text:
    Missouri Pacific Railroad Company v. Juneau.
    Opinion delivered November 19, 1928.

      E. B. Kinsworthy and R. M. Ryan, for appellant.

      Murphy & Wood, for appellee.
   Mehaffy, J.

The appellee brought suit in the Garland Circuit Court against the appellant, alleging that he was the owner of certain property, describing it, and that, in 1900, the Little Bock, Hot Springs & Western Bailroad Company constructed its main line track in Valley Street, west of plaintiff’s property, and about forty-five feet from said property; that since that time the Missouri Pacific has become the owner of the property, and that, some time in 1927, the appellant changed the location of its tracks, and placed its tracks in Valley Street, west of plaintiff’s property, so that said track runs within about 16 feet of his property; that it crosses the sidewalk on the "east side of Valley Street, a short distance south of plaintiff’s property, and that it is now operating its trains and railroad business over said track, located within 16 feet of plaintiff’s property; that it has abandoned and torn up the tracks over which it formerly operated. That plaintiff has a two-story building situated on his property, and is operating a grocery business on the first floor of said building, and occupies the upper story as a home and rooming house; that the change in the location of defendant’s tracks has obstructed the use of Valley 'Street, and has'made the property less accessible, and almost destroyed the use of Valley Street south of the plaintiff’s property by pedestrians; that the defendant operates heavy trains and heavy engines over said track, and is constantly switching cars over said track along Valley Street; that the change in the location has greatly damaged plaintiff’s property, on account of the noise and vibration caused by the operation of its trains and engines and the switching of cars, and the smoke and dirt from said tracks, and the dust and cinders caused by the passiage of such trains, engines and cars over said track, and that it has obstructed the use of Valley 'Street by the public. That the change in its tracks has greatly damaged plaintiff’s business on account of the noise, smoke, steam, dust and vibration, and that plaintiff has been damaged in the sum of $3,000. It also alleged that the city of Hot Springs had not granted the defendant the right to change its location.

The appellant filed its answer, denying all the material allegations of plaintiff’s complaint as to damaging his property, and alleged that the line constructed originally was 40.3 feet from the nearest point of plaintiff’s property, and admitted that, since the relocation, its line was 21.3 feet from plaintiff’s property. It admitted that it had abandoned and torn up the track over which it formerly operated. It denied that the location of the tracks and engines had obstructed the use of the street or made appellee’s property less accessible, or that it destroyed the use of Valley Street south of plaintiff’s property, and denied that the operation of its trains and engines damaged plaintiff’s property in any way. .It alleged in its answer that the city council of Hot Springs, in 1894, passed an ordinance granting a franchise of right-of-way over Valley Street, opposite appellee’s property, and attached said ordinance to its answer. It also alleged that, when the ordinance was passed, there was a consent to the granting of said franchise and right-of-way by the property owners 'along the street. It also alleged that the city council of Hot Springs, in 1899, passed an ordinance granting the same rights as above mentioned to the Little Rock, Hot Springs & Western Railroad Company, and that there was no objection to granting of said ordinances by the citizens of Hot Springs. That in 1900 the Little Rock, Hot Springs & Western Railroad Company built a line of railroad track along Valley Street, adjacent to appellee’s property, and began to operate its trains over it, and continued to do so until its property was sold to the St. Louis, Iron Mountain & Southern Railroad Company, and that more than ten years ago the appellant purchased all the property of the St. Louis, Iron Mountain & Southern Railway Company in Hot Springs, including the right-of-way along Valley 'Street and adjacent to the property of appellee. That none of the property owners had ever objected to the building, maintaining and operating of said track, and that, under said ordinance, the appellee had no right or title in and over said Valley Street, or, if he had ever had such right, it was barred by the statute of limitations. That, when the track was originally built, Hot Springs was a small village, but that it has grown to a city of the first class and of great commercial interest, and that its business and traffic had grown so that it was impossible for appellant to perform its duties as common carrier. That the track as originally built was on the curve, and dangerous to be operated, and that in 1927 it moved its said tracks, as alleged by plaintiff, and is now operating its trains over said tracks under authority given to it by the ordinances above mentioned. It especially alleged that appellee had not been damaged, and pleaded the right and authority given to it by the ordinances as a complete defense and bar to the action. The ordinances grant to the- railroad company the right to lay, maintain and operate its tracks and engines over said Valley 'Street, adjacent to appellee’s property.

The appellee testified that his property was located on East Grand and Valley Streets, being part of lot 6, in block 40. The lot is 35 feet deep on Valley Street and 130 feet on Grand Avenue. That he acquired the property through his father, and had been in possession of it since 1905. Deeds to the property were introduced. He further testified that his property contained five rooms upstairs, and a store room and a four-room apartment with bath; that he rented out the five rooms upstairs, and ran a grocery ‘and meat business downstairs. The size of the building was 40 feet wide, and it took up the entire ground,, about 40' feet by 35 feet. The building was a frame building, with a concrete foundation. That the relocation of the tracks was made about ten months ago; that before the change was made the track was about 40 feet from his building, and that since the track has been changed it is 17 feet from the corner of his building to the nearest rail, and was 23 feet 3 inches from the front of his building to the ball of the rail. That before the track was changed appellee never paid any attention to it. That he had a driveway along by his building, and wagons and trucks and everything went along there. That, since the track has been moved over, the vibration was so great that it caused a tremor of the whole building. That you could feel it all over, and that the smoke and cinders were bad. That he never noticed this before the change was made. Six trains ran over the track every day each way, and the switch engine worked in and over said track. The railroad yards are about 250 feet north of his property. The switch engine, in switching cars, had to pass over the track near his place, and it caused him inconvenience and discomfort, and he could not leave the windows up upstairs on the side of the building next to the track. That it increased the danger from fire. That when the heavy engines passed they shook the building very materially, and that it shook articles on the shelves in the store. That before the change was made there was no vibration, and that he was not inconvenienced by reason of cinders. That the switch engine operated over the track from eight o’clock in the morning to four in the afternoon, and that sometimes in the winter a night crew would operate until about 11 o’clock. Before the change, cars and wagons could park .on the west side, but it was dangerous now to park there, and a man with .a team is 'afraid that he will get caught if he parks between the railroad and the building. If a ear was parked there, no one could pass. The rails were not buried down in the ground, but the whole rail sticks up. There is a light pole or telephone pole that sets off from the building. In the passageway between the pole and the track there is not sufficient room for a car to pass.

Appellee, over the objection of appellant, testified that there had been a decrease in his business. That, prior to the change of the track, people would send their little children to the store, but they are afraid to do so now because the track is so close to the building. And appellee testified at length about his business and about the decrease in his business because of the relocation of the track. He also testified, over the objection of appellant, about ability to rent his rooms. Admitted that' he had sued the railroad company. twice before. That in 1912 the train ran over him, and cut off his leg. That he was working for them at the time. That he got $7,500 judgment against them, and that in another suit he sued the M. D. & G. for running through and taking part of his building, and that he recovered $1,900 for that. Before the relocation of the tracks he rented his rooms for $2 a week, and he now gets $1.50 a week.

He testified that engines will throw cinders more at 17 feet than they will at 40 feet, 'and that it depends upon the wind which way the cinders blow. That the present track is now 17 feet from his building, and that the little building that offsets into the street is 11 feet from the railroad track. That the closest rail to his house proper is about 17 feet. None of the railroad track is on his property. The house has been on his property about 40 years. His building faces Grand Avenue and does not face Valley Street. That the railroad company is not interfering with any entrance on Valley Street, but" is interfering with the traffic along Valley Street. He also testified that the conditions on Grand Avenue were the same now as they were before the change.

G. C. Smith, W. T. Hawkins, Mrs. Bode Crawford, M. S. Bayless, George Hubbard, Jim Lowrey, O. A. Rutledge, R. S. Wood, Mrs. Sam Campbell, Tim O’Connor and Frank Rawson all testified about the situation of the property and tracks and the operation of trains before and after the relocation of the road, and to the accessibility to’ plaintiff’s property, etc.

F. Leslie Body, S. J. Erickson, E. L. Howlett, T. J. Bledsoe, Leon Numainville, W. L. 'Calvert, E. J. Lassiter, T. O. Davis, A. F. Annen and B. F. Latta testified for appellant, in effect, that the relocation of the track did not injure or damage appellee’s property, and that they felt no vibration.

There is. a . conflict in the evidence on the material points, the witnesses for appellee testifying to certain facts that are denied by the defendant’s witnesses. We deem it unnecessary to set out the testimony fully, because it was conflicting, and it was therefore the province of the jury to settle the facts.

The appellant contends that the evidence is totally insufficient to support the verdict of the jury, and argues, together with this proposition, that the verdict was contrary to law, contrary to evidence, and contrary to both the law and evidence. It is contended that trains cannot be operated without noise, smoke or cinders, and that, if appellant is to be penalized because of these things, there is no way or manner in which a steam engine or locomotive could be operated. And he cites and quotes from the case of Metropolitan West Side Elevated Rd. Co. v. Goll, 100 Ill. App. 323, cited in note, 22 A. L. R. 180. .He quotes the following from the above case: “We are not referred to any cases in this .State which hold that noise and disturbance by the running or operating of trains were of'such character that at common law the same would be actionable. ’ ’ The above quotation is not quite correct. See same case in 100 Ill. App. 323. The opinion in the above ease, among other things, states:

“Damage thereby caused to neighboring property owners was without remedy in this State until, by virtue of the constitutional provision made in 1870, that private property shall not be taken or damaged for public use without compensation, such damages have again become recoverable as at common law. * * * It cannot be doubted that at common law mere noise in the immediate vicinity' of the premises, and especially of the dwelling house of a landowner, may be of such a character as to constitute an actionable nuisance, remediable by an action on the case for damages or by injunction. Noise and disturbances therefore, of such a character as at common law would be actionable, are an element of damages for which recovery can be had in a suit like the one at bar. ”

The court also said in the same case: “But, when either a private person or a corporation so uses his or its property as to cause damage actionable at common law, then either or both are liable therefor, and the corporation is not protected from such liability by the fact that it may have been authorized by statutory enactment to do the-things which occasioned such actionable damage. ’ ’

The court also said: “There has been some conflict of opinion as to whether necessary noise incident to the operation of a railroad is an element for damage for which recovery can be had. * * * Such ordinary and necessary noise is generally considered to affect only a public and common right, for which no private action will lie. But it has been held in this State that mere noise made by a railroad company in the immediate vicinity of a dwelling house may be of such a character as to constitute an actionable nuisance. ’ ’

It is also held by the same court that it is a question of fact for the jury to determine, and that, if one’s property is injured by noise, smoke and dust, .the property owner may recover damages therefor.

In 22 A. L. R., referred to by the appellant, it is stated: “If noise, smoke, dust, cinders or things of that sort can be shown to have damaged the property itself, then they should be considered by the jury in arriving at the amount of the recovery. If, however, they amount simply to an inconvenience or discomfort to the occupants of the property, they would not be an element of damages, and should_not be considered by the jury.”

It is also stated in the annotations in 22 A. L. R., referred to, that not only smoke and cinders may cause such damage as that a recovery can be had, but cutting off access by the laying and use of a switch close to abutting property gives the property owner right of damages; and that the cases uniformly hold that, if a grade of a street is changed by a cut or viaduct, so as bo interfere with the abutting owner’s ingress and egress, he is entitled to damages. And, of course, the same rule would apply where, instead of changing the grade, they changed the location of the track, and that does not mean prevent ingress or egress, but interfere with it, and thereby damage the property.

When the track was originally laid, appellee, or the owner of the property, could have recovered all the damages that he suffered because of the railroad track and the operation of the track at that time; and that means future damages as well as present. That is, all the damages resulting from a proper operation of its trains. But if a relocation of a track damages the property in addition to the damage suffered because of the operation of the trains on the original track, then the property owner would have a right to recover.

Our Constitution provides: ‘ ‘ The right of property is before and higher than any constitutional sanction; and private property shall not be taken, appropriated or damaged for public use without full compensation therefor.”

Therefore, if appellee’s property was damaged by the relocation of this track and the operation of engines and trains over it as relocated, he has a right to recover whatever damages the evidence shows were caused by the relocation of the track and the operation of the trains over it as relocated.

The track was originally 40 feet from appellant’s property. As now located, it is approximately 17 feet, and the proof shows that the track, located as it now is, is an interference with ingress and egress to appellee’s property that did not exist before the relocation of the track. Also that operating engines and trains on the original track caused no vibration, and at the present location there is. To be sure, there is a conflict of evidence about this vibration, but it was the province of the jury to settle that.

' Appellant argues that the ingress and egress to appellee’s property has not been affected, but appellee testified that, before the track was changed, he had a driveway along by Ms bMlding, and wagons and trucks and everytMng went along there. That, since the track has been moved over, the vibration was so great it caused a tremor of the whole building; that you could feel it all over, and the smoke and cinders were bad. That cars and wagons used to park on the west side of the building before the change was made, but it is dangerous now to park there. And that a man with a team is afraid he will get caught if he parks between the railroad and the building; that if a car was parked there, no one could pass. If tMs is true, it certainly interferes with the ingress and egress to appellee’s property.

In the Gulledge case, referred to by appellant, it is stated: “It is alleged that, by reason of the appropriation of said street by defendant for its roadbed, switches and switch stands, and the operation of the railroad along the street, plaintiff’s property has been diminished in value to the extent of the sum of $2,000. ’ ’ Ashley, D. & N. Ry. Co. v. Gulledge, 121 Ark. 143, 180 S. W. 222.

And in that ¡case the appellant railroad company insisted that the testimony was not sufficient to make out a case which rendered the railway company liable. But the court said that, under the well settled decisions of this court, the evidence was sufficient to warrant a recovery on account of the depreciation of appellant’s property in value.

In speaking of the case referred to in 73 Ark. 1, Little Rock & H. S. Rd. Co. v. Newman, 83 S. W. 653, 108 A. S. R. 17, the court in the Grulledge case said that the access to the plaintiff’s property was not taken away or rendered less convenient. Certainly the proof in the instant case shows that it was rendered less oonvement and the ¡access was interfered with.

It is unnecessary, however, to' either cite or quote from decisions of this court, because ■ it has been uniformly held, since the adoption of the 'Constitution of 1874, that damages may be recovered if caused by'the construction or operation of a railroad, if caused to abutting property.

It is contended also by appellant that tbe court erred in permitting appellee to testify as to tbe decrease in his grocery business. We think this testimony, in connection with the testimony of appellee that the building of the track where it now is made it dangerous, and that small children who came there to purchase things before could not now come, was competent evidence. Of course he could not recover any speculative profits, but this was one way of showing that his property had been damaged.

It is also contended that the court erred in permitting appellee to show that the market value of his property had decreased. We do not agree with counsel in this contention. • If the building of the railroad track near his property decreased its market value, it injured it. It damaged it, and for this damage the owner of the property is entitled to recover. And, after this testimony was objected to by the appellant, appellee was then asked to state whether that decrease in the market value of his property was caused by the change of the track or some other cause. If it was caused by anything else, of course it would not be proper, because, if the railroad company is liable at all, it is liable for the damage it caused, and not for damage caused by some other agency.

Appellant next objects to instruction number one. It is contended that the court should have told the jury that, unless the appellee' had suffered some peculiar or special damage by reason of smoke, noise and cinders than that suffered by the other property owners in like circumstances, then he could not recover, and that a failure of the court to tell the jury this made instruction number one erroneous. In instruction number one the court stated the issues to the jury, and it did not undertake to do anything else other than state what the issues were. .

It is next contended that the court erred in giving instruction number two. In that instruction the court told the jury that it should not determine whether or not the defendant had a right to lay its tracks along the street in question, and that there could be no damages recovered by the plaintiff in this case on account of the location as first made; but, after the tracks had been once laid, they could not be changed or relocated without the consent of the owners, unless the defendant company should pay to the abutting owners of the property any damage that would be suffered on account of the relocation of the tracks. The court continued, in instruction number two: “In other words, the company would not have a right to relocate their tracks under the original grant or ordinance by the city, without being liable to the plaintiff in this case, if his property there has been damaged on account of the relocation of the tracks.”

This was a plain statement to the .jury of the law. If the relocation of the tracks caused damage to his property, he was entitled to recover. Otherwise, he was not entitled to recover. But the appellant says that it has been held that a right given a railroad company in a ■State cannot afterwards be impaired, and that the franchise as originally passed became a contract.

That might be true if the track remained where originally located, but the appellant and city of Hot Springs could not make a contract that would deprive any property owner of the right to recover damages if the building of the track or the relocation of it damaged his property. In other words, the changing a grade or relocating a line by which property is damaged, that was not damaged before the grade was changed or line relocated, gives the one whose property is damaged thereby the right to recover.

Appellant discusses other instructions, and especially instruction number three, but we think the instructions as a whole constituted a correct statement of the law, land that there was no error in the granting or refusing to grant any instructions.

The question as to whether the relocation of the track damaged the property of appellee was one of fact to be determined by the jury from the case, and the finding of fact by a jury is conclusive if there is any substantial evidence to sustain such finding. This court has uniformly held that a verdict of a jury based on substantial evidence will not be disturbed by this court, although we might think that it was against the weight of the evidence. We do not pass on the weight of the evidence nor the credibility of the witnesses.

Since we hold that there was evidence .sufficient to justify the submission of the case to the jury, it follows that the case must be affirmed.


source: Caselaw Access Project

author: McHaney, J.

license: Public Domain

text:
    First National Bank of Mineral Springs v. Hayes-McKean Hardware Company.
    Opinion delivered November 19, 1928.

      Feazel & Steel, for appellant.

      Lake, Lake & Carlton, for appellee.
   McHaney, J.

On November 15,1926, one Joe Smith, being indebted to the appellee in the sum of $649.16 for borrowed money, executed his note therefor, secured by a mortgage oh certain lands, containing the following clause: “And it is further stipulated that, in case the said Joe E. Smith and Gladys Smith shall make default in payment of taxes, or assessments for local improvements or other purpose, or of keeping said buildings insured :as aforesaid, then the said Hayes-McKean Hardware Company or legal representatives may pay such taxes and assessments and effect such insurance, and the amount so expended therefor, with interest at ten per cent, per annum from date of such expenditure until repaid, shall be considered a sum the repayment of which is intended to be hereby secured.”

The mortgage was recorded on the date of its execution. On February 11, 1927, appellant secured a judgment against said Smith, in the circuit court of Sevier County, in the sum of $333.51. Thereafter, on March 23, 1927, appellee was forced to redeem the land covered by its first mortgage from tax forfeiture for State, county and road improvement district taxes, which it paid in the sum of $180.15, and at that time required said Smiths to execute another mortgage securing the payment of said taxes. Appellant caused an execution to issue on its judgment against Smith, in August, 1927, and had same levied upon the land covered by said mortgage, and on September 21, 1927, the sheriff sold Smith’s interest therein to appellant.

On the 18th day of November, 1927, appellee instituted this action in the chancery court to foreclose its first mortgage against Smith, in which appellant was made a party defendant, and in which it prayed that all rights of appellant in the land which it claimed by reason of the execution sale be canceled in so far as it affected the rights and interests of the appellee. The court entered a decree foreclosing the mortgage for the full amount of Smith’s indebtedness to appellee, and making its lien superior to that of appellant.

The only question presented by this appeal for our determination is the priority of the respective liens of the parties, appellant claiming that its judgment lien was superior to appellee’s second mortgage- covering the money loaned to redeem the land from tax forfeitures. Appellant admits that appellee, under the terms of its first mortgage, had the right to pay the taxes for Joe Smith to protect its lien, even if there had been no provision in the mortgage as heretofore set out, but it says that, by taking the second mortgage, appellee waived its rights under the first mortgage, and also any equitable lien it may have had for the amount of the taxes paid in order to protect its lien under the first mortgage, for the reason that its judgment against Smith antedated the second mortgage.

We cannot agree with counsel in this contention. The payment of the taxes on the land was necessary in order to protect the interest of both parties. The payment of the taxes inured to the benefit of appellant as well as appellee, for, if neither had paid the taxes, the land would have passed to a stranger to the title and been lost to both parties.

Under the above clause in the mortgage, appellee was secured for all advances made for taxes, and it was unnecessary to take the second mortgage. The proof conclusively shows that the second mortgage was taken in ignorance of the provision contained in the first mortgage, and without actual knowledge of appellant’s judgment against Smith. - Appellee cannot be held to have waived a right of which it was ignorant. The uncontradicted proof shows that it was ignorant both of the provision in the mortgage and of its right under the law to an equitable lien for the payment of taxes. To hold that, by the mere fact of taking the second mortgage, it waived rights already given it, both under the first mortgage and the law, without regard to the mortgage, would be manifestly inequitable and unjust, and in the face of the uncontradioted proof that appellee did not intend to waive its rights.

A “waiver” has been defined to be “an intentional abandonment or relinquishment of a known right.” Words & Phrases, Second Series, p. 1222. This definition was cited with approval in Sovereign Camp W. O. W. v. Newsom, 142 Ark. 132, 219 S. W. 759, 14 A. L. R. 903.

Therefore, since appellee did not know of its rights under the first mortgage and the law, and since it did not intend to relinquish any rights it had, it cannot be held to have waived its prior lien by taking the second mortgage. Eather, we think, instead of intending to abandon any right it had, appellee was taking an abundance of precaution to protect its rights.

We find no error, and the decree is affirmed.


text:
    Barton v. Hardin.
    Opinion delivered November 19, 1928.

      Dobbs & Young, for appellant.

      H. P. Warner, H. T. Harrison and Abe Collins, for appellee.
   McHaney, J.

On May 3, 1920, appellee purchased for himseLf and the appellee, J. R. Hooten, 600 acres of timber land on the Cbssatat River, in Sevier County, from Tom Edwards and J. Thomas Penny. The consideration was $20,000, $4,000 of which was paid in cash and the remainder in eight notes of $2,000 each, secured by a mortgage on the land. The deal was made through one Prank Ogden, who wias introduced to appellee Hardin by appellant, who was a close personal friend of Hardin, and who recommended each to the other in the highest terms as being absolutely trustworthy and reliable. The notes not being paid at maturity, Edwards and Penny and G. P. Pride instituted this action in the Sevier Chancery Court to foreclose the mortgage to collect said notes, the complaint alleging that Penny and Edwards had conveyed one of the $2,000 notes to Ogden as a part of his commission in the sale of the real estate, who, in turn, had sold the note to Pride, and that Pride was a “bona fide holder and owner of said note for value in due course of business.”

Appellees answered, and filed a cross-complaint, and, after the taking of much testimony, it developed that Pride claimed only one-half interest in said note, and that the other half was owned by Barton by virtue of a secret arrangement between Barton and Ogden, who had divided equally the $1,000 cash paid on commission, and were to divide the proceeds of the $2,000 note. At this time the plaintiffs, Penny, Edwards and Pride, agreed with Hardin on a compromise of the litigation, but the interest of appellant in said note was not compromised. Appellant thereupon filed an intervention, claiming to own one-half of said $2,000' note, to which appellees responded, alleging that Ogden had procured these notes through fraud, to which appellant was a party, and he was therefore not entitled to recover.

The court entered a decree canceling the note and denying appellant’s right to recovery, as follows:

“The court is of the opinion that there was a collusion between the intervener, Barton, and Prank Ogden to put over this deal with the defendant G. C. Hardin, and that Hardin was deceived and misled by the intervener in his dealings with Ogden; that the land was not as represented, and that such facts were known to Ogden and Barton when made, and that the intervener is in no position to come into chancery court and ask for the relief sought; that his complaint should be dismissed for want of equity; that the said note be canceled, and the title to the land quieted as against any lien against the land by reason thereof, and that the intervener, W. B. Barton, should pay all cost relating to said intervention.”

The principal attack made upon the decree by this appeal is that it was without sufficient allegations in the complaint, and that the proof thereof is. insufficient to sustain a judgment for fraud. We cannot agree with counsel in this contention. We cannot undertake to review the testimony in detail, as it would unduly extend this opinion. It is the settled rule of this court, under decisions too numerous to mention, that the findings of fact made by a chancery court will not be disturbed on appeal unless they are against the clear preponderance of the evidence. Bearing this rule in mind, we find from the evidence that the appellee, Hardin, spoke to some of his friends in Fort Smith, who were timber people, including appellant, that he desired to locate a tract of high-grade land with a growth of high-class hardwood timber suitable for high-grade wagon stocks and handles, on river bottom land, above overflow, which would be suitable, after the removal o}f the timber, for a stock farm, and for the growth of alfalfa and other crops, and that he would expect to pay a good price therefor. Appellant volunteered to try to locate such a tract for him. Later, appellant brought a letter to Hardin from Ogden regarding this tract of land, and, still later, appellant brought Ogden to Hardin’s office, placed one hand on Ogden’s shoulder and one on. Hardin’s, stating that he was acting as a friend, and recommended Ogden to Hardin in the highest terms, stating that Ogden was a large landowner in Sevier County, a good judge of timber land, and a man of large means. Ogden stated that there was more than one million feet of first-class hickory and oak, more than one million feet of first-class gum, and other quantities of pine and cypress; that the land was. not subject to overflow, except in some places, in exceedingly high water, it would overflow a few inches, but that for all practical purposes it was above overflow. Hardin requested Ogden to go and look at the land himself and satisfy himself that it was the character of timber land that Hardin desired to purchase. The land was first priced to Hardin at $40 per acre, and later he reduced the price to $20,000 for the whole tract, stating that his principals were willing to do that in order to get established in that vicinity a stock farm of that character. It was made clear to Ogden that Hardin could not go to see the land himself, but was relying upon his representations. It later developed that these representations were false; that the amount of timber was greatly overestimated, there being only about 200,000 feet of hickory and oak and about a half million feet of gum, and very little pine or cypress. The land was subject to. overflow with almost every rise of the river, and wholly unadapted to the purposes for which Hardin had made, the purchase. Most of the testimony of Hardin was not denied by Ogden, and appellant did not take the stand.

Under this state of facts we are of the opinion that the chancellor was justified in entering the decree aforesaid. At least it cannot be said that it is against the preponderance of the evidence. It is suggested that Hardin sent Davidson to examine the land for him, but this is disputed by both Hardin and Davidson. Davidson went to look at the timber only, and on his own account, for the reason that he was purchasing or marketing the products of Hardin and Hooten, and desired to see the character of timber that was to produce the stock to be marketed by him. Appellant made no representations regarding the land, but, being a partner with Ogden, he will be held bound by the fraudulent representations of his partner, and will not be permitted to share the fruits of the fraud on any theory of estoppel or laches in failing to move to rescind sooner.

Appellees did not discover appellant’s connection with the fraud until the trial of the case, and they thereupon immediately interposed the defense herein stated.

Moreover, appellant is not entitled, under the facts in this case, to invoke the aid of a court of equity, as he does not come with clean hands.

As said by this court in O’Conner v. Patton, 171 Ark. 626-638, 286 S. W. 822-826: “ ‘He who comes into equity must come with clean hands,’ or, as it is sometimes expressed, ‘he that hath committed iniquity shall not have equity,’ is one of the cardinal maxims of equity. Says Mr. Pomeroy: ‘Whenever a party who, as actor, seeks to set the judicial machinery in motion and obtain some remedy, has violated conscience, or good faith, or other equitable principles, in his prior conduct, then the doors of the court will be shut against him in limine; the court will refuse to interfere on his 'behalf, to acknowledge his right, or to award him lany remedy.’ 1 Pomeroy Eq. Jur., § 397, and numerous cases cited in note.”

Now, as we have already shown, appellant, acting as a friend of Hardin’s, introduced Ogden to him in glowing terms as to his standing and honesty, thereby making it possible for Ogden to perpetrate the fraud in the sale of this land. Then on the trial of this case it developed that he was sharing in the fruits of the fraud, and came into a court of equity to enforce the collection thereof. He is therefore in no better position to enforce this demand than Ogden would have been.

We find no error, and the decree is affirmed.


author: Hart, C. J.,

text:
    Dubard v. Nevin.
    Opinion delivered November 26, 1928.

      J. G. Waskom, for appellant.

      Ogan & Shaver, for appellee.
   Hart, C. J.,

(after stating the facts). The judgment of the circuit court was correct. Payment of the warrants was refused by the county treasurer on the ground that the bank, which had them for collection, held them for three days without presenting them, and that this was an unreasonable time, and resulted in loss to the county treasurer because the bank became insolvent; for, if the warrant had been presented in time, he had on deposit in the bank a sum more than sufficient to pay the warrants. This was no defense. The school warrants were orders upon the county treasurer to pay out of the school funds in his hands the amounts specified; and, although the warrants are negotiable in form and transferable by delivery, they are not negotiable instruments in the sense of the law merchant. First National Bank of Waldron v. Wisenhunt, 94 Ark. 583, 127 S. W. 968; and Vale v. Buchanan, 98 Ark. 299, 135 6. W. 848. Hence the rule in regard to the presentation of negotiable paper is not applicable. Our statute did not require the warrants to be presented within any particular period of time, and there was no reason why the county treasurer should not have paid them when they were presented by the State Bank Commissioner. The affairs of the insolvent bank had been turned over to him for liquidation under the' statute, and he had a right to collect the warrants.

Again, it is insisted that the writ of mandamus should not be issued against the county treasurer in this case because the officers of the bank did not present the warrants to the treasurer for payment during the first three days they were in the hands of the bank for colleetion, for the reason that the officers of the bank knew that the treasurer would pay the warrants out of the funds on hand in the bank belonging to him as -county treasurer, and that this might result in hastening the insolvency of the 'bank, which the officers, at the time, were trying to prevent. Even if this were true, it would not defeat this action. The holders of the warrants were not guilty of any improper conduct whatever. In good faith they sent the warrants to the bank for collection, without any qualifications or restrictions of any kind as to the time within which they should be presented for payment. - The holders of the warrants could not be held liable in any sense for any misconduct of their collecting agent in withholding the warrants during the three days in question. The holders could in no sense be held parties to any wrongful or illegal act of their agent in the premises.

Therefore the judgment of the circuit court, directing the issuance of the writ of mandamus to the county treasurer to pay the warrants, was correct, and it will be affirmed.


text:
    Hood v. Young.
    Opinion delivered November 26, 1928.

      Hill, Fitehugh <& Brissolara, for appellant.

      Dobbs & Young, for appellee.
   Hart, C. J.,

(after stating the facts). The decree of the chancellor was wrong. The testimony of J. M. Young and J. "W. Young, to the effect that E. W. Hood came into their office and told them, in the presence of Reginald Lane, that he was going to assume the payment of the mortgage indebtedness when he purchased the property from Lane, does not entitle Young to recover against Hood the amount of the mortgage indebtedness. Suppose it to be true that Hood did tell Young that he was about to purchase the property from Lane and would assume the mortgage indebtedness, he evidently after-wards changed his mind. He not only did not execute the deed which had been prepared by Young to that effect, but he had his attorneys prepare a new deed, in which he stated that he had purchased the property subject to the mortgage of Young. He executed the deed in this form, and delivered it to Lane. Lane accepted the deed, and its terms became the contract between the parties. The clause in the deed to the effect that the deed was made subject to the mortgage of Young was contractual in its nature, and bound the parties. It could not have even been contradicted by parol evidence. Wilson v. Nugent, 174 Ark. 1115, 299 S. W. 18.

The chancellor seems to have proceeded on the theory that the assumption of the mortgage indebtedness by Hood was a part of the- consideration for the execution of the deed by Lane to Hood. Hood denies that he ever agreed to execute a deed in this form. On the other hand, both of the Youngs testified that he did state to them, in the presence of Lane, that such was his agreement. This did not make any difference. Assuming it to be true, the parties evidently changed their, minds. Instead of executing the deed with the clause that he assumed the balance of the Young' mortgage, Hood declined to execute this deed, and had another one prepared by his attorneys, in which it was stated that the deed was subject to the Young mortgage. In this form the deed was executed by Hood and delivered to Lane. As we have .just seen, the clause that the deed was subject to the Young mortgage was contractual in its nature, and became the contract between Hood and Lane, who were the contracting parties. There is no clause in it indicating that Hood assumed the Young mortgage. On the contrary, the deed expressly recites that it is made subject to the Young mortgage. Young was not a party to the contract between Hood and Lane, and had no rights under it except what the contract itself gave him. Hence the chancellor erred in holding that Hood agreed to assume the mortgage indebtedness to Young.

For' that error the decree will be reversed, and the cause remanded with directions to dismiss the complaint against E. W. Hood. No appeal was taken by Nell A. Lane, and the judgment and decree of foreclosure against her are not affected by this appeal.


text:
    Chicago Title & Trust Company v. Hagler Special School District No. 27.
    Opinion delivered November 26, 1928.

      Carmichael Hendricks, for appellant.

      Peyton D. Moncrief, A. G. Meehan, John- W. Moncrief, and R. D. Rasco, for appellee.
   Hart, C. J.,

(after stating the facts). After the transcript was filed in this 'court, counsel for appellants ascertained that the deposition of E. F. Horning, one of the bondholders, had been lost. The decree recites that the case was heard upon the pleadings and depositions of certain witnesses, specifically named, ¡and among them is the name of E. P. Horning. Counsel for appellants applied to the chancery court from which this appeal was taken to supply the lost deposition. The chancery court granted their request, and, upon proper proof, the lost deposition was supplied and made ¡a part of the record, and so certified by the clerk of the chancery court, under the direction of the chancellor.

It is earnestly insisted by counsel for appellees that no such power existed in the chancery court. We cannot agree with counsel in this contention. 'Section 8342 of Crawford & Moses’ Digest provides that, whenever any of the public records, including all records, papers and proceedings of every description, of record or on file in ¡any court, or clerk’s or recorder’s office, or other public office of a county, shall be lost, or burned, or otherwise destroyed, the same may be reinstated and restored in the manner hereinafter provided. This court has held that, independent of .statute, a court of general jurisdiction possesses the inherent power to substitute or restore its lost or destroyed records, and such power is not taken away by a statute unless a clear intention to do so appears in the body of the statute itself. Fort Smith Automobile & Supply Co. v. Nedry, 100 Ark. 485, 140 S. W. 711. So it will be seen from the language of the statute that it is merely declaratory of the common law.

The rule and the necessity for it were clearly stated by Mr. Justice Mitchell of the Supreme Court of Minnesota, in Red River & Lake of the Woods Railroad Company v. Sture, 20 N. W. 229, as follows:

“Independently of statute, and by virtue of its inherent powers, unaffected by lapse of time, every court has the right to replace its records when lost or destroyed by accident, negligence, or wantonness. If it had not thi s power, the rule that the record imports absolute verity, and is exclusively admissible evidence of matters properly incorporated in it, would work much mischief. The power which enables a court to supply an entire record after judgment extends to supplying any pleadings or papers in civil cases prior to judgment.”

Under our practice, depositions, when filed, or oral evidence ordered to be reduced to writing and filed as depositions, become a part of the record in a chancery court. Fletcher v. Simpson, 144 Ark. 436, 222 S. W. 710; Harmon v. Harmon, 152 Ark. 129, 237 S. W. 1096; McGraw v. Berry, 152 Ark. 452, 238 S. W. 618; C. A. Rees & Co. v. Pace, 156 Ark. 473, 246 S. W. 491; Rose v. Rose, 9 Ark. 507; Lemay v. Johnson, 35 Ark. 225; and Casteel v. Casteel, 38 Ark. 477.

Of course, the court should proceed cautiously in the matter of restoring lost records, especially lost depositions ; but this was done in the case at bar.

The chancellor held that the contract of the school district for the sale of the bonds was invalid, because the trustee named in the bonds and in the mortgage given to secure the same was a foreign corporation, which had not complied with our statute authorizing foreign corporations to do business in this 'State. We do not agree with this construction placed upon our statute prescribing upon what conditions foreign corporations may do business in this State. The language of the statute shows that it was intended to prevent a foreign corporation from doing business in this State, for which it was organized in another State, until it had procured the required certificate to do business in this State. In Kephart v. People, 28 Colo. 73, 62 Pac. 946, the Supreme Court of Colorado had under consideration a statute of that State which provided, among other things, that, if a foreign corporation fails to pay a prescribed fee to the .Secretary of State, it shall not exercise any corporate powers or do any business in the State until the fee shall be paid; and it was held that the statute did not prevent an action by the foreign corporation to collect State warrants bought at its place of business in the State where such corporation was created. In Bamberger v. Schoolfield, 160 U. S. 149, 16 S. C,t. 225, it was held that a corporation of one State does not carry on business in another State by discounting a note sent it from the other State. In Equitable Credit Co. v. Rogers, 175 Ark. 205, 299 S. W. 747, it was held that a foreign corporation which has purchased in another State a note and contract of sale from a motor vehicle concern doing business within this State, in attempting to collect such note, was not doing business within the State.

The record does, not show in what business the Chicago Title & Trust Company was engaged. In the bonds and in the mortgage involved in this suit, that corporation was named as trustee, and the bonds recite that they are payable at its place of business in the city of Chicago, Illinois.s The Chicago Title & Trust Company has no beneficiary interest whatever in the bonds, and, if it should go out of existence or refuse to act, the bondholders would have the right to have a substituted trustee appointed; and we do not think the act of bringing suit by such corporation in this State to enforce the collection of the school 'bonds was such an exercise of corporate power as comes within the inhibition oif the statute. It follows that the 'Chicago Title & Trust Company was not doing business in this State by merely bringing suit for the collection of the bonds sued on.

It is also insisted that the bonds sued on are invalid because the Legislatures of 1917 and of 1919 passed acts detaching portions of the special school district created by the Acts of 1915, and embraced these detached portions in new school districts, and in the acts creating the new districts recited that the Constitution of the State of Arkansas with regard to giving notice of the passage of special acts had not been complied with in act 314 of the Acts of 1915.

This declaration on the part of the Legislatures of 1917 and 1919 could have no other effect than to impair the obligation of the original contract under which the bonds were issued, in violation of the Constitution of this State and the Constitution of the United States.

In Ennis Waterworks v. City of Ennis, 233 U. S. 651, 34 S. Ct. 767, it was held that although, when the assertion is made that contract rights are impaired, it is the duty of the court to determine for itself whether or not there was a valid contract, in considering a contract arising from a State law, the Supreme Court of the United States will treat it as though there was embodied in its text the settled rule of law which existed in the State when the action relied upon was taken. In Hill v. American Book Company, 171 Ark. 427, 285 S. W. 20, it was held that where, by public law, officers are appointed to enter into a contract for the State, the law under which they act is as- much a part of the contract as if transcribed therein.

As we have already seen, Hagier Special School District No. 27 was created by a special act of the Legislature of 1915. The Legislature in passing the act, under our decisions, necessarily found that the notice required by the Constitution was given, and its action could not be reviewed by the courts. Davis v. Gaines, 48 Ark. 370, 3 S. W. 184; Booe v. Road Imp. Dist., 141 Ark. 140, 216 S. W. 500; and Gibson v. Spikes, 143 Ark. 270, 220 S. W. 56.

■ The bonds in question in this suit were issued' by the directors of Hagier Special School District pursuant to the power conferred upon them by the special act creating the district, and the terms of that act and the construction placed upon the provisions of the Constitution relating to its passage necessarily form a part of the contract for the issuance of the bonds. If the contract was valid and enforceable when entered into between the parties, it is perfectly plain that no act or declaration oif subsequent Legislatures could alter its terms injuriously to the parties thereto without impairing" the obligations of the contract.

We now come to the question whether the Legislature of 1917 and that of 1919 could detach material portions of territory from the original district, which issued the bonds, and thereby defeat or impair the rights of the purchasers of the bonds in the collection thereof. This could not be done. It is well settled that school districts are creatures of the Legislature, and that the Legislative power to create or abolish school districts, or change the boundaries thereof, is full and complete. Special School District No. 2 v. Special School Dist. of Texarkana, 111 Ark. 379, 163 S. W. 1164; and Kies v. Lowrey, 199 U. S. 233, 26 S. Ct. 27. It is equally well settled, however, that it is a plain violation of our own Constitution as well as of the Constitution of the United States to enact a law which has the effect of impairing the obligation of a contraot. In Louisiana v. New Orleans, 102 U. S. 203, Mr. Justice Field said:

“The obligation of a contract, in the constitutional sense, is the means provided by law by which it can be enforced — by which the parties can be obliged to perform it. Whatever legislation lessens the efficiency of these means impairs the obligation. If it tends to postpone or retard the enforcement of the contract, the obligation of the latter is to that extent weakened. ’ ’

To the same effect see Edwards v. Kearzey, 96 U. S. 595, and Seibert v. Lewis, 122 U. S. 284, 7 S. Ct. 1190.

The territory comprising Hagler Special School District, and the revenue for school purposes derived from it at the time the bonds were issued and sold, constituted the principal protection of the bondholders. It was a material part of the contraot that such creditors should have the right to have a school tax levied and collected as provided by law upon the whole territory embraced in the school, district as it then existed. Of course, this court has recognized that the Legislature, in the exercise of its powers to change the boundaries of school districts, might make immaterial changes which could not in any sense impair the vested rights of the bondholders; but it could not take away material portions of the district, as was done in this case, and thereby seriously impair or affect injuriously the vested rights of the bondholders, who, as creditors of the district, had the right to have the territory remain as it was at the time the bonds were issued. Every case must be determined upon its own circumstances, but the record in this case shows that the severance of territory from the original district by the Legislature of 1917 and of 1919 seriously impaired the enforcement of the contract, and disturbed or tended to defeat the rights of the bondholders as creditors- of the district. Therefore the acts are void in so far as the bondholders are concerned. As sustaining this view, under essentially a same state of facts, see Midland Special School Dist. of Sebastian County v. Central Trust Co. of Illinois, 1 Fed. Rep. (2d) 124.

The Jesuit of our views is that the chancellor erred in dismissing the complaint of appellants for want of equity. For that error the decree will be reversed, and the cause will be remanded with directions to the chancery court to render judgment in favor of the bondholders for the amount of the bpnds sued on, and to foreclose their mortgage upon all of the property embodied in such mortgage in Hagler Special School District No! 27 as it existed at the time the bonds were issued and the mortgage executed, and for such other proceedings as may be necessary under, the principles of equity and not inconsistent with this opinion. It is so ordered.


author: -Smith, J.

text:
    Goode v. Ætna Casualty & Surety Company.
    Opinion delivered November 26, 1928.

      F. G. Taylor, for appellant.

      John A. Sherrill, for appellee.
   -Smith, J.

Appellant brought suit against certain persons doing business as Tolbert Bros, So Company and the .¿Etna Casualty & Surety Company, and for his cause of action alleged “that the defendants, Tolbert Bros. & Company, are indebted to this plaintiff in the sum of $663.08 on account, which is for labor performed by laborers in the employ of said defendants, Tolbert Bros. & Company, which were assigned to plaintiff by said laborers and approved by said defendants, Tolbert Bros. & Company, except the sum of $128.13, which is for stock feed sold and delivered by plaintiff to Tolbert Bros. & Company, and which was used to feed the stock used by them under their contract with the Highway Commission of the State of Arkansas, hereinafter mentioned # *

The complaint further alleged that Tolbert Bros. & Company, as contractors, executed a bond, with the surety company as surety, to the State Highway Commission, conditioned that the said contractors should build the certain road covered 'by the contract, and should, among other things, “pay all bills for material and labor entering’ into the construction of said work or used in the course of performance of the work, and shall complete said work within the time specified in said contracts,” etc.

A motion was filed to make the complaint more definite by requiring plaintiff to “file as an exhibit the original assignment alleged to have been obtained by plaintiff from said laborers, together with the approval of the defendants, Tolbert Bros. & Company. ’ ’

In response to this motion, plaintiff amended his complaint to allege “that he has no assignment, and that there was no written assignment of said labor to him, but that he claims by agreement between said laborers and defendants, Tolbert Bros. & Company, the'labor was paid for by this plaintiff, and that constitutes in law an assignment of the amount of labor so paid for by him. ’ ’

These allegations, in connection with those of the amended complaint wdiich the plaintiff later filed, state, in effect, that the plaintiff, who is a merchant, furnished supplies to the contractors’ employees, at the request of the contractors and upon the understanding and with the agreement that the contractors should pay for these supplies to the extent of the wages of the employees, and this agreement was alleged to constitute an assignment of the wages.

A demurrer to the complaint as amended was sustained as to the surety company, and, as the plaintiff refused to plead further against that defendant, the complaint was dismissed as to it, and this appeal is from that judgment.

It clearly appears that the bond executed by the contractors to the State Highway Commission covers the wages of the laborers employed in constructing the road, and these laborers had a cause of action to sue on the bond. But the plaintiff has only an account against these laborers for supplies furnished them in different amounts, and if it be said that the complaint sufficiently alleges an agreement on the part of the laborers to assign to plaintiff their causes of action against the surety company, it is answered that the alleged agreement was an oral one, and not evidenced by any writing.

In the case of St. L. I. M. & S. Ry. Co. v. Camden Bank, 47 Ark. 541, 1. S. W. 704, it was held that an open account is not an assignable instrument within the meaning of the statute, and a party to whom it is transferred cannot sue on it alone, but must make his assignor a party to the suit, this decision being based upon what is now § 1090, C. & M. Digest, which reads as follows: “Where the assignment of a thing in action is not authorized by statute, the assignor must be a party, as plaintiff or defendant.” Plaintiff could not therefore sue upon the oral contract of assignment of the accounts without making the assignors parties.

The complaint alleges, however, a direct sale of stock feed, sold and delivered to the contractors, which was used to feed the stock employed by the contractors in the performance of the contract with the Highway Commission ; but it is answered by the surety on the contractors ’ bond that it is liable only for the value of such material as actually entered into the construction of the road, and that it is not liable for the value of feed furnished the stock which was used in-the work on the road. • This contention appears to be sustained by the following oases: Pierce Oil Corporation v. Parker, 168 Ark. 400, 271 S. W. 24; Heltzel Steel Form & Iron Co. v. Fidelity Deposit Co. of Maryland, 168 Ark. 728, 271 S. W. 325. See also Southern Surety Co. v. Simon, 172 Ark, 924, 299 S. W. 960. The surety is therefore not liable for the- value of the feed.

Prom what we have said it appears that the court below properly sustained the demurrer to the complaint; but it is insisted that the surety company is liable for the amount of the accounts upon a written agreement to pay them after the accounts had been incurred and default had been made in their payment. If it be said that the complaint is sufficient to raise the issue that there was a supplemental agreement on the part of the surety company, to pay plaintiff the accounts due them, it may be and is answered that no consideration for such a promise is alleged.

We conclude therefore that, upon a consideration of the whole case, the demurrer to the complaint was properly sustained, and the judgment is affirmed.


author: Smith, J.

text:
    Dixie Culvert Manufacturing Company v. Perry County.
    Opinion delivered November 26, 1928.

      Horace Chamberlin, for appellant.

      Boyd Cypert, for appellee.
   Smith, J.

Appellant filed a petition in the county court of Perry County, which it -says is in the nature of a suit in replevin. It was alleged therein that petitioner sold the county certain culverts of the aggregate value of $2,424.76, in the year 1926; that petitioner endeavored to collect the purchase price of the culverts from the county, hut that it was shown in the trial thereof that the agreement for payment was in violation of Amendment No. 11 to the Constitution. That judgment of the county court was affirmed -on the appeal to this court (174 Ark. 107, 294 S. W. 381), where it was held that the amendment designated as No. 11 prohibited a county from incurring any obligation in 'any year exceeding the revenues of that year, it being there said that such contracts were void, and -could not be paid out of the revenues of a succeeding year.

The petition further alleged that the county -still has the culverts in its custody and control, and that, by virtue of the above-mentioned decision of the Supreme Court, the title and right to possession remained in petitioner, and demand for the surrender thereof had been made and refused. The petitioner alleged that by reason of the detention of the 'culverts it had been damaged to the extent of $1,750 in addition to the value of the culverts, which had been sold and delivered to the county within three- years prior to the institution of this suit, and the culverts had not been taken from petitioner for any tax or fine or under any judgment or order of any court, nor had they 'been seized under any execution or attachment against its property. Petitioner prayed judgment against the county in the sum of $1,760, and that, if it be shown that the county cannot deliver the culverts, it have judgment against the county for the value thereof.

Attached to the complaint as an exhibit thereto was an order of the county court — the date of which is not given — reciting the terms of the contract of purchase of the culverts by the county and the fact that the culverts had been delivered to the county in accordance with said contract and had been placed in the roads of the county, in consideration of which facts the contract of sale was ratified by the county court.

The county court denied the prayer of the petition, and an appeal was duly prosecuted to the circuit court, where a demurrer was filed, which alleged that the circuit court had no jurisdiction of the subject-matter, and that the matter in controversy had been formerly adjudicated. The demurrer was sustained, and the cause of action dismissed, and this appeal is from that judgment.

It affirmatively appears that the culverts have been placed in the roads of the county and have become a part thereof. They have therefore ceased to be personal property, and an action in replevin will not lie for their possession, even though it had been brought in a court having jurisdiction of that action, which the county court has not. Dent v. Bowers, 166 Ark. 418, 265 S. W. 636.

It is pointed out that petitioner prayed for an alternative judgment in the county court, if the culverts could not be re-delivered, for their value; but it is answered in the brief on behalf of the county that this, in effect, is a second suit upon a cause of action which this court has already held cannot be maintained.

It is argued in the brief of petitioner, although it was not alleged in its petition, that the revenues of the county were not exhausted when the contract for the purchase of the culverts was made, and the opinion on the former appeal is questioned as being an improper interpretation of Amendment No. 11.

In reply to these arguments, it suffices to say that, if we were convinced now that the opinion on the former appeal was erroneous (and we are not), it would profit appellant nothing, as the former' opinion is the law of this case, even though it might be overruled in some other case. Upon the former appeal appellant’s right to recover the contract price of the culverts was denied upon the ground that the contract for the purchase price of the culverts was made in violation of the amendment to the Constitution commonly referred to as No. 11, and that opinion is decisive of this claim. This amendment imposes upon one who makes a contract with a county, city or incorporated town the penalty of losing the value of the article sold in violation of its inhibitions, and imposes upon any officer who issues a warrant or certificate of indebtedness in violation of its inhibitions a heavy fine, with the penalty of loss of office. No right to recover the culverts could therefore be asserted if they had not ceased to be personal property, because a violation of this constitutional amendment must be shown in the assertion of that right. The law of this subject was fully considered and discussed at length in the case of Carter v. Bradley County Road Imp. Dists., 155 Ark. 288, 246 S. W. 9, and no useful purpose would be served by ag'ain reviewing the authorities.

The demurrer was properly sustained, and the judgment of the court below so doing- is therefore affirmed.


text:
    Wiseman v. Graham.
    Opinion delivered November 26, 1928.

      John Mayes, for appellant.
   Smith, J.

In October, 1924, appellees shipped a car of apples from Springdale, Arkansas, to Winchester, Tennessee, and Eura Baggett was sent along, to sell the apples. About the same time • appellant, Bradley, also shipped from Springdale a car of apples to Winchester, Tennessee, and J. B. Wiseman was sent along to sell these apples. ‘ Neither shipper knew of the other shipment until after the arrival of the apples in Winchester. :

The two cars arrived in Winchester about the same time, and both were unloaded in the same building, and for about a week each agent sold for his principal as many apples as he could. Baggett testified that he and Wiseman had more apples than they could sell, and both were on expense, and each had a helper employed. Baggett proposed that Wiseman take charge of both cars and employ one assistant, and that the apples be sold for the joint account of the owners, and, after expenses were paid, that the balance be equally divided. Baggett further testified that, pursuant to this understanding, he turned his apples over to Wiseman and came home, and Wiseman later submitted • to him a statement showing the sale of $305.50 worth of apples after this agreement had been made. It is undisputed that Wiseman collected for appellees $16.55 on account of overcharge- on freight.

Wiseman denied that lie had agreed-to sell appellees’ apples, or that he had sold any of them. He testified that Baggett sold as many of the apples as he could, and left, after asking witness to pay a board bill of $18 for him. This witness did by giving the boarding-house keeper apples belonging to Baggett’s principal. Witness had the greatest difficulty selling the apples belonging to Bradley, and four or five weeks were required for that purpose. He further testified that the apples which he sold did not pay expenses, and that he had no authority from his principal except to sell his principal’s apples. He admitted collecting the excess freight, but testified that he did this as an accommodation. It was not denied that a tender of this excess freight was made-and’declined.

There was a verdict and judgment in favor- of appellees for $100, and this appeal is from that judgment.

An instruction was. asked on behalf of appellant to the effect that Wiseman was a special agent, without power or authority to enter into the alleged contract with Baggett as the agent of appellees. This instruction was refused, and appellant then requested the following instruction: “You are instructed that all-parties dealing with a special agent must ascertain the limitations upon his authority, and his principal is not bound by any act of his special agent Unless such act was expressly authorized by this- principal.” 'This instruction was also refused.

■ The court submitted to the jury the question of fact whether Baggett and Wiseman had made a contract, and, if so, what its terms were, and directed the jury, if they found there was a contract for the joint sale of the apples, to state an account between the parties and to return a verdict accordingly.

The motion for a new trial questions only the sufficiency and competency of the testimony to establish a joint adventure for the sale of the apples. The verdict of the jury is conclusive of the fact that Baggett and Wiseman made an agreement for a joint adventure in the matter of the sale of the apples, and we think the court did not err in refusing to declare as a: matter of law that the testimony was insufficient to support a finding that Baggett and Wiseman had authority to make such an agreement. It is true Baggett and Wiseman were special agents, but the agency was special in the sense that the agency was confined to the sale of the apples, but their agreement related to this subject, and did not extend beyond it.

The receipt of the two cars of apples on the same day “flooded” the apple market at Winchester, and by the end of the first week, when the agreement was made, it was apparent to both agents that the expense of selling the apples would consume, not only the profits, but the total proceeds of the sale, and a joint adventure, whereby expenses were to be shared and proceeds to be divided, was an agreement which, we think, the jury was warranted in finding was within the scope of the authority of these agents to make in the discharge of their agency to sell apples.

The contract made between Baggett and Wiseman was not a delegation of the agency of either, but was an agreement whereby Baggett employed a subagent, in doing which a joint adventure was created.

A leading case on the right of an agent to employ a subagent or an assistant is that of Day v. Noble, 2 Pick. (Mass.) 615, 13 Am. Dec. 463. In that case the master of a vessel, who had carried goods to a distant port with orders to dispose of them to the best advantage, was held to have authority, failing to find a purchaser, to place the goods in the hands of a merchant to be sold for the owner’s benefit.

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


author: Humphreys, J.

text:
    Natural Gas & Fuel Corporation v. Alotto.
    Opinion delivered November 26, 1928.

      J. M. Shackleford and Busbee, Pugh <& Harrison, for appellant.

      W. R. McHaney and J. B. Milham, for Appellee.
   Humphreys, J.

Appellee was injured by an automobile driven by W. D. Hawkins, while making meter connections with the pipe line through which natural gas was carried to consumers in the town of ■Louann, Arkansas. A ditch -6 feet long by 4- feet- deep had been excavated about the middle of the main street in the town for the purpose of making the connection. In excavating the same the dirt had been thrown out on the sides of the ditch, and served as some protection against injury to workmen engaged in making the connection. As a further protection a telephone pole was laid at right angles to and immediately in front of the ditch. The ditch was near the intersection of two streets where there was much traffic. There was a distance between it :and the sidewalk on one side of 19 feet, and 25 feet on the other side, for the public to drive around the ditch. In making the connection it was necessary for the workmen doing the work to look down.

Appellee 'brought this suit in the circuit court of Ouachita County against appellant to recover damages for the injury received while making- the meter connection, -alleging that he was in the employ of appellant at the time, and that it failed to use due care to furnish bim a reasonably safe place in which to work. Also that his foreman, R. J. Lewis, committed acts of negligence attributable to appellant by inducing him to go in the ditch and tighten up the connections on the promise to stand there and keep watch for the traffic, or warn appellee of its approach, and in walking away from the ditch without informing appellee and without appellee’s knowledge of his departure.

Appellant filed an answer, denying- that appellee or his foreman was in its employ at the time of the injury, as well as all other material allegations in the complaint, and interposed the further defenses of assumed risk and contributory negligence.

The cause proceeded to trial, and at the conclusion of the testimony appellant requested the court to instruct a verdict, which the court refused to do, over its objection and exception. The cause was then submitted to the jury upon the pleadings, testimony introduced by the parties and instructions of the court, which resulted in a verdict land judgment against appellant for $1,500, from which is this appeal.

Appellant contends that the trial court committed reversible error in refusing to instruct a verdict for it, for two alleged reasons:.

First. The undisputed proof shows that the aecid|^i was due to the negligence of a third person, and «Tit could not have been reasonably anticipated by the defendant.

Second. That plaintiff, at the time of the accident complained of, was not engaged in the performance of any duties for the Natural Gas & Fuel Corporation, but was working with a crew in the employ of Public Utilities Corporation; that the undisputed proof shows that the man R. J. Lewis, of whose alleged negligence plaintiff complains, was in the employ of Public Utilities Corporation.

(1) . The undisputed proof does not show that the injury was caused solely by the negligence of a third party, nor that it was an injury that could have been reasonably anticipated. Appellee testified that the injury resulted from a failure of his foreman, R. J. Lewis, to stand watch for him, as he had promised to do, while he made the connection. Dr. Ootner testified that he saw Lewis standing by the ditch, keeping watch for awhile, but, after a few minutes, he went away and left appellee unprotected. R. J. Lewis testified that appellee kept watch for him while he was working in the ditch. C. H. Vick testified that it was the custom to put two men on ditch jobs like this, so that, by alternating, one could keep watch while the other worked. We think that this proof, if believed by the jury, indicated that the injury was the result of the concurring negligence of the driver of the automobile and R. J. Lewis.

(2) . Neither does the undisputed proof show that appellee was employed by the Public Utilities Corporation. Appellee testified that he was working for appellant at the time he was injured. He was corroborated in his statement by J. A. Chinn, who testified that he was employed by appellant, and was working in the public utilities department; that both McNeil and Lewis were working under him, and that he paid appellee for the work he was doing at the time of his injury, as the representative of appellant. With this testimony in the record it cannot be said that the undisputed evidence showed that appellee was working for the Public Utilities Corporation at the time he received the injury.

Appellant also contends that the trial court committed reversible error in giving instruction No. 3, which is as follows:

“You are instructed that it was the duty of the defendant to exercise ordinary care to furnish plaintiff with a reasonably safe place in which to perform his work, and, if you believe from the evidence in this case that defendant failed to exercise ordinary care to furnish plaintiff with a reasonably safe place to do his work, and plaintiff was injured thereby, and that the injury was caused by such failure on the part of the defendant to exercise such care to furnish a reasonably safe place to work, then you are told to find for the plaintiff in this action.”

The instruction is criticised on the alleged ground that it excluded from the jury’s consideration the defense of assumed risk and the issue of whether or not appellee was employed ¡by appellant at the time he received the injury. The instruction does not mention either defense, and, standing alone, it would be subject to the criticism made, but instruction No. 2 immediately preceding it, which was given by the court, told the jury that appellee assumed all risks incident to his employment, except the risk growing out of the negligence of appellant or its employees, unless he knew of such negligence and appreciated the danger thereof. Instructions numbers 4 and 5, given by the court, imparted the information to the jury that, in order to fix liability upon appellant for the injury, it was necessary to find that he was in its employ at the time. The court also told the jury that they must consider the instructions given in the ease as a whole, and, when so considered together as a whole, they constituted the law by which they should be governed in making up their verdict.

In view of the juxtaposition of instructions numbers 2, 3, 4 and 5, and the court’s instruction to the effect that no one instruction should be regarded by them as the law of the case, but, in arriving at the verdict, they must be governed by all of the instructions, it cannot be said that the defenses referred to were excluded from the jury’s consideration.

The instruction is also criticised 'because it told the jury as a matter of law to find for appellee merely upon the finding that appellant had failed to exercise ordinary care to furnish appellee with a reasonably safe place to work. It is argued that appellee assumed all dangers incident to the location of the job and its physical surroundings, -and that the only act of negligence attributable to appellant, under the testimony introduced by appellee, was the failure of E. J. Lewis to keep watch, if he promised to do so, while appellee was working in the ditch. In other words, the árgument is made that the instruction was abstract and misleading in submitting the issue of whether or not appellant exercised ordinary care to furnish appellee a reasonably safe place in which to work, because there was no evidence tending to show such neglect aside from the failure of E. J. Lewis to keep watch, if he promised to do so. ’

The majority of the court is of the opinion that, if the jury found E. J. Lewis had promised to keep watch, and walked away without the knowledge of appellee while he was at work in the ditch, thus leaving him unprotected, the jury might have found, under the circumstances, that appellant failed to furnish appellee with a reasonably safe place to work after the departure of E. J. Lewis.

Lastly, appellant contends for a reversal of the judgment because the court gave appellee’s requested instruction No, 4, which is ás follows:

.“You are instructed that, if you find from a preponderance of the evidence in this case that the plaintiff was in the employ of the defendant company and was working for it under the orders and instructions of its foreman, and you find from the evidence that he was in the exercise of ordinary care for his own protection, and you find from the evidence that he had not assumed the risk, and you find from the evidence that he was injured on account of the negligence of the defendant company, its agents, servants or employees, as alleged in the complaint, it will be your duty and you are told to find for the plaintiff.”

The instruction is criticised because it also, like instruction No. 3, submitted the issue to the jury of whether appellant was negligent in failing to furnish appellee a reasonably safe place in which to work. As stated above, a majority of the court is of the opinion that the testimony warranted the submission of that issue to the jury.

The writer is of the opinion that the only evidence introduced tending to show that appellant was negligent was its failure to keep a watchman at the ditch while appellee was mailing the meter connection, and that the trial court committed reversible error in submitting any other issue to the jury.

In accordance with the majority opinion, the judgment is affirmed. .


text:
    Lincoln Reserve Life Insurance Company v. Jones.
    Opinion delivered November 26, 1928.

      Henry Stevens, for appellant.

      Wade Kitchens, for appellee.
   Humphreys, J.

Appellee, beneficiary in a life insurance policy for $1,000, No. 2684, issued by appellant to Amanda Harris, brought suit, after her death, against appellant to recover $758.04, alleging that said amount was due him after deducting the amount loaned on the policy by appellant to the insured and himself. He also prayed in the complaint for the statutory penalty of 12 per cent, and a reasonable attorney’s fee.

Appellant filed an answer, admitting the issuanceof the policy to Amanda Harris, insuring her life for said sum, payable at her death to appellee, and that the amount due on the policy above the amount advanced by it to the insured and appellee was $758.04, but that it paid said amount to J. T. Bagby, to whom the policy had been assigned by the insured and appellee, and that it paid same to Bagby under the representation of appellee that he, Bagby, was the assignee of said policy. It prayed for a dismissal of the complaint, and a judgment for its costs.

The cause was submitted to the jury upon the pleadings, the testimony adduced by the parties and the instructions oif the court, resulting in a verdict for $250 against appellant, for which amount the court rendered judgment, together with a penalty of 12 per cent, and an attorney’s fee of $50, from which is this appeal.

The record reflects the following undisputed facts:' Appellant insured the life of Amanda Harris for $1,000 on the 17th day of March, 1914, naming appellee in the policy as beneficiary, and reciting that he was the insured’s nephew. The insured and appellee borrowed $200 from appellant upon the policy on March 17, 1921, and duly assigned the policy to it as security for the loan. The policy remained in the possession of the insurance company after the assignment, and was never returned to the insured or to appellee.

The rules of the company provide that assignments of policies should be made in duplicate and both copies sent to the company, one of which the company was to retain and the other to be returned to the insured, and also contained the provision that the company should not be responsible for the validity of any assignment.

Pursuant to the rules for the assignment of the policy, the insured and appellee executed and mailed duplicate assignments to appellant on the 11th day of June, 1923. Appellant retained one of the assignents and mailed tlíé other to J. T. Bagby. The assignments are as follows:

“For value received, I, Amanda Harris, being of legal age, hereby assign and transfer unto J. T. Bagby of Russellville, Arkansas, the policy of insurance known as policy No. 2684, issued by the Lincoln Reserve Life Insurance Company upon the life of Amanda Harris of Stamps, Arkansas, c/o G. Jones, box 187, and all dividend, benefit and advantage to be had or derived therefrom, subject to the conditions of the said policy and the rules and regulations of the company, not exceeding the amount justly due and owing to J. T. Bagby by said Amanda Harris at the time of her death. Witness our hands and seals this 11th day of Jiine, nineteen hundred and twenty-three.

her

“Amanda X Harris,

mark

“General Jones.”

(Certificate omitted).

A note bearing the same date of the assignment was executed, either at the time or on a subsequent date, by the insured and appellee to J. T. Bagby, for $571.50, bearing interest at the rate of 10 per cent, per annum from date until paid, which is as follows:

“$571.50 Stamps, Ark., June 11, 1923.

‘ ‘ On demand, after date, I, we or either of us promise to pay to the order of J. T. 'Bagby five hundred seventy-one and 50/100 dollars, for value received, payable at Bodcaw Bank, Stamps, Ark., with interest from date at the rate of 10 per cent, per annum until paid. And it is hereby specially agreed that if this note is placed in the hands of an attorney for collection I, we, or either of us promise to pay ten per cent, additional on the full amount due for attorney’s fees.

“Demand, notice and protest waived.

her

“Amanda X Harris,

mark

“ General J ones. ’ ’

This note was not sent to the company, but was delivered to Bagby at some time or place, either directly or by mail. A copy of the note was sent to the company by Bagby, and had a notation to the effect that it was secured by the policy. The original note was introduced in evidence, and bears no such notation.

After the assignment was received by J. T. Bagby he paid premiums on the policy until the death of Amanda Harris, who died on August 19, 1926', amounting to $237.41.

On September 14, appellee made proof of Amanda Harris’ death, according to the rules of the company, stating that he was her grandson and the beneficiary designated in the policy, and made a claim for the amount due on the policy, except the amount theretofore borrowed. It was stated in the proof that J. T. Bagby at Russellville, Arkansas, was the assignee of the policy. On September 17,'1926, J. T. Bagby filed with appellant an affidavit to the effect that the amount due him as assignee of the policy was $808.91.

' On September 28, 1926, appellee wrote to appellant in reference to the claim, urging that it pay him, and received information from it of the Bagby affidavit, some time prior to October 20, 1926. .

On October 15,,1926, appellant issued a voucher payable to J. T. Bagby, as assignee, and. General Jones, Russellville, Arkansas, as beneficiary, for $758.04, in payment ‘in full of its liability to both of them under the policy. On October 20, 1926, before receiving; information that appellant had issued the voucher, appellee wrote to appellant as follows:

“Magnolia, Arkansas, 10-20-’26.

“Lincoln Reserve Life Insurance Company,

Birmingham, Alabama.

“Gentlemen: Please note the policy of Amanda Harris, No. '2684. The claimant statement have reached the home office 'before with necessary proof. Now, as to J. T. Bagby of Russellville, Arkansas, affidavit. I don’t know anything’ about it, but if the affidavit exceeds three hundred dollars cancel for the statement is bogus. The writer is a policyholder, part of the Co., policy No. 7064, and am expecting policy number 2684 to be paid as willed. Hope this will meet your approval. For information write General Jones, Magnolia, Ark. Looking to hear from you in return mail, yours for future business.

“General Jones,

“Magnolia, Arkansas.

“P. G. Now, if the Bagby claim is of a nature unreasonable, cancel the whole claim and pay as per willed, except that the company holds policy for.”

On October 22, 1926, before receiving appellee’s letter of October 20, 1926, appellant wrote to him as follows:

‘ ‘ General J ones,

Magnolia, Ark.

“Dear sir: Be: Policy No. 2684, Amanda Harris, deceased. We have your letter of the 28th in reference the above claim. Under date of October 18 wre mailed to our general agents, Messrs. Gough & Dearing, your voucher No. 3384, in the amount of $768.04. This voucher was made payable to J. T. Bagby, assignee, and yourself as the beneficiary in the policy. . Messrs. Gough & Dearing will deliver this voucher to you and Mr. Bagby, and it will be necessary for you both to indorse it before it can be paid. At that time you can straighten out the matter of the amount due Mr. Bagby. Of course we know nothing about the amount of this indebtedness, and feel sure you can straighten it out to your mutual satisfaction when the check is delivered to you.

“Yours very truly,

“H. C. Lockhart, Asst. Sec’y.”

On the 9th of November, 1926, as an accommodation to J. T. Bagby, the voucher in favor of Bagby and appellee was recalled and a new one issued for the same amount payable to Bagby. Bagby cashed the voucher.

The record reflects a dispute in the testimony as to whether there was any consideration for the $571.50 note. J. T. Bagby testified that it was executed and delivered to him to cover the advances of money he had made from time to time and on the date of the note to Amanda Harris and appellee.

Appellee, over the objection and exception of appellant, was permitted to testify as follows:

“After Bagby had paid two premiums, he wanted some instrument of writing so he could get some money in case of my death, as I was beneficiary under the policy, and one-half of the policy would have been five hundred dollars, and I gave him a note for that, but this note was not to be considered unless I died, it was not to come up in my lifetime.' It was just for his protection. That was made after the premiums Avere paid. The note Avas dated the same date as the premiums Avere. ’ ’

Appellant’s first contention for a reversal of the judgment is the admission of the oral testimony of appellee explanatory of the execution of the $571.50 note by himself and Amanda Harris to J. T. 'Bagby. The explanation Avas to the effect that the note was without consideration, and for the purpose of splitting the policy equally between appellee and Bagby upon the death of Amanda Harris,-provided Bagby would pay the premiums on the policy as they matured. This court has ruled that: “No rule of evidence is violated 'by admitting oral proof of the consideration for a promissory note for the purpose of showing want of failure of consideration, or illegality of consideration.” Little v. National Bank, 105 Ark. 281, 152 S. W. 281. Appellant contends, however, that the admission of oral testimony-had the effect of denying the validity of the assignment of the policy. This might he true if the assignment had been absolute and not partial, and had stated that it was made to secure the payment of the note, or if the note had recited that the policy was assigned to- secure its payment'. The assignment only covered such amount as might be due and owing by Amanda Harris at the time of her death. In order to determine the amount, it was necessary to ascertain whether the note was valid, as it had been introduced by appellant as a part of the indebtedness which Amanda Harris and appellee owed Bagby at the time of her death. The introduction of this oral evidence did not have the effect of contradicting the written assignment, ivhioh was a partial assignment only.

Appellant’s next contention for a reversal of the judgment is that, when appellee testified that he was the grandson instead of a nephew of Amanda Harris, he defeated his right of 'action as beneficiary in the policy, because the beneficiary named in the policy was a nephew of the insured. Appellant’s answer admits that appellee was a beneficiary named in the policy. After admitting in its answer that appellee was a beneficiary and treating with him throughout as the beneficiary, in order to escape liability to him on the policy it should have shown by the evidence that there were two persons by the name of General Jones, one the grandson and the other the nephew of Amanda Harris, and that it was her intention to make the nephew and not the grandson her beneficiary.

Appellant’s next contention for a reversal of the judgment is that the court should have construed the written assignment by Amanda Harris and appellee to J. T. Bagby as an absolute assignment of the policy, thereby vesting in him authority to collect the entire amount due thereon. The language of the assignment does not warrant that construction. It was plainly stated in the assignment that it was made to secure what was “justly due and owing Bagby by Amanda Harris at the time of her death. ’ ’ This constituted-a partial- assignment, and limited Bagby’s interest under the assignment to such amount as Amanda Harris might owe him at her death, leaving the balance due under the policy payable t-o the beneficiary therein. The case of- Page v. Bernstein, 102 U. S. 664, and Manhattan Life Insurance Co. v. Hennesy, 99 F. 64, 39 C. C. A. Reports 631, cited by appellant in support of its contention, involved absolute assignments or transfers of the policy, and are not applicable in the instant case, because- the Bagby assignment was only a partial one. The case' of Cheeves v. Anders, 87 Tex. 287, 28 S. W. 274, 47 A. S. R. 107, also cited by appellant in support of its position, did not turn upon the question of an assignment but upon the liability of the insurer on the policy. In the instant case appellant admitted its liability, and, as a defense, justified itself in paying the balance due on the policy to Bagby on the theory that the policy had been absolutely assigned to him.

Appellant’s next contention for a reversal of the judgment is that appellee instructed it to pay the entire amount due on the policy to Bagby if his claim was reasonable, and that, upon the presentation of the note and proof that he had paid the premiums, it was justified, under appellee’s instruction, in paying all that was due on the policy to Bagby, because the note and the amount of premiums paid to him exceeded the amount it owed on the policy. As a basis for this contention appellant relies upon the letter written to it on October 20, 19'26, by appellee. The letter is not susceptible of the construction placed upon it by appellant. It plainly states that, if Bagby’s claim is in excess of $300, it was bogus, and, in a postscript to the letter, said that “if oif a nature unreasonable to cancel the claim and pay as per will, except what the company holds the policy for.” We think the proper construction of this letter is that any amount Bagby might claim above $300 was an unreasonable amount, and that the most appellant could have paid Bagby under the authority of the letter was $300.

Appellant’s next contention for a reversal of the judgment is that the court erred in submitting the case to the jury upon the sole issue of what amount Manda Harris, at the time of her death, and-appellee justly owed Bagby. We think the court properly construed the assignment to be a partial one on its face, and that the letter written by-appellee to appellant meant that it should not pay Bagby any amount in excess of $300, and that, in view of this construction, the only issue left in the case for determination by the jury was the amount justly due Bagby at the time'of the death of Amanda Harris.

Lastly, appellant contends for a reversal of the judgment because the court assessed a .penalty of 12 per cent, and allowed $50 as an attorney’s fee.

Appellee recovered only $250, and, according to our construction of his complaint, he brought suit for $758.04, the balance due on the policy after deducting therefrom the amount he and Amanda Harris owed the company. Under the authority of Fidelity-Phoenix Fire Ins. Co. v. Friedman, 117 Ark. 71, 174 S. W. 215, “a recovery for less than the amount sued for does not justify an ¡allowanee of an attorney’s fee and the assessment of a penalty provided by statute.”

The judgment is therefore modified -by reducing’ it by the amount of the penalty and attorney’s fee, and, as modified, it is affirmed.