text:
    Smith-Arkansas Traveler Company v. General Tire & Rubber Company.
    •Opinion delivered December 1, 1930.

      Robinson, House <& Moses and Harry E. Me eh, for appellant, .Smith-Ark. Traveler Co., and R. E. Wiley, for Mo. Pac. Transportation Co., appellant.

      Rose, Hemingway, Cmtrell & Loughborough, for appellee.
   Mehaeey, J.

The Smith-Arkansas Traveler Company was engaged in operating various bus lines out of the city of [Little Rock, Arkansas, and on October 15, 1928, entered into a written contract with the General Tire & Rubber Company under which contract the General Tire & Rubber Company agreed to equip all motor coaches owned and operated by the motor coach operator with General Cord Tires of sizes to be designated. Said tires to be rented by the tire manufacturer to the motor coach operator; the motor coach operator agreed to equip all motor coaches owned and operated by it for at least a minimum of 3,500 miles per motor •coach per month, and the manufacturer reserved the right to require the use of 3,500 miles per motor coach per month in each and every month in which the average tire mileage is less than the guaranteed mileage above. The price agreed on which the motor coach operator was to pay was $0.14 per motor coach per mile. This contract was really a renewal contract continuing the arrangement which had been in effect under similar contracts between the companies for several years.

On January 2, 1929, the Smith-Arkansas Traveler Company sold all its holdings to the Missouri Pacific Transportation Company, the purchaser assuming actual possession on that date. There was a provision in the contract permitting the motor coach operator to use the tires it then had until they were worn out. The contract also provided that, if the motor coach operator desired to dispose of its equipment, the manufacturer would sell outright for cash all the tires on such motor coaches on the basis of the tire manufacturer’s printed dealer’s list in effect at the time of such disposal, less the accumulated mileage already paid for by the motor coach operator on such tires. There are numerous other provisions of the contract which we deem unnecessary to copy here, but attention may be called to some of them in the opinion. This suit was begun by the General Tire & Rubber Company in the Pulaski Circuit Court against the Smith-Arkansas Traveler Company to recover the amount alleged to be due it by the Traveler Company under the terms of the contract. The Smith-Arkansas Traveler Company filed answer admitting the execution of the contract sued on, and- admitting the sale of all its property to the Missouri Pacific Transportation Company, and that the Missouri Pacific Transportation Company continued to operate the coaches with the tires and tubes thereon long after the purchase from the Smith-Arkansas Traveler Company. It denied that there is $11,205.78 due the appellee. It states that it executed a bill of sale to the Missouri Pacific Transportation Company, and that the Missouri Pacific Transportation Company took over all its property, and that all the obligations for tires and tubes were the obligations of the Missouri Pacific Transportation Company, and that said purchaser assumed all liabilities of the Traveler Company under its contract, and that, if the Tire Company was entitled to any sum, it was the obligation of the Missouri Pacific Transportation Company. It asked that the cause be transferred to equity and that the Missouri Pacific Transportation Company be made a party defendant. The Missouri Pacific Transportation Company thereafter filed answer and cross-complaint. It denied liability and alleged that any obligation arising under the contract was the sole obligation of the Traveler Company. It asked that, if any judgment was rendered against it, it have judgment against C. H. Moses, W. A. Smith and Ike Kempner.

As we have already stated, the Smith-Arkansas Traveler Company sold to the Missouri Pacific Transportation Company and delivered to it all of its equipment on January 2. The court entered a decree in favor of the General Tire & Rubber Company against the Smith-Arkansas Traveler Company for $11,013.62 with interest thereon from January 1, 1929, to the date of the decree, amounting to the total sum of $11,674.49. On the cross-complaint óf the Smith-Arkansas Traveler Company against the Missouri Pacific Transportation Company, the chancellor entered a decree in favor of the Smith-Arkansas Traveler Company against the Missouri Pacific Transportation Company for $6,820.03 with interest from February 28, 1929, until paid at the rate of 6 per cent, per annum. The Smith-Arkansas Traveler Company has appealed to this court for a reversal of the judgment against it, and the Missouri Pacific Transportation Company was granted a cross-appeal against the Smith-Arkansas Traveler Company and seeks a reversal of the judgment against it. The court found in favor of C. H. Moses, W. A. Smith and Ike Kempner.

It is earnestly insisted by the appellant, Smith-Arkansas Traveler Company, that its liability to the General Tire & Rubber Company should be computed on the basis of the number of tires on hand on March 1, rather than January 1, and quotes and relies on the following clause of the contract: “If during the life of this agreement the motor coach operator desires to dispose of * * * its fleet or equipment, * * * the tire manufacturer agrees to sell outright for cash all tires on such motor coaches to the motor coach operator on the basis of the tire manufacturer’s printed dealer’s list in effect at the time of such disposal or removal of motor coaches —less the accumulated mileage already paid for by the motor coach operator on such tires.” The clause of the contract is unambiguous, and we think necessarily means that when the coach operator disposes of the equipment he must pay for the tires according to the dealer’s list less the accumulated mileage already paid. This means that when the Traveler Company disposed of the tires to the Missouri Pacific Company, the tire company no longer had any interest in the tires. 'The Traveler Company could permit the purchaser to use them or not, and the Tire Company would have no right except its right to collect the amount due at the time the Traveler Company sold to the Missouri Pacific Transportation Company. The Traveler Company permitted the use of the tires by the purchaser until the first day of March. Under the terms of the contract it then became liable to the Tire Company for the list price of the tires less the mileage paid for or the mileage due up to the time that the Smith-Arkansas Traveler Company sold it to the Missouri P’aoific Transportation Company.

Appellant insists that because the Tire Company brought suit on the theory that the paragraph of the contract 'became operative as of the date the Missouri Pacific ceased using its tires and insisted that the contract should be made as of the date the Missouri Pacific ceased using its tires, it should be bound by this position and should not have been permitted to make the correction when it discovered that the January and February mileage had not been deducted. We do not agree with the appellants in this contention, but think the chancery court adopted the correct method.

The fact that appellee adopted an erroneous theory did not disentitle it to amend and proceed under a correct theory. “It is true that one by his conduct or statements may be estopped from asserting rights which might otherwise have existed, but, before he will be estopped, it must be shown that another has in good faith relied on such conduct or statements and has been thereby led to change his, position for the worse. ” Norton v. Maryland Casualty Co., ante p. 609 ; Hot Springs Golf & Country Club Assn. v. Community Bank & Trust Co., ante p. 715; Thomas v. Spiers, 180 Ark. 671, 22 S. W. (2d) 553. There is nothing in the evidence in this case that tends to show that appellant relied on any statements or conduct and was thereby led to change its position for the worse.

It is contended that the conduct of the Tire Company did not indicate that during January and February it regarded the title to the tires as vested in Smith-Arkansas Traveler Company. Evidently the Smith-Arkansas Traveler Company and the General Tire & Rubber Company wished the Missouri Pacific Transportation Company to assume the contract of the Traveler Company. This would have been advantageous to both of them, and we find nothing in the conduct of the Tire Company to indicate any intention td modify in any way the contract or to waive or relinquish any of its rights under the contract. It is contended, however, that, even if the Missouri Pacific Transportation Company did not agree to run out all the tires as contended by appellant, the record discloses facts sufficient to establish an implied liability to run out all such tires. There was nothing in the conduct of either party that in any way injured the Traveler Company. The decision of these questions, however, depends wholly upon the evidence, and the evidence is conflicting, and we are unable to say that the chancellor’s finding is against the preponderance of the evidence, and in cases where the finding of facts by the chancellor is not against the preponderance of the evidence, such finding will not be disturbed. Under this rule the chancellor’s finding of fact on these questions must be affirmed.

The Missouri Pacific Transportation Company prosecutes a cross-appeal, but it admits that the chancellor ’s finding that the obligation of the Missouri Pacific Transportation Company reached only 161 tires which were on the coaches on January 1, is not clearly against the preponderance of the evidence, but contends that the correct charge against the Missouri Pacific Transportation Company is $2,036.63, and that the amount found by the court is excessive and was on a wrong basis. "We do not agree with this contention. The same may be said of the evidence on this proposition as we have said on the other, that the chancellor’s finding will not be disturbed when not against the preponderance of the evidence. The entire argument of the Missouri Pacific Transportation Company on this question is that the court adopted a wrong or improper basis, and we have reached the conclusion that the court adopted the correct basis. The following is the court’s finding on this issue: “The court finds, on the cross-complaint of the Smith-Arkansas Traveler Company against the Missouri Pacific Transportation Company that the" said Smith-Arkansas Traveler Company is entitled to recover of the said Missouri Pacific Transportation Company the proportion of the said sum for which judgment is herein rendered in favor .of the said plaintiff, General Tire & Rubber Company, that the 161 tires upon the buses bear to the 99 tires that were left in stock after deducting the 86 tires as aforesaid, to-wit: the sum of $6,820.03; and it is considered, ordered and decreed that said Smith-Arkansas Traveler Company have and recover of and from the said Missouri Pacific Transportation Company the said sum of $6,820.03 with interest thereon from the 2iSth day of February, 1929, until paid, at the rate of six per cent, per annum, and its costs, and have execution therefor as at law. ’ ’

We think the above finding is supported by the evidence and is fair and equitable, and the chancellor’s finding, being supported by. a preponderance of the evidence, will not be disturbed by this court.

We have carefully considered all the evidence and have reached the conclusion that the decree is supported by a preponderance of the evidence, and it is therefore affirmed both on appeal and cross-appeal.


source: Caselaw Access Project

author: Butler, J.

license: Public Domain

text:
    Unionaid Life Insurance Company v. Crutchfield.
    Opinion delivered December 1, 1930.

      J. V. Walker, Duty é Duty, W. B. Sorrels, M. J. Harrison and Greed Caldioell, for appellant.

      Isaac McClellan, for appellee.
   Butler, J.

Action in the court below by the appellee (plaintiff) to recover the sum of $218.18, total amount of assessments paid on certificate of membership in the Mutual Aid Union Society, the ground for recovery first alleged being for breach of contract and later by amendment to complaint for fraud and misrepresentation in the procurement of appellee’s application. There was a verdict and judgment against the defendant (appellant) in favor of the appellee for the sum sued for, from which judgment is this appeal.

The facts of this case, with the exception of the names, dates, and the issue raised by the amendment to the complaint, are identical with those of the case of Fowler v. Unionaid Insurance Company, 180 Ark. 140, 20 S. W. (2d) 611.

'The pleading designated by the. appellee as “Reply to the Answer of Defendant” was in fact an amendment to the complaint by which was engrafted on the suit on contract an action in tort. The effect of the allegations of this pleading was that appellee was induced to apply for1 the certificate of membership on the representation of the agent that the monthly assessment would never exceed the maximum rate named in the certificate, and the agent failed to acquaint him with the provision of the application iby which the officers of the Mutual Aid Union were constituted attorneys in fact to vote" at the annual elections for directors and on other questions arising for consideration at such meetings, and that, had he known that by his application a proxy would have been given the officers, or that the monthly assessment could be raised above the maximum named, he would not have signed the application or become a member of the Union, and that such statements of the agent and concealments by, him constituted a fraud in the procurement of the contract.

The allegations of the complaint as amended stated inconsistent causes of action, the first being that there was a valid contract and a breach of same resulting in damage to the plaintiff, the second being- that there was no contract because of fraud in the procurement of the application, andl that the sums paid under the purported contract should be recovered because of such fraud. It is clear that the evidence to sustain one allegation would be different from that necessary to sustain the other and therefore they ought not to have been joined. Conant v. Storthz, 69 Ark. 209, 62 S. W. 415.

On the question of fraudulent representations or concealments, appellee was the only witness. He was testifying' as to a transaction which’occurred about twelve years prior to the time of his testimony, and during which time nothing happened to cause him to remember the details of such transaction. It is therefore not surprising that his testimony was equivocal. Stated most favorably for the appellee and boiled down, it amounts to this: Appellee was an uneducated farmer about fifty-five years of age at the time, but could read and write. The solicitor for the Mutual Aid Union, who is called in appellee’s pleadings and testimony “the agent of the company,” was an ex-county judge of appellee’s county, well known to him and highly respected in the community. He solicited of the appellee his application for membership in the Union, procured his signature to the application, and issued a receipt for the amount paid upon the signing of the application, which receipt was kept by the appellee, exhibited on the trial, and on its face showed that the application ivas to be forwarded to the Mutual Aid Union, and, if accepted by the Union, the certificate of membership was to be issued and delivered to the appellee. At the time the application was solicited it was explained to the appellee that the assessments would be monthly, beginning with fifty-four cents and increasing one cent a month for eighty months and would not exceed in the future the sum of $1.34, the amount named as the maximum assessment. (This .is the only representation claimed by the appellee to have been made by the person who solicited of him membership in the Mutual Aid Union). He was not informed of the provision in the application by which the officers of the Union were constituted his attorneys in fact to cast his vote at the annual elections. He did not remember whether he read the application, but thought he 'did not, and did not remember whether or not it ivas read to him by the agent. He knew he had the right to attend the annual meetings of the Union and to oast his vote on questions there presented and was familiar with the fact that in organizations of that character the certificates were subject to, and controlled by, the by-laws. He continued to pay his assessments regularly until they reached the sum of $1.34 per month and such assessments as were demanded from time to time during a period of about twelve years and until he received notice from the appellant company that it had taken over the business of the Mutual Aid Union, by which notice he was advised of the different rates he might pay and the amount of benefit which would accrue under the various plans, the acceptance of any one of which was made optional with him, and that to continue the certificate for the benefit named therein a monthly assessment in excess of $1.34 was required. He refused to pay the increased assessments and brought this suit.

1. With the exception of the issue of fraud raised by the amendment to the complaint, the facts as above stated are practically identical with those in the case of Fowler v. Unionaid Life Insurance Co., supra. That case rules this. In the instant case, as in the case cited, the application for membership, the certificate, the bylaws of the Mutual Aid Union and the notice of reinsurance contract entered into between the Mutual Aid Union and the appellant company were introduced in evidence. By section 4 of the by-laws in force at the time of the application and at the time the contract of reinsurance was entered into authority was given the management of the Union to increase the amount or require additional or extra assessments when necessary, and that the policyholders would be subject to such increased or extra assessments. By section 31 of the by-laws the board of directors was given power, if expedient, to transfer or merge the membership in whole or in part with any other institution when deemed for the best interests of the membership.

The evidence in this case sets out the entire contract of which the by-laws are an essential part and of which fact appellee had knowledge. While the appellee never had in his possession a copy of the constitution and bylaws of the Union, it is not contended that he could not have obtained same, had he so desired, and he must be held to have known of the essential provisions of the same and to be bound by them, for the application, certificate and by-laws constitute the contract. Mutual Aid Union v. Purdue, 162 Ark. 551, 258 S. W. 375 ; Ill. Bank ers’ Life Assn. v. Byassee, 169 Ark. 230, 275 S. W. 519, 41 A. L. R. 379 ; Mutual Aid Union v. Lovitt, 170 Ark. 745, 281 S. W. 354 ; Fowler v. Unionaid Life Ins. Co., supra. In the last-named case we said: “If the entire contract is considered, there can he ho donbt that the right to change or raise the rates was agreed to, and that-the appellant authorized the officers of the company to act as -his attorneys in fact and cast any vote that he might cast. ’ ’

2. On the issue of fraud raised by the amendment to the complaint, passing by the question as to the misjoinder of causes of action and the competency of the evidence on the part of the appellee on that issue, we have concluded that there were no false representations made or deceit practiced, for the statement relied on was an opinion only. The receipt issued to the appellee upon his signing the application and delivery of it to him apprized him of the extent of the agent’s authority, which was merely that of a soliciting’ agent, and by a provision of the application it was expressly stipulated that the Union should not be bound or any of the provisions oif the certificate issued on the application waived or affected by any act or statement made by any agent or other person which was not contained in the application. If, then, the agent made the statements attributed to him, he merely stated what appeared in the application itself, which application, together with the by-laws and certificate, constituted the contract. The statement was substantially true at the time it was made, and remained so for a period of twelve years, and until the Insurance Department of the State of Arkansas, under authority vested in it by acts 137 and 139 of the Acts of 1925, by peremptory order caused the appellant company, successor to the Mutual Aid Union, to require the certificate holders of the Union to pay “an adequate rate on such a basis as to give full benefit or such benefit as would be commensurate with the monthly contributions paid. ’ ’ It follows that, as the statement was true at the time made, subsequent changes in the condition of affairs mailing necessary an increased rate which, one of the knowledge and experience of the person making' it could not reasonably have foreseen cannot affect the liability of the person making it or alter the contractual relation of the parties. 12 R. C. L. 303, § 64; Corbett v. Gilbert, 24 Ga. 454 ; Elliott on Contracts, vol. 1, § 87; Johnson v. Baxter, 108 Ark. 350, 157 S. W. 387.

'Construing the evidence in the most favorable light for the appellee and giving it its strongest probative value, we are of the opinion that in any. phase of the case the appellee has failed to establish his right to recover, and that the trial court erred in its finding and judgment. As the case appears to have been fully developed on trial in the court below, the judgment is reversed and the cause dismissed.


text:
    Betts v. Brundidge.
    Opinion delivered December 1, 1930.

      U. A. Gentry and E. F. McEaddm, for appellant.

      O. A. Graves, for appellee.
   Butler, J.

In 1917 A. L. Betts and J. P. Brundidge were partners in the cotton business, and remained so until November 8, 1918, when the partnership was dissolved by mutual agreement; Brundidge agreeing that the cotton on hand, which was the principal asset, should be valued at thirty-two cents a pound, and Betts agreeing that he would take over the business of the partnership and, when the liabilities were ascertained and deducted from the assets, he would pay to Brundidge one-half of the value of the assets over the liabilities. The bookkeeper of the concern made a statement of its affairs, and a tentative settlement was had on the basis of that statement, but it was understood between the parties that this settlement should not be deemed to be final but subject to revision and correction by Mr. 'C'ameron, an accountant in the firm of E. F. Leathern & Company, who had been accustomed to make the audits for the partnership; that 'Cameron should check up on the books- to see if the statement made by the bookkeeper represented the true condition of affairs, and, if the statement of the bookkeeper did not agree with Cameron’s, the audit made by Cameron should govern. In February following Mr. Cameron completed his audit and corrected the statement made by the bookkeeper, deducting in certain particulars from the amount shown from the statement of the -bookkeeper to be due Brundidge and adding to the statement as an asset a claim against the Federal Government for a refund for excess profit tax amounting to $18,163.90 which he said was due to be refunded, and that all that was necessary to be done was to file a claim and the United 'States Government would repay that amount of money. Settlement was accordingly made on Cameron’s audit, the refund item being calculated as a part of the assets and one-half of the excess in value of assets over the liabilities paid to Brundidge.

On the advice of 'Cameron a written assignment of Brundidge’s interest in the claim for refund of' excess profit tax was made to Betts, who filed the claim with the proper department, and, after much correspondence, on or about March 4, 1924, Betts was informed by the Commissioner of Internal Revenue that his claim was disallowed, and that, instead of the government owing him the amount of the claim, the firm of Betts & Cameron owed the government an additional tax of $37,572.45 more than the partnership had paid. Betts individually owed an income tax amounting to some $16,000, and he attempted to offset this by the claim for the refund of the excess profit tax of 1918 but without success. Finally, in 1926, the government closed the negotiations, and, after disallowing the claim for the refund, made demand for the amount it determined was due. In 1924 when Brundidge learned that the government was claiming an additional amount of tax for the year 1918, he took steps to protect his interest by employing a firm of lawyers and procuring the services of Mr. Cameron. In 1926 when the question oif the refund was closed by the government and upon final denial of the claim, Betts made demand on Brundidge for one-half of that amount, to-wit, $9,081.95. Brundidge refused to make payment as demanded, and on November 28, 1928, Betts brought suit in the Hempstead Chancery Court to “reopen, surcharge and falsify the partnership settlement between the parties,” alleging “that the settlement of said partnership was erroneous and ¡based on mutual mistake of the parties in good faith believing that the Federal Government in fact owed said partnership, * * * and the same constituted the value and positive asset of said partnership.” Brundidge answered denying that the settlement was the result of mutual mistake or that said settlement should be reopened, and alleged in substance that in the settlement the parties dealt at arm’s length, and that it was 1 ‘ expressly understood and agreed * * * that it was a full and complete settlement of all partnership affairs, and that neither should at any time thereafter be liable the one to the other in any way whatever on account of said partnership business, nor in the sale of the assets thereof, regardless of whatever of assets of said firm should be more or less than the amounts agreed upon in the settlement and regardless of whether any of the assets had any value whatever. ’ ’ Other matters were pleaded in the answer as a defense to the action which will not he set out, as a consideration of these matters is unnecessary for a determination of this case.

The case was heard on oral testimony, and the court denied the prayer oif the complainant’s bill and by its decree found that “there is no equity in the complaint and that the defendant is not indebted' to plaintiff in any sum whatever,”' dismissing said complaint. Prom that finding and decree this appeal-is prosecuted.

There is but little dispute as to the. facts above narrated, the disputed matter being the understanding with respect to the settlement based on Cameron’s audit and particularly the item for refund of the excess profit tax; Betts claiming and testifying that the understanding with reference to the refund item was that, if it was not collected, -Brundidge was to repay to him one-half that sum. Pie stated that he filed the claim, and made diligent effort to collect it, employing Cameron for that purpose, and that Brundidge took active part in the effort to secure its allowance. He discussed the progress they were making with Brundidge and finally, when claim was denied, demanded payment of him.

Touching- the time the alleged agreement was made by Brundidge to repay Betts, if the government denied the claim, the following* dialogue occurred on the witness stand between Betts and appellee’s attorney:

“Q. Was that agreement made at the time you settled with him on the Cameron audit-—if the government didn’t pay he would pay? A. I don’t know whether he did or not. We looked upon it as a legal claim against the government. Q. Did he tell you that at the time he settled, or did you just think it would be settled in that way? A. No; he assigned it to- me—-his part of it—■ $9,000'—and he was urging- Mr. -Cameron (interrupted) — Q. Now, wait a minute; I understand that went in as assets, and he got credit for $9,000, but at the time you made settlement on Cameron’s audit was anything said as to whether or not he would make it good if you didn’t collect it? A. I don’t recollect about that, hut I suppose it was because we looked upon it as a valid claim against the government.”

To corroborate his testimony, telegrams and certain letters were introduced during the cross-examination of Brundidge, passing between him and Cameron in March, 1924. The most these show is that the claim for refund had been denied, with the opinion expressed by Cameron that Betts would claim return of half the sum paid by him to Brundidge with an intimation that Brundidge ought to pay it, and a denial by Brundidge that he was under any obligation to do so; that he wanted to do right, but would have to consider further before determining what he would do.

Brundidge stated in effect: that the settlement was ■based on the statement prepared by Cameron, and it was understood to be and was a full and final settlement of the affairs of the partnership without any promise on his part to make good wholly or in part any claim listed as an asset -which might prove worthless. That he surrendered all the tangible assets of the co-partnership and assigned in writing all interest in the claim for refund of excess profit taxes, and had no' further connection with any of the matters connected with the former partnership or with Betts or Cameron, except when he was informed that the United States Government was claiming an additional excess profit tax and that he was liable for and might be called upon to pay the whole amount, he took such action as he could to protect his interests, but at no time agreed to pay Betts any part of the refund claim that had been denied by the government.

This was substantially all the evidence, except that contained in the testimony of a witness who qualified as an expert accountant and gave his opinion regarding the validity of claims made and disallowed by the government, which we think, was not material to the question in issue.

1. In order to support the contention that the settlement was entered into because of mutual mistake of the parties and to entitle one to have the settlement reopened, surcharged and falsified, such mutual mistake must he affirmatively shown by the evidence. Continental Supply Co. v. Robertson, 166 Ark. 52, 265 S. W. 659. And the decree of the chancellor will not be disturbed unless it appears to be against the clear preponderance of the evidence.

The issue of fact was squarely presented to the trial court, and, while there was no specific finding of fact, the finding made that the complaint was without equity necessarily .implies that the chancellor passed on the question of fact and found adverse to the contention of the appellant. Under the rule stated, we are of the opinion that the finding of the trial court was not against the preponderance of the evidence, and that the settlement tentatively entered into in November, 1928, and finally consummated on the basis of the auditor's statement in February, 1929, was final and conclusive. It is evident from the testimony of Mr. Betts himself that any agreement that Brundidge made or thought was made was subsequent to the settlement based on the account stated by 'Cameron. This is disclosed by his cross-examination, as it is apparent from his statement that he did not know whether Brundidg'e did or did not agree to repay him if the government did not pay the claim— that he took the claim as an asset because he thought it was a legal claim against the government, and the mistake made was in this assumption.

To justify the relief sought, the appellant invokes the principle that “an account in which items have been entered or omitted through fraud, mistake, accident or undue advantage may be falsified or surcharged even after there has been a settlement and a payment of the balance found due,” and cites Fletcher v. Whitlow, 72 Ark. 234, 79 S. W. 773, and a number of other Arkansas cases supporting the principle announced. The trouble with the appellant’s contention in this case is that this principle finds no application to the facts as found by the chancellor, for there was no fraud, accident, or undue advantage shown or even claimed to have existed, and the mistake which arose was not one of fact but of law regarding the validity of the claim listed by Cameron. This arose from the too ready credence of the appellant in the opinion of Cameron on a legal question. Cameron forsook the practice of his- art to assume the position of an authority on the law, as is. not an infrequent practice of auditors, for this is observed in nearly every lawsuit in which they appear.

The case of House v. Weschler, 104 App. Div. 124, 93 N. Y. S. 593, is cited as a case in point and as based on facts similar to those of the instant case, which was a suit for the reformation of a contract of co-partnership settlement because of mutual mistake of' fact and for recovery of money paid in excess of the true amount by reason of such mutual mistake. But in that case there was, indeed, a mistake of fact because the bookkeeper who was entrusted with the duty of preparing the statement of account (as Cameron was in the instant case) inadvertently enumerated an asset which did not -exist and omitted an undoubted liability of which he was unaware. The precise value of the business was ascertainable byl the mere process of calculation, and the parties were both mistaken in believing that the process had been correctly performed. Here, however, as before stated, no such mistake existed, but simply an unwarranted reliance by the appellant on the opinion of 'Cameron which was not shared by the appellee, who stated that he knew the asset in controversy was-doubtful. The appellant argues that, if that was true, he should have so- advised his partner Betts, and by this statement he convicts himself of concealment or of over-reaching his partner. This is not so. All of the facts relating to the claim were equally known to Betts and Brnndidge, and the difference, if any, which existed was merely in the weight given to the opinion of Cameron. Brundidge' in his testimony specifically denied that at any time he ever agreed to mate good any claim or asset that might be found to be uncollectable, but insisted that there was a full, final and complete settlement by which they both agreed to abide. The telegram of Cameron, taken in connection with the reply of Brundidge to it and 'Cameron’s subsequent letter, is not sufficient in connection with the testimony of Betts to overcome the finding* of the chancellor under the rule announced.

In this case there was a settlement based on the written statement of account made by 'Cameron which nothing* short of clear and satisfactory evidence would be sufficient to overturn, and, as stated, in our opinion there was no mistake of fact. It is a settled rule that contracts of parties deliberately entered into will not be disturbed merely for mistakes of law. As defined in Palmer v. Cully, 52 Okla. 454, 153 Pac. 154, Ann. Cas. 1918E, 375, cited by the appellee, “A mistake of law happens when a party having full knowledge of the facts comes to an erroneous conclusion as to their legal effect. It is a mistaken opinion or inference arising from an imperfect or incorrect exercise of a judgment upon the facts as they really are,”' and in People’s Savings Bank & Trust Co. v. Hausman, 171 Ark. 680, 286 S. W. 865, we said: “It is a principle of almost universal application that a mistake of one of the parties to a contract concerning its legal effect will not, in the absence of fraud or misrepresentation, afford grounds for relief ag*ainst the performance of the contract.” And in Blackburn v. Texarkana G. & E. Co., 102 Ark. 158, 143 S. W. 588, “where one voluntarily makes a payment upon a claim with knowledge of the facts, or under such circumstances that he is affected with such knowledge, then he cannot recover back such payment upon the ground that the asserted claim was unenforceaJble. ”

On the conclusions reached, it is obvious that the case must be affirmed, and it will therefore be unnecessary to consider the other questions presented by counsel in their respective briefs. Affirmed.


text:
    Lewis v. Delinquent Lands.
    Opinion delivered December 1, 1930.

      Chas. A. Walls and Rose, Hemingway, Cantrell & Loughbrough, for appellant.

      Ingram & Moher, for appellee.
   Butler, J.

-Suit was brought in the Arkansas Chancery Court, Northern District, by the receivers of Farelly Lake Levee District of Jefferson and Arkansas counties for the purpose of enforcing the collection of taxes delinquent on the lands in said district for the years 19'28 and 1929, in which suit the Felger Timber Company, Inc., intervened alleging that it was the owner of the standing timber on certain lands described amounting to 4,300 acres, but was not the owner of the fee; that the timber had been separately assessed for taxation, is being taxed as personal property, was not liable for levee taxes sought to be collected, and prayed that the plaintiffs be restrained from collecting taxes upon the tirqber.

The ease was heard upon the pleadings/ record evidence and the testimony of witnesses. The trial court rendered judgment sustaining’ the prayer of the intervener and enjoining plaintiffs from further proceeding against the timber on the lands described in the intervention. From that judgment is this appeal.

1. Previous to the creation of the levee district and the erection by it of its levees, these lands were subject to recurrent inundation from the waters of the Bayou Meto and the Arkansas Biver, so that the lands had little value. It was difficult to remove timber therefrom because of the frequency of the overflows, the lands remaining soft and boggy for a considerable period of time after the subsidance of the waters. Since the completion of the levees, the lands when put in cultivation, have become very valuable for agricultural purposes—as valuable as any within the levee district. The lands are covered with a good growth of merchantable timber, principally oak and hickory with some cypress and ash. At the time the evidence was taken in this case this timber was estimated to be worth $20 per acre. The evidence was to the effect that the levee district had been formed for the primary purpose of eliminating the overflows so as to render the lands fit for agricultural purposes, the ultimate purpose being to convert them into farms. The estimated benefits were placed at $28 per acre, the assessments amounting annually to about $1.25 per acre.

2. With reference to the relation of the intervener, the facts are that the levee district was extended to include the Felger lands in 1917, which lands at that time had been owned by the Felger family for a number of years. The title was in Bertha S. Felger in May, 1928, when, for a nominal consideration, she conveyed the timber thereon of every character and description including its growth for a period of fifty years, in which time it might be removed, to Earl H. Felger, as trustee, giving to the grante'e the right to erect thereon houses, railroads, and all other improvements deemed necessary, stipulating that such improvements should be personalty with the right of removal within a reasonable time after the expiration of the time given for the cutting of the timber. Earl H. Felger was the son of Bertha S. Felger. On or before the execution of the timber deed a corporation was organized under the laws of the State of Delaware, the capital stock of which was owned by the Felger family except ten shares owned by four other persons, the said Earl H. Felger being the president and Bertha S. Felger the secretary of such corporation. Contemporaneous with the execution of the timber deed aforesaid to Earl H. Felger,- as trustee, he conveyed the timber on the same lands for a nominal consideration to the corporation, intervener in this action, the terms of the convejmnces being identical.

' Mrs. Felger had been the owner of the lands from before the formation of the levee district, and, as this suit was brought only for the delinquent assessments for the years 1928 and 1929, we infer she had regularly paid all the yearly assessments on the benefits assessed against her lands and until the improvement was completed and her lands freed from overflow. Then, for a nominal consideration, she conveyed, not, as is customary, certain species of trees or such as was merchantable, or for a timé limit reasonably necessary within which the timber might be removed, as in the'case of Dover Lumber Co. v. Board, etc., 173 N. C. 117, 91 S. E. 714, cited -by appellee, but the conveyance was for all the standing timber of every kind and character regardless of its size “with the growth of said timber” for and during a period of fifty years in which time the grantee might remove the timber. That grantee is a corporation whose entire property consists of the timber here involved and whose corporate stock, except a nominal number of no par value shares, is owned by the Felger family. The president of this corporation is Mrs. Felger’s son and its secretary herself.

So long as the timber remains uncut, the soil can have no value except that of the growth of the standing timber. As this is the case, and if, as contended by the appellee, the timber could not be subjected to any part of the payment of the annual assessments of benefits, then, as stated by the appellant, “no human being would be foolish enough to pay State, county and school taxes and also the levee assessment and get nothing in return for a period of fifty years.” Since it is not likely that any one would pay the taxes, the necessary result to the other landowners in the district would be an additional burden placed upon their lands and an increase in the amount of their assessments.

3. The appellee relies in this case on the force of act No. 146 of the Acts of 1905 which provides that “hereafter all timber in this State which has been sold separately and apart from the land on which it stands shall be classed as personal property and shall be subject to taxation as such,” and insists that, since it has paid the general taxes assessed against the timber as personal property, it is not subject to taxation for local benefits, as only such benefits can be assessed against lands in the territory - affected, and that, when the act creating’ the levee district used the word “land,” it meant the taxable real estate in the district as defined by the revenue law and as the same appears on the tax books.

A number of decisions of this court are cited by the appellee in support of this contention which we have examined and considered. Typical of these cases is that of St. L. S. W. Ry. Co. v. Levee District, 81 Ark. 562, 99 S. W. 843, a review of which will be sufficient to illustrate the character of the cases relied upon. That was a case where the roadbed and right-of-way of the railway was included in the assessment of benefits for the construction of a levee. Among other things, it is there contended that the assessment of the railroad tracks was invalid because it included the ties, angle bars and rails which were claimed to be personal property and as such exempt from taxation for local improvements. The court held these were a part of the roadbed and, for purposes of taxation, by virtue of our statute, was real estate. In Ft. Smith L. & T. R. Co. v. McDonough, 119 Ark. 258, 177 S. W. 926-7, the court said: “It must readily be conceded, and it is conceded by appellee, that taxation for local improvement must be confined to real estate to be benefited by the proposed improvement. Personal property is not subject to taxation for the purpose, nor was it attempted in the enactment of the statute under consideration to tax personalty. The statute expressly provides that real estate only shall be assessed, but in effect declares that railroads, tramroads, etc., shall be deemed to be real estate within the. meaning of the statute. It is doubtless within the power of the Legislature to classify property of doubtful character as real estate for the purpose of making it subject to assessment for local improvements. The statutes of this 'State provide that the tracks and right-of-way of railroads shall be real estate for the purpose of taxation and we have held that that classification makes property of that kind subject to special taxation for local improvement. ’ ’ In that case the court held that a street railway was not real estate.

Appellee also relies on the case of Anderson Tully Co. v. Gillett Lumber Co., 143 Ark. at page 101, 222 S. W. 362, where, referring to the act of 1905, sufra, the court said: “The act is intended to make timber sold separately and apart from the land on which it stands personalty for the purposes of taxation, so that the land and the timber may be separately assessed and the owner of the land be not required to pay the taxes on the timber, which would otherwise he charged to him as a part of the land.” This doctrine was recognized in the case of Southern Lumber Co. v. Arkansas Lumber Co., 176 Ark. 912, 4 S. W. (2d) 928, hut in that case the declaration is made that: “It is well settled in this State that growing trees may be severed from the land itself, and that the severance is accomplished by a conveyance of the timber, or by a conveyance of the land with a reservation or exception as to the timber. The ownership of the growing trees, after severance, is to all intents and purposes the same as the ownership of the land, and this ownership is attended with all the attributes peculiar thereto. In recognition of this rule, the Legislature of 1905 passed an act for the assessment of timber which had been sold separate and apart from the land on which it stands.”

From the act and the decisions, cited relating to and construing it, appellee reasons that the character of the standing timber on the lands in question is fixed as personal property, and therefore is not subject to taxes for local improvements. 'The cases do not support the contention of the appellee. It is settled law and common knowledge that iby the term “land” is meant everything that lies below the surface or is attached thereto by the processes of nature or of art and that standing timber is as much a part of the land as the soil constituting the surface, and it was in that sense the term was used in the act creating appellant district. Therefore, the benefit accruing to the landowner estimated at $28 per acre was the increased value of the land in its entirety and not to any particular interest therein, and the special assessment finds justification in the peculiar betterments to the property as a whole created by the building of the levee. Ahren v. Board of Imp. Dist., 69 Ark. 68, 61 S. W. 575 ; Kirst v. St. Imp. Dist., 86 Ark. 1, 109 S. W. 526 ; Gould v. Sanford, 155 Ark. 304, 244 S. W. 433. If the land is chiefly valuable for agricultural purposes, as claimed by the appellee, and the levees designed for the purpose of increasing that value, the fact that it is being used for some other purpose cannot relieve it from the assessments of benefits for the improvement made.

“The owner will not be relieved of taxation on account of the levee by reason of the fact that his lands will not be. enhanced in value to him for the purposes he is using or intends, to use them. The fact that the use to which the-property is devoted will not ibe increased will not relieve it because the improvement is thereby rendered valueless to the owner. Only to the extent that such use affects the market value can it be taken into consideration iby the assessor. As has been justly remarked by a court, ‘when the owner has. the unrestrained power of alienation, and the property may be converted to any use at his pleasure, it is difficult to see.how, upon any principle, an exception can be made to the rule regarding- only the market value. After the owner has escaped what would otherwise be a great burden, on the ground that he does not intend to use the property in a way which will make the improvement beneficial, he may change his mind, throw the property into the market, and realize advantages for which others had been made to pay.’ ” Memphis L. & T. Co. v. St. Francis Levee Dist., 64 Ark. 258, at page 265, 42 S. W. 763, 765.

Although in this case the land is devoted to the growth of timber instead of cotton and corn and other agricultural products, the burden of the local benefit remains, and the act of the owner by her conveyance of the timber in dividing the entire estate in the land into two estates, one consisting of the soil and the other of the timber standing thereon, does not change the character of the estate or relieve it of its burden. For, as is said in Southern Lumber Co. v. Arkansas Lbr. Co., 176 Ark. 912, 4 S. W. (2d) 928: “The ownership of growing trees after severance” (constructive severance by deed) “is to all intents and purposes the same as the ownership of land, and this ownership is attended with-all the attributes peculiar thereto.” And, in the case of Anderson Tully Co. v. Gillett Lumber Co., 143 Ark. 97, 222 S. W. 363, where act No. 146 of the Acts of 1905 was invoked to defeat an action for specific performance of a contract to convey certain timber on the ground that the timber sold apart from the land on which it stands becomes per-' sonalty, that contention was denied, the court saying: ‘ ‘In a number of cases prior to the passage of this act we recognized timber as a part of the realty and held that a conveyance of it as such conveyed an interest in the land itself; and we think there was no legislative intent to overturn those decisions. And in a number of cases since that act we have reiterated the doctrine that a conveyance of the timber on a certain tract of land is a conveyance of an interest in the land itself, and that the timber is real estate until it is severed from the soil.” In support of the principle there announced, the court cited Griffith v. Ayer-Lord Tie Co., 109 Ark. 223, 159 S. W. 218 ; Graysonia-Nashville Lbr. Co. v. Saline Development Co., 118 Ark. 192, 176 S. W. 129. Continuing, the court said: ‘ ‘ The act is intended to make timber sold separately and apart from the land on which it stands personalty for the purposes of taxation, so that the land and the timber may be separately assessed and the owner of the land be not required to pay the taxes on the timber, which would otherwise be charged to him as a part of the land.”

It is immaterial under the act of 1905 whether the timber owned separately from the ownership of the soil was to be assessed as personal property or otherwise, since the act provided that it should be assessed in the county in which the lands were situated. But, as the standing timber was not “property of a doubtful character,” the classification was arbitrary and unscientific, which the Legislature subsequently recognized by act 221 of the Acts of 1929, amending § 9856 of the Digest, where provision is made that where the timber rights in any lands shall, by conveyance ol otherwise, be held by one or more persons and the fee simple title in the lands held by one or more persons the timber rights in the land shall be assessed separately from “thé general property therein”; that a sale of the one for delinquent taxes should not affect the title of the other, and that when any timber rights should be forfeited for the non-payment of taxes it should 'be “certified to and redeemed in the same manner as is now provided for the certification and redemption of real estate upon which taxes duly assessed have not been paid.” This act recognized the force of our decisions, and it would seem that now standing timber remains, when constructively severed, even for purposes of general taxation, a part of the realty. But, assuming the classification made by the act of 1905 still in being, under repeated decisions oif this court this would not refer to taxes for local benefits. It seems to be the general rule that where the terms “taxes” or “taxation” are used in our Constitution or statutes, they are construed to have reference to taxation for general purposes, and not to local assessments where the fund raised is expended for the improvement of the property taxed.

In City of Bridgeport v. N. Y., etc. Ry. Co., 36 Conn. 263, quoted with approval in the case of Paving Dist., etc. v. Sisters of Mercy, 86 Ark. 109, 109 S. W. 1165, quoting from page 113, the court said: “An assessment of benefits for local improvements has never been regarded as a tax, or termed such in legislative proceedings, in our public or private laws, or in popular intercourse.”
“Assessment upon real estate for local improvements has no connection whatever with the general taxing powers mentioned, and this is so well settled as really to require no citation of authorities, much less argument.” Carson v. St. Francis Levee Dist., 59 Ark. 513, 27 S. W. 590, at page 531.

In Cooley on Taxation, p. 416, ch. 20, § 1, this question is thus discussed by the author: “Special assessments are a peculiar species of taxation, standing apart from the general burdens imposed for State and municipal purposes, and governed by principles that do not apply generally. The general levy of taxes is understood to exact contributions in return for the general benefits of government, and it promises nothing to the persons taxed beyond what may be anticipated from an administration of the laws for^ individual protection and the general public good. Special assessments, on the other hand, are made upon the assumption that a portion of the community is to be specially and peculiarly benefitted, in the enhancement of the value of property peculiarly situated as regards a contemplated expenditure of public funds; and, in addition to the general levy, they demand that special contributions, ill consideration of the special benefit, shall be made by the persons receiving it. The justice of demanding the special contribution is supposed to be evident in the fact that the persons who are to make it,jvhile they are made to bear the cost of a public work, are at the same time to suffer no pecuniary loss thereby, their property being increased in value by the expenditure to an amount at least equal to the sum they are required to pay.” And in Illinois Central Rd. v. Decatur, 147 U. S. 190, 13 S. Ct. 293, the court, referring to the principle stated by Mr. Cooley, supra, said: “These distinctions have been recognized and stated by the courts of almost every State in the Union, and a collection of the oases may be found in any • of the leading text books on taxation. Founded on this distinction is a rule of very general acceptance—that an exemption from taxation is to be taken as an exemption simply from the burden of ordinary taxes, taxes proper, and does not relieve from the obligation to pay special assessments.”

The rule announced in these cases seems to settle the instant case contrary to the contention of the appellee. He relies, however, on the case of Dover Lumber Co. v. Bd. of Com’rs, etc., 173 N. C. 117, 91 S. E. 714, where the court used the following language: “When standing timber is severed by conveyance from the land, with the right to cut and remove within a given period all timber of a certain size, it is no longer a part of the land. The owner of the timber is not a freeholder or landowner from the mere fact of owning a timber lease. It is true we have held that timber is to be considered as land for purposes of conveyancing, but it does not follow the land after it has been so conveyed, and is no longer a part and parcel of it.” The authority of this case is weakened by the dissenting opinion of Mr. Chief Justice Clark, who dissented from the statement made, which he contends is merely obiter dietumv, and for the reason that “moreover, the conveyance of the timiber right has been often held by this court to be a conveyance of the realty. If' the timber had not been conveyed at the time of the judgment in this drainage proceeding, the land with the timber on it would have been assessed its due share for the payment of the bonds and the expenses of the proceeding. The owner, having parted with the valuable timber interests, would not be assessed for the same valuation on the land as he would have been before such conveyance. If the valuation assessed against his land was reduced by the value of the conveyance of the timber, of' course the owner of such timber right would be assessed for the value of such timber as was standing and uncut at the time the assessment and valuation were made. It is true the conveyance may be called a lease, but it is not a lease in the ordinary sense of a lease of a house or farm which takes nothing from the value of the realty, but it is a conveyance of an interest for years in the land. Till the timber is cut, the land cannot be used for any other purpose, and the gradual cutting of the timber will impair the value of the tract. ’ ’

We think the better reason supports the statement of the Chief Justice, supra, and that it is in line with the rules announced by our own decisions. It will be noted, moreover, that the facts in the Dover Lumber case, supra, are quite different from those of the case at bar. In that case the timber was of a certain size and conveyed before the formation of the drainage district and for a period of only five years, while in this case when the district was formed Mrs. Felger owned the entire estate, and after the improvement had been completed she conveyed to a holding corporation for a period of fifty years all the timber and its growth during that period. It follows from what we have said that the chancellor erred in granting the relief prayed by the intervener. The decree is therefore reversed, and the cause remanded with directions to dismiss'the intervention of appellee, and for further proceedings in accordance with the rules of equity and not inconsistent with this opinion.


author: Hart, 'O. J.,

text:
    Robinson v. Gaylord.
    Opinion delivered December 8, 1930.

      Saxon S Warren, for appellant.

      Gaughan, Sifford, Godwin «& Gaughan, for appellee.
   Hart, 'O. J.,

(after stating the facts). This court has held in accord with the weight of authority that where there is douibt or uncertainty or a dispute has arisen as to the true location of a 'boundary line, the owners of the adjoining lands may, by parol agreement, fix a line that will be binding uponThem, although their possession under such agreement may not continue for the full statutory period. Sherman v. King, 71 Ark. 248, 72 S. W. 571 ; Cox v. Daugherty, 75 Ark. 395, 36 S. W. 184, 112 Am. St. Rep. 75 ; Deidrich v. Simmons, 75 Ark. 400, 87 S. W. 649 ; Payne v. McBride, 96 Ark. 168, 131 S. W. 463 ; O’Neal v. Ross, 100 Ark. 555, 140 S. W. 743 ; Butler v. Hines, 101 Ark. 400, 42 S. W. 509 ; Malone v. Mobbs, 102 Ark. 542, 145 S. W. 193 ; 146 S. W. 143 ; and Sherrin v. Coffman, 143 Ark. 8, 219 S. W. 348.

In a case-note to 8 Ann. Cas. page 83, it is said that this holding is in accord with the decided weight of authority in this country. Among the cases cited is that of Boyd v. Graves, 4 Wheat (U. S.) 513. In that case the Supreme Court of the United States said that such agreement is “not a contract for the sale or conveyance of lands, and has no ingredients of such a contract.”

The theory of these cases is that where owners of adjoining tracts of land adjust their division line by parol agreement or by long acquiescence, they do not convey any estate whatever between themselves, and that the agreement does not operate upon the title at all. The reason is that after their boundary line is fixed 'by consent, they hold up to it by virtue of the title deeds and not by virtue of a parol transfer. In such cases, the agreement or consent serves to fix the line to which the title of each extends.

In Cutler v. Callison, 72 Ill. 113, the rule itself and the reason for it is clearly stated as follows:

“While it may be regarded as well settled that the title to real estate cannot be transferred by parol, yet it is a principle well established that the owners of adjoining tracts of land may, by parol agreement, settle and establish permanently a boundary 'line between their lands, which, when followed by possession according to the line so agreed upon, is binding and conclusive, not only upon them, but their grantees.”

In the case at bar, counsel for appellant first earnestly insist that there is no testimony upon which to predicate an application of the rule of law above an-no'unced. 'They claim that there was no doubt, uncertainty, or dispute as to the boundary line between the two forty-acre tracts, and no proof tending to show that the parties agreed upon such division line. We cannot agree with counsel in this contention. The witnesses for the plaintiffs testified that fifty-eight years before the present controversy arose a stone marked the corner between the two forty acres of land, and that an old division fence was extended across the forty, and that this division line was recognized as the boundary between the owners of the adjoining forty acres of land. The land at that time was in cultivation on each side of the division fence, and the owners of the two tracts of land cultivated up to the division line. The old division fence was recognized as the boundary line between the two forty-acre tracts for many years.

Under this state of proof, the jury might have found that the long acquiescence in the division fence as a boundary line constituted a parol agreement to that effect and warranted the court in submitting1 this question to the jury. The evidence in reference to the division fence as the agreed line and the possession of the parties up to it was submitted to the jury under instructions according to the principles, df law above announced, and no useful purpose could be served by setting out the instructions in detail and reviewing them at length.

The court also submitted to the jury tbe question whether or not the defendant had acquired title to the disputed strip of land by adverse possession. The evidence adduced in favor of the plaintiffs warranted the jury in finding that there had been such long acqidescence in the old fence row as the division line 'between the two forty-acre tracts of land by the owners of the respective tracts that it amounted to a parol agreement that the old fence row was the division line, and that the defendant had not aoquired’title by adverse possession.

It is true that the disputed strip of land was after-wards permitted to grow up in trees, but for a long period of time it was cultivated and claimed by the owner of the south forty, and the old fence row was acquiesced in by the owners of both tracts as the division line for many years. This warranted the jury in finding that there was a parol agreement to that effect; and this agreement under the authorities above cited, was just as binding upon the defendant Robinson as it was on his grantors.

We find no reversible error in the record, and the judgment will therefore be affirmed.


author: Hart, iC. J.,

text:
    Booth & Flynn Company v. Pearsall.
    Opinion delivered December 8, 1930.

      John G. Rye and W. P. Strait, for appellant.

      G. W. Clark and R. W. Rodins, for appellee.
   Hart, iC. J.,

(after stating the facts). According to the settled law of this State, it is the duty of the master to exercise ordinary care to provide his servants with a reasonably safe place in which to work and reasonably safe appliances with which to work. Woodson v. Prescott & Northwestern Ry. Co., 91 Ark. 388, 121 S. W. 273 ; and International Harvester Co. of America v. Hawkins, 180 Ark. 1056, 24 S. W. (2d) 310.

It is also well settled that, in order to warrant a finding* that negligence is the proximate cause of an injury, it must appear .that the injury was the natural and probable consequence of the negligent or wrongful act, and that it ought to have been foreseen in the light of the attending circumstances. Ultima Thule, Arkadelphia & Mississippi Rd. Co. v. Benton, 86 Ark. 289, 110 S. W. 1037 ; and Pittsburg Reduction Co. v. Horton, 87 Ark. 576, 113 S. W. 647, 18 L. R. A. (N. S.) 905.

In cases like this, the burden olf proof is upon the ' injured servant to show negligence on the part of the master or of a fellow-servant in the failure to perform, his duty to him as such fellow-servant which proximately caused or resulted in his injury. Cleaver v. Bert Johnson Orchards, Inc., 175 Ark. 223, 298 S. W. 1016.

This burden was not met by the plaintiff in the case at bar. It cannot be said that, even though the sliver which struck the plaintiff in the eye came from the iron pipe, when his fellow-servant threw down the block of wood on it, the master or fellow-servant was guilty of negligence. The work was .being done in the ordinary and customary way of doing such work, and there is nothing to show that it was not reasonably safe. According to the plaintiff’s own testimony, some of the laborers would bend down in placing the blocks on the iron pipe, and others would let them fall or throw them down on the pipe. It could not have been reasonably anticipated that the act of letting fall the block of wood on the iron pipe would cause a sliver to be knocked from the pipe and injure a fellow-laborer.

No testimony of any character was introduced tending to show that the pipe was made of defective material or that the way of distributing the blocks adopted by the defendant was not a safe way in which to do the work. According to the plaintiff’s own testimony, his injury was the result of an unfortunate accident for which no one was to blame. It was an unanticipated and unexpected occurrence which no reasonable person would have likely foreseen. It was an unavoidable accident and a complete defense against liability on the part of the defendant. Therefore, the peremptory instruction requested by appellant should have been given, and, for the error in not so doing, the judgment will be reversed; and, inasmuch as the cause of action seems to have been fully developed, it will be dismissed here.


author: iSmith, J.

text:
    Public Utilities Corporation of Arkansas v. Carden.
    Opinion delivered December 8, 1930.

      W. P. Strait, for appellant.

      Dean, Moore d Brasil, for appellee.
   iSmith, J.

Appellee recovered a judgment to compensate an injury, which, according to his testimony at the trial from which this appeal comes, was sustained in the following manner: Appellant company had caused .ditches or trenches to be dug, in which a gas line pipe was to be laid. There was a large rook in the ditch, which appellee was ordered by his foreman to remove. Appellee called one J. W. Reynolds, a fellow-servant, to assist him, and the two began to lift the rock from the ground, and .just as they did so and while appellee was in a strained position, lifting all his strength would permit, Reynolds, without warning, released his hold, which unexpected action placed the entire weight of the rock on appellee in a strained position, and ruptured him.

Appellee’s testimony presented this question for the jury, and the law of the subject appears to have been correctly declared by the instructions which were given.

Appellant company introduced at the trial a statement signed by appellee, which purported to detail the circumstances of his injury, and it was therein stated as a fact that Reynolds did not release his hold on the rock, and Reynolds, testifying as a witness at the trial, stated that he did not do so. This was the pivotal question of fact in the case. Appellee admitted signing the statement, but testified that it did not read, when he signed it, as it read at the time it was offered in evidence at the trial.

Upon this question the court charged the jury as follows:

“An effort is made upon the part of the defendant to contradict the plaintiff in certain parts of his testimony, and with a view of doing that they have read in testimony here what they contend is a statement made and signed by the plaintiff soon after the injury occurred. The defendant contends that he made all of those statements that your attention was called to. He denies that.
‘ ‘ The court tells you that that statement, and all of that evidence connected with it, is admissible alone for the purpose of contradicting the plaintiff, 'Carden, if it does contradict him. It is not evidence for any other purpose, and you should consider it alone for that purpose.
“In making up your verdict and in weighing the evidence and deliberating upon the credibility of the witnesses, you take all of these things into consideration —whether- or not a witness has been contradicted, or whether or not he has been corroborated by other facts and circumstances—and that statement, together with all the testimony that has been introduced relating to it, is admitted to you to throw whatever light it may throw, if it throws any light upon what credence you are to give to the testimony of Mr. Carden—whether or not it will strengthen him. or weaken him, if it does either; and you are to consider it for no other purpose.”

This instruction was erroneous. It permitted the jury to consider the signed statement “for the purpose alone of contradicting plaintiff,” which it does, but its use should not have been limited to that purpose. It was a declaration against interest and was admissible as such. Booth v. St. L. S. W. Ry. Co., 170 Ark. 801, 281 S. W. 8. ; Davis v. Falls, 172 Ark. 314, 288 S. W. 723.

The signed statement purported to be a detailed narration of the circumstances of appellee’s injury, made by appellee himself, and was therefore admissible as substantive testimony, and not merely as impeaching’ testimony.

For instance, suppose Reynolds ’ testimony had been favorable, and not unfavorable as it was, and appellee had decided to rest his case upon the favorable testimony of Reynolds. Would the fact that appellee had not testified, and could not therefore be contradicted or impeached as a witness, render his signed statement inadmissible? Under the circumstances stated, it would" have been inadmissible if it could be considered only for the purpose of contradiction, because appellee had not testified. Its competency, of course, did not depend upon the fact that appellee testified. It would have been, and was, admissible, whether appellee testified or not, and its use should not therefore have been limited to that of .contradicting appellee, if this was its effect. It was admissible as a declaration against interest, and the jury should not have been denied the right to consider it as such.

The probative value of the statement was, of course, a question for the jury. Appellee’s testimony as to the circumstances under which it was signed was such, if • believed, as to discredit the statement altogether and cause it to be disregarded by the jury; but this, too, was a jury question. The jury might have found, if permitted to do so, that appellee was, in fact, injured in the manner detailed in the signed statement; in other words, that the signed statement spoke the truth, and then, if so, that there was no' negligence on the part of Reynolds, and consequently no liability against the appellant.

In the. case of Booth v. St. L. S. W. Ry. Co., supra, it was held (to quote a head-note): “Where a witness for defendant testified that plaintiff made a certain statement in the nature of an admission, which witness- immediately reduced to writing, the statement was admissible, though the plaintiff at the time refused to sign it, and at the trial denied having made it. ’ ’

At § 3 oif.the chapter on Admissions and Declarations, 1 It. C. L. page 468, it was said: “A statement, to be admissible within the rule pertaining to admissions and declarations, must be against the proprietary or pecuniary interest of the person mailing it, as when so made there is a reasonable guaranty for its truth, forasmuch as people ordinarily do not assert facts that are injurious to them. From this want of motive to falsify, th'en, and from necessity, there being no better evidence available, disserving declarations are admitted. The declarations when received in evidence are said to be admitted as facts in themselves, from which presumptions may arise for or against the facts in question.” The annotated oases cited in the note to the text quoted collect many cases which support the text.

For the error in giving the instruction set out above the judgment must be reversed, and the cause will be remanded for a new trial.


author: Smith, J.

text:
    Reynolds v. Union Bank & Trust Company.
    Opinion delivered December 8, 1930.

      Hogue Burney, for appellant.

      Brundidge $ Neelly, for appellee.
   Smith, J.

The Union Bank & Trust Company brought this suit against J. B. Strickland, to foreclose a deed of trust given by him to the bank. I. N. Reynolds was made a party defendant, for the purpose of foreclosing a lien on a small tract of land which Reynolds had purchased from Strickland, and for which Reynolds had given Strickland a note for $375, dated April 4,19191, and payable January 1, 1920; the note being secured by a vendor's lien reserved in the deed from Strickland to Reynolds. This purchase money note from Reynolds to Strickland was deposited by Strickland with the plaintiff bank as collateral security to his (Strickland’s) note to the bank. Strickland renewed his note to the bank from time to time, and the Reynolds note was at all times held as collateral to secure Strickland’s indebtedness and the renewals thereof.

Reynolds filed an answer, in which he denied that the bank was an innocent holder of this note, and he alleged also that the note was barred by the statute of limitations, and had been paid.

The testimony leaves no doubt whatever that the bank acquired Reynolds ’ note in due course as collateral, before its maturity, and it is equally as clear that Reynolds paid Strickland the amount of the note, but the payments were made to Strickland at a time when he was not the holder of the note.

The question in the case is whether the note is barred by the statute of limitations. The note was dated April 4, 1919, and fell due January 1, 1920, and the suit was filed May 21, 1928, but upon the back of the note a payment was indorsed as follows: “By cash paid to J. B. Strickland Dec. 1,1924—$75. ’ ’ This alleged payment was made before the bar of the statute of limitations had fallen, and the suit was brought within less than five years after the date of the payment, so this payment is the controlling question in the case.

Reynolds testified that there was no authority for this credit on the note, and, if this is true, the note was barred, for, as was said by Cockrill, C. J., in the case of Wilson v. Pryor, 44 Ark. 532 : “The presumption of a deliberate promise to pay the residue, which the fact of part payment raises, can arise only from what would be deemed an actual part payment.” Taylor v. White, ante p. 433, 31 S. W. (2d) 745.

The president of the bank testified that this $75 payment was not made to the bank, but was reported by Strickland as having been made to him by Reynolds, and at Strickland’s request the credit was indorsed upon the note while it was in the bank’s possession as collateral for Strickland’s own note to the bank. This testimony alone would not be sufficient to bind Reynolds as proving that he had made a payment on his note, but it is by no means the only testimony on that subject.

Reynolds, who was Strickland’s uncle, was a carpenter by trade, and after buying the land he left the neighborhood in which it was located and went away in search of work at his trade, and he left the property in charge of Strickland, with directions to collect the rent, amounting to $6 per month, and to apply it to the payment of the note. Reynolds himself so testified. Reynolds did not know that Strickland had hypothecated the note, but supposed that Strickland had it in his own possession, and on October 24, 1927, he received a receipt from Strickland showing that the note had been paid in full, which recited ‘‘ that said note was burned up and this receipt is given in place of the said canceled or paid note.”

It is undisputed that Strickland collected rents amounting to as much as $75, and that he had done so not later than the date of the credit of that payment on the note, and it is admitted that Reynolds rented his house under an agreement by which the rent was to be paid to Strickland and credited on Reynolds’ note and it is undisputed that Strickland directed the president of the plaintiff bank to indorse the $75 credit on the note, and that this was done before the bar of the statute had fallen.

It is true Reynolds denied that he authorized Strickland to indorse the credit of payment on the hack of the note, hut it is also true that Reynolds admitted that he directed the rents to he applied to the payment of the note, and it was this agreement which tolled the statute, for, as was said in the case of McAbee v. Wiley, 92 Ark. 245, 122 S. W. 623 : “It is actually the fact of the payment that tolls the statute, and not the indorsement; the indorsement is only a memorandum, or at most an evidence, of such payment; and there can he no stronger proof of such payment than the admission of the defendant himself, who at the trial is then the only person controverting it. ’ ’

As it is established by. the testimony that Reynolds placed iStrickland in charg’e of the property, with directions to collect the rent and apply the rent to the payment of the note, and further that, pursuant to this direction, Strickland did collect the rent.and directed the president of the plaintiff bank to indorse the receipt of payment of $75 to Strickland, who was Reynolds’ agent to collect the rents and pay them to himself as the payee in the note, we conclude that the chancellor was warranted in finding, as he did find, that a voluntary payment had been made on the note by Reynolds before the bar of the statute had fallen, and the decree, based upon that finding, must therefore be affirmed, and it is so ordered.

Mehaeey, J., dissent.


author: Humphreys, J.

text:
    Haymes v. Priest.
    Opinion delivered December 8, 1930.

      Madison K. Moran, for appellant.

      John R. Thompson, for appellee.
   Humphreys, J.

This suit was brought in the chancery court of Lonoke 'County by appellee against appellants to foreclose a chattel mortgage upon the separate property of one of the appellants, Maggie Haymes, executed jointly by appellants to appellee to secure supplies to be furnished them while making the crop during the year 1929. It was alleged that appellants owed appellee a balance of $461.41 for supplies furnished them during said year. An itemized copy of the book account showing debits and credits was attached to the complaint.

A separate answer was filed by Maggie Haymes denying every material allegation in the complaint.

Personal service was not obtained upon J. A. Haymes, and his appearance was not entered by answer or otherwise.

The cause was submitted upon the pleadings and testimony resulting in a personal .judgment being rendered against both appellants for $296.27, together with the decree of foreclosure and order of sale of all the personal property owned by Maggie Haymes in said county which had not already been sold to satisfy same, from which is this appeal.

It appears that appellant, Maggie Haymes, and her husband executed three notes in the total sum of $700, one of which, was to appellee for $300 and two of which were to the bank for $200 each; that the money obtained on the notes executed to the bank was paid to appellee and credited on the account for supplies furnished by appellee and charged to J. A. Haymes; that appellants executed a chattel mortgage covering the crop to be raised, and all the personal property owned by Maggie Haymes in said county to secure the supplies to be furnished by appellee during the year 1929; that the debits included an item of $105.90 advanced to Charlie Sharp and the $3 advanced to him in cash, which made a total of $108.90; that Charlie Sharp' turned his crop over to J. A. Haymes who assumed the payment of advances made by appellee to Sharp and directed that the amount be transferred and charged to his book account covering advances which had been made under the chattel mortgage; that J. A. Haymes took a car belonging to his wife, Maggie Haymes, and left the country and that Maggie Haymes thereupon turned the crops and personal property covered by the mortgage over to appellee for the purpose of selling same and applying the proceeds thereof to the account for supplies furnished by appellee.

The main contention of appellant for a reversal of the judgment and decree is that Maggie Haymes’ liability under the mortgage was limited to the face of the notes and interest. In other words, that her individual property covered by the mortgage could not be subjected to the payment of supplies sold and charged to her husband in excess of the face value of the notes and interest thereon. The notes were given as estimates only of the amount of supplies to be furnished. The language of the mortgage was broader and covered the value of all supplies to be furnished by appellee to appellants during the year 1929. ■ The language of the mortgage, however, was not broad enough to include supplies furnished and charged to a third party who thereafter sold his crop to J. A. Haymes. Under no construction of the language used in the mortgage can an intention be imputed to Maggie Haymes to pledge her individual property to secure advances made by appellee to one who might thereafter sell his crop to J. A. Haymes. The court erred, therefore, in holding that the mortgage secured advances made by appellee to 'Charlie 'Sharp in the sum of $108.90.

Appellant Maggie Haymes also contends that the court erred in rendering a personal judgment against her for the balance of the account which was charged on the books to her husband, J. A. Haymes, in excess of $700, the amount of the notes. Her liability under the terms of the mortgage is not limited to the face of the notes. ’The language of the mortgage secured the payment of all supplies furnished to both Mr. and Mrs. Haymes during the year 1929 for the purpose of making the crop. Mrs. Haymes testified, in addition to the language used in the mortgage which binds her, that she gave the mortgage to cover Arthur’s (her husband) account for supplies which were to be furnished them during the year 1929. It was her account as well as her husband’s, although charged against her husband, and it was proper to render a personal judgment against her for the balance eliminating the item advanced to Charlie Sharp.

It was improper, however, to render a personal judgment against J. A. Haymes who had not been personally served.

Appellant, Maggie Haymes, also contends for a reversal of the judgment and decree because same was based upon a report of a master filed in vacation without being accorded a hearing thereon. It is argued that a master was appointed to state the account and the cause continued, and that during vacation he filed a report upon which the judgment and decree were rendered and dated back as if same had been rendered in term time. We have examined the record, and are unable to find where any master was appointed or that he filed a report or that the judgment and decree were based upon such report. The judgment and decree recite that it was rendered on the 7th day of March, 1930, during term time, upon the pleadings and testimony adduced at the trial, and there is nothing in-the record showing that these recitals are not true.

The judgment and decree are therefore modified so as to conform to this opinion, and, as modified, are affirmed.


author: Kirby, J.,

text:
    Pacific Mutual Life Insurance Company v. Ware.
    Opinion delivered December 8, 1930.

      Bogle >& Sharp and Rose, Hemingway, Cantrell ■$ Loughborough, for appellant.

      Lee Moore, Guy E. Williams and O. E. Williams, for appellee.
   Kirby, J.,

(after stating the facts). Appellant insists that the court erred in giving said instruction No. 3, but concedes that the law was pro-perly declared in re-quested instructions Nos. 1 and-2 given by the court applying the principles of law to the case made.

In Mutual Benefit & Health Assn. v. Tilley, 176 Ark. 528, 3 S. W. (2d) 320, the court, in an action by the administrator of the insured to recover -on an accident policy for the death of the insured, who was shot by his wife, the beneficiary under the policy, where the jury found the killing was intentional but not justified, held that the killing was “accidental” within the meaning of the policy, saying: “Appellant insists that the killing, while intentional, was-justified, and insists that there can be no. recovery, and the following cases are cited in support of that contention (citing cases).

‘ ‘ In reply to this contention, it may be said that the jury has found, under the instructions referred to above, that the killing was intentional, but not justified. This béing true, the killing was ‘accidental’ within the meaning of the language employed in the policy sued on. ’ ’

The instruction No. 3 complained of is in no wise contradictory of the instructions that correctly declared the law as applicable to the proved facts, and is not, therefore, erroneous, and could not have been prejudicial, since it was not an incorrect definition of the term ‘ ‘ accidental,” and in any event the jury was not limited to the term as defined therein, the court saying: “If you find that the deceased, Ony Ware,"came to his death as a result of accidental means as defined to yon,” did not limit the definition to the particular instruction, having defined “accidental” also in the other correct instructions. It did not leave out any element necessary to he shown before a judgment could be rendered against the appellant not, as already said, limiting the definition to the particular instruction. The .jury could well have found from the testimony that Newman, having become angered at the conduct of the insured, aimed himself, continuing to make threats of getting even or of destroying him, sought the deceased, invited him into a small room away from the presence of others, assaulted and finally killed him without any justification; or that Newman provoked deceased into assaulting him, voluntarily engaged in the fight and without any effort to retire or withdraw therefrom' shot and killed the deceased without the right to do so in self-defense.

Appellant’s contention that the court erred in the admission of the testimony, the answer of appellee, stating she had two children and was employed in the State Educational Department, could not have been prejudicial, even if erroneous. There was no question in the case about what amount the recovery should be, if a recovery was had. It could not have resulted in any event in increasing the amount of the recovery, which was limited by the amount of the policy. The chief witness for appellant had stated in his testimony that he had a family of nine people dependent upon him, and apparently as some mitigation for his becoming enraged at the conduct of his partner and accentuated evidently the feeling aroused against him because of his conduct complained of, and the statement could be regarded as invited error, even if it were held to be error.

The alleged improper argument of counsel for appellee complained of is without merit. It was an expression only of surprise at the manner of appellant’s conduct of the trial of the case., but his opinion thereof, without reciting any facts or incidents, of the trial that caused such opinion to' be held and expressed, could not have been erroneous. Counsel made no statement of any facts outside the record, nor of any particular facts as shown by the record upon which his expression of surprise was based or founded, and the jury could not have been impressed with any other view than that it was but an expression of his opinion on the case and the manner of developing it and was entitled to weight only as it was warranted by the facts in the trial. It was but an argument and not outside the right of counsel in making an argument of the case to thé jury, and no error was committed in the making of such statement.

Upon a careful consideration, of the whole case, we do not find'any prejudicial error in the record, and the judgment is accordingly affirmed.


author: Mehaffy, J.

text:
    Missouri Pacific Railroad Company v. Hull.
    Opinion delivered December 8, 1930.

      Thomas B. Pryor and Baggett S Baggett, for appellant.

      Giles Bearing, for appellee.
   Mehaffy, J.

This suit was begun by appellee against appellant to recover damages for killing a bird dog. The dog was killed in the nighttime, and no one saw it killed. The evidence, however, shows that the dog was found on the track between the rails, mutilated, one foot cut off and its head and body injured. One witness said it looked as if the head of the dog was partly cut off and the body had been dragged five or six feet in an easterly direction. There was blood on the ties, the track was straight for half a mile or more on each side of the place where the dog was killed. There was blood and gravel on the track which showed where the dog had been dragged. Several witnesses testified as to the value of the dog, but there is no claim that the verdict is excessive, and it is not necessary to set out the evidence on the question of value.

The following stipulation was introduced in evidence: “It is hereby stipulated and agreed by and between Giles Dearing, attorney for the plaintiff herein, and 'O. E. Daggett, attorney for the defendant herein, that on the night of December 15, 19i29, the defendant company operated ten trains through the town of Wynne, Arkansas; that, if called to testify herein, the firemen and engineers on each of said trains so operated through the town of Wynne, Arkansas, on said date, would testify that at all times between a point east of the coal chute on the' right-of-way of the defendant company in the town of Wynne and a street crossing thereon known locally as Killough iCrossing, in the town off Wynne, each and all of said firemen and engineers were maintaining a lookout, as required by the statute of Arkansas, for persons and property on or adjacent to the track of said company; that neither of said firemen or engineers discovered a dog on the track at the place hereinbefore indicated, and have no knowledge of the train so operated by them, and each of them, having struck a dog.’’

Several instructions were given over the objection of appellant, and instructions requested by appellant were refused. It is not necessary to set out these instructions. The main objection to the court’s action in giving’ and refusing instructions was based on appellant’s contention that, in order to find for appellee, the jury had to presume in the first place that the dog was' killed by the operation of the train, and on that presumption base the presumption of negligence. The jury did not have to presume that the animal was killed by the operation of a train. This however was proved by circumstantial evidence. Before the jury would have been justified in finding for the appellee, it must have found as a fact that the dog was killed by a train. The evidence must have shown this. It was not necessary to show by direct evidence, but the fact might be shown by circumstantial evidence. A fact may be as thoroughly established by circumstances as by direct evidence.

“A well connected train of circumstances is as cogent of the existence of a fact as any array of direct evidence, and frequently outweighs opposite direct testimony.” 23 C. J., p. 48.

This court, in discussing the scintilla rule, said:

“While this rule is not to be ignored, it is equally well settled that any issue of fact in controversy may be established by circumstantial evidence where the circumstances adduced in evidence are such that reasonable minds might draw different conclusions therefrom.” St. L. I. M. & R. Co. v. Fuqua, 114 Ark. 112, 169 S. W. 786 ; Paragould & M. R. Co. v. Smith, 93 Ark. 224, 124 S. W. 776 ; St. L. I. M. & S. R. Co. v. Owens, 103 Ark. 61, 145 S. W. 879.

Of course the circumstances must agree with and support the hypothesis which they are adduced to prove, ■and, where circumstantial evidence is* relied upon, the circumstances themselves must be proved. Under the evidence in this case the jury were justified in finding that the dog was killed in the operation of a train. It is argued that the circumstances merely give rise to a presumption or inference that the dog was killed by the operation of a train, and that the jury, in order to find for the appellee, had to base another presumption on this presumption, that is the presumption that the appellant was guilty of negligence. We do not agree with appellant in this contention. In the first place, we think the proof showed that the dog was killed by the operation of the train, and the jury necessarily so found. When the jury found that, it did not have to indulge in any presumption at all. The laws presumes that, if the animal was killed by the operation of a train, it was negligently killed. This is not a presumption of the .jury, but it is a presumption created by statute. Appellant cites and relies on the case of Mo. Pac. Rd. Co. v. Forsee, 181 Ark. 471, 26 S. W. (2d) 108. In that case the proof of the killing was practically the same as in the instant case, and we said: “If the dog was killed by the operation of the train as the jury found, this made a prima facie case, and was sufficient to take the case to the jury unless the railroad company offered some evidence that it was at the time in the exercise of care, and did not negligently kill the dog.” In the1- instant case, the only evidence offered by the appellant was the stipulation set out above, and this only shows that the engineer and firemen of ten trains were keeping a lookout and did not see any dog. There is no claim that there was any lookout kept on the switch engines which operated over this portion of the track, any one of which might have killed the dog, and there is no evidence tending to show that the appellant was in the exercise of care or performing* its statutory duty of sounding the alarm before reaching a crossing. The facts do not bring this case within the rule discussed in the case of Mo. Pac. Rd. Co. v. Forsee, supra, nor within the rule announced by the Supreme Court in Western & A. R. Co. v. Henderson, 279 U. S. 369, 49 S. Ct. 445. There was ample evidence to justify the jury in reaching the conclusion that the dog* was killed by the operation of a train, and no evidence on the part of appellant that it was in the exercise of care at the time.

The judgment is affirmed.