Mining Company tract, and the Berry tract. On April 1, 1919, the Denning Coal Company sold out its properties, including the leases, to appellant Arkansas Light & Power Company, and the latter operated the mine from then until it was closed down on March 31,1921, there being removed during that period 46,085 tons. Two of the Butts heirs were infants, and appellant Truss Rye was their legally appointed guardian. These heirs were Rye’s children, and they resided in Pope County, where the guardianship was pending. The mineral lease made .by Bussell and the Butts heirs to McGraw and his associates was signed by Bye as guardian of his children. The undisputed evidence in the case shows that Bye did nothing in promoting the lease and had nothing to do with it except to sign the contract for his wards after it had been negotiated by Bussell and the other heirs who owned the larger interest. Bye received, during the proceedings, about $1,100 in royalties at ten cents per ton, in accordance with the terms of the lease. The court found that Bussell and the Butts heirs and Bye personally were liable for the full amount of coal mined out of the tract by all of the parties, and decreed a recovery against them for the full amount, 100,173 tons, at twenty-five cents per ton. The court found that McGraw and his associates and the Denning Coal Company were also liable for all of the coal mined out of the Berry tract at twenty-five cents per ton, and rendered a decree accordingly. The court found that the Arkansas Light & Power Company was liable for 28,456 tons of coal mined out of the tract by the Denning Goal Company between June 1,1918, and March 21,1919, and also 46,085 tons mined by that corporation itself after it acquired the properties from the Denning Coal Company on April 1, 1919. Appeals have been prosecuted by all of the defendants except Bussell and the heirs of Dr. Biltts.

It is the contention of learned counsel for appellee that the original decree fixed the extent of the liability of the present appellants, leaving only the quantity and value of the coal to be ascertained, and that, since that decree was affirmed by this court and the determination of the quantity of the coal has been correctly ascertained by the master, nothing remains to be determined concerning that phase of the controversy. We do not agree with counsel as to the effect of the original decree. In the first place, the decree did not attempt, except as against appellant Bye and the other original lessors, to fix the extent of the liability further than to declare that “the defendant, Arkansas Light & Power Company, is 1-iaible to the plaintiff herein for all coal mined from his land, recovered by him in this action, which was done or caused by said Arkansas Light & Power Company or authorized or consented to by it since the 9th day of October, 1916;” and, “defendants Dave McGraw, D. G. Pendergrass and W. J. Pendergrass are liable for coal removed and damage done by the Denning Coal Company which was done with their aid, consent and assistance.” It was left open for the master to ascertain what amount of coal had been mined by the Arkansas Light & Power Company or authorized or consented to by it, and the quantity of coal removed by the Denning Coal Company with the “aid, consent and assistance” of McGraw and his associates. But it must be conceded that the original decree as against appellant Bye and as against defendants Bussell and the heirs of Dr. Butts, who have not appealed, fixed the extent of liability, for it declared that Bye and the other defendants named were liable to the plaintiff for all coal extracted by the Denning Coal Company and all coal extracted by the Arkansas Light & Power Company. If that decree be found to be conclusive, then nothing remains, so far as determining the correctness of the decree against appellant Bye, but to ascertain the quantity and value of the coal taken out by the Denning Coal Company and the Arkansas Light & Power Company. We are of the opinion, however, that, under well settled principles often announced by this court, that portion of the decree was not final, and that the present appeal of Bye as well as of the other appellants brings up for review the question of the extent of the liability of each for the coal removed. Davie v. Davie, 52 Ark. 224; Heffner v. Day, 54 Ark. 79; Hargus v. Hayes; 83 Ark. 186; Brown v. Norvell, 88 Ark. 590; McDonald v. Rankin, 92 Ark. 173; Sennett v. Walker, 92 Ark. 607; Stuart v. Barron, 148 Ark. 380; Robertson v. Yarbrough, 160 Ark. 223.

This court did not, on the former appeal, deal with any question except that relating to the title to the land, hence the judgment of affirmance was not conclusive as to any other question relating to the liability of the parties. The extent of liability of each of the appellants is therefore open for our determination on this appeal.

First, as to appellants McGraw and his associates in the mining operations conducted by them for the Denning Coal Company. They are liable to appellee for all coal mined by the Denning Coal Company up to June 1, 1918., when they sold their stock and severed their connection with it—not because of the fact that they were stockholders, for merely that and nothing more would not render them liable, but—because the evidence shows that they were the active managers of the mining operations conducted by the corporation, and that they actually participated in the trespass. The removal of the coal being entirely without authority from the owner of the land, all persons who actually participated in the mining operations were liable for the damage done to the owner’s property. It is not denied that McGraw and his associates controlled the mining operations for the corporation, and, even though they were acting for the corporation, they were joint trespassers with their principal, the corporation itself, in removing the coal from appellee’s land. Those parties were not, however, liable for coal mined after June 1,1918, when they sold out their interest in the Denning Coal Company and ceased to participate in the activities of that corporation. They were not, after that time, either stockholders or agents of the corporation, and were therefore not liable for any damages caused 'by the removal of the coal. All that they did was to sell their stock to other individuals and retire from participation in the affairs of the corporation. Nor does the fact that they were original lessees of the mineral rights and transferred their leases to the Denning Coal Company render them liable for coal taken from the mine by a subsequent holder of the lease. An original lessor may be held liable for subsequent acts of trespass committed by lessees or sub-lessees by reason of the fact that he is asserting* ownership of the land, and holds himself out as having* authority to authorize the acts which caused the -damage. One who merely transfers a lease is not in that attitude, for he is not asserting title to the land itself, but merely is transferring* whatever rights he has under the lease. McGraw and his associates were not asserting ownership of the land; they were merely lesseés, and all they did was to transfer to the Denning Coal Oompany whatever rights they had under the lease. As long* as they remained participants in the removal of the coal by the Denning* Goal Oompany, they are liable for the damage, but after they ceased to operate the mine they were not liable for the damage done by the Arkansas Light & Power Company, even though that concern held under the lease which had been originally held by McGraw and his associates and assigned by them to the Denning Coal Company. The court erred therefore in its decree against those parties for the 28,456 tons -of coal -mined by the Arkansas Light & Power Company after March 31, 1919.

Next, as to the liability of Arkansas Light & Power Company: It is conceded by that corporation that it is liable to appellee for the 46,085 tons of coal mined after it acquired the property on April .1, 1919, but it denies liability for the 28,456 tons mined by the Denning Goal Company prior to that time. We do not agree with the contention of counsel for appellee that the evidence is sufficient to show that the power company became a stockholder in the Denning Coal Company when McGraw and his associates sold out on June 1, 1918. Nor do we agree with counsel that, even if the power company had been a stockholder, it would have been liable for wrongful trespass committed by the Denning Coal Company, for there is nothing in the statutes of this State which render stockholders with no other connection with a corporation liable for the debts -or wrongful acts of the latter. Nor is there any principle in the law outside of the -statutes of this State which imposes any such liability upon stockholders in a corporation. The evidence shows, however, that the Arkansas Light & Power Company entered into a contract with the Denning’ Coal Company on or about June 1, 1918, for the purchase of its output of coal, and it received all of the coal mined by the Denning Coal Company under that contract, and we are of the opinion that this fact rendered the Arkansas Light & Power Company liable to appellee for the value of all coal taken from his mine and delivered to the Arkansas Light & Power Company. ¡Such is the effect of the decision of this court in Central Coal & Coke Company v. John Henry Shoe Co., 69 Ark. 302. In that case the court said (quoting from the syllabus), that “where a trespasser wilfully entered upon another’s land, and cut and removed timber therefrom, and by his labor enhanced its value, one who innocently purchased the timber from such trespasser will be liable to the owner for the value of the timber with six per cent, interest from'the date of the conversion.” The court was therefore correct in finding that the Arkansas Light & Power Company was liable to appellee for 74,541 tons of coal mined from appellee’s tract of land in controversy.

Coming, then, to the question of liability of appellant Rye, we have reached the conclusion that the court erred in holding him personally responsible for any of the coal mined from the land. He asserted no personal interest in the land and gave no authority personally for anyone else to trespass upon the land. He acted merely in a representative capacity, as guardian appointed by the probate court of the county of the residence of his wards, and in signing the lease he merely undertook to confer whatever rights his wards possessed in the land. All of his authority was derived from his appointment by the probate court, and he was subject to the orders of that court, hence the mere fact of his signing the lease did not render him liable. According to the undisputed proof, he did nothing else. He was not active in the negotiations, and took no part in them except merely to sign the lease when it was sent to him. His conduct was not such as to either aid or encourage others to commit the trespass,, nor did he participate in any other way in the transaction. The money received by him as royalty from the mining of the coal was taken for his wards and not for himself. His act in receiving it was not a personal one, and did not serve as grounds for imposing liability against Mm for the act of trespass committed by the lessees.

This leaves for determination the question of value of the coal for which the respective parties are liable. The law of this feature of the case has 'been settled by our decision in the recent case of Ward v. Spadra Coal Co., 168 Ark. 853, where we said:

“The measure of damages in an action for unlawfully extracting* ore from the premises of another depends upon whether the invasion of the premises was through inadvertence or honest mistake, or was wilful. If the trespass is the result of an honest mistake, the defendant is compelled to pay only the value of the ore as it was when originally in place in the ground. If, on the other hand, the defendant takes out the ore wilfully and intem tionally, he must pay the value of the ore as found at the mouth of the mine.” Further along in the opinion we said: “It results from the authorities cited above that such value depends upon the position and circumstances of each particular mine, on the quality of the ore, the cost of mining and preparing it for market, its proximity to the places where it is to be used or sold, and on the facilities for transportation.”

The effect of that decision is that, where the trespass is wilful and intentional, that is to say, -with actual knowledge of the wrongfulness of the act, the trespasser is liable for the value of the coal at the mouth of the mine. But, on the other hand, if the coal has been taken in g*ood faith, without any intentional wrong, the measure of damages is the value of the ore when originally in place in the ground. The decree below was rendered prior to our decision in the Ward case, hut the chancellor seems to have had the same view of the law in referring the case to a master, for the direction to the master was to “find the value of the coal in place at the time of its severance and removal from plaintiff’s land.” We are of the opinion that this direction to the master was correct under the facts established by the proof in the case', for the evidence was not sufficient to warrant a finding that the trespass committed by appellants or either of them was wilfully or intentionally done. The proof fails to show that appellants had any knowledge of appellee’s claim to the land up to the time of the commencement of this suit, but, even as to the coal mined after the suit was commenced, there is nothing to show that the appellants were not acting in good faith in contending that they were the rightful owners of the coal, and had the right to remove it, notwithstanding the pendency of the litigation. They were not innocent purchasers in the sense that they were entitled to protection from liability for the value of the coal, but they were innocent in the sense that they were not wilfully or intentionally wrong in taking the coal, and this, as we understand, is the test prescribed under the law declared by this court in Ward v. Spadra Coal Company, supra. If the master and the court found that appellants were wilful trespassers, their conclusions were not supported by the evidence, and we must test the correctness of the award of damages by ascertaining from the evidence what the value of the coal was “when originally in place in the ground.” The amount of royalty as fixed in the lease was intended to be commensurate ‘with the value of the coal in place in the ground, and the lease in question fixed the value at ten cents per ton. Another one of the leases obtained by appellants McGraw and his associates fixed the royalty at ten cents per ton, and in still another lease the royalty was fixed at fifteen cents per ton, but as to the latter there were other elements of consideration involved. According to the testimony in this case, appellants McGraw and his associates incurred large expense in opening the mine on the Bourland place, which served in removing, coal from the other two tracts, including the Berry tract. There was no outside opening to the Berry mine, and there were no equipments connected with it except those which were used in the operation of the whole mine which covered the three tracts. Appellants introduced a large number- of witnesses, all of whom testified that the value of coal in place in lands in that locality was ten cents per ton, and we are of the opinion that, according to the preponderance of the testimony, that was the true value of coal in place. The testimony introduced by appellee consisted of other leases fixing the value of coal at higher sums, but there is little probative force in that evidence from the fact that the circumstances were not similar, for a mineral lease with accompanying equipments affords no test of the. value of coal in place in an unopened mine. According to the testimony in the case, if appellants had not opened the mine on appellee’s land, the market value of the coal in place would be ten cents per ton, and the liability co-uld not be enhanced by reason of the fact that the opening on the other land and the equipments connected therewith are available in operating the mine on the Berry tract. If -that state of affairs adds to the value of coal under the surface of appellee’s land, it is an added value that has been contributed by the appellants themselves, and appellee cannot claim the benefit of it. H.e must take the value of the coal as it was when the trespass was committed, and not the value added by the opening of the mine by the -appellants on an adjoining tract.

There is a further controversy as to the correctness of the decree in favor of appellee against McGraw for the sum of $3,101.80 for rents and value of timber removed after deducting taxes and betterments. There is a conflict in the testimony, but, after consideration, we are unable to say that the decree of the chancellor is incorrect. There is a contention of a clerical error of $432.22 in the calculations, but this difference seems to grow out of the fact that interest was added up to the date of the decree, at least counsel for appellants have not sufficiently pointed out the error to justify us in reducing the decree. The court in its decree made the following finding with reference to interest:

‘ ‘ That the plaintiff is entitled to interest at the rate of six per cent, per annum on the value of the coal removed during the period from October 9, 1916, to June 1, 1918, beginning with the last named date; that he is entitled to such interest on the value of the coal removed during the period from June 1, 1918, to Mijarch 31, 1919, beginning with the last named date; that he is entitled to such interest on the value of the coal removed during the period from March 31, 1919, to March 31, 1921, beginning with the last date; that he is entitled to interest on the value of the timber removed, such interest, to be calculated from the date of the decree heretofore rendered on the main issue in this cause, and affirmed by the Supreme Court of this State.”

There appears to be no objections made to this feature of the decree, hence it will be adopted in rendering the decree here in accordance with the findings of this court.

The decree against appellant Bye for the recovery of the value of coal mined is reversed, and the cause dismissed as to that feature of the case; the decree against appellants Dave McGraw, W. J. Pendergrass and D. G. Pendergrass is reversed, and judgment will be rendered here against them for the value of 25,632 tons of coal at ten cents per ton, with interest in accordance with the directions in the decree of the lower court; the decree against Arkansas Light & Power Company is reversed, and judgment will be rendered here against that appellant in favor of appellee for the recovery of the value of 74,541 tons of coal at ten cents per ton, with interest computed as aforesaid. In all other respects the decree will be affirmed. The clerk will compute the interest and enter judgment in accordance with the above directions.

Humphreys, J., dissents.