text:
    Williams v. Masters.
    Opinion delivered March 4, 1929.

      J. E. Bay, for appellant.

      M. F. Elms, for appellee, Maners; John L. Ingram, pro se.

   Humphreys, J.

B. L. Williams, husband of appellant, Ida R. Williams, owned certain real estate in the city of Stuttgart, and sold same, on the 3d day of February, 1920, to R. L. Metsker, and received seven one-thousand-dollar promissory notes and a first mortgage back on said property for the purchase price thereof. The first note became due and payable on October 1, 1921, and one each year thereafter until all became due. The notes bore interest at the rate of 8 per cent, per annum from date.

On the 21st day of April, 1920, B. L. Williams and his wife borrowed from and executed their joint note for $3,000 to W. H. Maners, one of the appellees herein, bearing interest at the rate of 8 per cent, per annum until paid, and with the indorsement on the note that it would bear 10 per cent, after maturity; and said sum was secured by the transfer of four of the seven promissory notes and mortgage executed by W. H. Maners to B. L. Williams; R. L. Metsker afterwards conveyed the property to Jennie Ferch, a nonresident of the State, both of whom failed to pay the taxes, and defaulted in the payment of the first note and interest on the others.

On April 20, 1922, B. L. Williams brought this suit to foreclose on the notes and the interest due to that date, subject to the notes not due, in which suit W. H. Maners intervened, alleging the assignment of four of the notes to him as collateral security, and praying' that the proceeds to be derived from the foreclosure sale should first be applied to the payment of the indebtedness which appellant and her husband owed him.

A receiver was appointed to rent the property and pay all delinquent taxes. He collected the rents, and redeemed the property from all tax sales except the special improvement taxes levied against the property by the Northern Road Improvement District, which he overlooked. The mortgagor, R. L. Metsker, not only failed to pay these taxes to protect the title to the property, but the mortgagee, B. L. Williams, had neglected to pay them in order to protect his lien. The lands were sold through proceedings in the chancery court for these taxes, amounting to $28.02, and were bought in by said district on the 23d day of August, 1922. The district sold and trans.-ferred its certificate of purchase to E. H. Noble, who presented it to the commissioner in chancery two years after the sale, 'and obtained a tax deed to the property. W. H. Maners, in looking through the record, discovered the outstanding tax title in Noble, and he and the Williamses tried to get a quitclaim deed from him, but failed to do so. They then brought suit in the chancery court against Noble, and obtained a decree canceling his tax title, but, in order to prevent an appeal to the Supreme Court, the Williamses and Maners purchased Noble’s tax title, agreeing to pay him $500 for it. Noble owed the Wil-liamses $100, and Maners loaned them the other $400 in order to purchase the outstanding tax title. The Wil-liamses executed to him two notes, one for $100, which was paid in a few months, and the other for $300, payable at a later date. By agreement the property was conveyed by Noble to appellant, at which time a written agreement was entered into between the Williamses and Maners whereby W. H. Maners acknowledged that appellant was the owner of the property and the Williamses acknowledged their indebtedness to him on the original $2,000 note, as well as the $300 note given for borrowed money to pay Noble for his tax deed, and turned the possession of the property over to him, to the end that he might rent same, pay the taxes and insurance and apply the balance to the liquidation of said indebtedness. Pursuant to the agreement, W. H. Maners took possession and rented the property, and credited the notes with $88 on January 2,1927, and with $125 on August 2,1927. After the execution of the contract, B. L. Williams became insolvent, and was adjudicated a bankrupt. Noble was appointed trustee in the bankrupt proceedings. W. H. Maners then filed an amended intervention in the foreclosure proceedings, setting out the facts detailed above, and making appellant and the trustee of B. L. Williams parties in the action, praying judgment for the amount due him, and that his indebtedness be declared a prior and paramount lien against the property. The cause was revived in the name of the trustee of B. L. Williams, without objection on the part of appellant.

Appellant filed an answer to the amended intervention, denying liability for the alleged balance of $1,993.22 on the $2,000 note executed by her husband and herself to W. H. Maners, alleging that she received no part of the borrowed money; also denying liability to the extent of $112.26 on the $300 note executed by herself and husband to Maners, or that such amount as she might owe thereon was or is a lien on the property; also denying that the purchase of the tax title from E. H. Noble amounted to a redemption of the property from the tax forfeiture and sale; and, by way of affirmative defense, alleged that she acquired the fee simple title to the property under her purchase and conveyance from E. H. Noble, clear of all claims and incumbrances of W. H. Maners and other parties to the suit.

The cause was submitted to the court upon the pleadings, exhibits thereto and the deposition of W. H. Maners, which resulted in a finding that the purchase of the tax title from E. H. Noble by appellant amounted to a redemption of the property from the tax forfeiture and sale for the benefit of W. H. Maners and the creditors of B. L. Williams, represented in the suit by his trustee in the bankrupt proceedings, and that W. EL Maners and the trustee were entitled to a decree of foreclosure of the property, and out of the proceeds of the sale W. H. Mailers was entitled to the amount due him, of $2,018.01, with interest from date of the finding, and that the trustee was entitled to $8,039,99, and that the balance, if any, should be held subject to the further order of the court. A decree was rendered in accordance with the findings, and the property was sold, and a commissioner’s deed was executed to the purchaser and approved and confirmed by the court, from which findings and decree is this appeal.

Appellant’s first contention for a reversal of the decree is that the court had lost jurisdiction over-the cause of action by reason of the rendition of a decree in the cause on the 8th day of October, 1924. Cases are cited to the effect that the court loses .jurisdiction over a cause of action and a final decree therein after the lapse of the term at which same is rendered. The principle invoked is not applicable in the instant case. Appellant did not plead res judicata as a defense, nor raise that question in the lower court. She has raised it here for the first time, basing her contention on the following notation appearing at page 68 lof the transcript: “Decree rendered on October 8, 1924.” The record is silent as to the contents of the decree, or by whom or on what authority it was made. The notation is too indefinite to sustain the defense of res judicata, had it been pleaded.

Appellant also contends for a reversal of the decree on the ground that no duty rested upon B. L. Williams or appellant to pay the taxes, and that therefore the court erred in treating’ the purchase of the tax title by her from E. IT. Noble as a redemption from the tax sale. It is argued that the only duty to pay taxes on the property rested upon the owner and mortgagor or his grantees. Cases are cited to the effect that such duty did rest upon them, but the cases do not go to the extent of holding that their duty in this respect was exclusive. The rule was announced by this court in the case of Ross v. Frick, 73 Ark. 45, 83 S. W. 343 (quoting syllabus): “While the mortgagee may pay the taxes on mortgaged land and claim reimbursement therefor, he may not permit the land to be sold for taxes and acquire title under the sale.” This court also ruled in the case of Herrin v. Henry, 75 Ark. 273, 87 S. W. 430, that: “Where a duty rested upon a husband to pay taxes upon property, the purchase -by his wife at the tax sale should be treated as his purchase and regarded as a redemption for the benefit of his creditors.” This court ruled in the recent case of Adams v. Simms, 177 Ark. 652, 9 S. W. (2d) 327, that, where wives of mortgagors purchased titles to their homesteads, under a sale thereof to satisfy road improvement taxes, with their individual money, such purchase by the wives would be treated, so far as the mortgages were concerned, as a redemption iof the land by the mortgagors. In principle the purchase of tax titles by wives of mortgagees would not be different from the wives of mortgagors. In the instant case the money with which the outstanding tax title was purchased was borrowed by appellant and her husband from W. IT. Maners, and he was placed in possession by them, with direction to collect the rents and apply same to the payment of the money thus borrowed, as well as the balance of the indebtedness which they owed him on the $2,000 note for borrowed money. It would be inequitable indeed to let appellant set up her tax title in defense of his claim.

Appellant also contends for a reversal of the decree because the $2,000 note signed by her and her husband jointly to W. H. Maners for borrowed money had -upon it the following indorsement: “I, the undersigned, agree to pay 10 per cent, after maturity.” It is argued that this indorsement was placed on the note by. B. L. Williams after its execution and maturity, without her consent, and invalidated the note as against her on account of an alteration and on account of its being an extension of the time for payment thereof. There is no testimony that this indorsement was placed upon the note after its execution. So far as the record discloses, appellant was a principal, and not a surety. It is true that she alleged that she received no consideration for signing the note, and signed it as surety for her husband, but she did not introduce any proof to this effect. She did not allege an alteration in the note or an extension thereof without her consent, and had raised both these questions for the first time in this court.

Appellant also contends for a reversal of the decree on the ground that, under the contract, W. H. Maners’ only remedy was to remain in possession of the property and collect his indebtedness out of the rents. There may have been something in this contention if B. L. Williams had not become insolvent and a bankrupt. The proceedings in bankruptcy placed him and appellant in a position where they could not carry out the contract relied upon. Without objection, his trustee was made a party in the foreclosure proceeding, and the cause was revived in his name. The trustee had the right to subject B. L. Williams’ equity in the property to the payment of the indebtedness due his creditors, after paying existing liens or incumbrances upon the property. W. H. Maners’ only remedy to collect his indebtedness was to enforce his rights in the mortgage foreclosure proceedings, which had never been dismissed.

No error appearing, the decree is affirmed.


source: Caselaw Access Project

author: Kirby, J.

license: Public Domain

text:
    Jones v. Ross.
    Opinion delivered March 4, 1929.

      A. F. Auer, for appellant.

      Feasel & Steel, for appellee.
   Kirby, J.

Eldridge Ross, residing in Howard County, executed two chattel mortgages on the same property, a cow and a bog, the first to appellant on the 20th day of January, 1927, to secure $50 due October 15, 1927, and the other to appellee on the.day of.....~. The mortgagor then moved with his family to Hempstead County before either mortgage was recorded, where he has since resided and was employed at the time of the trial.

Appellant filed his mortgage on the 28th day of November, 1927, not to be recorded, and appellee filed his mortgage, also in Howard County, shortly after it was executed, and before the filing of appellant’s mortgage.

Appellant recovered judgment for the possession of the cow in the replevin suit in the justice court, and the case was appealed to the circuit court. At this trial the mortgagor testified that he had returned the truck purchased from appellant — which was denied — to secure payment of the purchase price for which the mortgage was given, before the execution of the second mortgage to his father, whom he owed the debt secured by it. The court instructed the jury, and from the judgment on the verdict against him appellant prosecutes this appeal.

Appellant insists that the court erred in not directing a verdict in his favor, since his mortgage was first executed, and neither of the mortgages was a lien, not having been recorded in the county of the residence of the mortgagor.

If the mortgagor had not changed his residence from Howard to Hempstead County before the mortgages were recorded in Howard County, where made, the second mortgage, the une to appellee, would have constituted a prior'lien against the property anyway, being first recorded there. Merchants’ & Farmers’ Bank v. Citizens’ Bank, 125 Ark. 131, 187 S. W. 650. See Smith v. Union County, 178 Ark. 540, 11 S. W. (2d) 455.

Since the jury found, however, from virtually undisputed testimony, that-the mortgagor was a resident of Hempstead County when the mortgages were recorded in Howard County (Smith v. Union County, 178 Ark. 540, 11 S. W. [2d] 455), in a suit in replevin between the mortgagees, neither mortgage being a lien, with the second mortgagee in possession of the pnoperty, he was entitled, of course, to prevail, as the jury correctly found.

We find no error in the record, and the .judgment is affirmed.


author: Mehaffey, J.

text:
    Lynch v. Stephens.
    Opinion delivered March 4, 1929.

      T. J. Gmglicm, J. E. Gcmghan and E. E. Godwin, for appellant.
    J. S. McKnight, for appellee.
   Mehaffey, J.

The appellants entered into a contract with the highway commissioners to construct a certain highway, designated as the Thornton-Hampton Road, State Project No. C115-53-A, appellants! agreeing to furnish all materials necessary to build and construct the road. Thereafter the appellants and appellee entered into the following contract:

“This contract made and entered into by and between Lynch & Hill Construction Company of Little Rock, Ark., hereinafter known as party of the first part, and T. A. Stephens of Pine Bluff,' Ark., hereinafter known as party of the second part.
“Party of the first part hereby agrees to sublet to party of the second part the grubbing, clearing and excavation on the Hampton-Thornton Road, State Aid Project No. C115-53-A, Calhoun County, Arkansas, from station 187 x 00 to station 401 x 30 at the following unit prices:
Clearing ...$25.00 per acre.
Grubbing._.$75.00 per acre.
Excavation.$0.22 per cubic yd.
“Party of the second part agrees to furnish all labor, tools, machinery and materials to 'complete the work to the entire and full satisfaction of the engineer in charge, and shall at all times be under his supervision. Party of the first part is to pay to the party of the second part 85 per cent, monthly for the work done the previous month estimated by the engineer and paid for by the State Highway Department, the 15 per cent, to be retained until the work is completed, accepted and paid for by the Arkansas State Highway Department.
“It is further agreed that the Arkansas State Highway specifications be and hereby are made a part of this contract same as if written in.
“Given under our bands and seals this.day of ., 1927.'
“By T. A. Stephens.
“Lynch & Hill Contracting Co.
“By M. F. Hill.”
“Witness, W. R. Mead.”

The appellee had already begun work some time before they entered into the above written contract. The contract itself is not dated, but the testimony shows that it was made a month or more after appellee began work, and the work was begun about September 10, 1927. Appellee was then paid five installments on the estimates of the engineer. The last estimate, however, for $699.11, was not paid, and this suit was brought to collect the $699.11 and the 15 per cent, which was to be retained until the completion of the work. The suit was for $2,000.

The defendants answered, denying the material allegations in plaintiffs complaint; admitting, however, that they were engaged in the construction of the highway under a contract with the State Highway Commission, and that they had made a written contract with appellee, the contract above set out. They denied that they owed appellee anything for labor; alleged that ap-pellee failed and refused to do further work, sold his teams and equipment, and placed himself in a position where he could not carry out his part of the contract; that they repeatedly requested him to comply with the contract, but he refused to do so, and they were compelled, under their contract with the State Highway Commission, to finish the work. They alleged they had been damaged in the sum of $3,000 by appellee’s failure to perform the contract. They alleged that he failed to pay labor claims, and thereby 'Caused suit to be filed against them, and they were damaged in this respect $500'.

In addition to the $699.11 and the retained percentages, the testimony showed that appellee had removed dirt, for which he had no estimate, to the amount of $1,100.

After the appellee had been at work some time, he got sick, and sold his teams and outfit, intending to hire teams to finish the work. At the time he quit work the ditches were full of water, and it was impossible to work at that time. Appellee and one of the partners, Mr. Hill, discussed the matter, and appellee agreed to get somebody else to finish the work. He did not succeed in getting any one else, and the appellants notified him that the work must be finished at once or that appellants would have to put teams on it and 'Charge it to appellee’s account. This was on March 7. On March 24 appellants wrote appellee that it had become necessary to put teams on the work, and notified him to have a representative on the work to look after his interests, as he was aware that the cost of same would be charged to his account.

Appellee testified that they refused to pay him the $699.11 and retained percentages, and appellee did not put any representative on the job to look after his interest.

M. F. Hill, one of the partners, testified that they had 200 working days in which to complete the job. The contract with the Highway Department provided that the appellants should begin work within 10 days and complete the work within 200 working days thereafter, and that, for failure to complete the work within the time specified, they would pay damages at the rate of $15 per day; that this should be deducted from the final estimate. Hill testified that Stephens had been working about 30 days when they executed the contract with him, and that Hill never learned that Stephens had quit until the next day after he had given him the last 'check. After that, which was about the 20th of February, Hill never saw 'Stephens any more until the 20th of March, and Stephens told him that he would pick up siome teams, and Hill suggested that Stephens hire Mr. Neil to finish the work, but Neil declined to do it unless Hill would agree to pay him. The total cost of completing the job, in addition to what they had paid Stephens, was $6,282.31, or a total cost of $12,511.70. Hill also testified that, if Stephens worked some on station 401, be bad no right to do so. He also testified that be bad not paid him estimate No. 6, which was $699.11. He said he used that and the $1,120, or the percentages held back, to complete the work that Stephens was supposed to do.

Numbers of exhibits were introduced, -and 'there was a trial by jury, and the jury returned a verdict for $699.11. Judgment was entered for this amount, and this appeal is prosecuted to reverse said judgment.

Appellants filed motion for a new trial, containing several paragraphs, but the motion was overruled, and exceptions saved.

Appellants, however, rely for reversal on two assignments of error. First, that the trial court erred in giving the jury, over appellant’s objections and exceptions, appellee’s instructions numbers. 3 and 4. Instruction No. 3 is as follows:

“The court further instructs the jury that the burden rests upon the defendant, Lynch & Hill Construction Company, to show that the plaintiff, Stephens, broke his contract under which he was employed to build the road, or part hereof, in controversy in this action.”

Instruction No. 4 complained of reads as follows:

“You are also instructed that, before you can find for the defendant, you must believe from the testimony not only that T. A. Stephens, the plaintiff, breached his contract, but you must further find from the evidence that the defendants, Lynch & Hill Construction Company, were damaged thereby.”

The undisputed evidence in the case shows that.appellants were indebted to appellee in the sum of $699.11 on estimate No. 6. The undisputed evidence also shows that there was due him $1,120, retained percentage for the work he had already .done. Then the appellee testifies that he was entitled to $1,100, in addition to these sums, for dirt which he had removed and for which he had been given no credit.

Hill himself knew nothing about the amount that was paid out or the amount that was received on the Stephens job, hut he introduced a statement made by the bookkeeper, which shows the amount paid out to be $12,511.79. This was made by the bookkeeper, C. C. Craft, and subscribed and sworn to before Roy Martin, notary public. At the bottom of the statement, after the signature of the notary public, the following appears:

Total expenses .$12,511.71
Total revenue. 11,290.81
Total loss to Lynch & Hill on T. A. Stephens contract... 1,220.89

Of course the above was not evidence. Where the bookkeeper got the figures is not shown, and it is not shown whether he knew anything about it or not. He did not testify, and .the engineer did not testify, and nobody testified that they had received all coming to them from the Highway Department for the Stephens job. Appellants could very easily have had both their bookkeeper and their engineer to testify, and could have shown exactly what the cost of the job was, and also could have shown how much they received from the State, and could have shown very easily whether they had received all that they were to receive on the job, but they did not see proper to do this.

The testimony of Hill himself shows that Stephens had completed approximately 75 per cent, of the work that he was to do. Hill testified that the clearing was practically complete; that the estimates showed that the grubbing was complete. The engineer’s estimate showed that the grubbing was 100 per cent, complete and that the excavation from stations 188 to '211 was 60 per cent, complete; that from stations '221 to 249 it was 75 per cent, complete; that from 255 to 315, 75 per cent, complete; that from 315 to 364, 90 per cent, complete; from 364 to 365.25, 60 per cent, complete; and from 366 to 401.48, 90 per cent, complete. The greater part of the work was from 75 to 90 per cent, complete. It shows also that the overhaul was complete, and yet if the statement made by tbe bookkeeper and introduced in evidence is correct, tbe appellants paid as -much money to do less tban 25 per. cent, of tbe work as 'Stephens bad paid for more tban 75 per cent, of it. Tbe evidence that appellants owed appellee estimate No. 6, $699.11, and $1,120 retained percentages on tbe work be bad already done, is undisputed, and there is. no dispute that Stephens did tbe other work be testified about, and no dispute about tbe amount of it. Hill does not deny it, but simply says be bad no business, to work at that place.

While it is claimed that Stephens breached tbe contract, tbe undisputed proof shows that, at tbe time be quit, tbe conditions of tbe weather and tbe water in tbe ditches were such that it was impossible to do tbe work, and also that Stephens was sick, and that, when Stephens and Hill talked about tbe matter, Stephens told him that he was going to finish the work. Hill admits this, but Hill told Stephens that it would not be satisfactory for him to hire men and complete it like Stephens intended to, and that be bad better get Mr. Neil, a man at tbe other end of the line, to finish it, and that be would see Neil. Stephens testifies, that Hill promised to get Neil to do tbe work. Hill testifies that be promised to see Neil, and that Neil was willing to do tbe work if Hill would pay him for it, and Hill said be would not do this because be did not want to assume any obligations of Stephens. Just why be did not want to agree to pay Neil when be would have bad to pay Stephens, or anybody else who .did tbe work, is not explained. However, be did not employ him, but tbe contractors undertook to do the work themselves, and say that they completed it at tbe cost shown in tbe statement by tbe bookkeeper.

Hill does not claim that be made tbe estimates or that be made tbe statement introduced in evidence, but tbe undisputed proof shows that tbe estimates were made by tbe engineer, and it is claimed that tbe statement was made by tbe bookkeeper. The statement about tbe amount received, however, from tbe highway is not shown to have been made by any person, unless it may be assumed that it was made by the bookkeeper because it is on the bottom of the statement which the bookkeeper apparently swore to. There is no explanation offered for the failure to put the engineer or the bookkeeper on the stand to testify, the only witnesses that could have testified about the amount of work done and the amount of money received.

“ "Where it is apparent that a party has the power to produce evidence of a more explicit, direct, and satisfactory character than that which he does introduce and relies on, it may be presumed that, if more satisfactory evidence had been given, it would have been detrimental to him, and would have laid open deficiencies in, and objections to, his case, which the more obscure and uncertain evidence did not disclose. * * * Failure of a party to call an available witness possessing peculiar knowledge concerning facts essential to a party’s case, direct or rebutting, or to examine such witness as to the facts covered by his special knowledge, especially if the witness would naturally be favorable to the party’s contention, relying instead upon the evidence of witnesses less familiar with the matter, gives rise to an inference that the testimony of such uninterrogated witness would not sustain the contention of the party.” 22 C. J. 115-116. Wigonore on Evidence, vol. 1 (2 ed.), 584 et seq.

There is no dispute about the plaintiff’s claim of the $669.11, and practically no dispute about the rest of his claim, and there is no dispute about the fact that the appellant finished the work. There is no evidence, however, about what the cost was, except the statement of the engineer, which was not sworn to, the engineer not testifying, and there is no evidence of the amount appellant received from the Highway Department except Hill’s statement, and he concedes that he has no personal knowledge, and the only thing he knows about it is what he learned from the bookkeeper and the bookkeeper’s statement. These were all questions, of fact, and it was the province of the jury to determine what the indebtedness was and the amount that had been paid. And they had a right to infer, from the failure to put the engineer and bookkeeper on the stand, that their testimony would not have been favorable to appellant. At any rate there is ample evidence to sustain the verdict of the jury as to the amount of the indebtedness.

Appellant’s next contention is that the trial court erred in giving instructions Nos. 3 and 4 to the jury. These instructions have already been set out. Instruction No. 3 was not prejudicial. The' appellants themselves contended, not only that Stephens broke the contract, but that they had been damaged by reason of the breach of the contract, and of course the burden of proof was on them to show that he had breached the contract.

No. 4 simply tells the jury that, before they can find for the defendant, they must find not only that Stephens breached the contract, but that appellants had been damaged thereby. This was a correct instruction under the facts in this ease. Appellants, however, argue that this instruction was erroneous, because the plaintiff must allege and prove an offer to comply with the agreement or a sufficient excuse for not doing so. This is correct where there is a breach of an entire contract.

“Persons suing on an entire contract must usually allege and prove either a performance himself or a readiness and willingness and ability to perform.” 6 R. C. L. 943 et seq.

But contracts are construed as other written instruments. The purpose in interpreting or construing a contract or written instrument of any kind is to ascertain the intention of the parties in making the contract. The contract in this case provided for payments on estimates of the engineer as the work progressed, and provided for retaining 15 per cent, until the work was completed. It was therefore the intention of the parties, as expressed by the contract itself, that there would not have to be a performance of the entire contract to entitle appellee to recover. He was entitled to recover as the work progressed.

“For instance, there is a class of cases in which the services are, from their very nature, accepted from day to day, as the labor progresses, and where the benefit of the labor mnst necessarily be regarded as accepted and the benefits thereof appropriated by the employer, who, notwithstanding the fact he will not be liable upon the special contract, will nevertheless be held liable by many conrts to pay the fair value of the benefits resulting from the partial performance of the contract. In this class of cases the underlying principle seems to be that, although the contract calls for a continuous service, the parties have agreed in advance to an apportionment of the contract and an acceptance of the service as it shall be rendered from day to day, and that the performance of the whole labor is not to be treated as a condition precedent to the employer’s obligation to pay, unless the parties expressly stipulate that it shall be by providing that nothing shall be earned until the whole service is performed.” 6 E. C. L. 973.

However, in the instant case, the undisputed proof shows that the appellee told the appellant that he intended to finish the work by hiring persons and teams. The appellant said that this was not satisfactory, and suggested that he hire a man mentioned by the appellant, and agreed himself to see the party about finishing the work. He did not hire him because the man did not want to do the work without pay, and appellant said he did not want to be responsible for Stephens’ contract. But he did advise the appellee that he had taken charge of the work himself, and was going to charge the cost of it up to appellee. Appellee acquiesced in this, and this constituted a new agreement by which both parties are bound.

We find no error, and the judgment of the circuit court is affirmed.


author: McHaney, J.

text:
    Birnbach v. Wesson.
    Opinion delivered March 4, 1929.

      J. A. Tellier, for appellant.

      Gaughcm, Sifford, Godwin & Gcmghan, for appellee.
   McHaney, J.

On February 25,1927, appellant, who held an oil and gas lease on 4 acres of land in Ouachita County, known as the “Culp tract,’.’ subleased said tract to appellee, by the terms of which appellee agreed to pay appellant $50 in cash, and to begin the drilling of a well thereon within 20 days, the lease to run for six months and as long thereafter as production is obtained by the appellee. In addition to the cash payment, appellee agreed to pay appellant a “sum of money equal to one-sixteenth of the highest market value, f.o.b. nearest railroad tank cars, of all oil produced from said lands, ’ ’ and one-sixteenth of the value of gas and other substances or by-products. This one-sixteenth was to be paid monthly or semi-monthly in accordance with local custom, or as payments were made to appellee by the purchasers of the oil. Appellee agreed to pay all royalties accruing to B. Culp, lessor in the lease, to appellant. It was further provided that ‘ ‘ any unpaid sum or sums due the lessor (appellant) under this lease contract shall become a prior lien upon all production from the leased premises, to secure the payment of such sum or sums due lessor hereunder.” In other words, appellant retained a 1/16 overriding- royalty on all oil produced from the lease. A further clause in the lease provided that “failure or default in the performance of or compliance with any of the covenants, conditions * * * shall automatically terminate all rights and interest of the lessee thereunder,” and that appellee should make “sworn written reports” monthly concerning the operation of the lease.

Appellee drilled a small producing well on this lease, about 12% barrels daily, production beginning on May 1, 1927. All the oil therefrom was sold and delivered to the Atlantic Oil Refining Company, the only company having a pipe line in that territory. On June 23 appellant wrote appellee, demanding the monthly statements and settlement. Appellee promptly replied on June 27, advising that he had sold said company 4 tanks of oil, or about 500 barrels, and that he had not been able to collect therefor on account of a defect in the title. The Atlantic Oil Refining Company, as is the custom and universal practice of all oil purchasers, required of all the parties interested in the lease what is known as a “division order” before it would pay for oil. All parties interested in this lease, except appellant, signed such an order, and all parties, except appellant, were paid their respective share of the proceeds, until this action was instituted. Appellant again wrote appellee on July 18, demanding a detailed written, sworn report, regarding the manner of treating the oil employed, a full account of the gas production, etc., also “itemized statement of all fixtures, plants, tanks, structures, machinery and improvements on the premises, and their condition and value.” He also demanded settlement regularly, “settlement to be made directly from you to me as per contract.” To this letter appellee replied that the well was making- 12'14 barrels every 24 hours, which was sold at $1.08 per barrel, and that he supposed that the Atlantic Company was paying him his royalty. Also that there was no gas in the well, and if he was not satisfied, to come down and look it over for himself. A number of other letters along the same lines were written by the parties to each other, appellee advising appellant that the well was producing pipe-line oil that did not require treatment and was being sold for $1.08 per barrel, and that “there is nothing but a little oil to sell. No gas, gold, diamonds or silver.” .Finally appellant served notice on appellee demanding that he execute and place of record a release removing cloud on his title to the lease in controversy because of the alleged breach in failing to settle and in making reports. This suit to cancel the lease followed. Ap-pellee filed an answer, denying that the lease in question was the one agreed upon, that he signed it in blank, and that appellant filled out the blanks contrary to their oral agreement. He also filed a cross-complaint seeking a reformation of the instrument. The court dismissed both the complaint and cross-complaint for want of equity, and both parties have appealed.

Appellant urges that the court erred in refusing to decree a cancellation of the lease on the ground that ap-pellee breached the contract between them by failing to comply with three covenants in the lease, and that, under the clause therein providing that “failure or default in the performance of, or compliance with, any of the covenants, conditions, provisions or terms contained in this lease shall automatically terminate the rights and interest of the lessee thereunder.” It is said that the ap-pellee breached the lease in the following particulars:

(1) That he did not comply with the agreement or covenant contained in the lease to pay appellant a one-sixteenth overriding royalty on the oil and gas produced; (2) that he failed to comply with that part of the agreement to make written monthly verified reports to the appellant; (3) that he did not comply with that part of the. agreement requiring him to pay the one-eighth royalty to Culp, the original lessor.

With reference to the first proposition, it may he said that, while the lease provides that appellee shall pay appellant a one-sixteenth overriding, royalty, the fact remains that there has been no breach, because the amount due appellant has been available to him from the oil purchaser every month since the well began to produce oil. Appellant had a one-sixteenth overriding royalty interest, and it was quite proper for the Atlantic Oil Refining Company to pay the amount due the respective owners or persons interested in the lease the amounts due them. If appellant had signed the division order, he would have received his payments regularly. This being a royalty interest, and a lien being retained on all production in the lease tó secure the payment thereof, the oil purchaser would have paid the appellee at his peril the interest due appellant, under the authority of Shreveport-El Dorado Pipe Line Co. v. Bennett, 172 Ark. 804, 290 S. W. 929. We therefore hold that there has been no breach of the contract in this regard.

With reference to the second alleged 'breach of the contract, that he did not make the sworn monthly written reports in the manner called for in the lease, we think there is no merit in this contention. As heretofore set out, appellee, at appellant’s request, wrote him frequent letters giving him the absolute status of the well, in substantial compliance with the provisions of the contract. He told him what amount of oil the well was making, to whom he was selling the oil, and the price he was getting therefor. He told him that the overriding royalty interest due him was held by the oil purchaser, and that he would get it immediately on signing the division order, and that the well was making no gas, and no treatment of the oil was required. This was a substantial compliance with the provision of the lease requiring reports.

With reference to the third proposition, that appellant breached the contract by failure to pay Culp the one-eighth royalty due him, we are of the opinion that no breach has occurred in this regard, as the undisputed proof shows that Culp was paid his one-eighth royalty interest by the oil purchaser until the date of the bringing of this suit, and that the fund is now held by the Atlantic Oil Refining Company, to be paid to him on the settlement of this litigation.

Having found that there has been no breach of the contract, it necessarily follows that appellant was not entitled to a cancellation, and the decree of the court was correct in dismissing his complaint for want of equity.

"What we have said with reference to appellant’s contentions in effect disposes of appellee’s cross-appeal. In this view of the matter, appellee was not entitled to a reformation of the instrument. We do not review the evidence touching on this question, as it would serve no useful purpose. The chancellor correctly dismissed the cross-complaint for want of equity. We find no error, and the decree is affirmed.

Kirby, J., dissents on the direct appeal.


author: Hart, C. J.

text:
    Home Oil Company v. Helton.
    Opinion delivered March 11, 1929.

      Bridges & McGaughy, for appellant.

      G. E. Svmggs, for appellee.
   Hart, C. J.

Under § 6906 of Crawford & Moses’ Digest, every mechanic, etc., or other person who shall perform any work upon or furnish any material for any building, erection, or improvement upon land, under or by virtue of any contract with the owner thereof or his ag'ent, contractor or subcontractor, upon complying with the provisions of the act shall have a lien upon such building, erection or improvement, and the land on which it is erected. Section 6909 of the Digest provides that the lien for the things aforesaid shall attach to the buildings, erections, or other improvements for which they were furnished or work was done, in preference to any prior lien or mortgage existing upon said land. The section contains 'a proviso, however, that in all cases where said prior lien or mortgage was given or executed for the purpose of raising money or funds with which to mate such erection, improvement or building, then said lien shall he prior to- the lieu given by the act.

Under this proviso of the section of the statute, counsel for appellants claim that they are entitled to a reversal of the decree because, under the proof, the mortgage was given for the purpose of raising money with which to erect the storage station, and that the Sloan Oil Company, to whom the mortgage was given, could not he termed the contractor, under the statute giving mechanics’ liens for laihor done or materials furnished as above stated. They contend that the rights of the parties are fixed 'by the written contract of June 20,1927, a part of which is copied in our statement of facts, and that, under and by virtue of its terms, the Sloan Oil Company -could in no sense be termed a contractor within the meaning of our mechanics’ lien statute.

On the other hand, counsel for appellees contends that the. contract makes the Sloan Oil Company an original contractor, for the construction of the storage station mentioned in the contract, and that the findings of fact made by the chancery court so term him.

We are of the opinion that counsel for appellees is correct. The term “contractor,” as used in our statute relating to mechanics ’ lien, refers to one who, under a contract with the owner, agrees for a consideration to furnish the material, labor, and superintendence necessary to the erection of the 'building or other improvement on the owner’s premises. It is true that the contract contemplated that -G. 'C. MoGraw should operate a storage station on certain lots to be purchased by him in Star City, Arkansas, and that he should buy all his gasoline and oil products from the Sloan Oil Company, but the •contract also provided that the Sloan Oil Company should erect the storage station. The language used in McGraw’s agreement to- purchase from the Sloan Oil Company is “one bulk storage station, complete and ready for operation, for the sum of $7,432.” After stating the manner and the time in which the different payments shall he made, the contract recites that they represent the payment in full for the hulk storage station, complete and ready for operation. It is fairly infer able from the language used that the Sloan Oil Company was to furnish the material and labor necessary for the erection of said bulk storage station and to superintend its erection, in accordance with the plan and specifications agreed upon between the parties.

The lots upon which the storage station was to be •erected were to be purchased by McG-raw. The lots were purchased by him before the mortgage on them was executed by him to the Sloan Oil Company. Our statute gives subcontractors, laborers and materialmen a lien upon the improvement, and this is based upon the right of the implied agency of the original contractor to find the owner’s title. If the owner could give a mortgage to the principal contractor and thereby defeat the rights of subcontractors, laborers and materialmen, then we would have the case of the owner and the principal contractor making a contract which would have the effect of abrogating a statute lawfully enacted by the Legislature. This could not be done.

The word “contractor” as used in the statute means a person engaged in making a contract with the owner for the improvement of certain real estate. The other persons referred to in the statute embrace that class who may furnish material for the improvement of the real estate under a contract with the principal contractor. The statute creates a lien in their favor when certain conditions are complied with by them. Giving the words above referred to the meaning which we have attributed to them, it will be readily seen that, if the Sloan Oil Company is to be treated as a principal contractor, he could make no contract with the owner of the lots upon which the improvement was to be made which would result in defeating the liens given by statute to subcontractors, laborers and materialmen who have performed labor or furnished material for the construction of the improvement.

It does not make any difference that the Home Oil Company and the State Bank of Cowden are innocent purchasers of the notes for value before maturity. They could acquire no greater rights than the Sloan Oil Company, which was. the mortgagee. .Being innocent purchasers for value of the notes before maturity, the Home Oil Company and the State Bank of Cowden would be entitled to recover judgment against McGraw as the maker of the notes, but this would not give them the right to have a lien on the lots in question prior to the lien given by statute in favor or the subcontractors, laborers and materialmen.

Therefore the decree will be affirmed.


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

text:
    Henry v. Gulf Refining Company of Louisiana.
    Opinion delivered March 11, 1929.

      F. P. Sizer, Coulter & Coulter, Gordon Huff master, Tom W. Campbell and James D. Head, for appellant.

      Gaughan, Sifford, Godwin & Gaughan, Mahony, Yocym & Saye and Patterson & Hector, for appellee-.
   Hart, C. J.,

(after stating the facts). In the first place, counsel for appellees claim that the interest created by the leases which were assigned by Oonyers and Hunt to Henry did not create such an interest in lands as would support ejectment against the lessees by their assignee. This question was discussed and decided on the first appeal. The court said that an -action of ejectment -might be maintained in this. State in all cases where there is a legal right of possession against one who wrongfully holds possession from the person having the legal right.

It is not necessary to discuss this phase of the case any further than to say that, whatever was decided on, the first appeal remains the law of the case for all further proceedings. This general rule is grounded on public policy, expedience, and reason. The rule has been so long established and so uniformly adhered to that it i-s not a mere matter of practice or procedure. Taliaferro v. Barnett, 47 Ark. 359,1 S. W. 702; Vogel v. Little Rock, 55 Ark. 609, 19 S. W. 13; and Miller Lumber Company v. Floyd, 169 Ark. 473, 275 S. W. 741. Hence we may consider it is settled in -our former opinion that appellant had the right to maintain the action.

.After the ease was remanded, appellant filed what he terms an amended and substituted complaint in the circuit court. The amendment is too long to be set out in this opinion, and we only deem it necessary to state that it in no matter changes the issue between the parties in so far as it relates to the construction of the leases in question; and, under the well established rule in this State that the law as settled upon the first appeal becomes and must be observed as the law of the case in its subsequent progress throughout, the circuit court and, as well, this court upon a second appeal must regard as conclusive the issues decided in the former appeal. In short, the decision upon the former appeal, in so far as it construed the leases in question, is res judicata. Fort Smith Lumber Company v. State ex rel. Attorney General, 138 Ark. 581, 211 S. W. 662; Baum v. Ingraham, 147 Ark. 309, 227 S. W. 407; and Atkinson Improvement Company v. Nakdimen, 157 Ark. 403, 248 S. W. 561.

Counsel for the respective parties to this lawsuit have entered upon learned and elaborate discussions of the legal rights conferred upon the parties by the original leases, and the right which inured to the appellant by virtue of the second leases obtained by appellant’s grantor from the owners of the land. We need not consider this phase of the case, because it is res judicata, having-been expressly decided by the court upon the former appeal. It was there held that it is only where a grantor attempts to convey a greater estate in lands than he has a right and title to at the time of conveyance that an after-acquired title passes to the grantee, under Crawford & Moses’ Digest, § 1498, and then no greater estate than was attempted to be passed in the first conveyance. On this question the court said:

“The execution of these second leases by the owners of the lands to appellant’s assignor, even conceding it was sufficiently alleged that the right and estate conveyed thereby inured immediately to the benefit of the plaintiff under the terms of the statute, could have had no effect to convey any further or other right to plaintiff than had already been conveyed under the terms of the first leases in any event, and it was not alleged that the lessors did not have a right to convey the leasehold estates in the first instance, as was done. It is only in cases where the grantor attempts to convey a greater estate in the lands than he has the right and title to at the time of the conveyance that any after-acquired title passes to the grantee under the terms of the statute, and then no greater estate would pass than that attempted to be conveyed in the first instance.”

Thus it will be seen it was expressly held that the appellant in no event could acquire any greater title or interest in the lands than had been conveyed to him under the terms of the first leases. Hence it does not make any difference whatever whether the leases were freehold estates or estates for years. The oil and gas leases were to run for five years and as much longer as oil and gas were found in paying quantities. The oil and gas were to be extracted and taken by the lessees or their assignee, and for this royalties in money were to be paid.

By the terms of the leases, which, as we have just seen, fixed the rights- of appellant, he was bound to complete a well within one year from the -date of the lease, or it became null and void. When the year expired and he had not dug a well and found oil or gas within the depth prescribed by the terms of the leases, the leases themselves terminated, unless he complied with the other conditions in Ithe leases. A lease may terminate or end by the expiration of the term for which it was created, as well as by breach or a forfeiture under the terms of the lease. Hence, when the year from the date of the expiration of the lease which was assigned to appellant expired without his having drilled a well, as required by its terms, or attempting to comply with the other conditions in it, his rights under it terminated by the provisions of the lease itself. This is so because the lease provided in express terms that, if a well to the required depth had not been drilled within the year, or if oil or gas had not been found at a lesser depth, then the lease should become null and void. The record shows that appellant did not drill a well to the required depth and did not bring in a producing well at a lesser depth' within one year from the date of the execution of the lease. He did not attempt to drill another well after the one-year period, and did not institute this action until more than five years after the expiration of the one-year period. It will be remembered that the lease was for a definite term of five years from- the date of its execution and as long thereafter as oil or gas or either of them was produced from said land by the lessees. Hence appellant’s right to the possession of the land for the purpose of exploring it for gas and oil had ended by the terms of the lease itself, and the court rightfully held that he was not entitled to maintain an action o,f ejectment to recover the possession of the land for the purpose of further exploring it for gas and oil.

This brings us to a consideration of that branch of the case where appellant claims damages on account of having been prevented from drilling the well by the fraudulent acts of his assignors. It will be remembered that the leases were to remain in force five years and as much longer as oil or gas was being produced from the land by the lessees. The leases also contained a clause that the lessees should drill a test well under the conditions prescribed in the leases, and that, if said well was not drilled within one year from the date of the execution of the leases, the leases would be of no effect.

According to the version of the transaction by appellant, he toot an assignment of the leases from Con-yers- and Hunt without ever having seen the leased premises. He had three drilling rigs, and Conyers and Hunt represented to him that one of them would be the kind to drill the test well with. He set up this rig upon the leased premises, and found that it Was- not the kind necessary, on account of the formation of the earth in that territory. He then attempted to purchase a rotary rig:, which was the kind necessary for drilling operations in tliat territory. He had secured from friends a promise to finance him in buying a rotary rig, in the first part of April, about a month before the leases of the land on which he was drilling should expire. He could have finished drilling the test well under the terms of the leases within a month, and this would have been a compliance with the terms of his contract. About this time Conyers secured leases from the owners of the land on about 3,000 acres of the block which had been assigned’to him. He reported this fact to his backers, and they refused to assist him in procuring the rotary rig, and he was compelled to abandon operations on the leased premises. He did not finish drilling the first test well, and did not thereafter attempt to drill another one. This suit was not commenced for more than six years after he had abandoned drilling operations on the leased premises.

If he did not comply with the terms of the leases in drilling the test wells, his rights to continue operations under the leases expired. The leases contained an express provision that, if a test well was not drilled within one year from the date of the execution of the leases, the leases should become null and void and of no effect. By the terms of the leases and of the assignment to him, appellant became bound for the cost of the drilling operation, and, if the undertaking was unsuccessful, he alone was to sustain the loss. If it was successful, he was to share in the result with his lessor. The parties were competent to contract with each other, and entered into the contract for the assignment of the leases because the contract was satisfactory to both parties. There was nothing in the contract as to the kind of drilling rig to be used. .The statement of Conyers and Hunt to Henry that one of his rigs was adapted to the purpose was merely an expression of opinion, and was not a matter of inducement to Henry to enter into the contract with Conyers and Hunt for an assignment of the leases. "When appellant failed to comply with the terms of the leases in drilling the test well, his rights were forfeited to Hunt and Conyers, after the expiration of the one-year period. Lawrence v. Mahoney, 145 Ark. 310, 225 S. W. 340; Epperson v. Helbron, 145 Ark. 566, 225 S. W. 345, 15 A. L. R. 597; Hughes v. Cordell, 174 Ark. 757, 296 S. W. 735; and Drummond v. Alphin, 176 Ark. 1052, 4 S. W. (2d) 942.

The new leases taken by Conyers from the owners of the lands did not purport to commence until after the expiration of the leases which had been assigned to Henry. If they had done so, in the very nature of things they could not have been effective until the leases which had been assigned to Henry had expired either by their own terms or by his, failure to comply with the terms thereof. It did not make any difference what motive prompted Conyers to take the new leases. He might have thought that Henry would fail to comply with the terms of the original leases in drilling the test well, or he might have been actuated by a motive to regain possession of the leased premises because the prospects of bringing in oil had become better. The rights of Henry in the leased premises were vested in him by the terms of the leases which had been assigned to him, and could not be taken away by any subsequent leases,, whether executed by the owners to Conyers, or to other persons. There is nothing in the terms of the original leases which were assigned to Henry that prevented the owners from giving new leases to Conyers, or to any one else, to take effect upon the expiration of the term of the original leases. If Con-yers had a right to take the new leases, the effect that this might have upon Henry in securing financial assistance to finish drilling his first test well was not an element of damages ag’ainst Conyers and Hunt. There "was nothing in the original leases which gave the lessees or their assignee a preference right to secure reneAvals or extensions .of the leases. Hence any one had a right to secure new leases to go into effect after the expiration of the original leases, either by operation of law or by the failure of the lessees to perform the covenants and conditions prescribed therein. This being so, the procurers of the new leases would not be liable in damages to appellant, and, if appellant’s backers, refused Mm financial assistance because of this fact, it was a loss without a remedy.

It may be, as stated by him, that he could have finished drilling the test well if he had secured financial assistance within the last month of the first-year period, but his failure to do so was his own loss, and did not give him a right to recover damages against Conyers and Hunt. As we have already seen, by the terms of the" leases he was to bear the expenses of drilling the test well, and he alone was to suffer the loss occasioned by his failure to do so. Therefore we are of the opinion that the court properly directed a verdict in favor of appellees.

Other interesting propositions of law have been ably discussed by counsel on both sideg, but the views we have adopted and the conclusions we have reached render it unnecessary to determine them, and we pretermit any discussion of them in this opinion.

It follows that the judgment must be affirmed.

Hart, C. J.,

(on rehearing). It has been suggested that the petition for rehearing in this case should be granted because the necessary effect of the opinion upon the first appeal, under the style of Henry v. Gulf Refining Co. of Louisiana, 176 Ark. 133, 2 S. W. (2d) 687, was to hold that Henry was entitled to recover some amount of damages. We do not think so.

In that case the circuit court sustained a demurrer to the complaint. The prayer of the complaint was that Henry have judgment for the title and restitution of the possession of the leasehold estates described in the complaint ; that he have damages for the wrongful withholding of said property by the defendant; and that he recover damages against the defendant for the oil and gas wrongfully converted by them. In the opinion of this court it was held that the execution of the second leases by the owners of the land to Henry’s assignor, Conyers, could have no effect to convey any further right to Henry than had already been conveyed to him by the terms of the first leases. There was- no judgment for the restitution of the possession of the leasehold estates to Henry, because his leases had expired by their own terms. Hence he was not entitled to recover possession of the leasehold estate. He was not entitled to damages for the wrongful withholding’ of the premises, 'because his possession of the leasehold premises was not interfered with until his leases expired. There was no eviction, either actual or constructive. His actual possession of the leasehold estate was not interfered with. There was no constructive eviction by the assertion of a paramount title in a third person which could have had the effect to oust Henry. Both leases were executed by the same person as owner. After having made a lease to Conyers and Hunt, which was duly assigned to Henry, all that it was possible for the owner to- grant by a subsequent lease was such right in the leased premises as was not conveyed by the prior lease. The owner of the land, after the execution of the first lease, could not grant- anything in a subsequent lease which he had previously granted in the first lease. Hence Henry, not having been ousted from the possession of the leased premises, was not entitled to damages on that account.

Again, he asked judgment for damages against the defendants for oil and gas wrongfully converted by them. As we have already seen, the lessees under the second leases did not enter the premises and drill oil wells until after the leases which had been assigned to Henry had expired by their own terms.

This covers all the issues raised upon the first appeal. Upon the remand of the case, Henry filed what he terms a second amended and substituted complaint. In it it is alleged that Conyers and Hunt conspired together to hinder and prevent him from completing a well which he had started to drill on the leased premises. He asked for damages on that account. His prayer in that complaint is the same as the prayer contained in his complaint on the former appeal. We have treated the prayer of the complaint as amended so as to conform to the statements made by counsel in opening- the case, which was by ag-reement treated as the evidence introduced at the trial.

Complaint is made of our opinion in the present appeal because the court said that the new leases taken by Conyers from the owners of the land did not purport to commence until after the expiration of the leases which had been assigned to Henry. The use of the word “purport”' might have been left out of the opinion, and, in any event, could only be said to be a misapplication of terms. What the court meant to say, by the use of this word, is that it expressed the substance as it appears on the face of the lease to every person who might read it, and means the appearance and not the legal import of the leases. In other words, we meant to say that there was no express language in the leases showing that they were intended to impair the legal obligation of the first leases which had been executéd by the owners of the land to Conyers and Hunt and transferred by them to Henry. The new leases were executed about a month before the expiration of the fixed period in the old leases. They do contain the following: “It is agreed that this- lease shall remain in force and effect for a term of five years from this date, and as long thereafter as oil and .gas, or either of them, is produced from said land by the lessees/’ We do not think that the legal import of these words was an intent to impair the terms in the leases which had been transferred to Henry. Indeed, such an attempt would have been futile. At the time of the execution of the new leases, Henry was in possession of the leased premises described in the complaint, and such possession was notice to all the world, not only of- the possession itself, but also of the right, title and. interest, whatever they may be* of the party in possession.

In addition to this, Conyers and Hunt had actual notice that Henry was- in possession of the leased premises. There was no assertion of a paramount title of third parties as a result of which Henry was ousted from possession.

The principles announced in Millar v. Mauney, 150 Ark. 161, 234 S. W. 498, relied upon by counsel for appellant, have no application in the present case. In that case there was a suit by appellees as owners to recover possession of certain leased lands. Appellants demurred to the complaint, and made a motion to transfer to the chancery court. They also filed an answer in which they set up that appellees had thrown certain obstacles in their way which prevented them from performing the covenants of their leases. The court held that,-if appellees, by their conduct in instituting lawsuits, or in any other manner, put obstacles in the way of appellant which caused them to fail to perform their covenants, then appellees would be estopped from setting up an abandonment or. forfeiture by the appellants. Appellees based their right to recover possession of their lands on the ground that appellants, as lessees-, had abandoned or forfeited their right of possession of the leased premises. Appellants claimed appellees were estopped by conduct from asserting that they had forfeited or abandoned their rights in the leased premises. Here the owners of the new leases made no claim of abandonment or forfeiture on the part of Henry. They did not enter the land under the new leases until after the term of the first leases had ended. Henry only claims that he did not finish drilling during the first year because he could not borrow money after the execution of the new leases.

In the present case there was nothing done by ap-pellees to prevent appellant from drilling for oil under the terms of the leases which were assigned to him. There was no assertion of any paramount title by third parties. The same landowner had executed both leases. In order to extend the leases which had been assigned to Henry beyond the definite term provided in. the leases, Henry was required to show that he was engaged in the production of oil on the leased premises, and this he failed to do. Hence, at the end of his definite term, the leases expired by their own terms. We do not think that he has shown a legal cause for damages simply by establishing that the owners of the land executed new leases to Conyers about a month before the expiration of the definite terms in the leases which had been assigned to Henry. The execution of these new leases did not prevent him from drilling or exploring for oil. He does not claim such to be the case. He only claims that, when persons who had promised to lend him money to continue his work heard of the execution of these new leases, they refused to furnish him the money with which to carry on his drilling operations.

We adhere to our original opinion, that the execution of the new leases to 'Conyers did not enlarge the right of Henry to a freehold estate under the first leases; and a majority of the court is of the opinion that the failure of Henry’s backers to furnish him drilling expenses on account of the execution of the new leases does not constitute a legal cause of action against the appel-lees for damages. The leases which were transferred to Henry have ended by their own terms, and he is not entitled to recover damages from the appellees for the alleged wrongful taking of oil from the leased premises under the terms of their new leases or for the alleged conspiracy in preventing him from borrowing money with which to carry on his drilling operations. Therefore the petition for a rehearing will be denied.

Justices Wood, Humphbeys and Mehaffy dissent.


author: Smith, J.

text:
    Baucum v. Arkansas Power & Light Company.
    Opinion delivered March 11, 1929.

      Coleman & Riddick, for appellant.

      Robinson,- House •& Moses and W. H. Holmes, for appellee.
   Smith, J.

This suit was brought by appellee, Arkansas Power & Light Company, to condemn a right-of-way for an electric power transmission line across lands belonging to appellants. There was a verdict and judgment in appellants’ favor for $3,500, from which is this appeal.

Appellants! own a plantation consisting o,f 1,800 acres, of whiqh 1,500 are in 'cultivation, and the power line runs diagonally across the plantation.

The court gave, over appellants’ objection, the following instruction:

“The damages to which the defendants are entitled in this case are the difference between the fair cash market value of the 80-foot right-of-way before the line was constructed and the right to maintain it as established, and the value of the 80-foot right-of-way afterward. Considering that the plaintiff has the right to construct and maintain its poles, and line as now constructed and to use any part o.f the 80-foot right-of-way for that purpose, and the defendants have the right to make any use of the 80-foot right-of-way they may see fit, so long as such use does not interfere with the construction and maintenance of said line as how constructed, in determining the damage to the 80-foot right-of-way, you will determine from the evidence the difference between the fair cash market value before the construction and the right to maintain it as established, and its fair cash market value after its construction, and allow the defendants an amount equal to the difference.
“The plaintiffs have no right in the remainder of defendants’ land outside of the 80-foot right-of-way, but the defendants claim that the construction has damaged the remainder of their lands outside of the 80-foot right-of-way. If you find from the testimony that the construction of the line along the 80-foot right-of-way has damaged other lands of defendants, then you will determine from the testimony the difference, if any, between the fair cash market value of such other lands before the construction and the fair cash market value of such lands after the construction, and allow the defendants a difference, if you find there is a difference. By a fair cash market value is not necessarily meant the value at a forced sale, ¡but its value considering the reasonable length of time in which to make the sale.
“In determining the damages, you will not speculate as to the damages, but will determine the damages from all the testimony in the case. You will not consider any benefits that-may accrue to the lands by the construction of said line. In arriving at the amount of damages in this case you will not consider the possibility or probability of any danger or damage that may arise as to individuals or property from the presence of -said line.”

The following specific objections were made to the instructions:

(1) To the use of the Avord “cash,” in addition to the word “market,” as adjectives qualifying the noun “value,” for the reason that the instruction appears to r.equire the jury to find the amount for which the lands could be sold for cash. (2) Because the instruction limits the damages resulting from the line as “now constructed” and “as established,” thereby excluding from the jury’s, consideration the fact that the company has the right to add to or change its line Avithin the limit of the right-of-way. (3) Because it excludes from the consideration of the jury the danger and damage to persons and property, whereas the possibility or probability of such danger and damage affects, the market value of the land.

Certain other objections were made, which we do not think require discussion.

Appellants requested instructions to the folloAving effect:

(1) To find for the defendants for a sum equal to the value of the land taken by plaintiff for its right-of-way, plus the damage to the remainder of the land, if any. (2) That, though the plaintiff acquired what is technically known as an easement across defendants’ plantation, it is liable to the defendants for the full value of the right-of-way as if the fee had been taken. (3) In determining the value of the land taken, the defendants are entitled to recover the highest price it would bring after allowing defendants ample opportunity to sell it.

Defendants requested an instruction numbered 6, which the court refused, and which reads as follows:

“You are instructed that defendants must obtain compensation for any property taken from them and any damage done to them by reason of the location of plaintiff’s line across their plantation in this suit, and that if they fail to obtain such compensation in this proceeding they will be without remedy hereafter. When the power company has condemned a right-of-way across defendants’ plantation in this suit, it has the right to occupy the whole of said right-of-way at any time its business may so demand. It has the right to exclude the defendants from said right-of-way whenever such exclusion is necessary to the operation of plaintiff’s line. It has the right always to enter upon the right-of-way for the purpose of improving, repairing and building additions to its line, and it has the right to destroy any crop that may be growing thereon, if necessary, and defendants hereafter have no right in law to recover of the plaintiff any damage they may sustain by reason of the use of the right-of-way.”

Instruction numbered 7 requested by defendants, which was also refused, would, if given, have charged the jury “to consider the value of defendants’ land for all purposes, as shown by the evidence, including any special value it may have by reason of its situation, for the use of a power transmission line.”

These objections and exceptions require a discussion of the proper measure of damages recoverable by a landowner whose lands are condemned for a right-of-way for an electric power line.

We think the court should have omitted the word “cash,” as defendants requested, and should then have defined the term “market value.”

Section 9 of article 12 of the Constitution provides that: “No property nor right-of-way shall be appropriated to the use of any corporation until full compensation therefor shall he first made to the owner, in money, or first secured to him by a deposit of money, which compensation, irrespective of any benefit from any improvement proposed by such corporation, shall he ascertained by a jury of twelve men, in a court of competent jurisdiction, as shall be prescribed by law.”

In determining what is full compensation for property, or right-of-way through property, this court has several times defined the term “market value,” one of the latest being that of Rinke v. Union Special School District, 174 Ark. 59, 294 S. W. 410, in which we approved an instruction telling the jury that “* * * the market value is what the land would be reasonably worth on the market for a cash price, allowing a reasonable time within which to effect a sale.” In approving this instruction we said that “* '* * just compensation is held, by a long line of our decisions, to be the actual market value of the land at the time of the institution of the condemnation proceedings, and, since the compensation was to be paid in money, no error was committed in the court telling the jury that the amount of money the school board ought to pay (for the land condemned) would be the fair cash market value at the time of the taking, stating it to be what the land would be reasonably worth on the market for a cash price; allowing reasonable time within which to effect the sale.”

In other words, where one’s land is taken in the exercise of the right of eminent domain, he must have full and just compensation in money, and market value is the sum “the land would be reasonably worth on the market for a cash price;” but the term cash price, as here employed, means, a sum payable in cash, as contra-distinguished from an exchange of properties. It does not mean that the entire purchase price should be paid in cash upon the delivery of a deed. A sale would be for cash within the meaning of this definition if made' for a sum paid in money or for a sum paid and payable in .money. For instance, A owns a farm which he is willing but not required to sell. B wishes to buy it, but is not required to do so at an excessive price. A and B agree upon a price of $20,000, of which B pays in money $10,000, with balance payable in one year, or other customary time, this balance being secured.by a lien on the property itself, and bearing interest at a rate equal to the legal rate. If this security is such that the balance of the purchase price, with the interest tbereon, can, in the usual and ordinary course of business, be certainly realized out of the property, the sale is for cash, because its equivalent will be realized.

It is a matter of common knowledge that farms are rarely, if'ever, sold for a sum in cash laid down on the barrel-head, and if the landowner is to be limited to such a sum as he could get when the entire purchase price is paid cash down, he would be deprived of the valuable right of having his property appraised according to the custom and usage in selling farm lands. Cash value simply means money value, the value payable in money, as distinguished from a price which would be employed as the basis of an exchange. It would be a sale for cash, as the term is employed in eminent domain cases, if the sale was for the equivalent of cash.

We do not reverse the judgment because this instruction was given, but, in view of the specific, objection made to it, the court should have defined the term “market value” as herein defined, without the addition of the word “cash.” In other words, there should have been no implication in the instruction, in view of the specific objection made, that the market value could not exceed the sum which the owner could obtain for cash counted out and paid down. Of course, the market value, when thus ascertained, must be paid in money, but this is true because the Constitution has provided that it is upon this condition that the right of eminent domain may he exercised. There is no element of contract in the exercise of this right. Indeed, it is ordinarily exercised only when, as in the instant case, the parties have been unable to agree — to contract. In such a case the compensation guaranteed the owner by the Constitution must be paid in money, but the market value is arrived at by determining what one who is willing but not required to sell will take and what another who is willing and not required to buy will give, that sum being payable in cash when paid in accordance with the custom prevailing in similar sales. .

In the case of Calor OilS Gas Co. v. Franzell, 128 Ky. 715, 109 S. W. 328, 36 L. R. A. (N. S.) 456, the Court of Appeals of Kentucky approved the following statement of the law appearing’ in 15 Cyo., page 685:

“Market value 'means the fair value as between one who wants to purchase and one who wants to sell, not what could be obtained for it under peculiar circumstances when a greater than its fair price could be obtained, nor its speculative value, nor a value obtained from the necessity of another, its present value at a sale which a prudent owner would, make if he had the power of election as to the time and terms * * * .”

The opinion also quoted with approval the following statement of the law from 10 Am. & Eng. Enc. of Law (2 ed.) page 1151:

“* * * The market value of land is usually declared to be not what the land would bring at a forced sale, but what it would bring in the hands of a prudent seller, at liberty to fix the time and conditions of sale.”

See the numerous cases cited in the notes to the text quoted.

In the case of Metropolitan St. Ry. Co. v. Walsh, 197 Mo. 392, 94 S. W. 860, the Supreme Court of Missouri said:

“The jury, when told that the market value was such price as could be obtained for it (the land) on the usual or ordinary terms of private sale, would have no trouble in understanding what was meant by the court, for it would only be necessary to apply their common and everyday observations of the purchases and sales of real estate between their neighbors and other persons transacting such business.”

See also Madisonville H. & E. R. Co. v. Ross, 126 Ky. 138, 103 S. W. 330; Opelousas, G. & N. E. R. Co. v. Bradford, 118 La. 506, 43 Sou. 79; In the Matter of the Application by the City of Buffalo to take lands for a new reservoir, 1 Sheldon’s Buffalo Superior Court Reports, 408; 3 Dillon’s Municipal Corporations (5 ed.), § 1059, page 3673, § 1060, page 1674; 10 Am. & Eng. Enc. of Law (2 ed.), page 1152; 1 Nichols on Eminent Domain (2 ed.), § '217.

The instructions given and refused and the objections thereto present the question whether the jury should have assessed the damages as if the fee had been taken, that is, whether the jury should have found the full market value of the land taken. There appears to be some conflict in the authorities on this question, but we are of the opinion that those cases holding that the full market value of the land should be assessed are more in consonance with our Constitution.

We adopt the view of the Supreme Court of-Tennessee in the case of Kentucky-Tennessee Light & Power Co. v. Beard, 152 Term. 348, 277 S. W. 889, where it was held, after a review of the authorities (which we do not repeat), that, where an electric light and power company, in condemnation proceedings, acquired a permanent easement across the land of another, it became liable for the full value of the right-of-way- as if the fee had been taken. And the fact that the owner was given the permissive use of the right-of-way could not be considered in reduction of the sum to be allowed as compensation. The trial court was therefore in error in limiting the consideration of the jury to the line as “now constructed” and “as established,” for the reason that the company acquired by the condemnation proceedings the power to make such use of the right-of-way as its future needs required for the purpose for which the right-of-way was: 'condemned.

The court should also have charged the jury that full compensation for the market value and damages should he assessed in this suit, as future damages could be recovered only for the negligent use of the right-of-way condemned.

In the case of Telluride Power Co. v. Bruneau, 41 Utah 4, 125 Pac. 399, the Supreme Court of Utah said (to quote a syllabus):

'“In a proceeding to condemn a strip of land on which to erect poles bearing wires heavily charged with electricity, if the presence of the wires would expose persons and live stock on the land of defendant not taken to danger, and thus depreciate the market value of such land, the defendant was. entitled to show such fact.”

This view accords with the opinions of this court in the cases of Little Rock, M. R. & T. Ry. Co. v. Allen, 41 Ark. 431, and Railway Co v. Combs, 51 Ark. 324, 31 S. W. 418.

What we have just said does not mean that the jury in a condemnation suit should attempt to compensate the owner for live stock which might hereafter be killed or injured, but means only that, if the testimony shows there is. such probability, and that fact affects the value o.f the land not taken, the same may be considered in assessing damages. The court’s instructions specifically excluded this possible element of damage, and this was error.

On the question of damage to the land not taken the court properly charged the- jury as follows.: “If you find from the testimony that the construction of the line along the 80-foot right-of-way has damaged other lands of defendants, then you will determine from the testimony the difference, if any, between the fair cash market value of such other lands before the 'construction and the fair cash market value of such lands after the construction, and allow the defendants a difference, if you find there is a difference.” However, what we said above about the use of the word “cash” applies here.

Appellants’ instruction numbered 7, quoted above, is a correct declaration of the law, abstractly considered, but we think no error was committed in refusing it as applied to the facts of this case.

The testimony shows that when the right-of-way line of the power company reached appellants’ farm the right to continue across it was highly valuable, and that it would have been much more expensive to go around the farm than to go through it, this fact being accentuated by the presence of a lake on each side of the farm. The cases of Desha v. Independence County Bridge District, 176 Ark. 253, 3 S. W. (2d) 969; Fort Smith & Van Buren Dist. v. Scott, 103 Ark. 405, 147 S. W. 440; and Gurdon & F. S. Ry. Co. v. Vaught, 97 Ark. 234, 133 S. W. 1019, are cited in support of this contention.

In the first two cases the facts were that the lands condemned, by reason of their location, possessed a special value as a suitable location for a bridge, which other lands did not have. In the last cited case there was a pass between two mountains through which a railroad had to run to avoid large construction cost. Nothing of that kind is true here. Indeed, the testimony shows that it would have been and was much cheaper to run through appellants’ farm than it would have been to run around it, and this difference in cost was enhanced by the presence of lakes, but this fact would not have supported a finding that appellant’s land possessed a peculiar value as the location for the right-of-way of a power line between Little Rock and Pine Bluff, the termini of the line. Of course, when any owner’s land was reached, the right to continue across is valuable, and the exercise of this right saves the additional cost of diverting the route. But, if appellants were allowed to recover as an element of damage this difference in cost, it could not be denied all other landowners, for each one would claim it when the line o,f the right-of-way reached his property. The court evidently — and we think properly — took the view that appellants’ land did not possess any peculiar value as the location of a power line between Little Rock.and Pine Bluff.

Other questions are raised which we find it unnecessary to discuss, but, for the errors indicated, the judgment of the court below must be reversed, and the cause will be remanded for a new trial.

Hart, C.J., and Mehaffy and McHaney, JJ., dissent..


text:
    Unionaid Life Insurance Company v. Smith.
    Opinion delivered March 11, 1929.

      Duty & Duty and Greed Caldwell, for appellant.

      W. B. Sorrells, for appellee.
   Smith, J.

Separate suits were brought by plaintiffs, who alleged that, prior to 1926, there existed a mutual insurance company known as the Mutual Aid Union, which, in January, 1926, surrendered its charter to the State, 'but, before doing so, entered into a contract with the Unionaid Life Insurance Company, whereby that company reinsured its membership. The complaint in each case alleged that, after reinsuring’ the members of the Mutual Aid Union, the Unionaid Life Insurance Company had raised the premium on the certificates of insurance above that provided for in their original contracts, and these suits were brought to recover damages for this alleged breach of contract, the actions being apparently based on the rule announced by this court in the case of Mutual Relief Assn. v. Ray, 173 Ark. 9, 292 S. W. 396. Service, óf summons was had in each case on the defendant at its home office in Benton County. The summons issued in each case out of the office of the clerk of the circuit court of Cleveland County, addressed to the sheriff of Benton County, and required the defendant to appear and answer in Cleveland County.

The defendant insurance company appeared specially, and filed a motion to quash the service of the summons on the ground that the circuit court of Cleveland County was without jurisdiction to try a damage suit against the insurance company located in Benton County and having no agent for service in that county, and upon service procured through the sheriff of Benton County. Attached to the motion was a certified copy of the articles, of incorporation of the defendant, Union-aid Life Insurance Company, showing that it had been organized under the provisions of act 137 of the Acts of 1925 (Acts 1925, page 390). This is an act entitled “An act providing for stipulated premium insurance companies operating on the stipulated premium plan, and regulating same.” The trial court overruled this motion, and, the defendant declining to answer or plead further, judgment was rendered against it, and this appeal has been prosecuted to reverse that judgment.

It is earnestly insisted that there is no authority under the statute to sue the appellant, a domestic insurance corporation, except in the county of its residence, under the provisions of the act under which it was created, to-wit, act 137 of the Acts of 3925. This act, which provides that it shall he in force from and after its passage, contains no provision concerning suits against companies organized pursuant to its terms.

The articles of incorporation of the appellant company, filed with its motion to quash the service, show that it has a capital stock of $50,000; that its principal place of business is in Rogers, Benton County, and that it was formed for the purpose of talcing insurance on the lives of individuals on the “stipulated premium plan, with a stipulated premium as defined and regulated herein.”

There was passed at the same session act No. 139 (Acts 1925, page 405), entitled “An act to define assessment life, health and accident associations or companies, industrial insurance companies, to provide how same may be organized and transact business in this State, for proper regulation of same, and for other purposes.” The last section of this act provided that: “Nothing in this act shall be construed to apply to or affect fraternal benefit associations, farmers’ mutual aid associations, reciprocal or inter-insurance exchanges, nor to mutual insurance companies operating on a legal reserve basis, other than to industrial insurance as herein provided. This act to go into effect six months after its passage.”

Paragraph A of § 3 of act 139 reads as .follows: “Level or stipulated rate assessment associations, companies or corporations are defined as those corporations granting insurance benefits on the assessment plan, and which collect from their membership a level or stipulated monthly, quarterly, semi-annual or annual assessment or premium, which assessment or premium is not made contingent upon the happening of a certain event but is based upon stated periodical rates or charges estimated to be sufficient for the payment of all claims and expenses.”

Evidently the appellant company is such a company as the language just quoted refers to.

By § 15 of act 139 it is provided that in all actions against assessment or mutual insurance' companies or the bonds of such companies, by any policyholder or beneficiary, suit may be brought in any county in the State where such 'company has its principal office or place of business. This § 15 was amended by act No. 194 of the Acts of 1927, page 663, to read as follows: “In any action on-any claims arising or accruing under policies of insurance or membership certificates, against assessment or mutual insurance companies,” or the bondsmen of such companies, the suit may be brought in any county in tlie State where the plaintiff, or any one of the plaintiffs, in snch action may reside. ■

Construing these acts tog-ether, we are of the opinion that it was the intention of the Legislature to make all of these companies liable to respond to a suit brought in the county in which the plaintiff resides, in any action on any claim arising or accruing under policies of insurance issued by such companies. It remains therefore only to determine whether the instant suits are actions on claims arising or accruing under policies of insurance. And we think they are.

Webster’s New International Dictionary defines a “claim” as follows: “A demand of a right or supposed right; a calling on another for something due or supposed to be due; an assertion of a right or fact.” It is further defined as: “A right to claim something; a title to any debt, privilege,-or other thing in possession of another; also a title to anything which another should give or concede, or confer on, the claimant.”

.The instant suits are predicated upon the allegation that the defendant has breached its contract of reinsurance, and this is a claim arising- or accruing under a, policy of insurance; and we conclude therefore that the motion to quash was properly overruled, and that judgment is affirmed in each case.


author: Humphreys, J.

text:
    Shields v. Shields.
    Opinion delivered March 11, 1929.

      Sidney S. Taylor, for appellant.

      Martin, Wooton i& Martin, for appellee.
   Humphreys, J.

This case is here on appeal from the chancery court of Garland County, and the sole question involved is whether appellee took a fee simple or a life estate in lot 13, block 77, in the city of Hot Springs, Arkansas, under the fourth clause of the last will and testament of her deceased father, John J. Horner. The fourth clause of the will is as follows:

“I give, devise and bequeath to my beloved daughter, Louise Elizabeth Horner, for her use during her natural life, and the remainder after her death to her heirs at law, lot No. 13 of block No. 77 of the city of Hot Springs, Arkansas, with all the improvements and appurtenances thereto belonging.”

The language employed in the devise has a technical meaning in the law, hence the clause must be interpreted in accordance with the technical meaning of the language used. The legal technical meaning of the language used is a limitation of the estate to the heirs in general of the devisee, according to the K-ule in Shelley’s Case, which rule is in full force -and effect in Arkansas, and vested a fee simple title to said real estate in appellee, the first taker. In the case of Wilmans v. Robinson, 67 Ark. 517, 55 S. W. 960, this court said:

“The Rule in Shelley’s Case is a rule of construction and not of law, simply providing that, where an estate of freehold is limited to a person, and the same instrument contains a limitation, either mediate or immediate, to his heirs or the heirs of his body, the word ‘heirs’ is a word of limitation; that is, the ancestor takes the whole estate comprised in the term. If the limitation he to the heirs of his body, he takes a fee tail. If to his heirs generally, he takes a fee simple.”

It was also said by this court, in the case of Eversmeyer v. McCollum, 171 Ark. 117, 283 S. W. 379, that “the Rule in Shelley’s Case is applicable only when the language used in the conveyance creates a limitation to the heirs of the grantee in general.”

The instant case is governed by the rule as declared in Hardage v. Stroope, 58 Ark. 303, 24 S. W. 490, and Ryan v. Ryan, 138 Ark. 362, 211 S. W. 183.

No error appearing, the decree is affirmed.

Chief Justice Hart and Justices Smith and Mehaeey dissent.


text:
    Central State Bank of McKinney, Texas, v. Toland.
    Opinion delivered March 11, 1929.

      Feasel & Steel and L. C. Clifton, for appellant.

      D. R. Sain, for appellee.
   Humphreys, J.

This suit was brought by appellee against the McKinney Crain Company, a nonresident, to recover damages in the sum of $138 for failure to ship a car of corn purchased by appellee from it in December, 1927. Based upon an allegation that the First National Bank of Mineral Springs, Arkansas, was indebted to the McKinney Crain Company, a writ of garnishment was procured and served upon said bank. The bank answered that it had 0697.97, which it collected from T. J. Dillard on a draft drawn by- McKinney Crain Company and indorsed to the Central State Bank of McKinney, Texas, which draft it received by mail from the Central State Bank for collection and remittance, and, according to the indorsement, it was indebted to the Central State Bank for the amount collected, and not to appellee.

The Central State Bank intervened in the suit for the fund, alleging that, in the ordinary course of trade, it purchased said draft, paying the said McKinney Grain Company the value thereof, less customary discount, and, in the ordinary course of trade, forwarded said draft through the regular channel to the First National Bank of Mineral Springs., Arkansas, for collection, and that the fund 'claimed on the draft became its property before the-issuance and service of the writ of garnishment.

The cause was tried to a jury in the circuit court of Howard County, resulting in a verdict and judgment in favor of appellee, from which is this appeal.

When the testimony in the ease had been concluded, appellant requested an instructed verdict in its favor, on the theory that the undisputed evidence showed that it purchased the draft outright, and owned it at the time the garnishment in the case was issued. This request was refused, over the objection and exception of appellant, and such refusal is urged here as reversible error. In support of the alleged error, appellant relies upon the testimony of Sims Cameron, assistant cashier of its bank, to the effect that he handled the draft drawn by the McKinney Grain Company on T. J. Dillard for $697.97; that this draft was paid by appellant and indorsed over to it, and. that appellant credited it on an overdraft which- it then carried for the grain company, less discount of $1.50; and the. testimony of A. H. Hughes, cashier of the Planters Bank and Trust Company of Nashville, Arkansas, and Rudolph Dickinson, cashier of the First National Bank of Mineral Springs,, Arkansas, to the effect that nothing appeared on the slip of paper attached to and accompanying the draft upon which they could base an opinion as to whether .the; original draft was owned by the grain company or by appellant,

If this were all of the testimony in the case, the trial court should have granted appellant’s request for an instructed verdict in its favor, for the case would then be ruled by the case of Collin County National Bank v. Harris, 90 Ark. 439, 119 S. W. 662, cited by appellant in support of its contention. The record reflects, however that the letter accompanying the draft in regard thereto stated that it was for collection and return; and that three experienced bankers, A. H. Hughes, Jay Y. Toland and Rudolph Dickinson, testified that, if the draft had been purchased, there would have been a discount charge of from 10 to 15 per cent, instead of one-fourth of one per cent., and that one-fourth of one per cent, was the usual and customary charge for collecting drafts.

The testimony last recited tended to contradict the testimony of Sims Cameron, and made the question of whether appellant was the owner of the draft or whether it received same for collection one for determination by the jury.

The testimony in the instant case is, in substance, the same as in the case of Collin County National Bank v. Laser Grain Company, 130 Ark. 396, 197 S. W. 707, in which this court ruled that there was sufficient conflict in the testimony to warrant the submission of the issue joined to a jury for determination.

No error appearing, the. judgment is affirmed.