author: McCulloch, C. J.

text:
    Fort Smith v. Western Hide & Fur Company.
    Opinion delivered April 10, 1922.
    1. Nuisance — distinction between public and private nuisance. —The distinction between a public and a private nuisance lies merely in the extent of injury or annoyance which results therefrom; if injury results only to a few, the nuisance is private, and the remedy is confined to those who suffer from the effects of the nuisance; but if the injury is sufficient in extent to become common to all persons who may come within its influence, it is of a public nature, and the remedy is by action on the part of the municipality.
    2. Nuisance — remedy.—Although a municipality may abate a public nuisance by police interference when so authorized by ordinance, in the absence of such authority the remedy is by suit in equity.
    3. Nuisance — sufficiency of evidence. — In a suit by a city to enjoin a public nuisance, the chancellor’s finding that defendant’s hide and fur business in a thickly settled portion of the city was not a public nuisance held to be contrary to the weight of evidence.
    4. Nuisance — effect of growth of city upon business. — Though a hide and fur business was not a public nuisance when originally established in a sparsely settled part of the city, it may become such by reason of the city’s growth, in which ease private rights must yield to the public good.
    5. Nuisance — licensed business. — The fact that a city had issued a license to defendant to conduct its business of dealing in hides and furs did not authorize defendant to conduct its business in such manner as to constitute a public nuisance nor bar the city from suppressing such nuisance.
    Appeal from Sebastian Chancery Court, Fort Smith District; J. V. Bourland, Chancellor;
    reversed.

      Cravens, Oglesby S Cravens, for appellant.
    The testimony was sufficient to show that the defendant maintained a business that, in its nature, constituted a public nuisance. Joyce on Nuisances, secs. 5, 7, 157, 158; 89 Am. Dec. 616; 29 N. E: 656; 32 Atl. 495; 188 Pac. 772; 141 Fed. 385; 92 Ark. 546.

      Jas. B. McDonough, for appellee.
    The testimony is sufficient, to support the chancellor’s finding’. 41 Ark. 526; 81 Ark, 117; 64 Ark, 609; 9ft Ark. 437; 143 Ark. 48; 138 Ark. 329; 122 Ark. 379; 93 Ark. 362; 29 Cyc. 1153; 92 Ark. 546.. . .
   McCulloch, C. J.

Appellee is engaged in the business of buying and selling hides and furs, the business being operated in its own building situated near the center of the business district in the city of Fort Smith. Appellee has been operating the business at that place for the past ten years.

This is an action in chancery, instituted by the city of Fort Smith against appellee, to restrain the further operation of said business at the place mentioned on the ground, as alleged in the complaint, that the method in which the business is operated constitutes a public nui sanee.

It is alleged in the complaint that appellee’s place of business is situated in a thickly populated section of the city and is a great annoyance to the people in that neighborhood and to passers-by, for the reason that the storage of hides in the house gives off offensive odors and attracts flies, and affects the comfort and endangers the health of the people of the city living near that locality. The complaint, in other words, states facts relative to the manner in which the business is conducted sufficient to constitute the maintenance of a public nuisance.

Appellee, in the answer, denied the allegation of the •complaint with respect to the method in which the business was operated, and denied that offensive odors arose from the place of business, or that flies were attracted there any more than is the case at other places of business during warm weather.

There was a trial of the issues before the court upon oral testimony, reduced to writing and made a part of the record, and the decree dismissed the complaint for want of equity.

The distinction between a public and private nuisance lies merely in the extent of the injury or annoyance which results therefrom. If injury results only to a few, on account of the peculiar circumstances, the nuisauce is private,' and the remedy is confined to those who suffer from the effects of the nuisance. If, on the other hand, the injury or annoyance is sufficient in extent to become common to all persons who may come within its influence, it is of a public nature, and the remedy is by action on the part of the municipality to abate the nuisance, either by police interference under an ordinance, or by suit in equity to restrain the maintenance of the nuisance. Harvey v. Dewoody, 18 Ark. 252; Lonoke v. C., R. I. & P. Ry. Co., 92 Ark. 546; Gus Blass D. G. Co. v. Reinman, 102 Ark. 287.

In the absence of an ordinance authorizing the abatement of the nuisance by police interference, the remedy must be, on the part of the municipality, by a suit in equity. Lonoke v. C. R. I. & P. Ry. Co., supra.

In the case of Durfey v. Thalheimer, 85 Ark. 544, there was involved the question of nuisance in the maintenance of a livery stable, and Judge Battle, speaking for the court, after declaring that, while a livery stable operated in a city or town is not necessarily or prima facie a nuisance, it may become so by the manner in which it is constructed or conducted, and, in defining what may constitute a nuisance, he said:

“It is the duty of every one to so use his property as not to injure that of another; and it matters not how well constructed or conducted a livery stable may be, it is nevertheless a nuisance if it is so built or used as to destroy the comfort of persons owning and occupying adjoining premises, creating an annoyance which renders life uncomfortable; and it may be abated as a nuisance.”

In Lonoke v. C. R. I. & P. Ry. Co., supra, we adopted the following as an appropriate definition of a public nuisance:

“A common or public nuisance has been defined to be ‘that which affects the people and is a violation of a public right, either by a direct encroachment upon public property or by doing some act which tends to a common injury, or by the omitting of that which it is the duty of a person to do. Public nuisances are founded upon wrongs that arise from the unreasonable, unwarrantable or unlawful use of property, or from improper, indecent or unlawful conduct, working 'an obstruction or injury to the public and producing material annoyance, inconvenience, and discomfort founded upon a wrong.’ ”

It is unnecessary to give any further definition of a public or private nuisance.

There were numerous witnesses in the case for the city and for appellee. The city introduced eight witnesses, all of whom gave testimony which tended to show that the operation of the business by appellee was a nuisance, that noxious odors arose from the building, particularly that part where hides were stored, and that in warm weather there was an accumulation of flies about the place. Most of these witnesses were people who lived in the immediate neighborhood and were engaged in business of various kinds.

One of the witnesses operated a baker shop and lunch room, and he testified that the odors from appellee’s place of business were so offensive that it seriously interfered with his business.

Another one of the witnesses was interested in the operation of a barber shop and pool hall, and he testified that the odors were so offensive inside of the shop that waiting customers would not remain in the room, but would stand on the outside so that they could get relief from the odors.

One of the witnesses — Mr. Miller — was a commissioner of the city and a member of the district board of health, and he testified that he visited appellee’s place of business several times and found that the odors from the place were very offensive. He testified that he visited the place for the purpose of making an investigation and that he could detect the odors a considerable distance from the house.

Appellee introduced ten or twelve witnesses in addition to the manager and owner, whose testimony tended to some extent to overcome the charge that offensive odors constantly arose from the building, at least to the extent claimed by witnesses for the city. These witnesses were more or less definite in their statements, but none of them disputed the fact that there were peculiar odors arising more or less from the place of business. Many of the witnesses said that these odors were noticeable but were not offensive. Some of the witnesses stated that the odors arose on account of the disinfectants used and that these were, not offensive odors, at least not so to them.

Mr. Davidson, the manager of the business, stated that there were odors going out from the hides, but that such an odor as that was not offensive. He admitted, however, that sometime hides were bought which were partially decomposed and that it was necessary to put them down in salt in order to stop decomposition. He testified that all the fresh hides purchased were salted to prevent decomposition.

A careful consideration of the testimony leaves no escape from the conclusion that the place of business maintained by appellee was' offensive to those who came into the immediate neighborhood. There were bad odors which were easily detected, and which were sufficient to constantly annoy those who were engaged in business in the locality or who came there for any purpose.

It is conceded that the operation of a hide and fur business is not a nuisance per se, but the contention is that the operation in the manner in which it is carried on in the locality where the place of business is situated constitutes a nuisance, and we are of the opinion that the preponderance of the evidence sustains this contention.

The case affords, perhaps, an example where a business established at a place remote from population is gradually surrounded and becomes part of a populous center, so that a business which formerly was not an interference with the rights of others has become so by the encroachment of the population. Under these circumstances, private rights must yield to the public good, and a court of equity will afford relief, even where a thing, originally harmless under certain circumstances, has become a nuisance under changed conditions.

Appellee pleads a license from the city in bar of the right to abate the nuisance, but the fact that the city granted a license to operate a hide and fur business does not imply that it could be operated in a manner so as to constitute a public nuisance, or to bar the city from suppressing the nuisance. Durfey v. Thalheimer, supra; Wilder v. Little Rock, 150 Ark. 439.

The decree is therefore reversed, and the cause remanded, with directions to enter a decree in favor of the city of Fort Smith, according to the prayer of the complaint, restraining appellee from maintaining a nuisance.


source: Caselaw Access Project

license: Public Domain

text:
    Harrell v. Saline Oil & Gas Company.
    Opinion delivered April 10, 1922.
    1. Appeal and error — question not raised below. — Where the complaint, in an action to cancel an oil and gas lease, set forth the lease, which provided that if no well was commenced by a certain date the lease should terminate unless the lessee tendered a given rental, and alleged a failure to pay such rental as agreed, and both parties directed their proof entirely to the question of such payment, it was too late on appeal to take advantage of the plaintiff’s failure to plead and prove that no work had been done on the leased premises, since, if the complaint was indefinite, the remedy was a motion to make it more definite and certain.
    2. Mines and minerals — notice of forfeiture of lease. — Under an oil and gas lease providing for its termination if no well should be commenced by a certain date unless the lessee paid a certain rental, notice of forfeiture was not necessary where the lessor remained in possession; time being of the essence of the contract and no re-entry being required.
    8. Mines and minerals — forfeited lease — reinstatement.—After forfeiture of an oil and gas lease, the lessor cannot reinstate the lease after he leased the land to another.
    Appeal from Drew Chancery Court; E. G. Hammock, Chancellor;
    reversed.

      P. 8. Seamcms, for appellant.
    Notice is not necessary to declare a forfeiture upon the failure to pay the stipulated rentals. Epperson v. Helbron, 145 Ark. 566. Especially is this true where the lease does not provide for any notice. 152 Pac. 597. However, the execution by the lessor of a second lease, with knowledge thereof on the part of the first lessee, is sufficient notice; 86 N. T. 368; 67 N. E. 259; 62 L. R. A. 869; 24 Cyc. p. 1357. A refusal of the lessor to accept rent from the lessee in sufficient notice. 105 S. W. 424.

      Henry & Harris, for appellee.
    No declaration of forfeiture was made. 225 S. W. 345; 44 Ind. App. 207; 88 N. E. 859; 160 Pac. 94; L. R. A. 1917-B 1184. Upon failure to pay rentals title does not revest in lessor, but he then merely has the right to declare a forfeiture. Thornton’s Law of Oil & Gas, sec. 175; 98 Atl. 955.
    Acceptance of rentals estops the lessor. Thornton, sec. 177; 99 S. W. 668. Only the lessor, not a stranger, can avail himself of the right to declare a forfeiture. Thornton, sees. 175 and 177; 176 S. W. 816.
   McCulloch, C. J.

Appellant instituted this action in the chancery court of Drew County to cancel a lease executed by Harper Green, the owner of a tract of land in that county, to appellee, Saline Oil & Gas Company, permitting the latter to explore the land for oil and gas and to develop same if discovered. The contract was in writing, executed by the parties on January 19, 1.920, and granted to the lessee the right to explore for gas and oil, and, if the mineral was developed, to pay to lessor one-eighth of the price for the commodities developed and sold. The contract contained the following clause:

“If no well is commenced on said land on or before the 19th day of January, 1921, this lease shall terminate as to both parties, unless the lessee, on or before that date, shall pay or tender to Harper Green, who is hereby appointed agent for such purpose, in the manner hereinafter ' provided, the sum of thirty dollars, which shell operate as a rental to recover the privilege of deferring the commencement of a well for twelve months from saicf date.”

The lessor, Green, executed a second lease to appellant on January 24,1921, and the contention of appellant is that at the time of the execution of the lease to him there had been a forfeiture by appellee of its lease from Green.

It is alleged in the complaint that appellee, not having commenced a well on the leased land within a year, as specified in the contract, failed to pay the rental as stipulated in the contract on or before the date mentioned therein and that the lease thereby became forfeited.

The answer contained a denial of all the allegations of the complaint with respect to forfeiture, and also pleaded that there was no forfeiture by reason of the fact that there had been no declaration or notice by the lessor of the termination of the lease.

There was a decree dismissing the bill for want of equity.

It is contended by counsel for appellee that there is neither allegation nor proof that exploration or development work was not commenced on the place within a year from the date of the lease, and that for this reason the question of forfeiture or abandonment by reason of the failure to pay the rental does not arise. We are of the opinion that this contention is not sustained by the record, and that the point is raised here for the first time.

The terms of the lease contract are set forth in the complaint, and there is a statement that the lessee failed to pay the lessor said rental “in accordance with the terms of said contract, and, having failed to in any manner whatever make such payment on or before the 19th of January, 1921, allowed said lease contract to lapse and become null and void. ’ ’ This allegation was denied in the answer. It was equivalent to an allegation, inferentially at least, that work had not been commenced on the land within the time mentioned, for the contract is set forth in the pleadings, and it is shown that according to its terms the failure to pay the rental within the time specified would not operate as a forfeiture unless there had been a failure to commence work within that time.

The allegation was, it is true, imperfect and indefinite, but the remedy was by motion to make the complaint more definite and certain in this respect.

It is the same with regard to the proof in the case. Both sides directed their proof to the question of payment of the rental, and nothing was said by the witnesses about the failure to commence work. It is clear that both sides introduced proof upon the assumption that there had been no work commenced on the land, and both sides treated the issue of fact in the ease to be whether or not there had'been a forfeiture on account of the failure to pay rental.

Appellee’s manager, in his testimony concerning the failure to pay the rental within the stipulated time, spoke of it as a delinquency, and this necessarily implied that no work had been done on the land.

It is too late now to take advantage of defects in the pleadings and proof as to the failure to allege and prove directly the fact that there had been no work done on the leased premises.

There is really no dispute concerning the material facts in the case. Green was living on the land at the time of the execution of the first lease and continued to reside there up to the trial of this cause. The rental under the lease was not paid to Green, and on January 24,1921, appellant drove out to Green’s home and secured another lease from him on substantially the same terms as the one formerly executed and under which appellee claims.

The evidence shows that Green hesitated about executing the lease until he could make a further inquiry at one of the banks at Monticello to ascertain whether or not appellee had paid the rental money within the time specified in the contract, and he finally executed the lease to appellant -with, the distinct understanding that if, upon further inquiry, it was found that appellee had paid the rental within the time specified, the lease to appellant should be canceled. It was found upon, further inquiry that appellee had not paid the amount into the bank, but on January 29, 1921, appellee paid the rental money to Green, who accepted the same and tendered to appellant the sum of twenty dollars, which was paid to him as consideration for the execution of the lease to appellant. This sum was rejected by appellant, and the present suit was immediately instituted.

This brings us to the decisive point of the case— whether or not a declaration of the forfeiture, or notice of the intention on the part of the lessor to declare a forfeiture before the payment of the réntal, is essential to the consummation of the forfeiture.

We have decided that the time specified for performance in a contract similar to the one now under consideration is of the essence of the contract. Epperson v. Helbron, 145 Ark. 566.

It is contended on behalf of appellee that the case just cited also decides, according to his contention, that there must be a declaration of forfeiture before the offer to pay the rental in order to consummate the forfeiture, but we do not find on consideration of the opinion in that case that that was the question presented or decided. It is true that it was contended in that case that there was a waiver of the forfeiture by failure to give notice, before the payment of the rental, of an intention to forfeit. But we decided that the. placing of notice in the mails by the lessor, properly addressed to the lessee, was sufficient notice; we did not go into the question at all of the necessity for notice. We must therefore treat the question as still being an open one, so far as being covered by the decisions of this court.

According to the great weight of authority, notice of forfeiture is not necessary under a contract similar or identical with the one now under consideration in order to terminate the contract. The authorities on the subject. are to the effect.that where the parties state that the contract shall be terminated unless certain acts are performed within a certain time,, the contract comes to an end without further action unless, notice is provided in the contract itself. That rule is stated in Thornton on the Law of Oil and Gas, Yol. 1, Sec. 182, as follows:

“If the lessor be in possession, notice to the lessee of his intention to declare a forfeiture is not necessary, unless the lease provides for it; and if a notice is necessary, the execution of a second lease, to the knowledge of the first lessee, is a sufficient notice to him. ’ ’

It was decided in the following cases that notice was not required: Allegheny Coal Co. v. Bradford Oil Co., 21 Hun (N. W.) 26, affirmed in 86 N. Y. 368; Mitchell v. Probst, 52 Okla. 10, 152 Pac. 597; Jennings-Heywood Oil Synd. v. Houssiere-Latreille Oil Co., 119 La. 794; Brown v. Wilson, 58 Okla. 392, L. R. A. 1917-B, 1184; Gadbury v. Gas Co., 162 Ind. 9, 62 L. R. A. 895.

In some of the cases a distinction is made between contracts which provide for forfeiture in the event of failure to commence work within the stipulated time “unless” rentals be paid within a certain time, and where the contract provides for payment of rental in the alternative. In the Oklahoma case of Brown v. Wilson, supra, it was decided that there was no real distinction between the two forms of contract, but in the Natural Gas Co. v. Wolcott, 98 Atl. 955, the Supreme Court of Pennsylvania decided that, where the contract was in the alternative, notice of forfeiture was essential. In the decisions which hold that notice is not essential it is upon the ground that, time being of the essence of the contract, if the lessor remains in possession, there can be no reentry, and no further act or notice is necessary in order to terminate the contract.

We think the reasoning of these cases is sound, and in the present instance there was a forfeiture or abandonment of the contract by the lessee. Of course, the lessor had no right to reinstate the contract by acceptance of rentals after having leased the land to appellant.

It follows that the decree was erroneous, and the same is therefore reversed, and the cause is remanded, with directions to enter a decree in favor of the appellant in accordance with the prayer- of the complaint.


text:
    Shelpman v. Shelpman.
    Opinion delivered April 10, 1922.
    1. Divorce — custody of child. — A decree awarding to a divorced husband the custody of an infant daughter will be upheld where it appears that the father is-able and willing to furnish a home and other advantages to the child, while the mother is not so situated.
    2. Divorce — alimony.—A court has power to award alimony to a divorced wife, even where the divorce is granted on the husband’s complaint.
    3. Divorce — alimony.—Where the original decree gave the wife custody of a child and $60 a month alimony, and was subsequently modified by giving the child to the husband, it was not improper, in the modified decree, to fix alimony at $40 a month, in view of his financial ability.
    Appeal from Independence Chancery Court; Lyman F. Reeder, 'Chancellor;
    affirmed.

      Samuel M. Casey, for appellant.
    Under the circumstances of this case, although this court has held that alimony may he allowed a wife where the divorce was granted at the suit of appellant (88 Ark. 302) it would be wrong to compel appellant to contribute to his divorced wife’s support. Ann. Cas. 1915-C p. 1252; 106 N. E. 428; 128 N. W. 649.
    The custody of a child as between parents living apart is determined solely with respect to the best in-. terests of the child. Jaclcson v. Jaclcson, 151 Ark. 9.

      Lewis Rhoton, for appellee.
   McCulloch, C. J.

The parties to this appeal were formerly husband and wife, but were divorced by a decree of the chancery court of Independence County, rendered January 1,1920, on complaint of the husband charging misconduct on the part of the wife.

There were two children, issue of the marriage, a boy and a girl, and the court in the divorce decree awarded the custody of the boy to the father, and awarded the custody of the girl to the mother. The court also awarded the wife alimony in the sum of sixty dollars per month. There was no appeal from that decree.

The present proceeding was instituted by petition of the husband in the chancery court of Independence County to modify the former decree by awarding the custody of the girl to him and to strike out the .allowance of alimony.

It is alleged in the petition, as grounds for modification of the former decree, that the defendant resides in the city of Little Eock, where she had taken the child with her, and that she had been guilty of such misconduct and was so neglectful of the welfare of the child that she was not a fit person to have the child in her custody, and that the probation court at Little Eock had awarded the custody of the child-to the plaintiff.

There was an answer to the petition, in which the defendant denied the charges of misconduct on her part or neglect of the welfare of the child, and she asked that the former decree be modified by increasing the allowance of alimony to the sum of seventy-five dollars per month.

The cause was heard by the court on oral testimony, which has been properly preserved in the record and brought up for our consideration, and the former decree was modified by awarding the custody of the girl to. the plaintiff, but providing that the defendant should have the right of receiving the children for a visit during one month of each year.

The former decree in regard to alimony was also modified so as to reduce the amount of the monthly payments to the sum of forty dollars.

The court also made an additional order requiring the plaintiff to pay the accumulated delinquent installments under the former decree.

Each party has appealed.

The testimony is somewhat voluminous, and the witnesses are numerous, embracing close relatives of the parties, and their friends.

Testimony was adduced tending, with considerable force, to show that the defendant is not a fit person to have the custody of the girl child, and that she is not so situated in her life in Little Rock that she can afford a proper home for the child. This testimony is denied, however, and there are witnesses in Little Rock who testified that defendant’s conduct is above reproach and that she is altogether capable of taking proper care of the child and of properly rearing her. It is unnecessary to state this evidence in detail, for it would serve no useful purpose to do so.

We >are convinced, as the chancellor seems to have been, that the father is so circumstanced as to be able to give a better home and sanctuary to the child than is the mother, and .that it is to the -best interests of the child that she should be with her father.

Defendant is living in the city of Little Rock, where she is engaged as .a professional nurse. She has no home of her own to offer to the child. The plaintiff resides in the city of Batesville, where he has a residence of his own, and his mother keeps house for him. The evidence tends to show that he is able, financially and otherwise, to afford the best advantages to his children, and that he is, under the circumstances, the proper person to have the custody of both of the children.

The fact that the two children can, under these circumstances, reside together is not without considerable force in determining the question of the custody of the girl. In order to support this part of the decree of the chancery court it is not necessary to find that the defendant has been guilty of misconduct which involves her moral character, though there is some testimony tending to show that she has been associating with and receiving attentions from a certain undivorced married man in Little Rock.

The decree awarding the custody of the girl to the plaintiff may well be based solely upon the ground that the defendant is not so situated that she can furnish a home and other advantages to the child, while the plaintiff is abundantly able and is willing to do so.

There was, as before stated, no appeal from the former decree, and we are not called on to review the decision of the chancery court allowing alimony to the defendant, notwithstanding the fact that she was the guilty party and the divorce was granted on account of her misconduct. The court had the power to award alimony, even where the divorce was granted on the complaint of the husband. Pryor v. Pryor, 88 Ark. 302.

We have now only to deal with the question of reduction of the amount of alimony. The proof shows that the amount awarded under the modified decree is not out of proportion to the financial ability of the plaintiff to pay, and that the award is not excessive. The fact that the custody of the daughter has been taken away from the defendant does not necessarily afford ground for holding that the further continuance of the award of alimony was erroneous.

It does not appear that the court originally allowed alimony solely on the ground that the custody of the child was awarded to defendant. The proof shows that the plaintiff was then, as now, financially able to contribute to the support of his wife, and the court, in reducing the amount, may have taken into consideration the fact that the defendant ho longer had to support the child. It was, at least, proper for that to be taken into consideration.

The proof shows that the defendant receives a very small income from her professional activities and earns scarcely enough to live on, whilst the plaintiff is in good circumstances and is drawing a liberal salary.

The defendant does not complain of the reduction made 'by the court, but the complaint as to that p.art of the decree comes from the plaintiff, who contends that the award should have been stricken out altogether.

We cannot say, under the evidence, that it was improper for the court to continue the alimony for the reduced amount.

The decree is therefore affirmed on both appeals.


text:
    Standard Oil Company of Louisiana v. Brodie.
    Opinion delivered April 10, 1922.
    1. Constitutional law — construction op statutes. — Every reasonable construction must be resorted to, in order to save a statute from unconstitutionality.
    2. Statutes — construction against absurdity. — Where a statute is susceptible of two constructions, one of which would lead to an absurdity and the other wóuld not, the latter will be adopted.
    3. Statutes — construction according to intent. — In the construction of a statute, the strict literal meaning ought not to prevail where it is opposed to the intention of the Legislature.
    4. Taxation — validity op gasoline tax. — Acts 1921, p. 685, providing that persons, firms or corporations who sell gasoline, kerosene or other products to be used in propelling motor vehicles using combustible type engines over the highways of this State, shall collect from such purchaser one cent for each gallon so sold, imposes a tax upon the use of public highways, and is not invalid as imposing a tax on property in violation of the uniformity clause of the State Constitution, though the Legislature, by Acts 1921, p. 490, had previously imposed a privilege tax on automobiles according to their capacity.
    5. Taxation — power to tax use op highways. — Under Const, art. 16, § 5, granting power to the Legislature to tax privileges in such manner as may be deemed proper, the Legislature is authorized to impose a tax for State purposes on the use of the public roads for revenue purposes.
    6. Constitutional law — discriminatory tax. — Acts 1921, p. 685, § 1-4, providing that persons, firms or corporations selling gasoline, kerosene or other products to be used in propelling motor vehicles using combustible type engines over the highways of the State shall collect from such purchaser one cent for each gallon so sold, is not invalid as being arbitrary, unreasonable and discriminatory in its application in that it does not affect vehicles propelled by steam, electricity or gasoline purchased out of the State.
    7. Constitutional law — gasoline tax. — Acts 1921, p. 685, §§ 1-4, providing for collection of a tax on gasoline, kerosene and other products used in propelling motor vehicles, is not invalid as violating the due process clauses of State and Federal Constitutions.
    8. Statutes — uncertainty.—Acts 1921, p. 685, §§ 1-4, providing for collection of a tax on gasoline, kerosene and other products used in propelling motor vehicles, is not invalid for uncertainty.
    Appeal from Pulaski 'Chancery Court; John E. Martinea/w, Chancellor;
    affirmed.

      Gas Ottenheimer, Reid, Gray, Burrow <& McDonnell, for appellants.
    The act imposes a tax either upon property, the sale thereof or purchase and ownership thereof, and is therefore a tax upon the property itself, and void. 12 Wheaton 419; 197 U. S. 60; 91 U. S.'275; 73 .Sou. 193; 23 R. C. L. 36; 41 Sup. <Ot. Rep. 272; 72 Sou. 892. The title of the act should he considered in arriving at the intention of the Legislature. 234 >S. W. 45; 124 Ark. 475; 138 Ark. 131.
    The tax imposed is not a privilege tax. 32 Cyc. 390; 6 Words & Phrases, p. 5586; 23 R. C. L. p. 236. Since the act does not so expressly declare, act 606 cannot be construed as conferring a privilege for the use of the highways of the State. 70 Ark. 554; 36 Cyc. 1179. A statute is not presumed to make any alteration of the common law other than as expressly declared. 115 111. App. 31; 23 Ind. 32; 125 Ind. 176; 50 Am.. St. Rep. 334; 40 Mo. 253; 55 S. W. 92; 117 Fed. 452; 12 Ky. Law Rep. 839; 13 Ky. Law Rep. 89; 86 N. Y. 8, 49; 57 A. 910; 44 S. E. 760; 80 Ala. 219; 6 Ark. 280; 32 Ark. 59; 47 Ark. 442; 59 Ark. 344; 71 Ark. 556; 59 Ark. 81; 70 Ark. 481. The act being penal must be strictly construed. 6 Ark. 131; 13 Ark. 405; 43 Ark. 413; 59 Ark. 341; 53 Ark. 334; 56 Ark. 45; 38 Ark. 519; 79 Ark. 517; 68 Ark. 34.
    The tax construed as a privilege tax is unconstitutional, because violative of art. 2 sec. 18 of the Constitution. 85 Ark. 573; 12 C. J. 117; 70 Ark. 549.
    The act violates the due process clauses of the State and Federal 'Constitutions in that dealers are required to perform services for the State without compensation. 94 Ark. 27; 113 Ark. 149; 91 Fed. 93; 55 Fed. 26.

      ■ --The'act is void for uncertainty. 34 Ark. 224; 45 Ark. 158; 105 Ark. 280; 52 F,ed. 917; 39 Cyc. 969; 25 K. C. L. 810; 6 D. C. 75; 59 N. E. 489.

      J. 8. Utley, Attorney General, Elbert Godwin and Wm. T. Hammock, Assistants, and Geo. W. Emerson, prosecuting attorney, for appellee.
    The tax is not a property tax but rather a tax on the use of the highways by certain vehicles using gasoline.
    The legislative intention must be inferred from the plain meaning of the words used. 133 Ark. 1; some meaning must be given every word, if possible. 135 Ark. 262; and sections must be read and construed in the light of. each other. 131 Ark. 129; 140 Ark. 398. The title of an act is not conclusive of legislative intent. 138 Ark. 381.
    The act does not contravene sec. 2, art. 18, Const, because no immunity is granted to any class. The tax is laid alike on all persons similarly situated, and is a valid act. 70 Ark. .549; 85 Ark. 512.
    The due process clause of the Constitution is not violated by the act. No fundamental rights are infringed. 204 TJ. S. 241; 74 Ark. 174; 95 TJ. S. 714; 134 TJ. S. 232; 113 TJ. S. 703; 160 TJ. S. 452; 115 TJ. ¡S. 321.
    The act does not contravene sec. 2, art. 18, Const, be-Constitution of Arkansas. 99 Ark. 1; 49 Ark. 100. The Legislature has power to make such laws as are not prohibited by the Constitution. 112 Ark. 342; 43 Ark. 527; 1 Ark. 513; 4 Ark. 473; 130 TJ. S. 641; 173 TJ. S. 592. Nor does it violate the Fourteenth Amendment to the Constitution of the United States. 113 U. S. 27;. 127 U. S. 678; 128 U. S. 82.
   McCulloch, C. J.

This litigation calls for an interpretation, and involves the validity, of a statute enacted by the General Assembly of 1921, providing for the col-, lection of a tax upon the sale of “gasoline, kerosene or other products to be used by the purchaser thereof in the propelling of motor vehicles using combustible type engines over the highways.” (Acts 1921, p. 685). The validity of the tax is 'Challenged on numerous grounds, which will he discussed in the order presented in the briefs, of counsel.

The title of the statute is as follows: “An Act to levy a tax upon gasoline used in the "propelling of motor vehicles, and for other purposes.”

Section 1 of the statute, which is the one imposing the tax, reads as follows:

“That all persons, firms or corporations who shall sell gasoline, kerosene or other products to be used by the purchaser thereof in the propelling of motor vehicles, using combustible type engines, over the highways of this State, shall collect from such purchaser, in addition to the usual charge therefor, the sum of one cent (lc) per gallon for each gallon so sold.”

Section 2 requires all dealers in the sale of gasoline for use in propelling motor vehicles to register with the county clerk of their respective counties and to file a report on or before the tenth day of each month, showing the sales of gasoline, kerosene'or other products purchased for use in the propelling of motor vehicles.

Section 3 provides that all dealers who shall sell gasoline or other products upon which the tax is imposed and who shall fail to collect the same “shall be personally liable for the amount of such tax so uncollected,” and that such dealers shall pay to the treasurer of the county the sum of one cent per gallon for all gasoline sold for the purposes named.

Section 4 requires all wholesale distributers of gasoline and like products suitable for the use of propelling motor vehicles to file with the county clerk of their respective counties a statement showing the amount of gasoline and other such products sold by them to retailers. A penalty of not less than ten nor more than one thousand dollars is imposed on dealers who shall fail to account for all moneys due by them under the terms of the statute.

Another section provides that of the tax so' collected one-half shall be credited to the general road fund of the county, and the other half shall he transmitted to the treasurer, to be placed to the credit of the highway improvement fund.

It is first contended, in the attack on the validity of the statute, that it constitutes the imposition of a property tax on gasoline and the other commodities mentioned, and that it is void because in violation of the uniformity clause of the Constitution of this State. It is conceded in all quarters that if the imposition is, in effect, a property tax it is void. This calls for an interpretation of the statute for the purpose of determining the character of tax sought to be imposed.

In the outset of the discussion it is well to call attention to certain rules of interpretation for the purpose of determining the constitutionality and validity of a legislative enactment.

The Supreme Court of the United States has said that “the elementary rule is that every reasonable construction must be resorted to in order to save the statute from unconstitutionally. ” Hooper v. California, 155 U. S. 657.

In the recent case of Dobbs v. Holland, 140 Ark. 398, we announced the same rule, and we treated it as so familiar in the rules of interpretation of statutes that it was unnecessary to cite authorities in support. We have also said that if a statute is susceptible to two constructions, one of which would lead to an absurdity and the other not, the latter would be adopted. State v. Jones, 91 Ark. 5. There are many decisions of this court announcing and adhering to those rules and giving them application under a variety of circumstances. Hartford Fire Ins. Co. v. State, 76 Ark. 303; Pryor v. Murphy, 80 Ark. 150; Bowman v. State, 93 Ark. 168; Garland Power & Dev. Co. v. State Board of R. R. Incorporation, 94 Ark. 422; Hughes v. Kelley, 95 Ark. 327; Leonard v. State, 95 Ark. 381; State v. Handlin, 100 Ark. 175; Snowden v. Thompson, 106 Ark. 517; State v. Trulock, 109 Ark. 556.

In the case of State v. Trulock, supra, we quoted, with approval, the following statement on this subject by Mr. Sutherland:

“The mere literal construction of a section in a statute ought not to prevail if it is opposed to the intention of the Legislature apparent by the statutes; and if the words are sufficiently flexible to admit of some other construction, it is to be adopted to effectuate that Intention. The-intent prevails over the letter, and the letter will, if possible, be so read as to conform to the spirit of the act.” 2 Lewis’ Sutherland, Statutory Construction, § 376.

When the interpretation of this statute is approached in conformity with the rules thus stated, it is easy to discover in the language an intention on the part of the lawmakers to impose a tax, not on property, but on a privilege, so as to bring the enactment within constitutional limits. The tax is not imposed on the sale or purchase of gasoline, nor on the gasoline itself, nor even on the use of the gasoline. On the contrary, the final and essential element in the imposition of the tax is that the gasoline purchased must be used in propelling a certain kind of vehicle over the public highways. In the final analysis of this language it comes down to the point that the thing which is really taxed is the use of the vehicle of the character described upon the public highway, and the extent of the use is .measured by the quantity of fuel consumed, and the tax is imposed according to the extent of the use as thus measured.

If it had been intended merely to tax the gasoline or its use, it would have been wholly unnecessary to describe the character of the use or the place where it was to be used, and the fact that the lawmakers incorporated these elements in laying the bases of the taxation shows unmistakably that it was intended to impose a tax upon the use of the public hig’hways by the method described. It is clear that the tax is not imposed on the seller nor upon the gasoline while in his hands, and this of itself makes it manifest that there was no intention to levy a tax upon the sale of gasoline nor upon the gasoline itself.

“In construing a statute,” said this court in State v. Embrey, 135 Ark. 262, “some meaning should be given to every word contained therein, if possible.” ' It is our duty, therefore, to give some meaning and effect to that part of the statute which prescribes the use of the gasoline in propelling an automobile along the highway as the final test of the basis of the tax, and especially is it our duty to do this when the constitutionality of the statute depends upon giving some effect to that feature of it.

Counsel for appellants insist that, even if this is not a direct tax on the gasoline itself, it is, at least, a tax on the use of the gasoline, and that this constitutes a tax on the property itself, for the reason that it is a tax on the only available use to which the article is susceptible. In other’ words, they invoke the rule' that has been announced in some quarters, to filie effect that'a tax levied upon the only available use to which.an article is susceptible is, in effect, a tax on the article itself. 26 R. C. L. 236.

It may be conceded that a tax on gasoline for its only available use would, in effect, be a tax on the commodity itself, but such might not be the case as to other articles, and we are unwilling to subscribe unqualifiedly to the doctrine that a tax on the only available use of an article is, in every instance, a tax on the article itself. In fact, this court repudiated the doctrine in the case of Fort Smith v. Scruggs, 70 Ark. 549, where Judge Riddick, speaking for the court, said:

“Counsel say that a tax on the use of an article is a tax on the article itself. While this may be true of a piano, bedstead, or cooking-stove, the.use of which involves no injury or detriment to the public or its property, as to wheeled vehicles it is different, for they are made to be used upon roads and streets. The streets belong to the public, and are under the control of the Legislature, whose province it is to enact laws for their improvement and repair. The chief necessity for keeping improved streets is that they may be used for the passage of wheeled vehicles, and the wear of the streets caused by the passage of such vehicles over them makes necessary constant and expensive repairs. For this reason, no doubt, the Legislature considered it to be equitable and just that owners of such vehicles should, in addition to the general tax upon their property, pay something for the privilege of using the streets as driveways, the amount paid to go towards keeping the streets in good repair. This is what the Legislature attempted to do.”

But, as we have already said, this is not a tax on gasoline, but on the use on the public highway of the vehicles mentioned, and the case comes, therefore, within the doctrine announced by Judge Riddick in the Scruggs case, supra, that the tax on the article used does not constitute a tax on the article itself, for the privilege is not upon the article but upon the use of it on the public highway. It is, in effect, the use of the public highway that is taxed, and not the use of the article itself.

Among other reasons stated by counsel for appellants in the argument why this statute should not be interpreted as imposing a tax on automobiles used on the public highways, is that such a tax is imposed under another statute, and that a statute amending the former one and increasing the amount of taxes was passed by the Legislature and approved by the Governor only a few days before the enactment of the statute now under consideration. Acts 1921, p. 490. This is indeed a circumstance of some value in arriving at the intention of the Legislature, but it is by no means conclusive, for the other statute merely levied a tax on the privilege according to the capacity of the car, whilst the present statute, as now interpreted, imposes a tax on the privilege according to the extent of the use of the car. It is not unreasonable to suppose that by the former statute the lawmakers intended to impose a minimum privilege tax, laid according to the capacity of the ear, and by the statute now under consideration they intended to impose an additional tax according to the extent of the use of the car on the public highway. It is, at least, our duty to ascribe to tbe lawmakers such an intention as is compatible with the Constitution of the State, by which they were bound, and to which, we must presume, they intended to conform.

Our conclusion, therefore, is that, under a fair interpretation of the statute, it imposes, not a property tax, but a tax upon the privilege of using automobiles on the public highway.

The validity of the tax is questioned, even as a privilege tax, on the ground that the Legislature had no power to impose it as a State tax for revenue purposes.

The Constitution provides (sec. 5, art. XVI) “that the General Assembly shall have power from time to time to tax hawkers, peddlers, ferries, exhibitions and privileges in such manner as may be deemed proper.” It is contended that this provision of the Constitution is a limitation upon the taxing power of the State for revenue purposes, and that the power to tax is limited to the subjects specifically mentioned — that the use of the word “privileges” must be construed, under the doctrine of ejusdem generis, to relate only to the subjects which precede its use. Counsel rely, for this contention, upon .the decision of this court in Washington v. State, 13 Ark. 752, under a provision of the Constitution of 1836 almost identical with the provision on this subject in the present Constitution. We do not think that the case just cited decides what counsel contend that it does. The substance of that decision is that the constitutional provision mentioned'is a restriction upon the power of taxation of privileges, and that it does not authorize taxation upon a privilege which was a common right of every citizen.

In the later case of Baker v. State, 44 Ark. 134, Chief Justice Cockrill summarizes the effect of the ruling in the Washington case, supra, as follows:

“We do not understand this case, reading it all together, to limit the power of legislation for State purposes to the taxation of such privileges as were technically known as such at the common law, notwithstanding an expression to that effect occurs in the opinion. We think the Legislature is not restrained by anything in the organic law from laying a tax on the franchise of a corporation, and the reasoning of the learned judge who delivered the opinion in Washington’s case, supra, leads to that conclusion. ’ ’

We understand the effect of this decision to be that the restriction is not to the privileges specifically mentioned in the Constitution, nor privileges which were “technically known as such at the common law,” but that the restriction relates merely to privileges which were matters of common right. This being true, there is nothing in the provision of the Constitution referred to which prohibits taxation for State purposes of the use of the public roads. While the public highways are for the common use of all, they belong to the public, and it is within the power of the Legislature either to regulate or to tax the privilege of using them. This power was declared in express terms by Judge Riddick in the Scruggs. ease, supra.

Again it is argued that the statute, treating it as imposing a privilege tax, is arbitrary and unreasonable in that it discriminates against the users of certain kinds of cars, while exempting from the burden of taxation users of other kinds of cars, and that it also exempts -cars propelled by the use of gasoline not purchased in this State. Illustrations are given of the discriminatory effects of the statute in the fact that it includes only motor vehicles using combustible type engines, whereas there are certain motor cars in use that are propelled, some by electricity and some by steam; also that residents near the borders of the State may conveniently purchase gasoline in a bordering State for use in a car propelled along the highway in this State.

It is true that, under the terms of the statute, a motor car propelled otherwise than by the explosive type of engine escapes the taxation imposed by the statute, and it must also be conceded that evasions of the law in the manner indicated in the argument of counsel are possible, But this does not render the statute arbitrarily discriminatory in a legal sense.

We have often said that complete uniformity in matters of taxation is unattainable, and it is not essential to the validity of a tax, either upon property or upon privilege, that it be absolutely free from inequalities or discrimination. The lawmakers have some discretion, even in legislating with reference to the power of taxation as restricted by the terms of the Constitution, and they may determine the scope and extent of the exercise of the taxing power, and a mere incidental inequality or discrimination does not affect the validity of the statute.

The Supreme Court of the United States, in the case of Ozan Lumber Co. v. Union County National Bank, 207 U. S. 251, speaking on a kindred subject, said:

“It is almost impossible, in some matters, to foresee and provide for every imaginable and exceptional case, and a Legislature ought not to be required to do so at the risk of having its legislation declared void, although appropriate and proper upon the general subject upon which such legislation is to act, so long as there is no substantial and fair ground to say that the statute makes an unreasonable and unfounded general classification, and thereby denies to any person the equal protection of the laws. In a classification for govermental purposes there cannot be an exact exclusion or inclusion of persons and things.”

The same principle has been announced and applied by this court in Williams v. State, 85 Ark. 464; St. L. I. M. & S. Ry. Co. v. State, 86 Ark. 518; St. L. I. M. & S. Ry. Co. v. State, 102 Ark. 205, and State v. Kansas City & Memphis Ry. & Bridge Co., 117 Ark. 606.

The fact that there may be evasions of a taxation statute does not affect its validity, for all such statutes are open to evasions. If the general classification is not discriminatory, then mere incidental discriminations or opportunities for evasions do not affect its validity.

It is next contended that the due process clause of the Constitution of this State and of the United States is violated by the requirement laid upon the dealers in gasoline to collect and pay the tax. It must be remembered that the tax is not laid on the sale of the gasoline, nor upon the business of the dealer. The dealer is not required to pay the tax, but to collect it, keep and present an account thereof and pay it over to the'county treasurer. The purpose of the statute is two-fold, namely, to impose a tax upon the purchaser of gasoline for the use of the car, and to regulate the business of the dealer by requiring him to collect the tax and pay it over to the county treasurer. It is certainly within the power of the Legislature to regulate the business of selling gasoline, and it is not an unreasonable regulation, for it does not involve the payment of any fee, nor the pérformance of any unreasonable task.

Counsel base their contention in this respect upon decisions, particularly those of the Supreme Court of the United States, holding that the validity of a regulation requiring the collection of a tax upon corporate stock at the source, that is, through the corporation issuing the stock, is dependent upon the fact that a lien is given to the corporation against the stock in the hands of the holder — in other words, that there must be some mode of reimbursement provided before the duty can be imposed upon a person other than the taxpayer to collect the tax. Clement National Bank v. Vermont, 231 U. S. 120; New York v. Purdy, 231 U. S. 373; First National Bank v. Commonwealth, 9 Wall. 353; First National Bank v. Chehalis County, 166 U. S. 440; Citizens’ National Bank v. Kentucky, 217 U. S. 443; National Safety Deposit Co. v. Stead, 232 U. S. 58.

That principle is not ignored in the provisions of the statute now under consideration, for the dealer has ample opportunity to reimburse himself in advance bv the collection of the tax before the commodity is delivered. He has the power to compel obedience to the law by refusing to sell the gasoline unless the tax is paid, and the dealer may adopt reasonable means of ascertaining the real purpose of the purchaser of the article. Of course, there may be evasions, and it cannot always be definitely ascertained what the purpose of the purchaser of the gasoline is, so as to determine whether or not he is attempting to evade the law, but, as before stated, these inherent defects in all such statutes do not affect their validity.

The presumption must be indulged that the vast majority of people who purchase gasoline for use in motor vehicles will obey the law rather than attempt to evade it, and the fact that the few may evade the law does not afford reasons for striking it down. There is scarcely a tax law on the statute books of this or any other State that is not evaded in exceptional instances.

Finally, it is argued that the law is vague and uncertain — so much so that it is incapable of enforcement. The interpretation which we have given to the statute, and which, we think, is a fair and reasonable one, relieves it from this charge of uncertainty, for we think that it means what we have stated in this opinion, and that it can be readily understood.

The fact that there may be a difference of opinion as to the meaning of the language of a statute does not render it too vague or uncertain to be enforceable. It is not infrequent that statutes have to be construed by the courts before laymen, or even lawyers, have a settled view as to the proper interpretation, but a statute which is fairly susceptible to definite interpretation is not too vague for enforcement.

Our conclusion therefore upon the whole case is that the statute is valid, and the decree is therefore affirmed.


author: Woon, J.

text:
    Norman v. S. L. Joseph Mercantile Company.
    Opinion delivered April 10, 1922.
    1. Mortgages — insufficiency of description. — Mortgages of cotton described as “6 acres of cotton grown on the John Moore lease,” which land consisted of 12 acres, held void for uncertainty of description, as it furnished no description from which it could be ascertained what particular 6 acres were intended.
    2. Mortgages — notice.—Persons purchasing personal property with actual notice of a mortgage thereon take free from such mortgage where the description in the mortgage does not identify the property intended to be mortgaged, as the purchaser is required only to take notice of the description in the recorded mortgage.
    Appeal from Greene Circuit Court; D. G. Beau-champ, special judge;
    affirmed.

      Jeff Bratton, for appellant.
    Where a mortgage covers an undivided interest in a whole crop, it is not necessary that it designate the manner in which the interest .conveyed should be separated from the balance. 11 C. J. 470; 48 Ark. 293.
    The notice was sufficient. 51 Ark. 414; 23 Ark. 744; 58 Ark. 91.

      Block S Kirsch and Fuhr & Futrell, for appellee.
    The description in the mortgage was void for uncertainty. 41 Ark. 70; 43 Ark. 350; 11 O. J. 470 ; 31 Am. Rep. 652.
   Woon, J.

One W. C. Rasberry executed to appellant a mortgage in which the property mortgaged was described as “six acres of cotton grown on the John Moore lease.” Rasberry and one John Moore owned an undivided one-half interest on cotton that was grown on twelve acres of land designated as the “John Moore lease.” The S. L. Joseph Mercantile Company, a corporation, and Bertig Bros., a partnership, purchased of Rasberry cotton owned by Rasberry that was grown on the John Moore lease. They purchased the cotton after the appellant had told them that he had a mortgage on Rasberry’s cotton. The appellant instituted separate actions against the appellees to recover of them respectively the' amounts paid by them to Easberry for the cotton. The causes were consolidated for trial, and by consent of parties were tried by the court sitting as a jury. The court, upon the facts, rendered judgment in favor of the appellees, from which is this appeal.

The mortgage was void because of uncertainty in the description. It furnishes no. data by which it can be ascertained what particular six acres of cotton grown on the John Moore lease of twelve acres was intended. “A mortgage covering crops growing on a certain number of acres in a larger tract, without specifying the particular part intended, is void for uncertainty. ’ ’ 11 Cor. Jur. 470; Dodds v. Neal, 41 Ark. 70; Krone & Co. v. Phelps, 43 Ark. 350.

As between the appellant and the appellees, the latter only had to take notice of the description in the mortgage that was on file in the office of the circuit clerk of Greene County. Krone & Co. v. Phelps, supra. The judgment is correct, and it is therefore affirmed.


author: Hart, J.

text:
    McGregor v. Echols.
    Opinion delivered April 10, 1922.
    1. Vendor and purchaser — damages for breach of contract.— The proper measure of damages for breach hy the purchaser in an executory contract for the sale of land is the difference between the contract price and the market value at the time of the breach, less the portion of the purchase price already paid.
    2. Vendor and purchaser — incumbrance no defense when. — It is no defense to an action by the vendor on an executory contract of sale that at the time the contract was executed the property was incumbered hy a vendor's lien, if the incumbrance was removed before the time for completing the purchase.
    Appeal from Woodruff Circuit 'Court, Southern District; J. M. Jackson, Judge;
    reversed.
    STATEMENT OR RAOTS.
    This was a suit by a vendor against his vendee for the breach of an executory written contract for the sale of land.

      On the 28th day of April, 1920, D. H. Echols entered into a written contract whereby he agreed to sell to J. D. McGregor about 630 acres of land in Woodruff County, Ark., for the sum of $50,000. The sum of $500 was paid to Echols by McGregor at the time the instrument was signed, and it was provided that McGregor might pay $9,500 in cash on January 1, 1921, and execute eight promissory notes for $5,000 each for the deferred payments. The instrument also provided that Echols should remain in possession of the land and be entitled to the rents thereof for the year 1920.
    On January 1, 1921, D. H. Echols executed a warranty deed to said land to Joe D. McGregor and tendered the same to him and demanded the payment of $9,500 from him and the execution of his promissory notes for the balance of the purchase money. McGregor refused the tender and declined to carry out the contract on his part. Echols then instituted this suit against him in the circuit court to recover damages.
    In addition to the above facts, it was shown at the trial that Echols had purchased the land from Dr. R. R. J ames for $40,000. He paid $10,000 in cash, and Dr. James retained a lien on the land for the balance of the purchase money. On the 1st day of January, 1921, Dr. James executed an instrument in writing in favor of D. H. Echols whereby he agreed to accept the purchase money notes of Joe D. McGregor to the amount of his vendor’s lien and to release his vendor’s lien on said land. There were about $1,600 or $1,700 worth of mules and farming implements that went with the sale of the place. McGregor never took possession either of the land or of the personal property.
    McGregor offered to prove that the market value of the land on the 1st day of January, 1921, was more than $50,000. The court excluded'this .testimony and instructed the jury to return a verdict for the plaintiff in the sum of $7,800.
    From the judgment rendered the defendant has duly prosecuted an appeal to this court.

      Mathis é Trice and G. F. Greenlee, for appellant.
    The court erred in directing a verdict for the plaintiff.
    The measure of damages for breach of contract to purchase land is the difference between the price agreed-to be paid for the land and its real value at the time the contract is broken. Sutherland on Damages, vol. 2, p. 196; 6 Gray 25; 7 M. & W. 474; 127 Iowa 545; A. & E. Ann. Cas. vol 4, p. 789; 2 Warvelle on Vendors, sec. 937; 67 Am. Dec. 278; 2 Sutherland on Damages, sec. 1758; Wood’s Mayne on Damages, sec. 243; Hall on Damages, p. 366; 98 Iowa 242; 52 L. Rep. Ann. 258; 51 N. H. 167; 12 Am. Rep. 76; 63 N. H. 171; 10 App. D. C. 379 ; 40 Ind. 466; 16 Abb. Pr. 133; 66 Am. Dec. 394; 62 Pa. 148; 51 N. H. 167; 39 €yc. 2114; 47 Ark. 519; 2 Ark. 397; 6 Wheat. 109; L. R. 3 Q. B. 1 L. R. 4 Q. B. 659; 40 N. Y. 59; 65 Me. 87; 58 Mo. 32; 17 Amer. Rep. 678; 78 111. 222; 20 Am. Rep. 261; 55 Ark. 376; 70 Ark. 39; 92 Ark. Ill; 79 Ark. 338; 40 Fed. 677; 55 Ark. 199.
    A purchaser of real estate is entitled to a marketable title free from incumbrance and defects, unless he expressly stipulates to accept a defective title. 63 Ark. 548; 66 Ark. 436; 85 Ark. 289; 11 Ark. 75; 121 Ark. 482; 97 Ark. 397; 108 Ark. 490; 87 Ark. 490; 126 Ark. 420; 103 Ark. 425.

      Roy D. Campbell, for appellee.
    The court was correct in rendering judgment for the defendant. Where a party agrees to purchase real estate at a stipulated price and subsequently refuses to perform his contract, the loss in the bargain is the measure of damages. Sutherland on Damages, p. 38; 33 O. O. A. 550; 178 H. S. 1; 52 L. R. A. 258.
    Whenever a contract is breached the party to the contract that is without fault is entitled to his action for any damage he has sustained. 80 Ark. 232; 13 Oyc. 53; 78 Ark. 336; 97 Ark. 533; 80 Ark. 288'; 91 Ark. 427; 95 Ark. 363; 78 Ark. 336; 69 Ark. 219; 105 Ark. 433; 111 Ark. 485; 122 Ark. 192; 140 Ark. 78; 145 Ark. 182; 122 Ark. 189; 103 Ark. 584.
   Hart, J.

(after stating the facts). The court erred in instructing a verdict for the plaintiff. The plaintiff purchased the land for $40,000 and sold it to the defendant for $50,000. The defendant paid $500 at the time the written contract fox' the sale of the land was executed. There was about $1,600 or $1,700 of personal property that was to go with the land. By deducting the $500 paid when the contract was'executed and the value of the personal property in the sum of $1,700 from $10,000, the estimated profits of Echols, the court arrived at the sum of $7,800, for which the jury was directed to return a verdict in favor of the plaintiff.

The court did not adopt the proper measure of damages. It is true that McGregor committed a breach of the contract by failing to accept the deed tendered by Echols and to carry out his part of the contract, but this left Echols in possession of the land and of the personal property. In such cases the rule as announced by this court, which is in accord with the weight of authority on the question, is to the effect that, upon the breach by the vendee of an executory contract for the sale of land, the vendor may have an action at law for damages, and his measure of damages is the difference between the contract price of the land and its market value at the time of the breach, less the portion of the purchase price already paid. Fears v. Merrill, 9 Ark. 559; Old Colony Railroad Corporation v. Evans, 6 Gray (Mass.) 25; Porter v. Travis, 40 Ind. 556; Hodges v. Kowing, 58 Conn. 12; Pritchard v. Mulhall (Iowa) 4 Ann. Cas. 789; Muenchow v. Roberts, 77 Wis. 520, and Hogan v. Kyle, (Wash.) 35 Pac. 399.

In an action by the purchaser of land for a breach of the contract to convey, this court has also laid down the rule that the measure of damages is the difference between the contract price and the value of the land when the breach occurred, with interest on such difference. Kempner v. Cohn, 47 Ark. 519.

In Old Colony Railroad Corp. v. Evans, (Mass.) 6 Gray, 25, 56 Am. Dec. 394, the rule of damages is clearly stated as follows: “In actions against a vendee on a contract for the purchase of real estate, we had supposed it to be a well settled rule that when a party agreed to purchase real estate at a certain stipulated price, and subsequently refuses to perform his contract, the loss in the bargain constitutes the measure of damages, and that is the difference between the price fixed in the contract and the salable value of the land at the time the contract was to be executed.’’

It follows that the court erred in excluding the testimony offered by the defendant 'as to the market or salable value of the land at the time he breached the contract and in directing a verdict for the plaintiff.

It is also insisted by counsel for the defendant that the plaintiff is not entitled to recover, because Dr. James had a lien on the land for $30,000. The record showed that Dr. James executed an instrument in writing releasing his vendor’s lien for the unpaid purchase money upon the delivery to him of the notes to McGregor for a like sum. The general rule is that where a contract is entered into in good faith, it is not necessary that the vendor be actually in the situation to perform it at the time it is entered into, provided he be able at the proper time to place himself in that situation. Incumbrances on the land when the contract is made will form no ground of objection thereto if removed before the time of completing the purchase. 39 Cyc. 1931-1932; Townsend v. Goodfellow, (Minn.) 41 N. W. 1056.

The record shows in the present case that the incumbrance was removed by the date that Echols was required to execute a deed to the land to McGregor. Therefore, the contention of the defendant on this point is not well taken.

For the error in directing a verdict for the plaintiff, as indicated in the opinion, the judgment must be reversed and the cause remanded for a new trial.


text:
    Augusta Cooperage Company v. Bloch.
    Opinion delivered April 10, 1922.
    1. Equity — affording complete relief. — Where, to a complaint at law, defendant tendered an equitable issue, equity will assume jurisdiction and retain it for the purpose of disposing of all the issues raised by the pleadings.
    2. Reformation of instruments — sufficiency of evidence. — In a suit to reform an instrument, the evidence to establish a mutual mistake must be clear, unequivocal and convincing.
    3. Equity — administering complete relief. — Where plaintiff in an action at law sought the recovery of treble damages for cutting timber, under Crawford & Mioses’ Dig., § 10320, and the defendant had the. cause transferred to equity, the chancery court, having thus acquired jurisdiction and having determined that plaintiff was entitled to treble damages under the statute, should have awarded such damages without sending the case back to the law court.
    4. Trespass — unintentional wrong — treble damages. — Where the cutting of elm timber by the defendant on the land of plaintiff was the result of inadvertence and mistake and not a wilful wrong, plaintiff could recover only the value of the property when taken.
    5. Appeal and error — conolusiveness of chancellor’s finding.— Where a decree of the chancery court is sustained by the preponderance of the evidence, the cause will not be reversed, though erroneous reasons for the decree were given by the court.
    Appeal from Jackson 'Chancery Court; Lyman F. Feeder, Chancellor;
    affirmed.

      J. F. Summers, for appellant; Geo. B. Webster, of counsel.
    Written instruments may be reformed on the ground of mutual mistake, and proof of such mistake may be established by parol evidence. 98 Ark. 10; 71 Ark. 614; 98 Ark. 23; 144 Ark. 23.
    The elm timber was not wilfully cut, but was done in good faith, and the value of the property when first taken must govern. 87 Ark. 80.
    The only competent evidence of value of the timber was by actual sales, which fixed the market price. 92 Ark. 297. •

      Gustave Jones, for appellee.
    The case was improperly transferred to the chancery court, to escape the award of treble damages. This court has held, however, that in cases originating in chancery treble damages can be awarded.
    Reformation of a contract, on account of the mistake of one of the parties, will not be granted. 99 Ark. 480; 83 Ark. 131; 74 Ark. 336; 89 Ark. 668. To justify reformation, proof of mistake must be established not merely by a preponderance of the evidence, but by proof that is clear, unequivocal and decisive. 101 Ark. 46; 108 Ark. 503; 104 Ark. 475; 132 Ark. 227; 94 Ark. 621; 120 Ark. 326; 111 Ark. 205.
    The trespass was wilful, and treble damages should have been awarded. 69 Ark. 302; 87 Ark. 80; 96 Ark. 87; 105 Ark. 157.
    The question of value is one entirely of opinions of witnesses and does not require expertness on the subject. 137 Ark. 592; 130 Ark. 547.
   Woon, J.

This action was instituted by the appellees against the appellant in the circuit court to recover damages. The appellees alleged that they were the owners of certain tracts of land in sections 22 and 34 in township 10 north, range 3 west, in Jackson County, Arkansas, and that appellant wilfully trespassed upon these lands by cutting and removing therefrom elm timber to the amount of 290,000 feet, which appellant converted into 870,000 staves of the value of $17,400, for which appellees prayed judgment.

The appellant answered denying all the material allegations of the complaint and set up that it had purchased of the appellees all the elm timber on the sections mentioned, and that, in a deed executed by the appellees to the appellant, conveying the different kinds of timber the appellant had purchased from the appellees, through mutual mistake the elm timber was omitted. That the appellant, knowing that it had purchased the elm timber and believing that it was included in the deed, proceeded to cut and remove, along with the other timber, 123,000 feet of elm timber from section 22. Appellant denied that it cut and removed any elm timber from section 34. The appellant also alleged that all of the elm timber cut except 33,000 feet was cut more than three years before the commencement of the action and pleaded the statute of limitations to all except 33,000 feet. The appellant made its answer a cross-action against the appellees, and asked that the cause be transferred to equity and that the timber deed be reformed so as to include the elm timber in section 22. The appellees answered denying the allegations of the cross-complaint. The appellant’s motion to transfer to equity was granted.

The allegations of appellant’s cross-complaint stated a cause of action which entitled appellant to have the cause transferred to the chancery court. The appellant sought reformation of the deed under which it claimed the right to cut the timber in controversy. This gave the chancery court jurisdiction, and, having entertained jurisdiction for that purpose, the court ruled correctly in retaining the cause and in disposing of all the issues involved.

1. The primary question in the case is whether or not the appellees sold to the appellant the elm timber as alleged in appellant’s cross-complaint. The appellant contends that the elm timber growing on the tracts mentioned in sections 22 and 34 was sold by the appellees and purchased by the appellant, and this timber should have been mentioned specifically, along with the other timber, in the deed evidencing the transaction; that it was the intention of the parties that this should be done, and that, through mutual mistake of parties in not calling the attention of the draftsman of the deed to this fact, the elm timber was not included therein.

On this issue, a witness who was appellant’s superintendent at the time of the alleged sale of timber, testified that he made a survey of the timber before the purchase, and that it.was his understanding that appellant was to purchase the gum timber on section 34 and all the soft woods on section 22 suitable for cooperage stock, which included gum, elm, maple, hackberry and sycamore.

Another witness (Massey) for the appellant testified that when he looked over the timber with a view to purchase same J. H. Keel, one of the appellees (who was representing the other appellees), said that appellant would only get the gum species from section 34, but on section 22 appellant would get everything except the oak and hickory. In other words, appellant was to get the soft wood species including gum, elm, maple, hackberry, sycamore, cottonwood, ash and cypress. This witness stated that he was present at Newport when the contract was made for the timber and heard the conversation relative to the contract betw'een the parties, that is, between Lyons and Keel representing the appellees, and Heckart and Diamant representing the appellant. Concerning this conversation the witness said: “Mr. Diamant made the remark, ‘I suppose you all know or understand the purpose of this meeting.’ Mr. Lyons said, ‘Yes.’ Mr. Diamant said, ‘I understand that Bloch, Lyons and Keel want to sell the gum on No. 34,’ having a list there he had prepared, with the gum and elm and different species, and went over the ash, hackberry, maple, etc., on 22, and said, ‘Is that right?’ ” He went ahead with his conversation with Mr. Lyons and he said, “Have you a price?” and Mr. Lyons said, “Yes.” Witness “did not go with them when they went to draw the contract. ’ ’

Mr. Lyons testified concerning the transaction substantially as follows: Diamant, Heckart, Keel and witness met at the hotel, and Diamant told witness that he would like to buy the gum timber on section 34 and section 22 which was owned by Bloch, Lyons, and Keel. He wanted to know what I wanted for it, and I told him I wanted $13,000 cash. They agreed upon the consideration and terms of payment and went over to Joe Stay-ton’s office, an attorney, and gave the details to Mr. Stay-ton. After Mr. Stayton had started writing the contract for the gum on the two sections, something came up about the hackberry, sycamore and tnpelo gum. Tupelo gum was not mentioned at first — just the main gum. As there was very little of this timber on these tracts, we decided that we would include those in this price, for it didn’t amount to anything from the amount of timber that was standing. The written contract exhibited with the pleadings is absolutely the contract made between the Augusta Cooperage Company and Bloch, Lyons and Kjeel. It specifies each class of timber specifically as to what they were to get. The witness was asked the following question: “Was there at any time any agreement, understanding or intention to convey to them the elm and ash?” Ans. “No sir, we were under the impression at that time that we had a contract out upon the ash and elm, and that we could not sell it if we wanted to.”

J. H. Keel, one of the appellees, testified substantially corroborating the testimony of Lyons. He stated that while Mr. Stayton was drawing the contract the question was asked whether the appellees could put in the ash and the elm with the other varieties of soft wood mentioned, and witness stated, “We couldn’t sell the ash and elm. We couldn’t let those two go. We could put in the other timber.” The reason the witness so stated was because his recollection was “that they had a contract out for both the ash and the elm with other people, which contract had not expired.”

Wé need not pursue this issue further, for it will be observed that there was a sharp conflict in the testimony as to whether or not the appellees sold to the appellant the elm timber, and as to whether or not such timber was omitted from the deed evidencing the transaction through mutual mistake. In view of such conflict in the testimony,, it is apparent that the appellant has not proved by a preponderance of the evidence that the elm timber was sold and that it was not included in the deed through mutual mistake of the parties. The appellant therefore falls far short of establishing a cause of action for a reformation of the deed. In one of our recent cases upon this subject we said: “Equity will not reform a deed on account of mistake in description unless the proof of such mistake be clear, unequivocal and convincing, nor unless the mistake is clearly shown to have been common to both parties. While there must be something more than a mere preponderance of evidence to show a mutual mistake, the rule does not require that the proof be undisputed. The requirements of law are fully met when the testimony tending to show a mutual mistake is unequivocal and clear, that is, such as to satisfy and convince the court that the mistake was made and that the instrument was so drawn as not to express what the parties to the contract intended.” Beneaux v. Sparks, 144 Ark. 23. Other cases are Greenhaw v. Cohn, 74 Ark. 336; Varner v. Turner, 83 Ark. 131; Cherry v. Brizzolara, 89 Ark. 668; McKnight v. Wilmington, 94 Ark. 621; Wales-Riggs Plantation v. Banks, 101 Ark. 461; Tedford Auto Co. v. Thomas, 108 Ark. 503; Eureka Stone Co. v. Roach, 120 Ark. 326; Hoffman v. Rice-Stix Dry Goods Co., 111 Ark. 205; Welch v. Welch, 132 Ark. 227; Waddell v. Bowdre, 151 Ark. 474.

2. The trial court found that the trespass was wilful, but refused to award treble damages, citing Cooley v. Lovell, 95 Ark. 567; Hendricks v. Black, 132 Ark. 473. These were cases originating in courts of chancery to enforce penalties, and we held that ‘ ‘ courts of equity will not aid in the enforcement of penalties.” But, where one goes into a court of law to recover treble damages awarded by the statute (§ 10320, C. & M.) and the defendant in the action asks and succeeds in having the cause transferred to equity, the chancery court, having acquired jurisdiction and having determined on trial of the issues that the plaintiff is entitled to treble damages under the statute,.may follow the law and award such damages without sending the cause back to the law court.

But while the appellant’s alleged cause of action for reformation of the deed breaks down under the above rule, it does not follow from the above facts that the trespass was wilful, and that the. appellees are entitled to treble damages. On the- contrary, while the above testimony does not prove clearly and unequivocally that it was the intention of the parties to- sell the elm timber and to have the same included in the deed, it occurs to us that it was sufficient, taken in connection with other testimony in the record, to show that the agents and servants of appellant in cutting the elm timber' were not wilful trespassers. The testimony of appellant’s agent, Massey, who was in charge of appellant’s logging operations during the period covered by these alleged trespasses, shows that he believed that-the appellant had purchased the elm timber and had the right to cut and remove the same. Although he was mistaken in this belief, nevertheless, the circumstances detailed by him were such as to warrant the conclusion that he honestly entertained such belief, and therefore was acting in good faith in cutting the elm timber, believing that he had a right to do so.

In U. S. v. Flint Lumber Co., 87 Ark. 80, we held, quoting from Pine River Lbr. Co. v. U. S., 186 U. S. 279, and Woodenware Co. v. U. S., 106 U. S. 432, as follows: “Where the trespass is the result of inadvertence or mistake and the wrong was not intentional, the value of the property when first taken must govern.” Also citing U. S. v. Anthony Ry. Co., 192 U. S. 524. Therefore, the court ruled correctly in refusing to allow appellees treble damages, although its ruling was grounded upon an erroneous reason.

3. The next question is, what was the quantity and value of the elm timber cut by the appellant? The trial court found that the appellant, during the years 1917, 1918 and 1919, had cut 128,218 feet of elm timber from the land of the appellees and found that the value of this timber was $2,412.07, which was about $19 per thousand feet. This issue as to the quantity and value of the elm timber cut is purely one of fact. The testimony bearing upon this issue is quite voluminous, and it could serve no useful purpose as a precedent to set it out and discuss it in detail.

After a careful consideration of it we have reached the conclusion that the preponderance of the evidence shows that the stumpage value of the elm-timber would amount to the sum at least of $2,412.07, the amount of the decree of the trial court. Even though the trial court gave erroneous reasons for its findings and decree, nevertheless, we find that the amount of the decree based on the stumpage value of the timber was justified by a preponderance of the evidence in the record.

There is no error which should cause a reversal of the decree of the trial court, and the same is therefore affirmed.


text:
    Vaughan v. Humphreys.
    Opinion delivered April 10, 1922.
    1. Insurance — attorney’s pee as part op recovery. — The attorney’s fee, which the statute permits to be recovered from an insurance company upon its failure to pay the loss after demand made, is a penalty given to reimburse the policy holder for expenses incurred in enforcing the contract of indebtedness, and is taxed as costs in the case, -and therefore is part of the recovery against the insurance company.
    2. Attorney and client — percentage op recovery. — Where an attorney’s contract, gave him certain percentage of the recovery in a certain action against an insurance company, and the client recovered from the company, in addition to the amount of the policy, a sum for an attorney’s fee, the attorney is entitled, not to the entire fee so recovered, but only to the stated percentage of the attorney’s fee in. addition .to his percentage on the balance of the recovery.
    3. Attorney and client — right to costs and extra allowance.— As between an attorney and his client, as well as between the client and third persons, a judgment of costs, whether consisting only of those items taxable as of course, or of an extra allowance as well, belongs to the client.
    Appeal from Prairie Circuit Court, Northern District; George W. Clarice, Judge;
    affirmed.

      Brundidge & Neelly and Emmet Vaughan, for appellant.

      Mann & Mann, for appellees.
   Hart, J.

This appeal involves the construction of a contract for compensation between an attorney and his Client.

Appellant entered into a contract in writing with appellees to bring suit on a life insurance policy in the sum of $5,000, and the clause of the contract providing for the compensation of the attorney is as follows:

“The parties of the second part (appellees) hereby agree to pay the parties of the first part (appellant) as compensation for legal services, in the event they recover of the Kansas City Life Insurance Company for' said policy, the sum of forty per. cent, of recovery, the said parties of the first part accepting a fee contingent upon recovery, and agree to payor advance all.costs of the suit that may become necessary- to be paid, and the parties of the first part agree that no liability shall attach either to the guardian or to Maggie Kidout on any account whatever.”

Suit was brought against the insurance company, and judgment was rendered in favor of appellees in the sum of $5,000 and the accrued interest. The attorney’s fees were fixed by the court at $500. The circuit court allowed the attorney forty per cent, of the whole amount recovered by the plaintiffs in the suit against the insurance company. This included the face of the policy, interest, and the penalty and attorney’s fees allowed under the statute.

It was the contention of the attorney that he was entitled to the whole of the attorney’s fees allowed in the suit against the insurance company and forty per cent, of the other items. The attorney had collected the judgment against the insurance company and had retained the amount to which he deemed he was entitled under the contract.

From the judgment rendered against him in favor of appellees, appellant has duly prosecuted an appeal to this court.

Our statute provides that, upon the failure of the insurance company to pay the loss after demand made, such company shall be liable to pay to. the holder of the policy, in addition to the amount of loss, twelve per cent, damages, together with all reasonable attorney’s fees for the prosecution and collection of said loss.

The attorney’s fee is a penalty given to reimburse the policy-holder for expenses incurred in enforcing the contract of indebtedness, and is taxed as costs in the case. Arkansas Ins. Co. v. McManus, 86 Ark. 115, and Mutual Life Ins. Co. v. Owen, 111 Ark. 554. Hence the attorney’s, fee is part of the recovery of the policy-holder against the insurance company.

The legal meaning of “recovery” is the obtaining of a thing by the judgment of a court, as the result of an action brought for that purpose. The contract under consideration provides that the attorney shall have “forty, per cent, of recovery.” This means forty per cent, of the amount recovered by the policy-holder, which, as we have seen, includes the amount of the attorney’s fee allowed by the statute to the policy-holder. Under the statute, this is a much a part of the recovery of the policy holder as is the face of the policy and the penalty provided by the statute.

As between an attorney and his client, as well as between the client and third persons, a judgment for costs, whether the costs consist of those items taxable as of course or of an extra allowance as well, belongs to the client. McIlvane v. Steinson, 85 N. Y. Sup. 889.

It follows that the judgment must be affirmed.-


text:
    Arkansas Road Construction Company v. Evans.
    Opinion delivered April 10, 1922.
    1. Highways — contractor’s bond. — The bond required by Crawford & Moses’ Dig., § 5446, of a highway contractor, which requires him to pay all persons supplying him with material or labor in the prosecution of the work, inures to the benefit of those furnishing labor and. materials for the work under a subcontractor, so as to enable them to sue on such bond.

      2. Assignments — sub-contractor’s certificates of indebtedness. —Certificates of indebtedness issued' by a sub-contractor to laborers working under him are not binding on the principal contractor and are not assignable so as to permit the assignee to sue thereon without making the assignor a party.
    3. Appeal and error — defect of parties. — A defect of parties is waived unless objection to the complaint on that ground is raised in the court below, either by answer or special demurrer, and such objection cannot be raised for the first time in the. Su- ' preme Court.
    4. Appeal and error — defect of parties raised how. — An objection that certificates of indebtedness issued by a sub-contractor to his laborers for work on a highway were not assignable does not present the objection that the assignor should have been made a party to an action on the certificates by the. assignee against the principal contractor.
    Appealed from Howard Circuit Court; Percy Steel, special judge;
    affirmed.
    STATEMENT OF FACTS.
    Appellee commenced this suit in the justice court against appellants to recover $86.35. The Arkansas Road Construction Company made a contract with Road Improvement District No. 7, of Howard 'County, Ark., to construct the Mineral Springs and Saratoga road in Howard County, Ark., according to certain plans and specifications; and associated with it Gregory & Wilson to help finance it and, as compensation therefor, to share in the profits. They made a contract with Davies Brothers to construct about three miles of the road. Certain laborers worked for Davies Brothers in the construction of the three miles of road sublet to them by the Arkansas Road Construction Company. Davies Brothers issued to these laborers certificates that they owed them the amounts named therein for labor on the Mineral Springs and Saratoga road. The laborers made a written assignment of these certificates to W. D. Evans who, upon payment being refused, brought suit against the Arkansas Road Construction Company.
    An answer was filed in which liability, was denied, and in which, as a further defense, it was alleged that W. D. Evans was not entitled to maintain the action because the claims were not assignable.
    Judgment was rendered in favor of the plaintiff by the justice of the peace, and an appeal was taken to the circuit court. There the case was tried upon the facts stated above and also the evidence of witnesses tending to show that the labor had actually been performed on said road to the amount of said certificates of indebtedness.
    There was also introduced in evidence the contractor’s bond, which contained, among other provisions, the following: “and shall pay all bills for materials and labor entered in the construction of said work.”
    The circuit court directed a verdict in favor of appellee, who was the plaintiff below, and the appellant, Arkansas Road Construction Company, which was one of the defendants below, has duly prosecuted an appeal to this court.

      W. P. Feasel, for appellant.
    There was no privity of contract between appellee, or his assignors, and the appellants. 100 Ark. 47; 144 Ark. 8; 65 Ark. 27.
    The appellee, .having failed to make his assignors parties, cannot maintain this suit. 47 Ark.. 541.

      Jas. S. McConnell, for appellee.
   Hart, J.

(after stating the facts). In Oliver Construction Co. v. Williams, 152 Ark. 414, it was held that our statute providing that a contractor’s bond given thereunder for the faithful performance of public work shall inure to the benefit of those furnishing labor and materials, and that an action may be maintained by one of such persons to recover for labor' performed or materials furnished in the fulfillment of the contract. To the same effect see United States Gypsum Co. v. Gleason (Wis.) 17 L. R. A. (N. S.) p. 906; Knight & Jillson Co. v. Castle (Ind.) 27 L. R. A. (N. S.) p. 573 and case note, and National Surety Co. v. Hall-Miller Decorating Co. (Miss.) 46 L. R. A. (N. S.) p. 325.

In the last mentioned case, in discussing the reason for the statute providing for the execution of such a bond by the contractor, in the case of public works, the court said: “Taking it as a cold-blooded business proposition, this clause in the bond would naturally encourage subcontractors of the best sort to take contracts to do certain parts of the work; it would tend to prevent the abandonment of the work by mechanics not promptly paid their wages by the contractors, who might be suspected to be of doubtful financial solvency; it would procure the best work and material and the prompt services of all workers and subcontractors; and all of this would redound to the benefit of the public. It must be borne in mind that the mechanics, materialmen, and laborers could have no lien upon the building, and that the trustees, representing the State, would not be bound to reserve money with which to pay their claims; but they would have to depend upon the contractor alone. Taking these things into consideration, the bond, in a way, supplied the place of the mechanics’ lien law, and thus gave an additional security to all persons working upon this building and supplying material therefor; and this alone was, in our opinion, of the highest importance to the State.”

These principles of law control the present case, and under our statute the Arkansas Road Construction Company, the principal contractor, would be liable to laborers who performed work on the road for subcontractors.

It is next insisted by counsel for appellants that the judgment must be reversed because the laborers to whom the subcontractors issued the certificates of - indebtedness were not made parties to the action.

While the statute referred to above makes the principal contractor liable for all labor performed and materials furnished on a public improvement, the subcontractor’s certificate of the amount due by him to a laborer cannot be said to be an account stated in favor of the laborer against the principal contractor. St. L. I. M. & S. R. Co. v. Camden Bank, 47 Ark. 541. The certificates of indebtedness do not bind the principal contractor and are therefore not assignable so as to permit the assignee to bring action upon them without the assignor being a party.

It is well settled, however, in this State that a defect of parties is waived unless objection to the complaint on that account is raised in the court below, either hy answer or by special demurrer for that purpose. It can not, therefore, be raised for the first time in this court. Murphy v. Myar, 95 Ark. 32; Crawford County Bank v. Baker, 95 Ark. 438; Love v. Cahn, 93 Ark. 215; and Spear Mining Co. v. Shinn, 93 Ark. 346, and cases cited.

It is true that the answer in the present case alleges as a defense that the claims were not assignable. But no objection was made that there was a defect of parties, or that the complaint should be dismissed because the assignors of the claims were not joined as plaintiffs.

The case was tried below on the merits and the principal ground of defense was that the principal contractor was not liable under the statute for labor done on the road by the servants of the subcontractor. Therefore the objection that there was a defect of parties comes too late here.

It follows that the judgment must be affirmed.