text:
    Bald Knob Special School District v. McDonald.
    Opinion delivered May 17, 1926.
    Schools and sghool districts — verbal contract of employment of teacher. — While Crawford & Moses’ Dig., § 8917, requiring contracts for employment of teachers by school districts to be in writing, is mandatory, a verbal contract may be ratified by a district by accepting the teacher’s services, but, in the case of a partial performance, the ratification extends only to the period of performance.
    Appeal from White Circuit Court; E. D. Robertson, Judge;
    reversed.

      John, E. Miller and Gulbert L. Pearce, for appellant.

      Brundidge & Neelly, for appellee.
   McCulloch, C. J.

Appellee is a school-teacher 'by profession, and in September, 1924, the directors of appellant school district entered into a verbal contract with him whereby he was employed as superintendent of schools for a term of eight months, beginning September 15, 1924, at a salary of one hundred and fifty dollars per month. He acted in the capacity in which he was employed for about seven weeks from the commencement of the term, and was then discharged by the board, after a hearing upon charges preferred against him for certain misconduct. He was paid for his services actually performed at the rate stipulated in the verbal contract, and he instituted this action against the district to recover the salary for the remainder of the term for which he was employed. The district defended on the ground that the contract was void by reason of not being in writing, and also on the ground that appellee’s discharge was rightful on account of certain-misconduct. The trial court decided that the Contract, though. verbal, had been ratified, and, on the ether issues in the case, directed a verdict in favor of appellee.

The authority conferred upon directors of school districts with reference to the employment of teachers and superintendents is limited under the statute to (employment by written, Contract “specifying the time for which the teacher is to be employed, the wages to be paid i per month, and any other agreement entered into by the contracting parties.” Crawford & Moses' Digest & 8917; Griggs v. School District, 87 Ark. 93; Marr v. School District, 107 Ark. 305. The right of appellee to recover, however, is asserted on the ground that the directors ratified the contract by permitting appellee to perform services thereunder for a portion of the term. The decisions of this court support the contention that an invalid contract for the employment of a teacher or superintendent may be ratified, and in one of our cases (Dell Special School District v. Johnson, 129 Ark. 211) Ave applied that rule to a verbal contract. In that case, however, the teacher had completely performed the confeact for the full term of employment. In other cases Awe have held that partial performance of the contract Awonld constitute a ratification for the full term, but in ’rnone of those cases was there a verbal contract involved. School District v. Goodwin, 81 Ark. 143; School District W. Jackson, 110 Ark. 262; School District v. Hundley, 126 Ark. 622.

There is now presented to this court for the first ’time the question' whether or not part performance of such a contract, with the acquiescence of the directors and patrons of the district, constitutes a ratification so as to validate the contract in its entirety. Onr conclusion is that-the ratification extended only to the period of performance and not to the entire contract, -otherwise the statute would he entirely ignored. We hold that the statute is mandatory, and that the directors have no authority to make a contract in any other form. They may ratify such a contract by accepting the services of the teacher- or superintendent, but the ratification extends, as before stated, only to the period of performance. The question of liability under such a contract partially performed is the same as that of liability under a verbal contract for any other'personal services, which is governed by the Statute of Frauds, and this court has held that partial performance of a contract for personal services does not take a verbal contract out of the operation of the Statute of Frauds except to the extent of imposing liability for that part which was performed. Meyer v. Roberts, 46 Ark. 80; Henry v. Wells, 48 Ark. 485; Oak Leaf Mill Co. v. Cooper, 103 Ark. 79.

It is unnecessary to discuss the other features of the case, for the reason that, under the view of the law expressed ábove, there was no liability of the district tó appellee except for the part of the service actually performed, which has been discharged by payment.

The judgment is therefore reversed, and the' cause dismissed.


source: Caselaw Access Project

author: McCulloch, C. J.

license: Public Domain

text:
    Betterton v. Anderson.
    Opinion delivered May 10, 1926.
    li Justice of the peace — judgment on verdict. — A justice of the peace committed error in rendering judgment for the amount sued for, where the jury found for the plaintiff, without specifying the amount due.
    2. Justices of the peace — authority to modify judgment. — While a justice of the peace has power to quash void process or to- set aside a void judgment, and an appeal will lie from his judgment either granting or refusing that relief, he has no power to modify or change the judgment or to grant a rehearing for the correction of errors after ten days from the rendition of the judgment, as provided iby Crawford & Moses’ Dig., § 6450.
    3. Appeal and error — harmless error. — The error of dismissing an appeal from a justice of the peace, instead of affirming his judgment, was not prejudicial, as the effect of the order is the same as an order of affirmance.
    Appeal from Crawford Circuit Court; Jannes Cochran, Judge;
    affirmed,

      E. D. Chastain, for appellant.

      D. H. Howell, for appellee.
   McCulloch, C. J.

Appellee sued appellant before a justice of the peace to recover tbe sum of $187, alleged to be due for rent of land, and also caused an attachment to be issued and levied on certain property. . Appellant’s defense was that he was not to pay money rent, but was to pay a share of the crop. The case was tried before a jury, and, after the jury was impaneled,’ appellant paid to appellee, or to the constable, the sum of $30.50 as rent on the hay land, leaving a balance of $156.50, which was the rent claimed on corn land. The jury returned a verdict in the following form: “We, the jury, find a verdict in favor of the plaintiff, and sustain the attachment.” The justice of the peace thereupon entered judgment in favor of appellee against appellant for the recovery of $156.50 and the costs, and the judgment entry contained a recital as follows: ‘ ‘ There 'being no further controversy except plaintiff’s alleged contract for $8 per acre for 19y2 acres of corn land, the cause proceeded to hearing. After taking testimony and hearing arguments by counsel, the court instructed the jury that the only question for them to decide was whether the defendant should pay corn or money rent.” This judgment was rendered on November 10, 1924, and on January 27, 1925, appellant presented a motion to the justice of the peace to set aside the judgment on the ground that, since, the verdict of the jury did not specify any amount, the justice of the peace had no authority to render judgment except for costs. This motion was denied by the justice of the peace, and appellant thereupon prosecuted an appeal to the circuit court. The justice of the peace sent up a transcript containing all of his docket entries, including the judgment and the original papers, and when the cause came on for trial the matter was submitted to the court solely upon the transcript, and the court rendered a judgment dismissing the appeal.

It is contended that the justice of the peace should not have rendered a judgment where the verdict failed to specify any amount, and this contention is correct, but it was a mere error, and did not make the judgment void, the court having jurisdiction of the cause. It was an error which could only be corrected by appeal within the time specified by statute. Taylor v. Hathaway, 29 Ark. 597. No appeal was prosecuted from that judgment, and, instead of appealing, appellant, after the time therefor had elapsed, presented a motion to set aside the judgment — at least such was the effect of the motion, though the prayer was that the judgment be reformed so as to make the entry conform to the verdict of the jury.

It has been held by this court that a justice of the peace has power to quash void process or to set aside a void judgment, and that an appeal will lie from his order or judgment either granting or refusing that relief. Scanland v. Mixer, 34 Ark. 354; Woolum v. Kelton, 52 Ark. 445; Knight v. Creswell, 82 Ark. 330; Dale v. Bland, 93 Ark. 266; Metcalf v. Railway Co., 101 Ark. 193. Those were cases, however, where either the judgment or the process was void, but in the present case, as we have already seen, the judgment was not void but was merely erroneous. The justice of the peace had no power to modify or change the judgment, or to grant-a. rehearing merely for the correction of errors, after ten days from the rendition thereof. Crawford & Moses’ Digest, § 6449, 6450. The effort of appellant was not 'merely to correct an error in the entry of the judgment, but to correct the judgment itself and set it aside. The recitals in the transcript show that the entry reflected the judgment, and that the justice intended to render it, and that there was no error in the entry of the judgment, the error being in the judgment itself. There was no testimony introduced in the circuit court tending to show that there had been an error in the entry of the judgment. The justice was correct therefore in refusing, after the expiration of ten days, to modify his judgment.

The circuit court should not have dismissed the appeal, but should have affirmed the judgment of the justice refusing to set aside the former judgment. This error, however, goes merely to the form and not to the substance, for the effect is the same as if the circuit court had affirmed the judgment of the justice instead of dismissing the appeal. Nothing else was presented to the court except the transcript from the justice, and appellant was not entitled to any relief on his appeal. The form of the court’s order is therefore unimportant, as the effect of the order is the same as if the judgment had been affirmed. For this reason the judgment of the circuit court will be affirmed, and it is so ordered.


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

text:
    Security Life Insurance Company v. Leeper.
    Opinion delivered May 10, 1926.
    1. Insurance — reinstatement of policy — enlargement of conditions. — In a suit upon a reinstated policy of life insurance, which contained a stipulation allowing reinstatement as a matter of right upon compliance with certain requirements, the insurer has no right to enlarge the terms upon which the reinstatement can be obtained.
    2. Insurance — enlargement of conditions of reinstatement.— Where a life insurance policy gave an absolute right of reinstatement upon terms which did not include a new contract with reference to a forfeiture in case of suicide, the insurer had no right to impose that additional feature upon the assured in procuring a reinstatement.
    3. Release — fraud—evidence.—Evidence held to establish that there was no fraud in the procurement of a release.
    4. Contracts — mistake of law. — A mistake of law, in the absence of fraud or undue influence, does not afford ground for the abrogation or reformation of a contract.
    5. Insurance — settlement of claim — mistake.—Settlement of a claim under a life insurance policy on the advice of persons relied on by beneficiary in accepting as true statement by insurer’s representative that there was no liability thereunder, held not void for mutual mistake of law, of which insurer’s representative had superior ■ knowledge.

      Appeal from Chicot Circuit Court; Turner Butler, Judge;
    reversed.
    . Arthur S.. Lytton, O. G. Burnside, and W. G. Streett, for appellant.

      John Baxter and R. W. Wilson, for appellee.
   McCulloch, C. J.

This is an action instituted by appellee on á life insurance policy in the sum of $5,000 to recover an unpaid balance, alleged to be justly due, there, having already been paid a part of the sum named in the policy. Appellant defended on the ground that there was no liability at all on account of violation of a clause in the policy against suicide within one year, and defended also on the ground that there had been a settlement of the disputed claim, and that appellant had executed a release in consideration of the sum agreed upon.

The policy in question was issued on July 10, 1919, on the life of James E. Leeper, in the sum of $5,000, payable to his wife, the appellee, Julia Edna Leeper. There was a provision in the policy that, in the event the assured committed suicide within one year from date thereof, the amount payable should be limited to the sum of one annual premium. There was also a provision in the policy for a reinstatement in case of’lapse or forfeiture for nonpayment of premiums. There.was a forfeiture or lapse on March 10, 1921, by. reason of failure to pay a .premium, but on March 15, 1921, application for reinstatement was made in accordance with the terms of the policy, and a reinstatement was granted. The application reaffirmed the statements of the original policy, and recited an agreement that “in the event of self-destruction, whether sane or insane, within one year from the date of approval by the company of this application for reinstatement, the amount payable as a death benefit under said policy shall be equal to two annual premiums on said policy, and no more.”

James E. Leeper oommitted suicide on November 1, 1921, at the town of Dermott, Arkansas, where he and his wife, the appellee, resided, and a few days thereafter appellee made proof of the death to the company.

On November 13, 1921, Mr. C. V. Hicks of Chicago, who is a lawyer by profession and a member of appellant’s legal staff, went- to Dermott for the purpose of adjusting the claim with appellee. He remained there two days, and an agreement was finally entered into between appellee and Hicks, acting for appellant, whereby the latter paid the sum of $2,500 in full settlement of appellee’s claim under the policy. A written release was signed by appellee, reciting the terms of the policy- and agreeing to accept the sum named in full settlement.

James E. Leeper had borrowed from appellant $200, and on the trial of the cause the jury returned a verdict, in favor of appellee for the sum of $2,300, being the amount of the policy after deducting the sum of $2,500, already paid, and the $200 loan.

The first contention of appellant is that there is no liability under the policy because of violation of the stipulation against suicide within -one year, the contention being that the stipulation in the application was' controlling, and that the period ran from the date of the approval of the application. We are of the opinion, however, that the-point made by counsel is concluded by the decision of this court in the case of New York Life Insurance Co. v. Adams, 151 Ark. 123. That case, the same as the present one, was a suit on a reinstated policy which contained a stipulation-allowing reinstatement as a matter of right upon compliance with certain requirements, and we decided that the company “had no right to enlarge the terms upon which reinstatement- could be obtained.” In that case the original policy contained no warranty of the truth of the answers of the assured, and this court decided that the company had no power to require a stipulation in the application for reinstatement that the answers and statements of the assured should be treated as warranties. The only provision in the policy now before us with respect to suicide related to the period running from the date of the original policy, and, since the policy gave an absolute right of reinstatement upon terms which did not include a new contract with reference to suicide, appellant had no right to impose that additional feature upon the assured in procuring reinstatement. The trial court was correct therefore in holding that the company was originally liable under the policy, notwithstanding the stipulation in the application.

Appellee seeks to escape the effect of her settlement of the claim and her release executed to appellant on three grounds, namely: (1). That Hicks, the agent of appellant, perpetrated a fraud on her by misrepresenting the state of the law with reference to the effect of the suicide clause set forth in the application for reinstatement; (2) that the settlement was made under a mutual mistake of the parties as to the law with reference to the effect of the suicide clause; and (3), that she was mentally incapable of entering into a contract of settlement at the time the release was signed. These questions were submitted to the jury, and the verdict was, as before stated,, in favor of appellee.

.There is very little, if any, dispute as to the material facts concerning the execution of the release by appellee and the attendant circumstances.' James E. Leeper was the postmaster at Dermott, and, four days after his death, appellee was appointed postmistress, and she was acting, in that capacity until after this settlement was made with appellant. Appellee gave her personal attention to the management of the postoffice, and worked from, seven o’clock in the morning until seven o’clock in the evening. She had several clerks or assistants in thp office. When Hicks arrived in Dermott on November 14,1921, he called upon appellee at.the postoffiGe, and discussed with her the question of liability under the policy, and showed, her the suicide clause. set forth in the application for, reinstatement. He asserted to her at that time that the company was not liable for more than two premiums on account of the violation of the suicide clause, and he adhered to that assertion throughout subsequent negotiations. .There were several interviews between Hicks and appellee, and at the second one, which was late in the afternoon of the second day of Hicks’ visit to Dermott, he made appellee an offer to pay $1,000 in full settlement, which offer appellee declined. The settlement was made that night, at a meeting at the office of a bank in Dermott, at which meeting there were present, in addition to Hicks and appellee, a Mr. Franklin, the cashier of the bank, who was appellant’s local agent, and a Mr..Helm-, stetter, and Judge Hammock, the chancellor of that district, both of the latter being personal friends of appellee, and they attended the meeting as her friends and advisers. This meeting had been previously arranged. In the discussion there Hicks renewed the claim that the policy had been forfeited, and that there was no liability ■ on account of the breach of the suicide clause. Hicks also renewed his offer' of $1,000, which was again declined, and thereupon Helmstetter requested Hicks to leave the room for a while so as to permit a conference between the others present. Franklin was, as ■ before stated, local agent of appellant, but did not attend the meeting in that capacity, and had no authority from the company to make a settlement or to participate therein... After a conference between those who remained in the-room, lasting • twenty or thirty minutes, Hicks was recalled and was asked to increase his offer of settlement to $2,500, it being urged upon him by those, present that it wquld be good business policy, even if there was no liability, as the company was doing a considerable amount of business in that locality. Hicks accepted the offer, after some hesitancy, and after being assured1 by Judge Hammock that, if the company* found fault with him in making the settlement for that sum, they would volunteer to defend his course in the matter. The settlement was then closed at-this meeting, the release was signed, and the money was paid over to appellee. :It is-not contended that there was any misrepresentation made by Hicks as to any facts concerning the contents of the policy or any other fact,.but that there was merely a misstatement of the law concerning the legal effect of. the stipulation in the application for reinstatement. It seems 'dear to us that there is not the slightest evidence of any fraud involved in the statement concerning the legal effect of this stipulation. The Adams case, supra, was decided by this' court on December 19, 1921, more than a month after this settlement was made, therefore the question of law involved was, at least, an open one in this State at the time of the settlement. -There was no representation as to any particular decision of this court or of any other court, but merely a claim on 'the part of' Hicks that the stipulation in the application was legally 'controlling. There is nothing to show that this contention was- not made in perfectly good faith, for the law on the point was unsettled until the subsequent decision of this court. It must be remembered, too, that the-parties were dealing at arm’s length, and appellee had her friends and advisers present, and had no right to rely upon the statement of appellant as to the law applicable to the case. She and her advisers had the-same opportunities as Hicks did to ascertain the state of the law on the subject- The record is entirely devoid of any act of fraud or any fraudulent intent on the part of Hicks, and that feature of the case may readily be eliminated. ': ' •

Nor do we think that the evidence is legally sufficient to show lack of mental capacity on the part of -appellee at the' time she made the settlement-. It is true that some of the witnesses, including witness Franklin, testified that appellee -was laboring ' under intense mental strain on account of the tragic death of her husband^— that she was a mental wreck, as some of them- stated. These statements were, however, mere conclusions- of a relative degree of lack of mental capacity, for the undisputed evidence shows that appellee was a woman of intelligence and business capacity. She was engaged in business for herself at the time of the death of her husband, and she immediately took charge of the postoffice and operated it and was attending to the affairs of the posto-ffiee during both of the days when her interviews with Hicks occurred. Her own testimony shows beyond dispute that, while she was laboring under mental strain, she was fully capable of making a,contract, for she acted with the utmost caution, and refused to .make any settlement under the policy, even though a very substantial sum was offered, until she finally met with her friends and submitted a counter proposal, which was accepted by Hicks. It is only., natural that, she should have been laboring under more or less mental strain,, but this settlement occurred two weeks after the .death of her husband, and there is no indication that she was lacking- in that degree of mental capacity to make a valid contract. There was nothing hasty about the negotiations between appellee and Hicks, but there were different interviews during the period of two days,-and this settlement was negotiated after deliberate conference, not only between Hicks and the others. present at the meeting, but the counter. proposal was agreed upon in Hicks ’ absence, and was. submitted to him in appellee’s .presence by her friends and advisers. We' are clearly of the. opinion that the contract was entered into by appellee advisedly and deliberately, and.that she was capable of making- the contract-at that time. .

The final contention is that there was a mutual mistake as to the' law which induced the settlement, and that appellee is not bound by it. It is a rule of almost,universal application that a mistake of law,.in the-absence .of fraud dr undue influence, does not afford.grounds for the abrogation or reformation of a contract. Such has been the rule declared by this court. Lawrence County Bank v. Arndt, 69 Ark. 406; Phoenix Assurance Co. v. Boyette. 77 Ark. 41. In those cases it w.as held that, where. the contract was induced by. reliance upon the superior, knowledge of- one - of the parties, grounds for reformation, were thus afforded, and this was found to be an exception to the general,rule. Those cases, however, .related to questions of the interpretation, .of the contract, and the effect -of each of the decisions was that the court would place such interpretation upon it as was represented at the time of its-execution by the party having the superior knowledge on the subject. The present case is not one like those cited, which concern the representations made at the time of the execution of the original contract, but it is one where the representations or mistake arose at the time of the settlement of liability under the original contract. But, at any rate, this is not a case where the question of superior knowledge on the subject is important, for, as-before stated, the parties were dealing at arm’s length, and Hicks was representing an adverse interest, whilst appellee was acting upon the advice of those upon whom she relied in accepting as true the statement that there was no liability under the contract. This is merely an instance of adverse .claims with respect to liability, and which was compromised and settled. If it be the law that, whenever parties settle their differences concerning liability in an uncertain state of the law and it afterwards turns out that they were mistaken the settlement can be disregarded, then there is no stability whatever about such a settlement, even though made in the utmost good faith. The law has been definitely settled to the contrary by the Supreme Court of the United States in the case of Mutual Life Insurance Co. v. Phinney, 178 U. S. 327, where the court, speaking through Mr. Justice Brewer, said:

“But whether that statement of the agent was correct in matter of law is doubtful; whether true or false, or, more accurately, whether correct or not, in its interpretation of the law applicable to this contract, is immaterial. It was merely a statement of what he supposed the law was, and the insured was under the same obligations to know the law that the company, or its agent, was. The jury evidently proceeded upon the supposition that the insurance company, located in New York, knew what the law of that State was; the insured, residing in Washington, did not, and when the agent stated what the condition of the contract was, he misrepresented' the law of New York, of which the insured was ignorant, and, being ignorant, was not bound by any act based thereon, in the way of abandonment or rescission. But surely no such rule as that obtains. When two parties enter into a Contract, and make it determinable by the law of another State, it is conclusively presumed that each of them knows the law in respect to which they make the contract. There is no presumption of ignorance on the one side and knowledge on the other. ’ ’

Upon the whole case we are convinced that there is no theory supported by legally sufficient evidence upon which appellee can escape the effect of her voluntary settlement and release of all claims against the company under the policy. There was no fraudulent mispresentation, nor duress, nor lack of mental capacity. It is merely a case of voluntary settlement of a disputed claim of liability, and the settlement is conclusive upon both parties.

It follows that the judgment must be reversed, and it is so ordered, and, the facts being undisputed, judgment will be entered here dismissing the complaint.

Wood and Humphreys, JJ., dissent..

Humphreys, J.

The undisputed testimony in the case shows , that the settlement was procured upon the representation of V. Y. Hicks, an attorney from Chicago in the employ of the insurance company, that, under the law applicable to the suicide clause in the renewal policy, appellee could only recover two annual premiums. He professed to know the law, and assured appellee and her advisers that such was its effect. He was apprised by appellee and her advisers that they did not' know the law, and that they were mailing settlement with him in reliance by them upon his representation. He was in error as .to the law and its effect. The suicide clause was of no avail to appellant as a defense to the cause of action. Appellee was entitled to recover the face of the policy at the time the settlement was made. New York Life Insurance Company v. Adams, 151 Ark. 123. The law declared in the case cited was the law iñ Arkansas at the time Hicks induced the settlement by misstating the law and its effect to appellee. The most that can be said for Hicks is that he thought he knew the law, and w;as in good faith. His good faith cannot help appellee unless the company pays her what it justly owed her at .the time the settlement was induced. The misstatement of the law by one who professed superior knowledge induced the settlement. The settlement could not have been accomplished except through a mutual mistake of law. Under these circumstances the settlement should not be treated as an accord and satisfaction, and, for the reason stated, Justice Wood and myself dissent from the majority opinion.


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

text:
    Paragould v. Arkansas Light & Power Company.
    Opinion delivered May 10, 1926.
    1. Damages — breach op contract — burden-op proof. — In an action to recover damages for breach of a contract, the burden is on the plaintiff to establish such damages; but where the defendant claims that plaintiff could and should have minimized the damages so found, the burden is on the defendant to prove such fact.
    2. Damages — breach of contract — duty to minimize damages.— Where a party who has breached his contract subsequently offers a new contract, the other party is not required to accept such offer in order to minimize his damages, if the offer is conditioned upon a cancellation, extinguishment or rescission of the claim for damages for breach of the original contract.
    3. Damages — breach of contract — duty to minimize damages.— In a suit by a city to recover damages caused by defendant light company’s breach of its contract to furnish power at agreed rate to' do the jumping for the city’s waterworks, defendant cannot maintain that the city should have minimized the damages ■ by using defendant’s power at its primary rate -where to- do so would have required large additional expense by the city and where there was no established rate of which the city had the right, independently of contract, to avail itself.
    4. Damages — breach of contract. — Where the authority of a city to maintain its waterworks plant ceased upon the creation by the Legislature of a waterworks district to take ' over such ’ plant and the acceptance thereof by the city, the city could not claim subsequent damages for breach of a contract to furnish power for such waterworks.

      Appeal from Greene Circuit Court; G. E. Keck, Judge;
    modified.

      Block & Kirsch, for appellant.

      Robt. E. Fuhr and Robinson, House & Moses, for appellee.
   Smith, J.

This is the second appeal in this case. The opinion on the former appeal is found reported, in 146 Ark. 1. On the former appeal it was decided that the Arkansas Light & Power Company, hereinafter referred to as the company, had contracted with the city of Paragould, hereinafter referred to as the city, to furnish electrical power to do the pumping for the city’s waterworks plant for a period of ten years, and that the company had breached its contract and was liable to the city for the damages resulting from this breach. ■ The cause was remanded on the former appeal for the assessment of the damages.

By the terms of the contract the company agreed to furnish power for a period of ten years at the-rates fixed in the contract, which were not in any event to exceed forty per cent, of the bills collected by the city from its consumers, at the rate to the consumers then in effect.

The performance of the contract was begun on February 7, 1917, and continued until July 24, 1918, at which time the company gave notice that, after thirty .days, it would discontinue furnishing the -city power at the contract rates, and, pursuant to this notice, the company discontinued its service on August 25, 1918, after which time the city resumed the use of the.steam power plant with which it had done the pumping prior to the time its contract with the company became effective, and this suit was commenced to recover damages for the breach of the contract- ;

There existed in the city two waterworks improvement districts, known as Districts Nos. 1 and 2, and the city had, pursuant to the provisions of § 5739,- C. & M. Digest, taken over and was operating the steam pumping plant when its contract with the 'company was made. ;

During the pendency of the litigation, and before the decision of this court on the first appeal, there was passed at the extra session of the General Assembly on February 26,1920, an act numbered 397, “providing for the formation of an improvement district in the city of Paragould for the purpose of repairing, extending, enlarging, reconstructing, rebuilding and taking over the waterworks system in said city, and providing for additional sources of water supply for the demands of the city.”

Pursuant to the power conferred in this special act, Waterworks Improvement District No. 3 was organized. This new district included all the territory embraced in Districts Nos. 1 and 2, and included the entire city, which was an area considerably larger than the original Districts Nos. 1 and 2.

By this special act, District No. 3 superseded Districts Nos. 1 and 2, and the new district took over the waterworks system of the old districts, and it was provided that the commissioners of the new district should enlarge and reconstruct the existing districts, and should remain in control thereof and operate the' same until all the debts of both the old and the new districts had been paid, after which the control of the system should pass to the city.

• The initial ordinance of the city council to make the special act of the General Assembly effective was passed on May 19,1920, and the final ordinance creating the district and appointing the commissioners was enacted by the city council on July 23, 1920, and the commissioners of the new district qualified thereunder. After the organization of District No. 3 and the qualification of its commissioners, it was moved in the court below that the new district be made a party plaintiff to the action, by reason of its relationship to Districts Nos. 1 and 2, but this motion was overruled, and the trial proceeded between the original parties.

The company admits that, under the decisions of this court on the former appeal, it is liable to the city for the damages occasioned by the breach of its contract, but if insists that the city conld and should have minimized its damages by using its power at what it calls its primary rate, and that its liability for the breach of the contract could not extend beyond the time when Improvement District No. 3 was organized. On the other hand, the city contends that it is entitled to recover, as the measure of its damages, the difference between the contract price for the necessary power and the actual costs incurred by it in generating this power, and that it is entitled to recover the total of this difference up to the time of the expiration of the contract between the city and the company.

The cause was submitted to the court without a jury, and the court found that the city was bound by the so-called primary rate, and that the city’s right to recover ceased with the creation of Waterworks Improvement District No.. 3, and a judgment was rendered in accordance with these findings, from which the city has appealed. In order that a final judgment might be rendered upon this appeal, the court further found the damages sustained by the city in the operation of its plant in excess of the contract price, first, to the time of the organization of Waterworks Improvement District No. 3, and second, to the time of the institution of this suit. The correctness of these findings is not questioned by the company, its insistence being that the findings upon which the court based its judgment are correct and that the judgment should be affirmed.

There is, first, much discussion as to the burden of proof, each insisting that this burden- rests upon the other. But we are of opinion that, it having been adjudged that the company had breached the contract -and was liable for the damages resulting therefrom, the burden of proof was upon the city to establish its damages,' but, in so far as it was contended that the damages thus shown might and should have been minimized, that burden, was upon the company. The law is so declared in the annotated cases cited in the note to § 197 of the chapter on Damages in 8 R. C. L., page 655, and in the text to the section cited it is státed that “where it is claimed that expenditures were unreasonably incurred (in performing the service which the defaulting party should have performed), the burden is on the defendant to prove such to be the fact.” Arkansas Short Leaf Lbr. Co. v. McInturf, 134 Ark. 284.

It is very earnestly insisted by the company that the city- should not have continued to use the plant which it had in use when the contract was made with the company to-furnish the necessary power, but that the city should have used the power which the company was prepared to furnish, and would have furnished, at what it calls its primary rate.

The city’s plant was equipped to burn coal, and it was shown that the price of coal advanced constantly from the time the original contract between the city and the company was made until 1920, when the price of coal began to decline. The testimony shows that the company operated in a number of cities and towns of the State, and that it had established a rate available to all consumers of its-power using the company’s 2300 3-phase service. The service in the city of Paragould was a 2-phase service until the spring of 1921, and there is a question whether this service is interchangeable, but, conceding that it is, we do not regard that fact as controlling here, for reasons which will be hereinafter discussed.

It is an admitted fact that the city could not have availed itself of the company’s primary rate without changing from a steam to an electrical plant, and to do this additional machinery would have been required, which would have cost $6,000. The court found that the city should have purchased this machinery, in order that it.might avail itself of the company’s primary rate, and assessed the cost of this machinery as a part of the damages which the city should recover.

We are.of opinion, however, that the city was not required to incur this expense in order that its damages might be minimized. After the company had breached the contract, various propositions were made and negotiations conducted looking to an adjustment of the differences growing out of the company’s default, and we think it quite clear that the company’s attitude in these negotiations was that of a party having the right to contract as to the rates to be charged, rather than that of a public utility company which was required to furnish service at a fixed price to any one desiring it. This primary rate had never been approved by of filed with any • governmental agency having authority to fix or to regulate rates. Indeed, long after the controversy had arisen, the president of the company, in offering to furnish the power which its original contract required it to furnish, coupled to this offer the condition that the acceptance thereof should be in full settlement of the city’s claim for damages which had then accrued as a result of the company’s breach of the contract. This offer is contained in a letter dated January 18, 1919, addressed to the city council, and the first paragraph thereof reads as follows:' “In behalf of the Arkansas Light & Power Company, we beg to submit the following proposition in full settlement of the controversy now pending between said company and the city of Paragould, to wit:” It will be remembered that nearly five months had then expired since the date of the company’s default.

It is, of course, the Ñaw that the company could not impose a condition that the city waive any valid claim for damages, even though the company did in fact have a rate pot dependent upon contract. The excellent 'brief filed on behalf of the company concedes this to be the law. We copy from this brief the following statement of the law, which is fully .sustained by the authorities: “As a general proposition of law, it is true that any offer made by a party who has breached his contract toward performing the contract which was breached, or entering into a new contract, need not be accepted by the other party in order to minimize damages, if that offer results in -a cancellation, extinguishment or rescission of the claim for damages for the breach of the original contract. But if the offer as made does not result in the waiver of the 'breach of contract, and the other party is still in the same position to recover on said breach of contract, this rule does not apply.”

We do not copy the letter from the president of appellee company to the .city council in full, but it may be said that it contains no reference to any primary rate available to all persons. The letter is a proposition to make a private contract, and, while the contract proposed is similar to what the company shows its primary rate was, it is pointed out that there is a material difference in the discounts for excess of power used between the rates offered in this letter and those allowed in the primary rates.

It is insisted by counsel for the company that, in February, 1919, shortly after the above letter was written, the manager of the company in Paragould made the city a definite proposition for furnishing power for its water plant, which proposition was based on the primary rate and which did not include any condition or requirement that the acceptance of same should constitute a waiver of damages for the breach of the contract. This witness did testify that he'made the city a proposition “based on the primary power rate, along the same line.” But the manager’s offer contained no reference to the alleged primary rate and-was dependent upon the price of coal, and it is conceded that the discounts contemplated in his proposition were not identical with those called for in the primary .rate. In other words, we think the manager’s proposition was nothing more nor less than an offer to make a new contract.

That there was no established rate which the city had the right, independently of contract, to avail itself of, and which the company must have furnished, independently of any contract so to do,, is conclusively shown by the fact that,- after breaching the contract, the company, on October 1,1918, of its own motion and without permission so to do from any one, raised its primary rate. So that if, when the contract was breached, the city had applied for service under the then existing primary rate, and had obtained it, after incurring the expense of $6,000 to install the machinery necessary to make the company’s service available, it would have found its rate increased, with no assurance that it would not be raised still higher as the price of coal continued to advance.

Counsel cite and review the cases which have been decided by this court since the passage of the act of April 1, 1919 (act -571, Acts 1919, p..411), appearing as §§ 1607 et seq., C. & M. Digest.

The case of Harrison Electric Light Co. v. Citizens’ Ice & Storage Co., 149 Ark. 502, is cited. In that case the ice company had contracted with.the public utility company for electric current at a fixed price per month. The utility company increased the charge after having filed with the Corporation Commission a schedule of its rates.. The ice company brought suit to enjoin the utility company from cutting off its service when it refused to pay the new rate. It was held by this court on the appeal that, where a public utility filed a schedule of increased rates with the Corporation Commission, the new rates superseded contractual rates theretofore established, as there could be no valid contract against the power of public control by the Corporation Commission.

In the case of Arkansas Natural Cas Co. v. Norton Co., 165 Ark. 172, the gas company had filed its schedule of rates with the Arkansas Corporation. Commission,, which was creáted by the act of 1919 above referred to, and the Norton Company demanded that it be furnished gas at these rates. The utility company refused to furnish gas in accordance with its scheduled rates, and the. consumer paid the rate demanded to prevent the service being discontinued, and sued to recover the excess paid over the scheduled rates. It was held on the appeal to this court that the payment had not been made voluntarily, and might be recovered. In so holding we said that the law will not tolerate a discrimination in the. charges of public utility corporations,, and that all are. entitled' to have the same service on equal terms and at a uniform rate at the hands of corporations which have become public utility companies.

These cases are not in point, for the reason that the act of 1919 had not been passed when' the company breached its contract, apd it Was not shown that the company filed with the Corporation Commission, after its creation, any schedule of its rates. Upon the contrary, its attitude throughout towards the city was that it would furnish power to the city only upon such conditions as it might agree by contract to do, and, if power were furnished in accordance with this so-called primary rate, this would be done as a matter of contract. Moreover,’ the original contract herein' sued on fixed a price at which the power would be furnished to the city’s plant .under the conditions existing at the time the contract was made, and all ’the subsequent offers of service involved the expenditure by the city of $6,000 to obtain the service which the contract required the company to give without this-expenditure. Had the city entered into one of the new contracts proposed, it too might Have been breached had the price of Coal continued to advance, or if, for any other reason, the company had elected not to perform.

' We conclude therefore-that there was no primary or permanent rate which the city "could with certainty have availed itself of in an attempt to minimize its damages, and the city was therefore entitled to recover the increased cost of' operating its plant with the facilities it' had 'when the original contract was made.

But we think the right to recover this excess in cost-did' not exténd beyond the time when Waterworks'Improvement District No. 3 was organized. The city by its ordinances elected to proceed under the special act creating this district. The city'was operating under the authority of § 5739, C. & M. Digest, when the original contract was made. This section gives to the city and town councils of the State, after" the construction of waterworks or gas or electric light works has. been completed and paid for by an improvement district, the power to take over and operate such works, and, as an incident to this power, to make necessary' contracts in regard thereto. But, after Improvement District No. 3 had been organized, the .control of the city ceased. Section 5739, C. & M. Digest, was no longer applicable to this contract, for the reason that the commissioners of that district were placed in charge of it under the ordinances enacted to make the special act of 1920 effective, and the commissioners were directed to operate the plant until the debts of both the old. and the new districts had been paid. Moreover, District No. 3 was not the entity with which the company had contracted. It was a different and a larger district, and the. city, as a contracting party having authority to operate, had passed out of existence. The doctrine of the . case of Harrison Electric Light Co. v. Citizens’ Ice & Storage Co., supra, is applicable here, for, as was there said, there can be no valid contract against the power, of public control.

The court below found the fact to be that, from the date of the breach of the contract by the company to the date of the approval of the second petition by the property owners in Waterworks District No. 3, the city incurred expenses in excess of the contract price in the performance of the contract in the sum of $22,127.64, and that the interest thereon, computed on the basis of settlement provided for in the contract, amounted to $5,910.36, and, as the correctness of this finding is not questioned, .judgment will, be rendered here for the total of these two amounts.

Justices Wood and Hart dissent.

McCulloch, C. J.

I concur in the judgment of reversal for the reason that the city is entitled to recover, all that it is allowed under the opinion of the majority, and more. I discover no sound theory upon which the damages should be limited to such as accrued up to the organization of the new improvement district. The damages, and the right of action to recover same, accrued upon the breach of the contract, and there would seem to be no good reason why appellee should benefit by the change in the control of the public utility in the city or that the city should be held to have forfeited its right to recover the. damages because it relinquished control to another- public agency. The city was the public agency in the control of the utility, and the change of control was merely from one agency to another — both being for the public. All damages recovered by the city inure to the benefit of the public, hence it is wholly immaterial that there has been a change to the agency which is in the future to control the utility.

The damages suffered by the public from the breach of the contract were not mitigated in any degree by the change in the control of utility, for, as before stated, the public was the sufferer from the breach of the contract, regardless of the particular agency which represented the public in the control of the utility. There was neither in fact nor in law a mitigation of damages, and I think that the city should be permitted to recover for all the damages which accrued from the breach.


author: Wood, J.

text:
    Simmons v. Turner.
    Opinion delivered May 17, 1926.
    1. Appeal and error — final decree. — A decree is final which canceled certain deeds and settled the issues as to the title to land, though it may be necessary to have a further decree to adjust the account between the parties.
    2. Partition — adverse possession — jurisdiction.—Equity has no jurisdiction of an action for partition of lands of which the defendants are in possession holding adversely to the plaintiff.
    3. Quieting title — adverse possession — jurisdiction.—U n d e r Crawford & Moses’ Dig., § 8362, a plaintiff cannot invoke the jurisdiction of equity to confirm or quiet title in her to lands of which defendants are in the exclusive possession, claiming title adversely to her.
    4. Equity — jurisdiction op law court. — In a suit for partition and for confirmation of title to property which was adversely held by defendants, matters alleged as grounds of equitable relief, which were merely ancillary and subsidiary to a legal title when established at law, should not be given primacy merely for the purpose of defeating the jurisdiction of the law court to adjudicate the legal title and right to possession. «
    5. Trial — wrong forum — transfer.—Where a complaint in equity stated a good cause of action at law, instead of overruling a demurrer and motion to dismiss, the court should have treated the demurrer and motion as a motion to transfer to the law court, and have transferred the cause to that court.
    Appeal from Bradley Chancery Court; E. G. Hammock, Chancellor;
    reversed.

      D. A. Bradham and W. 8. Goodwin, for appellant.

      Williamson & Williamson, for appellee.
   Wood, J.

This action was instituted December 14, 1923, in the. chancery court of Bradley County by Mrs. Bessie Turner against George T., Simmons and his wife, Mrs. Beulah Simmons, and J. B. Hurley. Plaintiff alleged in' substance that she and Mrs. Beulah Simmons were the owners of an undivided interest as tenants in common of eighty acres of land in Bradley County, which she described; that the defendants were in possession of said lands and claiming to be the sole owners thereof, and had been for three years, and she prayed that certain' instruments, copies of which were made exhibits to her complaint, be canceled and set aside as clouds on her title, -and that title to the land described be confirmed in the plaintiff and in Beulah Simmons as tenants in common, share and share alike, and that the lands be partitioned 'between them, and the plaintiff have immediate possession of her share of the lands and a judgment for rents. The defendants demurred, and also moved to dismiss the complaint. The demurrer stated that “the complaint does not state a cause of action in equity,” and the motion to dismiss stated that the defendants “are in actual, open, notorious and adverse possession of the lands in suit and actually occupying the same at the present time, and were so occupying the same at the time of the institution of this suit; that the complaint does not state a cause of action cognizable in equity, 'but does state a cause of action cognizable at law.” The demurrer and motion to dismiss were overruled. The defendants then answered denying all the allegations of the complaint.

Samuel C. Brown obtained a patent from the United States Government to one hundred and sixty acres of land in Bradley County, including the eighty acres in controversy. He lived on this land as his homestead until his death. He died intestate, leaving a widow and two daughters. The elder daughter married G. W. Wagnon and the younger married W. C. Carter. Wagnon and his wife had two daughters, Bessie and Beulah. Bessie married Turner, and Beulah married Simmons. At the time of the death of Samuel C. Brown his daughter Turza was a small child, living on the homestead with her mother, Mrs. Samuel C. Brown. The other daughter, Mrs. Wagnon, was living with her husband, G. W. Wag-non, in Calhoun County. After the death of Brown, Wagnon and his wife moved on the homestead of Samuel C. Brown in Bradley County, and lived with and took care of Mrs. Samuel C. Brown and Turza as long as Mrs. Brown lived, and after her death they continued to take care of Turza until she married W. O. Carter and moved on the other half of the 160 acres of the Brown homestead not involved in this action. After the death of Mrs. Brown,’ Wagnon and his wife continued to live on the 80 acres in controversy until the death of Mrs. Wagnon, and after the death of Mrs. Wagnon, about 1887,- Wag-non continued to live on the land until his death on June 24,1921. Mrs. Bessie Turner and Mrs. Beulah Simmons are the sole and only heirs at law of Mr. and Mrs: G. W. Wagnon, and they, with the children of Mrs. Turza Carter, are the only heirs at law of Mr. and Mrs. Samuel-C. Brown. George W. Wagnon executed ' two warranty deeds to his son-in-law, G. T. Simmons, conveying the north forty-acre tract of the eighty acres in controversy. The first deed was not recorded. The second deed was dated September ‘29, 1913, -and was placed of record. Simmons and his wife still live on this north half of the land in controversy, and have so lived since 1908. At the death of Brown, in 1870, the 160 acres on which he lived as Ms homestead passed to his widow, Mrs. Samuel C. Brown, for her life, she having a homestead and dower right therein, the reversionary interest in his estate being in Mrs. Wagnon and Mrs. Carter. At the death of Mrs. Brown the fee title vested in the two heirs of Samuel Gr. Brown, Mrs. Wagnon and Mrs. Carter. After the death of Mrs. Brown the land constituting the. original 160 acres was partitioned between Mr. and Mrs. Wagnon and Mr. and Mrs. Carter.. Wagnon and wife retained possession of the eighty acres in controversy, and Carter and Mrs. Carter took the other eighty acres not in controversy in this action. At the death of Mrs. Wag-non, Wagnon acquired a life estate in the land in controversy by curtesy, his two children, Mrs. Bessie Turner and Mrs. Beulah Simmons, having the reversionary interest, and at the death of Wagnon, in 1921, the fee title to the land passed to them as tenants in common and as the only surviving heirs of Mrs. Wagnon, who owned the fee to the land. The above is the history of the title in controversy substantially as it is stated 'by counsel of Mrs. Bessie Turner, and as alleged in her complaint.

On the other hand, the defendants in their answer alleged that Brown gave the lands in question to Wagnon for a good consideration, and placed him in possession thereof; that Wagnon made improvements and had continued in possession for over forty years; that Wagnon did not come into possession of the land by reason of a life estate vested in him by curtesy, but that he acquired the title while Mrs. Brown, his wife’s mother, was still living. The defendants claimed the land therefore by adverse possession,, and further set up that the plaintiff, having waited until the death of Wagnon to institute the action, was barred by laches and limitation from maintaining the same.

The trial court heard the cause upon the evidence adduced to sustain the contention of the respective parties, and entered a decree canceling the various instruments, copies of which were attached as exhibits to the plaintiff’s complaint, and confirming and quieting title to the land in controversy in the plaintiff and the defendant, Mrs. Beulah Simmons, as tenants in common, and directed that the lands he partitioned between them; appointed commissioners to make the partition, and directed that Mrs. Turner and Mrs. Simmons should each have the right to immediate and absolute and unconditional possession of that portion of said land .allotted to them on said partition, for which writ of assistance may issue upon the request of the parties interested. The commissioners were also directed to report the value of the. permanent improvements and by whom made and the rents of the tract of land for the years 1921 to 1925 inclusive, and the cause was continued as to the rights of the respective parties concerning the rents, improvements and taxes until the same is' finally disposed of by the Supreme Court. From that decree is this appeal.

The appellee moved to dismiss on the ground that there is no final decree because the court continued the cause for further report of the commissioners as to improvements, rents and taxes. But the decree from which this appeal is prosecuted canceled a decree of confirmation and the various instruments, copies of which were made exhibits to the appellee’s complaint, and which are designated in the decree. The decree also vested the absolute title in fee simple in the land in controversy in Mrs. Turner and Mrs. Simmons, share and share alike. Thus the decree canceled instruments and settled the issue as to, the title to the lands in controversy between the appellants and the appellee. As to these matters the decree was final.

Perhaps the leading case in our reports on this sub ject is that, of Davey v. Davey, 52 Ark. 224-227, where this court, speaking through Mr- Chief Justice Cockrill, said: “Where the decree decides the rights to the property in contest and directs it to be delivered up, or directs it to be sold, and the complainant is entitled to have it carried into immediate execution, the decree must be regarded as final to that extent, although it may be necessary for a further decree to adjust the account between the parties. Forgay v. Conrad, 6 How. 206; Thompson v. Dear, 7 Wall, 342.” And further, “it is allowed also where a distinct and severable branch of the cause is finally determined, although the suit is not ended. ’ ’ See also Seitz v. Meriwether, 114 Ark. 289-296, and cases there cited; Robertson v. Yarbrough, 160 Ark. 223. In the last case, supra, we said: “A consideration of the substance of the decree makes it clear that there was a complete and final determination of the cause, so far as it related to the appellant’s assertion of title in her complaint and the assertion of title made by appellees in their cross-complaint. ” The motion to dismiss is therefore overruled.

When the appellee’s complaint is boiled down, the essence of it is that she is the owner in fee simple, under a' legal title, deraigned as set forth in her complaint, as a tenant in common with her sister, Mrs. Simmons, of an undivided half interest in the east half of the SW14 of section 13, township 12 south, range 12 west, in Bradley County, Arkansas, of which lands the appellants, Mrs. Beulah Simmons and her husband George T. Simmons, were in possession and had been for several years, claiming to be the absolute owners thereof and refusing to recognize the appellee’s interest therein; that a certain decree of the Bradley Chancery Court had been fraudulently obtained by G. W. Wagnon, appellee’s father, who had only a life interest in the lands, confirming and vesting title absolutely in him; that he had executed various conveyances and a will, and that appellants had executed certain instruments and conveyances, all of which were clouds on appellee’s title; that appellee was entitled to a partition and immediate possession of her share of the lands, and to have the decree and instruments designated as clouds on her title canceled.

The appellee’s complaint does not state a cause of action within the jurisdiction of the chancery court. The appellee cannot have partition of lands in equity of which appellants are in possession, holding adversely to the appellee and denying her title. Nor can the appellee inyoke a court of chancery to confirm or quiet title in her to lands of which the appellants are in the exclusive possession, claiming title adversely to her. Section 8362, C. & M. Digest.. A court of equity has no jurisdiction to determine that one who is claiming under a purely legal title has such title and the right of possession against one who is already in possession claiming the legal title thereto, and holding the same adversely against all the world. If the appellee’s complaint had stated any grounds of purely equitable jurisdiction wholly distinct from and independent of her suit for partition, or for confirmation of her title, then the court of chancery, having jurisdiction for one purpose, would retain it for all. But, after a careful analysis of appellee’s complaint, we do not discover that it alleges any ground of purely equitable cognizance independent of her suit for partition and to quiet title. On the contrary, the appellee’s complaint does not allege any equitable title in the appellee or any grounds whatever to justify her in invoking the jurisdiction of a court of chancery to obtain the relief which she seeks. The primary purpose of appellee’s complaint is to have herself declared to be the legal owner and entitled to the partition and immediate possession of her share of the land in controversy and the rents and profits that have accrued therefrom since the death of her father in 1921» The other matters set forth for relief are subsidiary, and would 'be bir1 ancillary to a legal title after the same had been established at law. These have no place until the legal title has been first determined at law, and they should not be given primacy merely for the purpose of defeating the jurisdiction of the law court to adjudicate the legal title and right to- possession.

Conceding, without deciding, that the allegations of her complaint are true, she has a complete and adequate remedy at law, and must resort to the forum of a law court to establish these alleged rights. The doctrine above announced bas been established by a long line of decisions of this court. Byers v. Danley, 27 Ark. 77-96; Trapnall v. Hill, 31 Ark. 345; Lawrence v. Zimpleman, 37 Ark. 644; London v. Overby, 40 Ark. 155; Criscoe v. Hambrick, 47 Ark. 235; Hankins v. Layne, 48 Ark. 544-550; Head v. Phillips, 70 Ark. 432; Eagle v. Franklin, 71 Ark. 544; Landon v. Morris, 75 Ark. 6; Cannon v. Stevens, 88 Ark. 610; Lacotts v. Pike, 91 Ark. 26-29; Hilly. Cherokee Const. Co., 99 Ark. 84-87; Moore v. Jackson, 164 Ark. 602.

Appellants’ demurrer to the complaint, and motion to dismiss, in which the sufficiency of the complaint to state a cause of action in equity is challenged, were overruled by the court. It follows from what we have said that the court erred in these rulings. The complaint, however, does state a cause of action at law. The court therefore should have treated appellant’s demurrer and motion to dismiss as a motion to transfer to the law court, and should have granted same and entered an order transferring the cause to the law court. Section 1041, C. & M. Digest; Grooms v. Bartlett, 123 Ark. 255.

For the error indicated the judgment is reversed, and the cause will be remanded with directions to enter an order transferring the cause to the law court.


text:
    St. Louis-San Francisco Railway Company v. Cox.
    Opinion delivered May 17, 1926.
    1. Release — mistake of fact. — Where a release of liability was procured from a passenger injured in the derailment of a train by means of false representations, made by a surgeon connected with the railroad hospital, to the effect that her injuries were cured, when in fact they were not, the release was not binding.
    2. Release — rescission—tender of sum paid. — Where a passenger was induced to sign a release of liability for personal injuries by false representations, she is not bound in this State to return the sum paid before suing to recover the damage sustained, though the injury was received and the release executed in another State, in which she would have been bound to make such return before suing, if her suit had been brought in that State.
    3. Contracts — enforcement of remedy. — -When a party comes into court to enforce his remedy upon a contract, that remedy will be enforced in accordance with the laws of the State regulating the remedy, and not according to the remedy of the State where the contract was made.
    4. Trial — general objection to- instruction. — Under a general objection to an instruction, the Supreme Court will determine whether or not there are any inherent defects therein, and, if ■ . so, whether, construing the charge as a whole, the giving of the instruction was prejudicial to appellant.
    5. Trial — erroneous instruction curel by other instructions.— An instruction in a personal injury case that, if the sum paid by the railroad to the plaintiff was not sufficient to compensate her for damages sustained, the jury should find the amount necessary to compensate her and deduct the amount already received, though erroneous as submitting only the question whether the passenger was sufficiently compensated, was not prejudicial where other instructions submitted the issue whether the release of the railroad was procured by fraud and the- issue as to the railroad’s liability.
    6. Trial — instructions—construction as a whole. — Where, from the language used or the relation, which the instructions bear to each other, they may be read together without conflict and as a harmonious whole, they will be so treated.
    7. Carriers — injury to passenger — burden of proof. — While, in an action by a passenger to recover for personal injuries received in a train wreck, the passenger had the burden of alleging and proving the liability of the carrier, -she met this burden and established a prima fade case when she proved that she was a passenger on defendant’s train, -and that the train was derailed, resulting in her injury.
    Appeal from Mississippi Circuit Court, Osceola District; W. W. Bandy, Judge;
    affirmed.

      E. T. Miller and W. J. Orr, for appellant.

      J. T. Goston, for appellee.
   Wood, J.

Lulu M. Cox instituted this action in the Mississippi County Circuit Court against the St, Louis-San Francisco Bailway Company. The plaintiff alleged that on September 1, 1922, she was a passenger on one of defendant’s trains going from St. Lonis, Missouri, to Osceola, Arkansas; that the train was derailed near Star-land, Missouri, resulting in severe injuries to plaintiff’s person and to her damage in the sum of $3,000, for which sum she prayed judgment.

The defendant answered and set up a written release executed October 25, 1922, in which it was recited that, on September 1, 1922, Lulu M. Cox was a passenger on train No. 805 of the St. Louis-San Francisco Railroad Company, which train was derailed at bridge No. 9705, near No. 76, Missouri; that she received severe personal injuries and loss and damage to personal property, which she claimed rendered the railroad company liable in damages; that the railroad company denied liability, and she, being desirous to compromise and adjust the entire matter, settled for the consideration of $1,575, to her in hand paid, and she forever released the railroad company from any and all liability for damages for such injuries, and acknowledged full satisfaction of all liability of the company to her. The release further recited that, at the time she received the money and executed the release, she was of lawful age and legally competent to execute the release, and before executing it she had fully informed herself of its contents and executed it with full knowledge thereof; that she had read the same, and understood it. The defendant alleged that the release was executed in Missouri, and, under the laws of that State, before plaintiff could maintain the action to cancel the release, she would have to tender to the defendant .the amount of money paid to her in consideration of the release, which plaintiff had not done.

The plaintiff testified that she was a passenger on defendant’s train coming from Ohio to Osceola, Arkansas; that the train was wrecked at Star land, Missouri; that plaintiff was severely injured. She was taken to the Frisco Hospital in St. Louis, Missouri, where two x-ray pictures were taken. She was treated by Dr. Woolsey, a surgeon of the railroad company. She was in the hospital exactly two months. While there she made a settlement with the railroad company. The consideration paid her was $1,575. In order to get her to sign the release, Dr. Woolsey represented to her that the injury to her ankle was all right, but that it would be easily injured again,. He seemed to think it was all right. He told witness to take the crutches and use them. He said witness was all right, but must take precaution not to injure-it again. Witness would be as strong as ever when the bones had had time to finish healing and time for the swelling to go down. These statements were made before witness signed the release, and, if she had not 'believed what he said, she would not have executed the same. She refused to settle until Dr. Woolsey told her it was all right. Witness- signed the release about a week before she came home in November. Witness was suffering horribly, and went to Memphis to consult Dr. Campbell, who- told her that she needed a brace. He stated that her ankle was dislocated, and she would have to have it rebroken. She went to a hospital in Memphis, and had the ankle broken and reset on November 10. Dr. Campbell performed the operation. Witness suffered a great deal. She was in the hospital at Memphis two weeks and a day. Witness still has to use a brace and crutches. Witness was a teacher, and was n.ot able to follow her profession. On cross-examination witness described the derailment of the train resulting in her injury, and stated that, after she was taken to the hospital, two x-ray pictures were taken. She understood the purpose of those pictures was to take a picture of the bones, and she asked to see them, but they would not show them to her. She was anxious to go home. Witness further detailed the injuries and the treatment she received after leaving the hospital, which it is unnecessary to set forth.

On cross-examination in regard to the release she stated ■ that she received the money and executed the release; that she read the release, and understood it; after describing her injuries and treatment at the hospital in Memphis, she concludes her testimony by saying that Dr. Campbell had informed her that he could not give her complete relief, and that her injury was permanent. She stated, in answer to a question, that she had scarcely any movement in her ankle, and demonstrated the same before the jury, saying that she could move it backwards and forwards a little, but not to the side. Witness weighed about 208 pounds when she was injured. Her ankle was turned over, the main portion of the foot turning in and the heel out.

Dr. Campbell testified that his specialty was orthopedic surgery. He qualified as an expert in the treatment of injuries and diseases of the bones, joints and deformities thereto. He attended Mrs. Cox, who gave witness a history of her injury. When she came to see witness in November, 1922, she was walking on crutches with difficulty and with much pain. Her left ankle was swollen and tender, and her left foot was markedly turned out, showing an unreduced Potts fracture. Witness then described the operation which he performed to refraeture and realign the bones into position — a rather extensive procedure on both bones. Witness described in detail the effect of the operation and result of the injury. The effect of the witness’ testimony was that, when Mrs. Cox came to see him, the fracture to her ankle was unreduced. She had a deformity that appears in cases where the fracture has never been set. The operation witness performed would not have been necessary if the fracture had been properly set and no complications thereafter, and if the bones had united in their proper positions, and if the treatment had continued of holding the foot in the proper position for a sufficient length of time, which requires six months or a year. Witness could not state definitely that she did not have proper attention at the hospital in St. Louis, because witness had -seen the patient a number of weeks after the fracture was set. Witness knew that fractures often became misplaced and had to be done over. Witness concluded Ms cross-examination by stating, in effect, that the two fractures which witness had described, to the limb of Mrs. Cox, if properly reduced within a reasonable time after the accident, and proper instructions as to the use of the limb had been followed, would have united perfectly, and there would have been a realignment of the ankle in six months. But Mrs. Cox was 54 years of age, and a fracture of her joint might have been a permanent disability, even under the best treatment from the first. She should not have attempted to put her weight on that limb for six or eight weeks after the injury, and then with support. She would probably have to use crutches on account of the pain at that time, and should have been protected by arch supports and braces. As a rule, one could not discard crutches in such cases after the removal of the cast under one or two months, tbe time differing in different individuals.

The defendant introduced Dr. Howell, who qualified as an expert physician and x-ray specialist. He examined the x-ray pictures of an ankle made an exhibit to Dr. Campbell’s deposition showing the fracture of tbe tibia at the point and also a fracture of the fibula. He stated that it was not uncommon for a person to grow up with a deformed ankle and then. to have the same straightened out and to have a perfect anlde. It was not a serious thing to have a tibia or fibula fractured. The usual result of a fracture of that kind, if a person puts weight on the leg before it is perfectly united, is a displacement. His testimony was to the effect that a woman of Mrs. Cox’s age and weight, with two small bones of her leg broken, as the x-ray pictures taken by Dr. Campbell indicate, if she was injured on 'September 1 and left the hospital November 1, purposely or otherwise, on that leg, she would likely have just what the picture indicates.

Dr. Woolsey testified that he was a physician and surgeon connected with the Frisco Employees’ Hospital Association in St. Louis., He qualified as an expert. He attended Mrs. Cox in the hospital in St. Louis. He explained in detail the treatment of Mrs. Cox, and his testimony tended to prove that his treatment was the usual treatment given patients in her condition, and that it was the correct treatment. He stated that Mrs. Cox left the hospital voluntarily. She was receiving free treatment, and would have received such treatment if she had remained longer. At the time she left, witness didn’t tell her that her ankle was entirely healed. It was not healed. It would have required about three months’ more treatment for a complete healing. It was still necessary for her to use crutches when she left the hospital. At the time Mrs. Cox signed the release on October 25,1925, witness passed her room at the hospital when the claim agents were there, and they later told witness that they had settled with Mrs. Cox. These agents asked witness if it were all right for Mrs. Cox to go home, and witness replied that it was if she went on crutches. • Witness didn’t tell her or the claim agents that the ankle had completely healed and that it was as good as ever. Witness never told Mrs. Cox that her ankle would be as good as ever.

The testimony of the claim agents who made the settlement with Mrs. Cox and took the release was to the effect that they were authorized to pay her the amount named in the release, and Mrs. Cox stated that she would take it and was glad to get the money, because she wanted to get back to her school; that she had a contract) and wanted to get back on November 1 to fill that contract. These witnesses stated that, during the negotiations, they did not ask Dr. Woolsey if Mrs. Cox was entirely healed, cured, and all right, and they did not hear Dr. Woolsey say anything to Mrs. Cox about her injury being healed. The question of her condition at that time was not discussed. Mrs. Cox first broached the subject of a compromise on October 24. She was not ready to settle before that day. One of the witnesses stated that he had met Mrs. Bragg, Mrs. Cox’s daughter. He was asked this question: “Weren’t you around there trying to get Mrs. Cox to settle, and didn’t she (Mrs. Bragg) ask you not to settle with Mrs. Cox in her absence ? ’ ’ Witness answered, ‘ ‘ Nothing of the kind was said.”

Mrs. Cox was recalled in rebuttal, and testified that tbe two claim agents were in her room when Dr. Woolsey came there and opened the door, and seemed surprised that they were there. Witness had not then signed the papers. One of the agents said, “Isn’t this woman all right?” and Dr. Woolsey said, “She is all right — it will take a little time to reduce that swelling — she will be all right.” 'The witness, on cross-examination, stated that, on a former trial of the case, about a year before, she had stated, in answer to á question, that,' while she and the claim agents were in a conversation- in regard to the settlement, and after a part of the conversation, Dr. Woolsey came to the door and opened it and looked in, and they asked him about the condition of witness ’ ankle, and he said it was healed. They also asked him how long it would be before witness would walk, and the doctor said, “Well, witness ought to walk within four months from the time she was injured. ’ ’ Witness had then been injured two months. Witness further stated that on the former trial she had stated that there wasn’t anybody present except the two adjusters when she signed the release, and that is what she now states.

Mrs. Bragg testified for the plaintiff, in rebuttal, that she was the daughter of Mrs. Cox. She went to see her mother about three weeks, after she was injured. Witness met Harwell, one of the claim agents. She asked him to come to the hospital, because her mother stated that they had been suggesting a settlement. Witness did not want her mother to settle unless witness was present, and told Harwell that witness did not want any mention made of settlement unless witness was present. He agreed on his word as a gentleman. Witness had not given her mother instructions not to settle until witness came again. 'She knew nothing about witness’ talking to Harwell. Witness stated that her mother kept off of her leg until she went to Memphis.

In its instruction No. 1 the court told the jury in effect that if, at the time of or before the release was executed and the consideration paid the plaintiff, Dr. Woolsey misrepresented the 'Condition of her anide and made her believe that her physical condition was much better than it really was, and that she was ignorant of her real physical condition, and that snch representations caused her to execute the release, then she would not be bound by it, and the jury would disregard the same and find for the plaintiff.

Instruction No. 2 was as follows: “The plaintiff has been paid the sum of $1,575, and if you find that the sum of $1,575 was sufficient to compensate the plaintiff for the damages which she has sustained, then your verdict will be for the defendant; on the other hand, if you find that the sum of $1,575 which she received was not sufficient to compensate her for the damage which she has sustained by her injuries, then your verdict will be for the plaintiff for such a sum as you may find, from a preponderance of the evidence, would compensate her for the damage which she has sustained, but you will deduct therefrom the said sum of $1,575.”

Instruction No. 3 in effect told the jury that if they found for the plaintiff they should take into consideration certain elements of damage (naming them), and allow the plaintiff compensation therefor, and concluded the instruction as follows: “But, if you find that her damages amount to more'than $1,575, you will deduct said sum from the amount of your verdict. ’ ’

The defendant, in its prayers for instructions numbered 3 and 4, in effect prayed the court to instruct the jury that the release which it pleaded in defense to the action was binding on both parties to the settlement, unless the plaintiff could prove that she was induced to enter into the same through the misrepresentation of the defendant as to the nature and extent of her injuries, and that she was ignorant of her condition; that, if the release were valid, the plaintiff would be bound by the amount named therein, although the jury might believe that her injuries would have entitled her to more; that, if a fraud was perpetrated upon her, it was her duty, as soon as she discovered the fraud, to have tendered to the defendant the amount she received in settlement. The court modified these instructions, and gave the same in substance, except that the court refused to tell the jury that it would be the duty of the plaintiff, if the settlement was made through misrepresentation of the defendant and fraud thereby perpetrated upon her, to tender to the defendant the amount of the settlement as soon as she discovered the fraud. The court also instructed the jury that the burden of proof was upon the-plaintiff to show that the release was obtained through false representations on the part of the defendant. The verdict and judgment were in favor of the' plaintiff, and the defendant duly prosecutes this appeal.

This court has held in St. Louis, etc. Ry. Co. v. Hambright, 87 Ark. 615, quoting syllabus: “If the chief surgeon of the railroad company in good faith represents to an injured employee that his injuries are slight- and temporary, when they are serious and permanent, and thereby misleads him into signing a release of the railroad company from damages, such release is not binding.” In this case we held also that it is not a condition precedent to the maintenance of the action that the consideration for the release be tendered to the defendant before the action, is instituted. And in St. Louis, etc., Ry. Co. v. Smith, 82 Ark, 105, we held in effect that, where a passenger was induced to sign the receipt by false representations, which she relied on as to its contents, she would not be bound to return the sum paid before suing to. recover the damages sustained. See also Industrial Indemnity Co. v. Thompson, 83 Ark. 575-584; and Pekin Cooperage Co. v. Gibbs, 114 Ark. 571, where we said: “Nor is a releasor required to return that which in any event he would be entitled to retain, either by virtue of the release itself or of the original liability, but credit must be given on the judgment.” See also Kilgo v. Continental Casualty Co., 140 Ark. 336-343.

Under the doctrine of the above cases it is not a condition precedent to the maintenance of this action by the appellee that she tender to the appellant the consideration received by her for the execution of the release. In other words, in this .jurisdiction the failure of tender is a matter that does not reach to the basis of the right of action itself. It is not a matter of substance relating to the right to maintain an action, but pertains only to the procedure or remedy. “The broad, uncontroverted rule is that the lex loci will govern as to all matters going to the basis of the right of action itself, while the lex fori controls all that is connected merely with the remedy.” 5 R. C. L., p. 917, § 11. In Shores-Mueller Co. v. Palmer, 141 Ark. 64-70, we said: “It is well settled in this State that, when a party comes into court to enforce his remedy upon a contract, that remedy will be enforced in accordance with the laws of this State regulating the remedy, and not according to the remedy of the State where the contract was made. Lawler v. Lawler, 107 Ark. 70, and Huff v. Iowa City State Bank, 134 Ark. 495.” See also Person v. Williams-Echols Dry Goods Co., 113 Ark. 467-470.

In Missouri it is held that “a plaintiff cannot recover as against a settlement on the ground that it was induced by fraud, where he had not tendered back the amount received as consideration for the settlement.” Althoff v. St. Louis Transit Co., 102 S. W. 642, and cases there cited. See also Metropolitan Paving Co. v. Brown, etc., 274 S. W. 815. Learned counsel for appellant contend that, since the release under review was executed in Missouri, the Missouri rule as stated above should apply here. But the Missouri Supreme Court treats the matter of tendering or refunding of the consideration for the release in such cases as “a matter going to the basis of the right of action itself.” It is a matter of substance, a condition precedent to the maintenance of the action.. But under our decisions, as above stated, a failure to refund or make tender of the consideration for the release in such cases relates only to the remedy, and is not a matter of substance pertaining to the right of action itself. It is a universal rule that laws relating to the remedy can have no extraterritorial effect. As is said in 5 R. C. L., p. 941, § 28, “it is a universally established rule that the affording of remedies in one State for enforcing a contract made in another, depends entirely upon judicial comity, and that the remedies and procedure are therefore governed entirely by the lex fori. Considering the matter apart from the principle of comity, there is not the same reason for looking to the intent of the parties in the case of the remedy as in the case of matters pertaining to the substance, for the parties do not necessarily look to the remedy when they make the contract.” See numerous cases cited in note.

The issue as to whether or not the release was executed under circumstances which constitute fraud on the rights of the appellee was submitted to the jury under correct instructions. The issue was one for the jury under the evidence. The instructions on the issue of fraud conformed to the law as declared by this court in St. Louis I. M. & S. Ry. Co. v. Hambright, supra; Chicago Rock Island Ry. Co. v. Smith, 128 Ark. 223; Western Cabinet, etc., Co. v. Davis, 121 Ark. 370. There was a sharp conflict in the evidence. The verdict of the jury on the issue of fact is conclusive here.

Prayer for instruction No. 2, set out above, given at the instance of the appellee, relates only to the question as to whether or not the amount paid appellee was sufficient to compensate her in damages for the injuries she had sustained. If the jury found from the evidence such sum was not sufficient, they should find from a preponderance of the evidence an amount necessary to compensate her for the damages she had sustained, and deduct therefrom the amount she had already received. If this instruction stood alone, the ruling of the court in giving the same would be erroneous and prejudicial, because it does not submit the issue as to whether or not the appellant was liable under the evidence, and does not submit the issue as to whether or not the release was procured by fraud, and makes the entire case turn on whether or not the appellee had received a sufficient sum to compensate her for the damages she had sustained. But, when this instruction is considered in connection with the other instructions immediately preceding and following, it occurs to us the jury could not have been misled, and that the giving of the instruction was not prejudicial. Instruction No. 2 is sandwiched between 1 and 3, in which-the- court submitted to the jury the issue as to whether or not the release was obtained through fraudulent representation made by the appellant’s agents, and if the jury found for the appellee on the issue of liability, and also for the appellee on the issue of alleged fraud in the release, then they should consider certain elements in determining the amount of her damáges. Instruction No. 2 was obviously meant to tell the jury that, if they found for the appellee on the other issues, then her damages should not exceed the sum which had already been paid her, unless the jury believed and found from a preponderance of the evidence - that the sum. already paid was not sufficient to compensate her for the damages which she had sustained. It tells the -jury to deduct the sum already paid from any amount of damages which they found the plaintiff had sustained in' excess of that sum. ■ ■

The bill of exceptions, ' as corrected by mmc pro tunc order of the trial court, which order the court had a right to make, and which we must accept as the true bill, shows that no specific objection was made to instruction No. 2. Freel v. State, 21 Ark. 213; Huffman v. Sudbury, 128 Ark. 559-562. Such being the case, the court cannot consider the specific objection here urged to the instruction-by the appellant. If the -appellant desired- that the instruction should cover the particular matters of-which it now complains, it should have first drawn the attention of the trial court to these matters by specific objection. St. Louis, etc., Ry. Co. v. Carter, 93 Ark. 589. Appellant having failed to offer any specific objection to the instruction in the court below, under the general objection made to the instruction we can only consider such instruction to determine whether or not there are any inherent defects therein, and, if so, whether, in the setting o.r connection which the instruction has in the charge as a whole, the giving of the instruction was prejudicial to the appellant. We are convinced that when the instruction ' (No. 2) is so considered in connection with instructions numbered 1 and 3, given at the instan.ce of the appellee, and also with prayers of the appellant for instruction numbered 3 and 4, which were modified and given as modified, it was not calculated to mislead or confuse the jury. Instruction No. 2 was not prejudicial to the appellant. The charge as a whole was not contradictory, and fully submitted all the contested issues of fact to the jury. In St. Louis, etc., Ry. Co. v. Rogers, 93 Ark. 564-573, we said: “If, from the language used or the relation which the instructions are made by the whole charge to bear toward each other, it is readily seen that they are.to be read together without conflict and as a harmonious whole, and they can be so read, then it is our duty to so treat them. ’ ’ Since the announcement of this rule in the above case, it has been consistently followed by this court in numerous cases. See Miller Rubber Co. v. King, 147 Ark. 302-308; Yellow Rose Mining Co. v. Straight, 133 Ark. 206-213; St. Louis, etc., Ry. Co. v. Cobb, 126 Ark. 225-230.

The appellant contends that the court’s charge was defective because it in effect ignored the question of the defendant’s liability for the derailment, and in effect directed a verdict for the plaintiff on that issue. At the conclusion of the testimony the appellant asked the court to instruct the jury to direct a verdict in its favor because, under the pleadings and the evidence, the plain* tiff is not entitled to récover. The court refused this prayer, and in, instruction No. 3, given at the instance of the appellee, told the jury, “if you find for the plaintiff, you will, in fixing the amount of damages,- take into consideration the damages,” etc. This instruction No. 3 was sufficient to submit the issue as to the liability of the appellant under the pleadings and all the testimony adduced* The appellant did not ask any more specific submission on tbe issue of appellant’s liability. Tbe other instructions in the cause, given both at the instance of the appellee and the appellant, were on the issue as to the release and its effect on the appellee’s alleged cause of action. The appellee alleged that she was a passenger on one of appellant’s interstate trains, and that the same was derailed, and that she was thereby injured. The appellant admitted these allegations. The appellee proved the above allegations, and that was sufficient to carry the issue of- liability to the jury, and, in the absence of any exculpatory evidence, justified the verdict of the jury in favor of the appellee on that issue. While the burden was upon the appellee to allege and prove the liability of appellant, she met this burden and established a prima facie case when she proved that she was a passenger on appellant’s train and that the train was derailed, resulting in her injury. Gleason v. Ry. Co., 140 U. S, 435-444; Kelly v. Jackson, 6 Peters 632. There is no error which calls for reversal of the judgment, and the same is therefore affirmed.