author: Humphreys, J.

text:
    Bank of Pangburn v. Tate.
    Opinion delivered January 31, 1921.
    1. Attachment — writ issued without service. — An order sustaining the attachment of an equitable interest in land, made without either personal or constructive* service upon the defendant, was void.
    2. Attachment — additional writs — necessity of service. — Constructive service in an action in which an attachment was levied on personal property could not be made the basis of service in a subsequent attachment proceeding against realty, as additional writs can not be issued and property seized thereunder sold without new service.

      3. Appeal and error — question not raised below. — Parties can not treat an issue as joined by the pleadings and, after trying it out, raise the question for the first time on appeal that the pleadings did not present the issue joined.
    Appeal from White Chancery Court; J. E. Martinecm, Chancellor;
    reversed.

      Brundidge <& Ne.elly, for appellant.
    The claims of appellant were prior to and paramount to that of the intervener, W. D. Tate, because (1) the agreed statement of facts shows that a writ of attachment was issued on December 19, 1919, and levied January 1, 1920, upon Pierce’s equity in the property, while appellee’s transcript from the justice of the peace court was not filed in the clerk’s office until afterward and was never entered on the judgment docket of the circuit court. Appellant’s attachment was the prior and paramount lien. 38 Ark. 421; 40 Ark. 129.

      Miller & Tingling and W. D. Dmenport, for appellee.
    1. The appellant has no right to complain against the decree. He is trying to collaterally attack the judgment of appellee in the justice of the peace court. This can not be done by anyone except the defendant, Pierce. 47 Ark. 31; 63 Id. 157; 62 Id. 171.
    2. Appellee’s lien became complete from the time the writ of attachment was levied upon the equity of the defendant. Appellant had notice of this lien December 8, 1919. Here the sale of the lot had already been made, and no sale of the lot is asked. 83 Ark. 419, does not sustain appellant. The statute does not provide that the lien once acquired by the issue and levy of attachment shall be destroyed unless the case is at once docketed on the common-law docket, but simply provides that before the clerk shall have authority to issue an order for the sale of the land under the attachment the cause must be docketed and must show that it is an attachment. This' is a proper construction of the statute, as it conforms to art. 7, § 40, Constitution of 1874.

      3. The attachment hy appellee of the lot was regular, has the sanction of the' law and is not void. An attachment affidavit can be amended, and this was done by the new affidavit. 37 Ark. 560. These sections are conclusive of the right of appellee to have the second attachment issued and levied. Appellee, in all things, complied with our statutes. Section 465 is as mandatory as § 6383, and both provide a simple method to reach both real and personal property. The decree is correct.
   Humphreys, J.

This appeal involves the priority of liens growing out of writs of attachment levied upon the equitable interest of J. W. Pierce in lot four, block two, Skillern’s addition to Pangburn, Arkansas. Appellant enforced a vendor’s lien note, in the sum of $450, which he had purchased, against said property, on the 28th day of February, 1920. After paying the indebtedness and costs, there remained in the hands of the commissioner $265.82.

Prior to the institution of the foreclosure suit, appellant had instituted a suit against J. W. Pierce in the White Circuit Court for $1,500 and obtained a writ of attachment, on the 19th' day of December, 1919, which was levied upon the equity of J. W. Pierce in said real estate on January 1, 1920. Based upon this proceeding, appellant filed an intervention in the foreclosure suit for the surplus remaining in the commissioner’s hands.

Prior to the institution of either suit, • appellee brought an attachment proceeding against J. W. Pierce before a magistrate in said county. A warning order was issued in the proceeding against J. W. Pierce, who was a nonresident, and the attachment was levied by the constable of the township upon personal property 'belonging to the said J. W. Pierce. Pierce made default, the attachment was sustained, and the personal property condemned and sold under an order of court to satisfy appellee’s claim, but only sold for sufficient to pay $173.40 thereon, leaving a balance due appellee of $165.58. On October 28, 1919, after the sale of the personal property, appellee filed another affidavit and procured the issuance of a writ of attachment on October 30,1919, which was levied upon the equity of J. W. Pierce in said real estate on December 1, 1919, without publishing an additional warning order. On the return of the writ showing a levy upon the equity of Pierce in said real estate, the attachment was sustained, a transcript of the judgment sustaining the attachment was lodged in the office of the clerk and entered in the lien record of certified judgments, mechanics ’ liens, etc., but was not docketed on the law docket of the circuit court. Based upon this proceeding, appellee filed an intervention in the foreclosure suit for the surplus aforesaid.

The question of the priority of the judgment-liens was submitted to the court on the interventions of appellant and appellee, together with an agreed statement of facts, in substance heretofore detailed.

The court found that appellee’s attachment lien was paramount to that of appellant and decreed that the surplus, or so much thereof as might be necessary, be applied to the payment of the debt due by J. W. Pierce to appellee. From that decree an appeal has been duly prosecuted to this court.

The issuance and levy of appellee’s attachment upon the equitable interest of J. W. Pierce in said real estate was prior in point of time to that of appellant’s; but it was void for the reason that it was issued and sustained without personal or constructive service upon Pierce. The attachment proceeding in the justice of the peace court by appellee against J. W. Pierce, which was levied upon certain personal property, became a finality with the condemnation and sale of said property. The constructive service obtained in that suit could not be made the basis of service in the subsequent attachment proceeding against the real estate. Writs of attachment can be issued in succession during the pendency of an action and ancillary to it. Additional writs can not be issued and the property seized thereunder condemned without new service, because. such a proceeding is clearly in the nature of a new suit. Otherwise, innumerable seizures and sales of property might be effected without notice, personal or constructive, to defendants in attachment proceedings.

It is contended, however, that no reply was filed to the intervention of appellee. The intervention filed by the respective parties were treated as presenting the issue as to the priority of liens. It is recited in the agreed statement of facts that, “This suit is for the purpose of determining whether the intervener, Tate, is entitled to the surplus aforesaid or whether the Bank of Pangburn is entitled to same.” Parties can not treat ■an issue as joined by the pleadings, and, after trying it ■out, raise the question for the first time on appeal that the pleadings did not present the issue tried.

The decree is reversed and the cause remanded for further proceedings not inconsistent with this opinion.


source: Caselaw Access Project

license: Public Domain

text:
    People’s Savings Bank v. McInturff.
    Opinion delivered January 31, 1921.
    1. Evidence — instrument insufficient as will. — A typewritten instrument designated as a will but not witnessed as required by law, which is not admissible in evidence as a will, because not properly executed, nor as a release, because made without consideration, may be admitted to corroborate other evidence that a note and mortgage to decedent had been settled, as it was a declaration against interest, and it is immaterial that the declaration was not made to the debtor.
    2. Witnesses — statements of intestate. — Crawford & Moses’ Digest, § 4144, prohibiting a party from testifying as to transactions with or statements of an intestate unless called by the opposite party, has no application to an agent or attorney of a party.
    3. Mortgages — decree sustained by evidence. — A decree, holding that a certain mortgage had been paid held sustained by the testimony.
    Appeal from Pulaski Chancery Court;' J. E. Martineau, Chancellor ;
    affirmed.

      Abner McGehee, for appellant.
    The paper designated as a will was not admissible in evidence because not probated nor subject to probate. Kirby’s Digest, §§ 8028-30. Nor could it be probated in Tennessee. 4 Shannon’s Code of Tenn., p. 3759. It was typewritten and without subscribing witnesses. The burden was on appellee, and she has failed to sustain her case, and the facts and circumstances and the contradictory statements aré so suspicious as to make the authenticity of the will doubtful.
    The statement of J. H. Carmichael was not admissible in evidence, and the decree below is not sustained by the weight of the evidence. Appellee’s evidence is not worthy of belief. The decree should be reversed with directions to enter a decree in favor of appellant.

      Carmichael & Brooks, for appellee..
    1. The paper headed “will” was admissible in evidence. It was a declaration against interest, as a written declaration of the intestate and as a circumstance to corroborate the other evidence to the effect that the note and mortgage for $4,000 had been settled. Greeleaf on Ev., p. 215, § 147; 115 Ark. 538; 98 Id. 340.
    2. The decree of the chancellor is sustained by the great weight of the testimony. 130 Ark. 465.
   Humphreys, J.

This suit was commenced on April 12, 1919, by the New York Life Insurance Company, in the Pulaski Chancery Court, in which appellant and appellee were made parses (defendant. The /allegation contained in the bill was that it owed $3,873.32 on two policies of insurance issued on the life of Lewey D. Able, now deceased, which was claimed by both appellant and appellee, and asked that they be required to answer and establish their respective claims to the fund.

Appellee answered, claiming the fund by virtue of assignments of the policies.

Appellant answered, claiming the fund on account of an indebtedness due from appellee to the estate of Lewey D. Able; that, on April 4, 1918, Lewey D. Able had filed a suit for said indebtedness against appellee in the chancery court of said county, which was still pending and to which no answer had been filed. The suit was for $4,000, evidenced by note and mortgage, and was a foreclosure proceeding. The suit bore No. 22584, and was revived in the name of appellant, as administrator for Lewey D. Able, deceased, and consolidated with the present case, which bore No. 24041. By way of amendment, appellant alleged an additional indebtedness of appellee to the estate of Lewey D. Able in the sum of $2,919.28, on account of failure of consideration for certain lands which had been conveyed by appellee to the said Lewey D. Able.

Ajppellee filed answer, denying any indebtedness whatever to the estate of Lewey D. Able,- deceased, and pleaded a settlement in full of all transactions between them prior to the death of the said Lewey D. Able.

The cause was submitted to the court upon the pleadings, evidence -and exhibits, from which the court found for appellee against appellant, and decreed that the money deposited in court by the New York Life Insurance Company be paid to appellee, from which'decree an appeal has been duly prosecuted to this court.

The validity of the assignments of the insurance policies to appellee was not attacked. No attempt was made to establish the alleged indebtedness of $2,919.28 in favor of the estate of Lewey D. Able against appellee. The sole issue, therefore, presented for determination on -appeal is whether appellee is indebted to the estate of Lewey D. Able, deceased, on account of the $4,000 note and mortgage, upon which suit was pending against appellee by Lewey D. Able at the time of his death.

The suit was instituted by A. J. Newman for Lewey D. Able against appellee on April 4, 1918. At that time, Mr. Newman had the original note and mortgage. At the time Mr. Newman testified in the instant case, he had the mortgage but did not have the note. He had an unsigned copy of the note, which he found, after the death of Lewey D. Able, amongst his papers. Appellee never denied to A. J. Newman that she was indebted to Lewey D. Able, bnt said that she had no money with which to pay it. After Able.’s death, which occurred on December 19, 1918, appellee requested A. J. Newman to dismiss the suit, asking at the time whether Mr. Able owed him anything. He said, “Yes; $50. ’’ She replied, if he dismissed the suit he wouldn’t lose his fee. The cause was continued along without answer being filed, with some sort of understanding between them that appellee should pay off. a lien against the property before proceeding further with the suit. J. H. Carmichael had been employed by appellee to enter a defense in the suit for her. He did not file an answer, because Lewey D. Able, in conversation with him about the middle of July, 1918, told him that there had been a settlement between appellee and himself, and that she did not owe him anything; that he would instruct A. J. Newman to dismiss the suit. For many years, Lewey D. Able and appellee were associated together in business. Appellee had invested Lewey D. Abie’s money in Saline, Pulaski and other places. Lewey D. Able had made his home with appellee and her parents for a number of years. On or about December 30, 1919, appellee called at the office of Banks & Harrelson, in Memphis, in search of papers belonging to Lewey D. Able, which she heard had been deposited with them. During a conversation with W. H. Harrelson, he recalled that, more than a year before, Lewey D. Able had left some papers with him. He had not heard of Abie’s death. The papers had been in his exclusive custody during the time. At the request of appellee, he expressed these papers to J. H. Carmichael in Little Bock. Among them was what purported to be a will. It was written in type and signed by Lewey D. Able. Its date was August 11, 1918, which was Sunday. There were no subscribing witnesses to the paper. It is as follows :

“Will.
‘ ‘ I make this my last will:
“I appoint Edith W. Mclnturff my executrix without bond, and want her to handle and dispose of my property, being guided by what I have told her for many years, as follows:
“I have disposed of all my real property by transfers to my brothers and sisters, or their heirs, as I want them to have it, and these deeds are in trust and will be turned over to them at a time I have arranged for. Edith W. Mclnturff has nothing to do with the handling of my real estate.
“Two paid-up life insurance policies in the New York Life Insurance Company have been assigned to Edith W. Mclnturff, several years ago, and these she is entitled to, as she paid for them by furnishing me money to make certain investments ten years ago.
“I owe none of my relatives anything, and I cancel any and all debts, notes or mortgages that may be due me at the time of my death by any of my relatives, or by Edith W. Mclnturff. I have had a home on her place and with her parents for the past eighteen years.
“Above all, I want the closing* of my affairs to be with as little confusion and trouble as possible. I have left full instructions with my executrix as to how I want my remains disposed of and matters closed.
“Should my executrix die before the closing of my estate, then I would ask that some trust company be appointed to take her place.
“Made at Memphis, Tennessee, on this August 11, 1918.
(Signed) ‘ ‘Lewey D.' Able.
“The following persons witness my signature.”

. The record contains statements made by appellee in reference to the information she received concerning the whereabouts of these papers which are out of the ordinary and somewhat unreasonable, but none of them are sufficient from which to find that the paper designated as a will is not genuine.

Appellant insists that the paper designated as a will was not admissible in evidence because not probated or subject to probate. Not being in proper form and subject to probate, appellant is correct in the contention that it can not be admitted in evidence as a will. While testators may release or remit debts by will, the debt in question can not be held to be released under its terms, for the reason that the instrument is not a will. Neither is it sufficient within itself as a contract to release the debt, because it was executed without consideration. We think, however, the will admissible in evidence as a written declaration by the intestate, Lewey D. Able, as a circumstance tending to corroborate the other evidence in the case to the effect that the note and mortgage of $4,000 had been settled. The declaration was against the interest of Lewey D. Able, upon that ground, was admissible. G-reenleaf on Evidence, vol. 1, § 147, page 232 (16 ed.). We find nothing in the rule requiring that the declarations must have been made to the debtor in order to be admissible, as suggested by learned counsel for appellant.

It is also insisted by appellant that the statement of J. H. Carmichael, to the effect that Lewey D. Able told him that appellee had settled the indebtedness made the basis of the foreclosure suit, which he had been employed to defend, and that he would inform A. J. Newman to dismiss the suit, was not admissible, because, at the time made, J. H. Carmichael was acting for appellee and the business related to a transaction with the deceased, Lewey D. Able. The only reason a declaration or admission made by the deceased to a party to the suit, pertaining to a transaction between them, is not admissible is because the statute bars the admission of such testimony. The prohibition does not extend to the agent or representative of the interested party. Crawford & Moses’ Digest, § 4144; Nolen v. Harden, 43 Ark. 307; McRae v. Holcomb, 46 Ark. 306; Brown v. Brown, 134 Ark. 380.

The last contention of appellant is that the decree of the chancery court is not sustained by the weight of ■ the evidence. J. H. Carmichael testified positively that the deceased informed him that appellee had settled the indebtedness evidenced by the note and mortgage of $4,000, upon which suit had been brought by A. J. Newman, and that he would instruct his attorney, A. J. Newman, to dismiss the suit. His evidence is corroborated to some extent by that of A. J. Newman, who testified in substance that the suit had been held up on account of some kind of settlement pending between the parties and the further circumstance that no steps were taken in the case during the lifetime of Lewey D. Able. His evidence is also corroborated by the declaration of the deceased, Lewey D. Able, contained in the paper purporting to be a will. There is practically no evidence in the record tending to show otherwise, so the decree of the chancery court is in accordance with the weight of the evidence.

No error appearing in the record, the decree is af-. firmed.


text:
    Miller Rubber Company v. King.
    Opinion delivered January 31, 1921.
    1. Sales — right to cancel orders. — Although a contract between an automobile tire concern and a local dealer provided that the former might refuse credit at its option, this would not justify it in declining to ship tires where it had accepted an order and agreed to ship them.
    2. Trial — question for jury. — Where the evidence on an issue was conflicting, it was not error to refuse to direct a verdict for the plaintiff.
    3. Sales — breach of contract — instruction.—In an action by the seller of automobile tires to recover a balance due, in which the buyer filed a counterclaim asking for damages for failure to fill an accepted order for tire's, instructions embodying the idea that the seller could arbitrarily refuse to ship an order after accepting it held properly refused.
    4. Trial — instructions considered as a whole. — If the various instructions separately present every phase of the law applicable • to the case as a harmonious whole, there is no error in each instruction failing to carry qualifications which are explained in others.
    5. Sales — loss of profits — instruction.—In an action for a balance due on a sale of tires, wherein the buyer counterclaimed damages for failure to ship tires ordered, an instruction that the buyer could not recover any loss of profits as damages was properly refused, the evidence showing that the buyer had an established business with a ready sale for such products.
    Appeal from Pulaski Circuit Court, Third Division; G. W. Hendricks; Judge;
    affirmed.

      Richard M. Mann, for appellant.
    1. The court erred in refusing to give appellants peremptory instruction on the counterclaim of appellee. The appellant clearly had the right to decline to ship this order of May 5, and it was error to refuse appellant’s instruction No. 4.
    2. The court erred in giving defendant’s instruction No. 1. It was peremptory and excluded two issues, (1) the right to fix the credit limit, and (2) the refusal of payment by appellee of his past due account, which was submitted in appellant’s instruction No. 6. Instructions which exclude or ignore issues are erroneous. i82 Ark. 424; 95 Id. 108; 108 Id. 171; 77 Id. 201. For the same reasons it was error to give appellee’s instructions 2, 3 and 4.
    3. The court erred in refusing papellant’s request, for instruction 3. It should have been given. 113 Ark. 556.
    4. The court should have given appellant’s instructions Nos. 4 and 5.
    5. The verdict is contrary to the law and the evidence.

      Rose, Hemingway, Cantrell & Loughborough, for appellee.
    1. There is no error in the instructions. 100 Ark. 107-119. See, also, 74 Ark. 377; 87 Id. 396; 88 Id. 433; 93 Id. 573.
    2. Only general objections were made to each of the instructions, and counsel did not ask for a modification. 93 Ark. 564.

      3. There was no error in refusing No. 3. 69 Ark. 219; 111 Id. 474-484. There is no error. The verdict on the counterclaim is amply supported by the evidence.
   Humphreys, J.

Appellant instituted suit against appellees in the Pulaski Circuit Court to recover $936.32, an alleged balance due for automobile tires sold by it to E. M. King, Jr., the payment of which was guaranteed by E. M. King, Sr.

Appellee E. M. King, Jr., filed answer, admitting the indebtedness, but, by way of counterclaim, pleaded damages in the sum of $721.77 on account of the failure of appellant to ship him automobile tires ordered on the 5th day of May, 1919, under the terms of the contract entered into by and between appellant' and him on the 30th day of September, 1918, for which he was entitled to a credit, leaving a balance of $214.55 due appellant. He tendered that amount.

Appellant filed a reply to the counterclaim, denying any obligation on its part to ship the tires ordered by said appellee on May 5, 1919, or that said appellee was damaged in the sum of $721.77, or in any sum by reason of its failure to make the shipment of tires.

The cause was submitted to a jury upon the pleadings, evidence and instructions of the court, which resulted in a verdict and judgment in favor of appellee on his counterclaim, from which judgment an appeal has been duly prosecuted to this court.

The contract made the basis of the suit provided for the sale by appellant to appellee E. M. King, Jr., of Miller pneumatic automobile tires on the basis of trade discounts from current Miller consumers’ lists. The second paragraph of the contract is as follows:

“Terms of payment are 5 per cent., 10 days,'net, 30 days; it being understood, however, that party of the first part may refuse such terms at its option, if, in its opinion, the financial responsibility of the party of the second part is impaired, or, for any other reason such action is deemed advisable. ’ ’

It was also provided in the contract that either party might terminate it at any time upon thirty days’ notice. Pursuant to the right to terminate the contract, appellant gave appellee E. M. King, Jr., notice on the 10th day of May, 1919, that it would cancel the contract on June 10 thereafter. On May 5 antedating the notice, said appellee made an order through appellant’s Memphis house by ’phone for a shipment of tires amounting to $1,824.73, according to the evidence of said appellee, and $2,100, according to the evidence of appellant. According to the evidence of appellee, appellant accepted and agreed to fill the order, and no refusal was made to ship under the terms specified in the contract nor on account of it being in excess of any credit limit or on account of any failure to pay amounts due on orders previously made. According to the evidence of appellant, Mr. Elkins, its manager, took the order down and told said appellee that he would see about it; that some days later he informed said appellee that if he would pay his past due account of $2,441.97 the order would be filled; that, on May 12, said appellee made payment and reduced the account, together with rebates to which he was entitled, to $936.32; that he did not pay the entire account, and, for that reason, the order made on May 5 was not shipped. When the contract was entered into and for some months thereafter, Mr. King’s territory was under the appellant’s Oklahoma branch house, but, in February, 1919, it was transferred to appellant’s Memphis branch house. During the fall of 1918, appellant placed a credit limit of $500 upon said appellee. Appellee thereafter executed to appellant a guarantee, signed by E. M. King, Sr., by which he guaranteed the payment of any account to appellant not exceeding $3,000. Appellant’s testimony tends to show that appellant fixed said appellee’s credit limit at $2,500, but the evidence fails to disclose that any notice of the credit limit was given to, or understood by, said appellee. During the period the credit limit was fixed at $500, the parties, in their transactions, did not adhere to it and the books show that the credit extended on two occasions was about $3,000. The evidence on behalf of appellee tended to show that, had appellant shipped the tires ordered on May 5, 1919, he could have sold them at a profit of $721.77 in the course of his regular business and without incurring any additional expense.

Appellant insists that, the court committed reversible error in refusing to give its peremptory instruction on appellee’s counterclaim, on the ground that it had a right to fix a credit limit and refuse to ship an order in excess of such limit. We think section 2 of the contract, heretofore set out, invested the right in appellant to place a credit limit upon appellee for any reason deemed advisable, upon notice to appellee, before or at the time an order for tires was made; but it would, notwithstanding, be bound to ship an order which it accepted and agreed to ship under the original terms specified in the contract. The evidence of appellee tended to show that appellant accepted and agreed to fill the order on May 5, 1919, unconditionally. Appellant’s evidence , tended to show the contrary. Thus an issue was presented for determination by the jury, and it was not error to refuse to give appellant’s peremptory request. Appellee requested and the court gave instruction No. 2, which correctly stated the law upon this issue. The instruction is as follows:

“You are instructed that, under, that portion of the contract relating to terms of payment, plaintiff could not refuse to sell and ship automobile tires to the defendant during the term of the contract, but it only authorized plaintiff to refuse the terms of payment set forth in the contract and suggest other terms of payment, and, until plaintiff specifically refused the terms of payment set forth in the contract, defendant was justified in con-' sidering those terms of payment still in force and acting accordingly.”

Appellants made two requests, 4 and 5, touching upon the same issue, which were refused. They are as follows:

“ (4) The plaintiff in this case had the right to fix a reasonable credit limit to be extended to the defendant, and if you find in this case that such credit limit was fixed by the plaintiff at $2,500 and that the order which was made by the defendant exceeded this credit limit, the plaintiff was not required to ship the order, and your verdict will be for the plaintiff on the issue.
“(5) If you find in this case that a guarantee agreement was made by E. M. King, Sr., father of the defendant, limiting the amount of the guaranty to $3,000, and that the order placed by Mr. King, involved in this case, plus the amount he owed at the- time, exceeded the sum of $3,000, the plaintiff was not. required to ship it, and your verdict will be for the defendant. ’ ’

These instructions were properly refused because erroneous in embodying the idea that appellant could arbitrarily refuse to ship the order after accepting it under the terms specified in the contract.

It is next insisted that the court erred in giving said appellee’s instructions 1, 2, 3 and 4, because they excluded, first, appellant’s right to fix a credit limit; second, the right to refuse to make the shipment because said appellee had failed to pay his past due account.

(1) As above stated, the evidence did not warrant the submission of appellant’s theory that it had the arbitrary right to fix a credit limit, without notice to appellee, and refuse to ship an order after having accepted and agreed to fill it under the terms specified in the contract.

(2) It is true the instructions objected to did not include appellant’s theory that it had a right to refuse to ship goods until said appellee should pay his past due account; but that theory of appellant’s was incorporated in a separate instruction asked by it, which is as follows:

“(6) If you find in this case that the Miller Rubber 'Company seasonably offered to the defendant, E. M. King, Jr., to ship the order of May 5 if he would pay his past due account, and the Miller Rubber Company would have shipped the order to the defendant had he paid his account, and he refused or failed to do so, the defendant can not recover and your verdict will be for the plaintiff, Miller Rubber Company, on the counterclaim. ’ ’

When that instruction is read in connection with the other instructions, it can not be said that appellant’s theory in that regard was excluded from the jury. This court is committed to the doctrine that “if. the various instructions separately present every phase of the law applicable to the case as a harmonious whole, there is no error in each instruction failing to carry qualifications which are explained in others.” St. L., I. M. & S. Ry. Co. v. Baker, 67 Ark. 531; St. L. S. W. Ry. Co. v. Graham, 83 Ark. 61; St. L., I. M. & S. Ry. Co. v. Rogers, 93 Ark. 564; St. L., I . M. & S. Ry. Co. v. Brown, 100 Ark. 107.

Appellant insists that the court erred in refusing to give appellant’s instruction No. 3, which is as follows: “The defendant in this case claims that the plaintiff failed to ship him the order for tires and tubes, and that, by reason of the failure on the part of the plaintiff to ship this order, he sustained damage in the loss of profits he would have made on the resale of these tires and tubes in his business. The court instructs you that the defendant can not recover any loss of profits as damages, where such profits, if any, are remotely connected with the alleged breach of contract or where they are speculative, resting only upon conjectural evidence or the opinion of parties or witnesses.” Appellant argues the necessity for this instruction on the ground that the evidence of said appellee with reference to the profits was conjectural and only the expression of an individual opinion. The evidence shows that said appellee had an establishing’ business, and that there was at the time of making the order a ready sale for automobile tires of the character ordered, at current prices. Our interpretation of the evidence is that the profits to be made upon the order were in no sense speculative, but could be, and were, estimated with reasonable certainty.

The last contention is that the jury awarded said appellee, Upon his cross-bill, gross profits, instead of deducting the necessary expense therefrom for selling the tires at retail. There was evidence tending to show that appellee was in a situation to sell the tires without any extra expense. The court instructed the jury to deduct from the gross profit the necessary expense of selling the tires at retail. The question, then, of expense was submitted to the jury, and it found against appellant on the issue.

No error appearing, the judgment is affirmed.


author: McCulloch, C. J.

text:
    Baum v. Ingraham.
    Opinion delivered February 7, 1921.
    Appeal and error — conclusiveness of former appeal. — Where on a former appeal it was erroneously adjudged that the appellee was entitled to recover betterments on land assigned to him by the decree, such error can not be cured on a second appeal.
    Appeal from Sebastian Chancery Court, Fort Smith District; G. R. Barry, Special Chancellor;
    affirmed.

      T. P. Winchester, for appellants.
    1. When Baum, Sr., died, the lots in controversy were unimproved. When his widow conveyed her dower to Ingraham, they were unimproved. When dower is ad-measured in this proceeding, the lots are improved, and dower must be assigned as they were when the right was consummated when the husband died. If this position is well taken, then—
    2. The lots (as unimproved) should have been sold, free of dower, and dower assigned out of the proceeds. It is not questioned that the price paid by Ingraham for the naked lots — $2,100—was the fair value at the time he bought; and,
    3. The statute provides for such procedure (Kirby’s Digest, § 2707), and the order in this case follows the statute. The facts make this proc edure the- only one that can be followed without great prejudice to the heirs.

      4. The result of the procedure here works injustice to the heirs, such as to merit the condemnation of the court.
    Costs of improvements put upon land by the widow before the assignment of dower can not be charged against the heirs. 19 C. J. 532, § 206. See, also, 34 Am. St. 236; 46 Am. Dec. 56; 90 Ky. 593.
    When defendant acquired his one-third interest in the lots and at the same time acquired the dower interest,, the dower interest was merged into the larger estate, and he had only a dower interest in the undivided two-thirds belonging to plaintiffs. It was at his own risk that he improved the property before he had the dower interest assigned. As against the heir, the widow takes dower in the condition the land is when the assignment is made but as against an alienee of the husband as of the date of the alienation. As against the heir where she delayed demanding dower until the heir- improved the property, She can not claim dower in the value as enhanced by the heir’s improvements. 47 Md. 359; 42 Miss. 747; 27 W. Va. 750; 5 Johns. Ch’y 497 (N. Y.). The defendant is entitled to dower in the undivided two-thirds in the plaintiff’s interest only, and the court erred in its decree.

      Pryor & Miles, for appeellee.
    This is the third appeal in this case. 131 Ark. 101; 141 Id. 243. This court reversed the' cause the last time because the dower interest held by appellee was not accurately determined, and the court directed that the dower be assigned and a resale had. This was done, and the only question now is whether the holder of the dower interest is to have dower assigned as of the date of the assignment or as of the date of the death of the original holder of the estate. In other words, shall dower be assigned with the improvements or without. The rule as laid down in 66 Ark. 251, has no application here. Wash-burn, Real Property (6 ed.), § 476; 19 Fed. Cases No. II, 356; 3 Mason 347; 27 W. Va. 750. See, also, 23 111. 585; 34 Conn. 488; 86 Ky. 198; 9 Mass. 218. Dower was properly assigned with reference to the land as it stood at the time of the assignment, and there is no error.
   McCulloch, C. J.

This is the third appearance here of this case, and the facts are fully stated in the former opinions. Ingraham v. Baum, 136 Ark. 101; Baum v. Ingraham, 141 Ark. 243. On the remand of the case after the last appeal, the chancery court decreed an assignment of the dower interest to appellee, Lee H. Ingraham, who had purchased it from the widow of William Baum. A certain portion of the real estate containing one of the houses erected by appellee was assigned to him as the dower interest of the widow. The court then ordered a sale of the property by a commissioner, for the purpose of satisfying the lien of appellee for betterments and for a division of the proceeds. Pursuant to that order a sale was'made by the commissioner and reported to the court, and the court proceeded to distribute the funds, paying first appellee’s claim for betterments.

The present appeal challenges the correctness of the court’s ruling in the distribution of the proceeds of sale. The contention is that appellee was not.entitled to reimbursement for the expense of building a house on the part of the land which was assigned to him as the widow’s dower. The argument is that, since appellee obtained this particular portion of the property in the assignment of dower, he is not entitled to reimbursement for the cost of the improvements thereon. The determination of this question settles the point of the complaint of appellants as to the distribution of the proceeds of the sale. The difficulty with the contention of appellants now is that this question has been settled against them by the first decree of the chancery court which was before us on the first appeal. In that decree the court ascertained the amount of betterments to be allowed to appellee and decreed the same to be a lien on the real estate in controversy. There was an appeal to this court by both parties to the controversy, but the present appellants only challenged the correctness of the decree as to the value of the betterments. Our attention was not then called to the question of the right of appellee to recover for betterments on such part of the property as might be assigned to him as the widow’s dower. The effect of the decree of the chancery court was, however, to determine the rights of the parties with respect to appellee’s recovery of the value of betterments, and it is too late' now to go back to that question, which was then finally adjudicated. However objectionable that feature of the decree may appear to be, it is too late now for the chancery court or this court to give relief against this. The last decree distributing the funds in accordance with the prior adjudication by the court must therefore be affirmed, and it is so ordered.


author: Wood, J.

text:
    Cureton v. Farmers' State Bank.
    Opinion delivered February 7, 1921.
    1. Banks and banking — depositor delivering check to wrong person. — Where a depositor delivered checks to the designated payee’s brother, mistaking him for the payee and intending that such brother should receive the proceeds of the checks, he can not recover from the bank which cashed the checks on the ground that it cashed the checks on indorsement in the payee’s name forged by his brother.
    2. Estoppel — acts making injury possible. — If neither the depositor nor the bank was negligent in such case, the loss sustained was that of the depositor, since, as between two innocent parties, the loss must fall on him whose act contributed most to produce it.
    3. Bills and notes — delivery of check without indorsement.— Delivery of a check without indorsement to a purchaser for value without notice to the purchaser of the fraud practiced on the depositor in procuring the check held sufficient to transfer title to the purchaser.
    Appeal from Faulkner Circuit Court; Geo. W. Clark, Judge;
    affirmed.

      P. M. Prmce, for appellant.
    The court erred in its findings. There was no negligence on the part of plaintiff, Cureton. The court overlooked the gross negligence of those parties trading for these negotiable bills of exchange made payable to order of A. J. Carman. The bank and these others should have had the negro to identify himself. A bank must use due diligence to ascertain whether the payee’s indorsement is genuine. If the indorsement is forged and the bank pays the check, the bank is liable to the depositor. 56 So. Rep. 868, 63 N. J. Law. 578. Bailee, at his peril, is bound to know to whom he delivers; he must use due diligence. 3 Am. & E. Enc. Law (2 ed.) 754. All plaintiff did was to execute the checks to order of A. J. Carman, and, being negotiable, parties taking the checks were bound at their peril to have the party identified before accepting and paying the checks. 9i8 Ark. 294; 104 Id. 550; 105 Id. 152; 89 Id. 349; 103 Id. 326. The general rule is, no man can get title to personal property from one who has no title; the only exception is a bona fide purchaser who is protected where the owner has conferred power upon the seller the apparent right ¡of property as owner. 128 Ark. 600-3; 62 Id. 84; 42 Id. 475.
    "Where a signature is forged or made without authority of the person whose signature it purports to be, it is wholly inoperative against the party against whom it is sought to enforce such right. Act No. 81, Acts 1913, p. 278, § 23. If the instrument is payable to bearer, it is negotiable by delivery; if to order, it is negotiable by indorsement of the holder, completed by delivery. Ib., § 30, p. 279. The title of a person who negotiates an instrument is defective within the meaning of the act when he obtains the instrument by fraud. Ib., § 55, p. 284. A check is a bill ¡of exchange drawn on a bank and a negotiable instrument. Ib., p. 316, § 90. "Where personal property is procured from the owner by a felonious act or by fraudulent pretense, the ownership is not changed, and he may recover without tendering the consideration received. 92 Ark. 509; 95 Id. 131; 77 Id. 279. No title passed to Carman from plaintiff,- as they were feloniously obtained and no title passed and he could not trade, sell or have the checks cashed by the bank or the other parties. 49 Ark. 40. The bank is responsible and must pay plaintiff the money negligently and wrongfully paid out. The findings and judgment are erroneous.
    ■ George F. Hartje and R. W. Robins, for appellees.
    1. The purpose of identification is to insure payment of the checks to the real payee, and if that is accomplished the want of identification is immaterial. The question then is whether the imposter is the real payee or at least whether appellant is not estopped to deny that he is such payee. It was clearly the intention of appellant to make these checks to the person-standing before him, and if appellees, before cashing the checks, had made proper inquiry whether the person presenting them was the person to whom they were intended to be paid, the answer would hav-e.been in the affirmative. Of course, appellant was deceived as to the name of the person he was dealing with, but he dealt with and intended to deal with the visible man who stood before him, identified by sight and hearing, and although he was mistaken, he was the person intended by him as the payee, and in fact the genuine indorsement of the person to whom the loan was made and for whom the checks were intended. 7 Ind. App. 322; 33 N. E. 247; 34 Id. 608; 141 Mass. 231; 55 Am. Rep. 471; 4 N. E. 619; 109 Atl. 296.
    2. The indorsement by impostor was not a forgery. To make it a forgery, there must be a design to pass as genuine a writing which is not. Ill Cal. 274, 43 Pac. 901; 31 L. R. A. 831; 64 111. App. 225; 109 Atl. 296.
    3. The impostor did not have to indorse check to convey title. Heiligers was a purchaser for value and without notice of the fraud. A delivery of the check for value with the intent to part with the title is sufficient. 91 Ark. 485; 36 Id. 501; 69 Id. 62; 97 N. E ‘ 395; 38 L. R. A. (N. S.) 1111; 61 N. E. 596; 109 Atl. 296; 46 Atl. 420; 79 Am. St.. 717. These cases govern this case. As the transaction began with ■ appellant, Cureton, it was his duty to ascertain the identity of the party. Failing to do this, he became the victim of a fraud. Where one of two innocent parties must suffer, the one whose act caused the loss should bear the consequences. It would be unreasonable and unjust to permit appellant to escape the natural consequences of his own neglect or mistake and the court was correct.
   Wood, J.

On January 30, 1919, H. V. Carmon obtained a loan from H. E: Cureton. H. V. Carmon, in the name of.A. J. Carmon, executed a chattel mortgage to secure the loan. Cureton drew checks payable to A. J. Carmon on the Farmers’ State Bank of Conway, Arkansas, where he had on deposit more than the sum of $300. There were six different checks for different amounts, amounting in the aggregate to $265. These checks were delivered by Cureton to H. V. Carmon, believing that he was delivering the same to A. J. Carmon. H. V. Carmon forged the name of A. J. Carmon on five of the checks and traded the same to merchants in Conway. One of the checks for $80 was cashed by one Sam Heiligers without endorsement. The checks were presented to the Farmers’ State Bank by the various indorsees and were paid by the bank out of the funds on deposit to the credit of Cureton. A. J. Carmon never received the checks, nor were they delivered by Cureton to a third party with directions to deliver the same to A. J. Carmon. Neither the bank nor the various parties who presented the checks, made any effort to have H; V. Carmon identified as A. J. Carmon.

The appellant brought this action against the Farmers’ State Bank to recover from it the sum of $265, the aggregate amount of the various checks, alleging that the bank had negligently failed to have the checks indorsed by A. J. Carmon and had failed to pay the checks to his order. At the instance of the bank, the various parties who presented the checks to the bank for payment, and to whom it paid the money, were made parties defendant. The defense of the bank was that it paid the checks to the person to whom Cureton delivered the same and to the person he intended should receive the proceeds of the checks. The cause was tried by the circuit court sitting as a jury, and the above are the facts upon which a judgment was rendered in favor of the bank, from which is this appeal.

1. The appellant himself testified that he intended that the man with whom he made the contract and to whom he delivered the chécks should get the money, but he believed that that man was A. J. Carmon. The court, therefore, was correct in finding the facts to be that ‘ ‘ at the time of the delivery of the checks the plaintiff intended that the man to whom he delivered the checks should have the proceeds.” Upon these facts the court was correct in declaring the law to be that the appellant must “stand the loss occasioned by his negligence in failing to have the person properly identified with whom he was dealing.” Whether the loss was occasioned through the appellant’s negligence, or through mistake on his part, without negligence, caused by the deception practiced upon him by H. Y. Carmon, the result is the same. Appellant, by delivering the checks in the first instance to H. V. Carmon, enabled him to practice the subsequent frauds which resulted in the loss of which the appellant complains. The appellee bank, having on general deposit funds to the credit of the appellant, at its peril would have been bound to ascertain that the signature to these checks was the genuine signature of appellant, and if the signature of appellant had been forged, though never so clever the deception, the appellee bank would have been liable. But there is no testimony in the record to show that the appellee bank was familiar with, or that it had any means of ascertaining that the indorsement of the name of A. J. Carmon on the checks was a forgery. The checks were not forgeries. People v. Bendit, 111 Cal. 274, 52 Am. St. Rep. 186; Montgomery Garage Co. v. Manufacturers’ Liability Ins. Co., 109 Atl. 296. The checks were drawn by the appellant and delivered to IT. Y. Carmon, who, it is true, was impersonating his brother, A. J. Carmon. H. V. Carmon was the payee of the checks under the name of A. J. Carmon, and he, under such assumed name, indorsed them and received the proceeds. It is wholly improbable, not to say impossible, that appellant would have suffered the loss of which he complains, had he not drawn these checks and delivered the same to H. Y. Carmon. The evidence shows that the appellant knew that one of the Carmons was a rascal. H. Y. Carmon represented to appellant that the rascal was his brother, A. J. Carmon, and, inasmuch as the brothers favored, appellant accepted such representations without further inquiry. It is manifest from these facts that, but for the negligence, or, to say the least, the mistake of the appellant himself in drawing and delivering the checks to H. Y. Carmon, the loss would not have occurred.

This court, in O. J. Lewis Mercantile Co. v. Harris, 101 Ark. 4-7, announced the well-established doctrine that “the holder of commercial paper, payable to order, must trace his title through a genuine indorsement, and that the drawee of a draft, payable to order, who pays upon a forged or unauthorized indorsement, dots so at his peril.” See also Koen v. Miller, 105 Ark. 152. But, as is said in Land Title & Trust Co. v. Northwestern National Bank, 196 Pa. 230, 79 Am. St. Rep. 717, “this doctrine is confined to cases in which the depositor has done nothing to increase the risk of the bank. It should not apply when the check is issued to one whom the drawer intends to designate as the payee: First, because in such a case the risk is not the ordinary risk assumed by the bank in its implied contract with its depositor, but a largely increased risk, as it follows that a check thus fraudulently obtained will be fraudulently used.. The bank is deprived of the protection afforded by the fact that a bona fide holder of a check will exercise care to preserve it from loss or theft, which are the ordinary risks. There is thrown upon the bank the risk of antecedent fraud practiced upon the drawer of the check, of which it has neither knowledge, nor means of knowledge; secondly, because in such a case the intention with which the drawer issued the check has been carried out. The person has been paid to whom he intended payment should be made; there has been no mistake of fact, except the mistake which he made when he issued the check, and the loss is due, not to the bank’s error in failing to carry out his intention, but primarily to his own error into which he was led by the deception previously practiced upon him.” McHenry v. Old Citizens’ National Bank, 97 N. E. 395, 38 L. R. A. (N. S.), 1111; Meridian National Bank v. First National Bank, 7 Ind. App. 322; Robertson v. Coleman, 141 Mass. 231. If it be conceded that the appellant was guilty of no negligence in delivering the checks to H. Y. Carmon and that appellee bank and the appellant were both innocent in the transaction, which must result in financial loss to one or the other of them, then the case under the facts would come clearly within that principle of natural justice and equity whicl requires that as between two innocent parties the loss must fall upon that one whose acts contributed most t-produce it. See Stout v. Benoist, 39 Mo. 277, 90 Am. Dec. 466, and cases there cited.

2. One check for $80 was purchased by appellee, Sam Heiligers, from H." Y. Carmon, to whom appellant had delivered the check, and same was delivered to Heiligers by H. Y. Carmon without-indorsement. Heiligers indorsed the same and presented it to the bank and it was paid. As before stated, the checks themselves were not forgeries, and the man to whom appellant delivered the checks transferred one of the checks to appellee, Heiligers, who received the money for the same from the bank. Heiligers was an innocent purchaser, having paid his money for the check which appellant drew and without notice of the fraud that had been practiced upon the appellant. The delivery of the check to him by H. Y. Carmon, under these circumstances, was sufficient to transfer the title to Heiligers. Heartman v. Franks, 36 Ark. 500: Lanigan v. North, 69 Ark. 62 Malory v. State, 91 Ark. 485. See, also, McHenry v. Old Citizens National Bank, supra, and other cases above cited.

The judgment is correct, and it is affirmed.


author: Hart, J.

text:
    Merchants’ Bank of Kansas City, Mo., v. Pine Bluff Produce & Provision Company.
    Opinion delivered February 7, 1921.
    Bills and notes — liability of purchaser of draft with bill of lading attached. — A bank which purchased from the seller of a carload of produce a draft for the purchase price with bill of lading attached did not thereby become substituted to the seller’s liability for defects in the quality of the produce.
    Appeal from Jefferson Circuit Court; W. B. Sorrels, Judge;
    reversed.
    STATEMENT OE PACTS.
    On February 9, 1920, the Pine Bluff Produce & Provision Company, a domestic corporation, brought this suit in the circuit court against the Michael-Swans on-Brady Produce Company, a foreign corporation, as defendant, and the Citizens’ Bank of Pine Bluff, as garnishee. The basis of the suit is, that on the 26th day of January, 1920, the defendant shipped to the plaintiff from Kansas City, Kansas, to Pine Bluff, Arkansas, a mixed car of produce on shipper’s order bill of lading. A draft for the sum of $1,574.16, representing the price-of the merchandise, was drawn by the defendant on the plaintiff, to which was attached a bill of lading for the car of merchandise. The draft was paid by the plaintiff. The contract of sale gave the plaintiff the right of inspection, and upon the arrival of the car at Pine Bluff on the 3d day of February, 1920, an inspection of the merchandise was made. It was ascertained that a portion of the produce was rotten and otherwise in a damaged condition.
    On January 27, 1920, the defendant, Michael-Swanson-Brady Produce Company deposited the draft for the sum of $1,574.16 with the Merchants’ Bank of Kansas City, Mo., with the bill of lading for the car of produce attached. The draft with the bill of lading attached was duly assigned to the bank, and the bank gave the produce company credit for the amount of the draft. The produce company received credit for the amount of the draft and checked the amount out of the bank.

      The bank was also made a defendant to the present suit. The court below, sitting as a jury, found in favor of the plaintiff, the Pine Bluff Produce & Provision Company, and rendered judgment against the defendant, Merchants’ Bank of Kansas City, Mo., for $200, which was shown by the evidence to be - the amount of damage suffered by the plaintiff by reason of the rotten condition of the produce when received at Pine Bluff.
    The Merchants’ Bank of Kansas City, Mo., has duly appealed to this court.

      A. B.'Cooper, for appellant.
    The relation of vendor and vendee did not exist in this transaction; the relation is that of debtor and creditor. 107 Ark. 601; 156 S. W. 187; 196 U. S. 280-5. This doctrine was approved in 101 Ark. 206, 142 S. W. 178. The declaration of law asked by appellant should have been given and the demurrer sustained.

      Harry T. Wooldridge, for appellee.
    The appellant bank, by taking the draft in the regular course of business and giving Michael-Swanson-Brady Produce Company credit therefor became the owner of the produce and was liable ifor any inferiority in quality or quantity of the goods described in the bill of lading. The bank stepped into the shoes of the shipper or depositor when it became the owner of the draft and bill of lading and was bound to carry out the contract of the shipper as reflected by the bill of lading. 126 Ark. 366, 375. See, also, 105 U. S. 7; 77 Ark. 482; (87 Id. 26. By statute and our decisions a transferee of a bill of lading becomes the owner of the goods. 91 U. S. 98; 19 Tex. Civ. App. 246; 46 S. W. 48; 32 So. Rep. 287; 49 L. R. A. 679; 126 N. C. 176; 144 Ala. 562; 39 So. Rep. 129; 1 L. R. A. (N. S.) -242. The ruling of these cases should be followed as there is no error.
   Hart, J.

(after stating the facts). The theory of the plaintiff, which was adopted by the lower. court, is, that when the Merchants ’ Bank of Kansas City, Mo., purchased the draft drawn by the seller on the purchaser with bill of lading attached, the bank became the owner of the car of merchandise and responsible for the performance of the contract of the seller for the sale of the car of produce and was liable in damages for any loss suffered by the purchaser on account of the produce being rotten, or otherwise damaged.

There are cases sustaining the contention of the plaintiff, but they are opposed to the weight of authority and to the reasoning of this court in previous cases bearing on the question.

In Brown v. Yukon Nat. Bank, 138 Ark. 210, the contest was between the bank, to whom the consignor of the goods had assigned the draft with bill of lading attached, and the purchasers who had paid the draft in the hands of a local bank for collection. The purchasers garnished the funds in the hands of the local bank for an amount alleged to be due them by reason of a breach of contract on the part of the seller of the produce. The bank, to whom the draft with the bill of lading attached had been assigned, did not know of any claim of the buyer against the seller for breach of the contract. The court held that where a draft is indorsed to and deposited with a bank and the amount credited to the holder’s account, the bank becomes the absolute owner of the draft and entitled to the proceeds in the hands of a garnishee. To the same effect is the decision in Cox Wholesale Grocery Co. v. National Bank of Pittsburg, Kansas, 107 Ark. 601.

While the cases just referred to do not control the present case, it is apparent that the holding would have been otherwise if the court had taken the position that an assignee for value of a draft with bill of lading attached made to shipper’s order succeeded to the situation of the shipper, and was bound to carry out his contract, and the court would not have held that the bank, which had discounted the draft in good faith, without knowing that the buyer had any claim against the shipper for breach of contract, could recover.

We think it is an erroneous position to assume that á bank, in discounting a draft for the purchase price of goods with bill of lading attached, takes over the original contract of sale, and becomes substituted to all the liabilities of the original drawer of the draft to the purchaser. It has been well said that such a holding would not only violate well-settled rules of law governing commercial paper, but would also tend to decrease the immense volume of business which is carried on by shippers of cotton, stock, grain, and other commodities by restricting that freedom with which banks advance money to the drawers of such drafts with bills of lading attached. If banks could be made liable in damages on account of defects in the quality or quantity of the property covered by the bill of lading, a serious impediment would be placed in the way of shippers who need a part or all b-f the price of the commodities sold before their arrival in the market to which they are consigned.

The question has received the careful consideration of annotators, and in several case notes numerous de-. cisions are cited to the effect that a bank which discounts a draft with bill of lading attached is not, in the absence of bad faith, answerable to the drawee for the performance of the consignor’s contract. In each of the cases cited the court has held that the drawee of a draft with bill of lading attached can not, in case the consignor does not comply with the contract, garnish the proceeds of the draft in the hands of the collecting bank to make good his loss on account of the inferiority of the consignment. Hawkins v. Alfalfa Products Co. (Ky.), 44 L. R. A. (N. S.) 600; General Mercantile Co. v. Oklahoma State Bank (Kan.), 33 L. R. A. (N. S.) 954; Mason v. Nelson (N. C.), 18 L. R. A. (N. S.) 1221 and note; Lewis v. Small & Company and Mechanics National Bank of Knoxville (Tenn.), 6 L. R. A. (N. S.) 887; case note to Haas v. Citizens’ Bank, 1 L. R. A. (N. S.) 242; case note to Finch v. Gregg (N. C.), 49 L. R. A. (N. S.) 679, and 4 R. C. L., § 36, p. 34.

The bank gave value for the draft with the bill of lading attached in the present case, and there is nothing in the record to show bad faith on its part in the transaction.

It follows that the judgment must be reversed, and the cause will be remanded for a new trial.


text:
    Johnson v. Berg.
    Opinion delivered February 7, 1921.
    1. Evidence — hearsay evidence as to fact shown by abstract books. — Testimony by the owner of a set of abstract books as to the date of a certain deed as shown by the abstract books is hearsay where witness did not keep the books himself and could not testify that the entries therein were correct.
    2. Execution — correction of deed to conform to facts. — In an action to recover land purchased at execution sale, where defendant claimed that the sale was void because made after the return day of the execution, but the return showed that the sale was made on the return day, evidence that the deed as recorded recited a sale three days after the return day, but that it had been corrected to show a sale on the return day, was immaterial, as it merely tended to prove that the deed was corrected to conform to the facts.
    Appeal from Clay Circuit Court, Western District; R. H. Dudley, Judge;
    affirmed.
    STATEMENT OF FACTS.
    This is the second appeal in this case. Clara Berg sued W. A. Johnson in the circuit court to recover a tract of land in Clay County, Arkansas. On motion of the defendant the cause was transferred to the chancery court, and a final decree was entered in favor of the defendant, Johnson.
    Upon appeal, this court reversed the decree on the ground that the case was improperly transferred to the chancery court. One of the grounds relied upon to sustain the transfer to equity was that there was a defect in the sheriff’s deed under the execution sale under which the plaintiff, Clara Berg, claimed. The alleged defect in the sheriff’s deed was that the deed showed that the execution sale was made after the return day of the writ, and that the defendant was entitled to have a reformation of the deed so as to show the true date of the sale.- The court said that the contention was not well taken because no issue that the execution sale was void on account of being made after the return day of the writ was made in the answer and that there was no prayer for equitable relief. The cause was remanded to the circuit court. See Berg v. Johnson, 139 Ark. 243.
    Upon the remand of the case it was transferred to the circuit court and there tried before a jury. The original execution upon which the sale of the land was made was introduced in evidence, and the return shows that the land was sold on Thursday, June 21, 1877, after being duly advertised. The advertisement showed that the land was to be sold on Thursday, June 21, 1877. The deed by the sheriff under the execution sale recites that the land was sold on the 21st day of June, 1877.
    Counsel for the defendant offered to introduce the deposition of D. Hopson to the effect that he had a set of abstract books for Clay County, Arkansas; that his abstract books showed the sheriff’s deed at the execution sale to the land in controversy; and that they show that the sale took place on the 24th day of June, 1877. D. Hopson stated in his deposition that he did not remember whether or not he or some person in his employ copied the deed from the record for his abstract books.
    The defendant also offered to introduce C-. L. Daniel as a witness. He said that Daniel would testify that he had made his own abstract books insofar as the land in question is concerned; that, if there had been any change in the date of the deed as it appeared on the deed record from the 24th of June, 1877, to the 21st of June, 1877, he would have noted such change on his abstract books; that said Daniel would further testify that in 1906 ■ or 1907 he made a comparison of his abstract books with the deed record for the purpose of correcting any errors that might appear in his abstract books; that, if the deed record at that time had showed a change in the date on the deed in question from the 24th of June, 1877, to the 21st of June, 1877, he would have noted such change on his abstract books; and that his abstract books did not show any such change.
    The court excluded this evidence from the jury. After hearing all the evidence adduced in favor of the plaintiff, the case was submitted to the jury under proper instructions from the court, and a verdict was returned in favor of the plaintiff. The defendant has appealed.

      Oliver £ Oliver, for appellant.
    1. The court erred in excluding the testimony of Daniel and Hopson. 35 Ark. 470-81; 34 Id. 534.
    2. The holding of the court that the question of the date of the sale had been decided by the chancery court and was res judicata was erroneous. Black on Judgments, 611-614; Freeman on Judgm. (4 ed.), § 257,; 23 Cyc. 1309 (c); 18 Ark. 142.
    The question of res juddcata here was a defense and must be submitted to a jury on proper evidence. Extrinsic evidence was necessary to prove the finding of the court, and this made it a case for a jury. 21 Cyc. 1543 D. The contention of appellant is correct. When an execution sale takes place, the sheriff is required to execute to the purchaser a certificate of purchase, and at the expiration of the time for redemption he must on presentation of the certificate execute a deed in conformity to the certificate of purchase. If the certificate and deed showed that the sale took place June 24, 1877, plaintiff would not be permitted to show that the sale took place on a different day and plaintiff was not entitled to prove that the sale took place on the 21st of June. S.ueh was the ruling on former appeal. 139 Ark. 243-7.
    2. The instructions refused were correct, and it was error to refuse them.

      F. G. Taylor, for appellee.
    1. Every question here was settled on the former appeal. The only question raised by appellant now is whether the sheriff’s deed under execution sale is competent evidence. This is res judicata and settled by the former appeal. This decision is conclusive. 86 Ark. 600; 55 Id. 609; 81 Id. 440. The return of a sheriff to a writ of execution is competent evidence and conclusive except for fraud or mistake. 14 Ark. 9; 29 Id. 307; 17 Id. 546.
    2. The evidence of Hopson and Daniel was incompetent for any purpose. 65 Ark. 316; 93 Id. 191. The deed record was competent. 34 Cyc. 591-2; 10 Ark. 187. The deed record can not be impeached by parol or extrinsic evidence. 17 Cyc. 581 and note 67. The recitals in the deed are primary proof and binding and conclusive on appellant. 24 Am. & Eng. Enc. Law 62.
   Hart, J.

(after stating the facts). Counsel for the defendant assign as error the ruling of the court in excluding the offered testimony of Daniel and Hopson from the jury.

In Hightower v. Hamlin, 27 Ark. 20, the court held that the sale of real estate under an execution after the return day is without authority and void.

Counsel for the defendant claim that the testimony of Daniel and Hopson tends to show that the execution sale under which the plaintiff claims was had after the return day of the writ of execution. The record shows that the execution was returnable on the 21st day of June, 1877. They insist that the excluded testimony tends to show that the execution sale took place on the 24th day of June, 1877, and that therefore the court committed prejudicial error in excluding the testimony from the jury.

The testimony does not tend to show that the execution sale in question was held on the 24th day of June, 1877. The testimony of Hopson was hearsay merely. He did not take the deed in question from the deed record, and of course could not know whether or not the deed was correctly copied upon his abstract books. Daniel testified that he copied the deed in question from the deed record, and that if there had been any change from the 24th day of June, 1877, to the 21st day of June, 1877, he would have noted that fact upon his abstract books. The deed, as introduced in evidence, recites that the execution sale was had on the 21st day of June, 1877. Hence the testimony of Daniel, if accepted as true, would only show that at the time he examined the deed record, the record showed that the deed was executed on the 24th day of June, 1877, and after giving full effect to his testimony it could only be said that at a subsequent time the execution deed was corrected so as to show that the sale took place on the 21st day of June, 1877, instead of the 24th day of June, 1877.

The return of the sheriff, who made the sale, and his advertisement of the sale, both show that the sale took place on June 21, 1877, and the presumption is that the deed was corrected so as to show the facts. The excluded testimony of Daniel would amount to no more than to show the deed was corrected after he had examined the record in 1906 or 1907. • His testimony would not show that the sale was made on that day. The defendant had the right to show that fact by witnesses who had knowledge of the facts, or of facts tending directly to establish the main fact, but he could not do so by showing a correction of the execution deed so as to recite that the sale was made on June 21st, instead .of June 24th, since such testimony was not sufficient for that purpose.

No other testimony was offered by the defendant on this point, and since the excluded testimony was not sufficient to establish the fact that the sale was made on the 24th day of June, 1877, being a day after the return day of the writ, prejudicial error was not committed by the court in excluding from the jury the offered testimony.

No other assignment of error is relied upon for a reversal of the judgment, and it follows that the judgment must be affirmed.


text:
    Hines v. Helena Cotton Oil Company.
    Opinion delivered February 7, 1921.
    1. Carriers — delay in shipment — burden of proof. — In an action for damage to a carload of cotton seed from delay, the burden was on defendant to show that a local freight train, which passed the station after the car in question was loaded and bill of lading was issued, could not carry it on that day, since its servants made up the train and knew whether the car could have been placed in the local freight train on that day.
    2. Appeal and error — conclusiveness of verdict. — Where a verdiet is supported by evidence of a substantial character, it will not be set aside as against the evidence.
    3. Carriers — damage by delay in shipment — evidence.—In an action against a railroad company for damages to cotton seed by unreasonable delay in shipment, evidence held to sustain a verdict for plaintiff.
    Appeal from Phillips Circuit Court; J. 'M. Jackson, Judge;
    affirmed.

      Troy Pace and Daggett & Daggett, for appellant.
    1. The evidence does not show any unreasonable delay in the shipment of the seed and does not show damage from delay in shipment, but the evidence does show that the damage or greater portion of it occurred not from delay in shipment but that the seed were in a deteriorating condition at the time of delivery and that the damage occurred as a natural consequence of their condition at time of shipment. The jury disregarded the undisputed evidence in finding for plaintiff, and the case should be reversed.

      Bevens & Mundt, for appellees.
    The evidence fully sustains the verdict and delay is amply proved, as well as the damage resulting therefrom. The proof is predominant and convincing.
   Hart, J.

This was an action by appellee against appellant to recover damages for the alleged negligent delay of the shipment of a car of cotton seed from Vanndale, Arkansas, to Helena, Arkansas.

Appellee, who was the plaintiff in the court below, recovered judgment against the defendant, who is the appellant.

It is earnestly insisted by counsel for appellant that the judgment obtained against the railroad company, by appellee in the court below, should be reversed because the evidence does not show any unreasonable delay in the shipment of the cotton seed and because the evidence does not show that the damage to the seed resulted from delay in shipment.

On the first point, the testimony is, that a car was set on the house track at Yanndale, Arkansas, by appellant for loading the seed in question, on the 27th day of October, 1919, and that a bill of lading was issued for the car of seed about four o’clock p. m. on the 30th inst. At that time there was a tri-weekly train service for local freight trains and there was a southbound local freight train which left Yanndale on the 30th day of October, 1919, after the car of cotton seed in question was ready to be moved and after a bill of lading had been issued therefor. The usual time for carrying a car of freight from Yanndale to Helena was twenty-eight hours. The car of seed in question did not reach Helena until the 5th day of November, 1919. Counsel for appellant concede that, if the car of seed had left Vanndale in the local freight train on the night of October 30, 1919, it should have reached Helena in twenty-eight hours; but insist that the judgment should be reversed because there is no testimony tending to show that appellant could have placed the car of seed in its local freight train of that date. It was the duty of the railroad company to have carried the car. of seed in question in its local freight train. Its servants made up the local freight train and operated it. Its servants knew whether or not the car of seed was placed, or could have been placed, in the local freight train that left Vanndale after four o’clock p. m. on the 30th day of October, 1919. Therefore, the burden was upon the railroad company to establish the fact that the train was already made up, and that it could not carry the car of seed on that day, if such was the fact. It failed to meet the burden in this respect. It can not now complain- of the absence of affirmative evidence on this point;

Again it is insisted by counsel for appellant that there is not sufficient legal evidence to show that the damage to the seed in question was caused by the unreasonable delay of appellant in carrying them from Vanndale to Helena.

Appellee showed the value of the seed at the point of shipment and their value in their damaged condition when they arrived at Helena. The loss shown was sufficient to support the verdict as to the amount,but counsel for appellant insist that the evidence was not sufficient to establish that the damage was caused by the delay in shipment.

It is true that appellant introduced evidence tending to show that the damage was not caused by the delay in shipment, but the evidence on this point adduced by appellee tended to contradict that of appellant, and, inasmuch as the jury was the judge of the credibility of the witnesses, it can not be. said that the verdict was not supported by the evidence, if the evidence on the part of appellee was of a substantial character.

Appellee’s agent, who bought the seed in question, and inspected them before they were loaded into the car, testified that his inspection showed that the seed cut 70 per cent, and that by this he meant that the seed were damaged 30 per cent. However, his further testimony shows that what he meant was that seed are bought on what is called a prime basis. When he stated that the seed in question were 30 per cent, damaged, he meant that they were 70 per cent, perfect, and that they were bought on that basis; and not that the seed were inherently damaged. The seed were damaged when they were received at Helena, and the evidence adduced by appellee tended to show that the. damage was caused by the delay in the carriage of the seed from the point of shipment to the point of delivery. The testimony on this point for appellee tended to show that the seed became heated on account of the delay in shipment, and that they thereby became materially damaged. Therefore, the evidence was sufficient to support the verdict.

No other assignment of error is urged for a reversal of the judgment, and it follows that the judgment must be affirmed.


text:
    Linton v. Erie Ozark Mining Company.
    Opinion delivered February 7, 1921.
    1. Mines and minerals — failure to pay royalty — forfeiture of lease. — Under a mine lease providing that the lessee every three months should deposit 10 per cent, of the proceeds of sales of products of the mine in a bank to the credit of the lessor, the lessee was not excused for failure to make such deposit because the products of the mine were sold by the lessee to pay the wages of laborers who got out the ore, and on account of such failure the lessor had a right to forfeit the lease.
    2. Corporations — foreign corporation — doing business in state.— A foreign corporation owning a mine in the State was not doing ¡business in the State where it had leased the mine.
    3. Corporations — doing business in state. — The institution and prosecution of an action by a foreign corporation within the State is not the doing of business therein.
    Appeal from Marion Chancery Court; B. F. McMahan, Chancellor;
    affirmed.
    STATEMENT OE PACTS.
    This appeal involves the correctness of a decision of the chancery court holding that a mining lease should be forfeited because of the nonperformance of its terms by the lessee and his assignees.

      On January 1, 1916, the Erie Ozark Mining Company, a foreign corporation, executed a mining lease to W. A. Childs on its mine situated on the ■ property in controversy which was to continue for ten years. Under the terms of the lease the lessee was to operate the mine to a reasonable extent at all times and to pay as rent ten per cent, of the gross receipts from all ores and products taken from the -mines,
    It was further provided that the lessee should render to the lessor once every three months a statement of all the ores and products sold and upon the receipt of any sales, to deposit to the credit of the lessor in the Bank of Yellville, at Yellville, Arkansas, ten per cent, thereof.
    It was provided that the failure on the part of the lessee to operate the mine should render the lease void. The lease was executed on the 1st day of January, 1916, and it provided that it should continue from that date until the 1st day of January, 1926. On the 29th day of January, 1916, W. A. Childs executed a sublease to said property to Charles Trease and E. H. Ross for a period of five years. They in turn assigned their sublease to the Unity Mining Company. The Unity Mining Company assigned its sublease to I. N. Linton.
    Subsequently, on July 17, 1916, W. A. .Childs brought in the circuit court, an action of unlawful detainer against I. N. Linton to recover possession of the mine on the ground of the forfeiture of the conditions of his lease. On August 30, 1916, the defendant filed his answer to the plaintiff’s complaint. On January 24, 1917, the defendant, Linton, filed his motion to make the Erie Ozark Mining Company a party to the suit, which was done. On the same day, he filed a cross-complaint against W. A. Childs. Linton also moved to transfer the case to the chancery court and his motion was granted.
    The Erie Ozark Mining Company filed its answer and cross-complaint in the chancery court. It asks that the lease be declared forfeited for nonperformance of the terms thereof by the.lessee and his assignees.
    On the part of the Erie Ozark Mining Company, it was shown that on the 20th day of January, 1917, it had served upon W. A. Childs and his assignees a notice that the mine lease should be declared void on the ground that the lessee and his assignees had failed to comply with its terms.
    The cashier of the Bank of Yellville testified that no royalties had been paid to the bank on the mine in question for the Erie Ozark Mining Company since the 1st day of March, 1916.
    On the part of I. N. Linton it was shown that the mine machinery was badly out of repair and that the mine was shut down for a part of the time in order to make repairs; that-the water rose in the mine to a considerable depth; that it was necessary to pump out the water after the repairs were made before the mine could be again operated; that the products of the mine were sold to pay the expenses of running it and that the sublessee was given by Childs a certain number of days in which to shut down the mine and make the repairs. The testimony also shows, however, that the mine was shut down for a longer period than was agreed upon between the parties.
    On April 23, 1918, the court entered a decree, whereby, among other things, the cross-complaint of Linton against the Erie Ozark Mining Company was dismissed for want of equity, and the original mining lease executed by the Erie Ozark Mining Company to W. A. Childs and persons holding subleases under him were canceled. The court was of the opinion that Linton and his assignors had failed to comply with the terms and conditions of the original lease, and that the lease should be canceled on that account.
    A decree was entered accordingly, and to reverse that decree Linton has prosecuted this appeal.

      Williams & Secaw ell, for appellant.
    1. Appellee is a foreign corporation and was doing business in this State and has no right to defend as against the cross-complaint of appellant and the original plaintiff, W. A. Childs. Appellee was doing business in this State, and the lease was made in this State, and all its requirements and covenants were to be performed wholly within this State. 2 Elliott on Cont., •§§ 112, 1142; 90 Ark. 351; 89 N. E. 193; 124 N. W. 1042; 66 Ark. 464; 12 C. J., § 31; 13 Id., % 31 and note 6. The place of delivery is the place of contract. 2 Elliott on Cont., § 1117. A lease does not take effect until delivered to the lessee. 2 Elliott on Cont., ■§ 4538; 24 Cyc., p. 905 (e). The lease was an Arkansas contract. Appellee had not complied with the laws of the State. The burden was on appellee as it was made an issue by appellant’s answer to the appellee’s cross-complaint. 128 Ark. 211. Proof of compliance could only be made by the introduction of a certificate issued by the Secretary of State. 132 Ark. 10i8. The evidence of articles of incorporation did not establish the right to do business nor of its right to defend or prosecute in this action.
    The purported receipt for a franchise tax for ,the year 1917 was not admissible. 1 Moore on Facts-, § 563. The chancellor erred therefore in granting any affirmative relief to appellee in declaring a forfeiture, cancelling the lease, giving it judgment for costs and allowing its defense to the claim of appellant.
    2. The findings of the court is against the evidence, and the burden was on appellee to establish a forfeiture such as would annul the lease. 51 Pa. St. 232; 1 Mor. Min.- Rep. 32; 68 Ark. 284-8.
    Failure to pay royalties and taxes is not made a cause or condition of forfeiture in the lease. The only cause or condition of forfeiture mentioned in the lease was “failure to operate the said mining property or the abandonment of same.”

      "Where in a lease canses of forfeiture are specified, it is not to be inferred that there are other grounds of forfeiture. 6 Mor. Min. Rep. 305; 43 S. E. 128; 41 Ark. 532. A breach of the covenants of a lease, in the absence of a clause to that effect, does not work a forfeiture. A forfeiture are construed strictly, and the facts to support the condition which was to work a forfeiture of the promisor’s rights on a failure to comply with the provisions of the contract which was to render it void. White on Mines & Mining Rem., § 245. Contracts which provide a fprfeiture are construed strictly, and the facts to support a forfeiture ought to be clear and explicit. 6 Mor. Min. Rep. 284, 299. Nonpayment of royalty or rent under the terms of this lease would not be a cause for forfeiture. 41 Ark. 532. Nor the failure to pay taxes.
    The proof is abundant that on and prior to July 17, 1916, appellant and his assignors were in good faith carrying on operations. The evidence is undisputed that, for several years prior to the exclusion of this lease, mining operations on this property had been abandoned. It is also shown that the developments that had been made were below the water level and required pumps to work the one properties. The mill had deteriorated, and many of its parts removed or destroyed. The evidence is sufficient to warrant a reversal of the decree, against appellant. Appellee is a foreign corporation, and its only holdings was mining property, and there is nothing to show that it had complied with our State laws. The court held the acts of Childs in dispossessing Linton to have been wrongful and found that appellant was in good faith complying with his lease agreements. He was ousted by law. Why does not the same principle apply in this case as excuses nonperformance of annual labor on mining claims and prevents a forfeiture? These principles are derived from equitable considerations and have often been applied to prevent loss of inchoate rights in property. 109 N. W. 508; 2 Lindley on Mines (3 ed.), § 634; 113 U. S. 534. See, also, 187 Fed. 779. Childs occupied a relation of trust to appellee. He was dealing with its property. The proof shows appellee was fully aware of the steps and proceedings pursued and establishes collusion or conspiracy. 81 Ark. 173; 11 C. J., p. 1220. We think the maxim pendente lite nihil innove^ tur should be applied to the peculiar equities of this case. 16 Ark. 168.
    The evidence proves beyond doubt that the value of the unexpired lease was of the value of $5,000, and that appellant and those from whom he received title had expended $5,000 or $6,000 in good faith in making repairs, improvements and development work, which were-necessary and permanent, and appellant ought to have judgment against appellee and Childs for at least $5,000.

      J. G. Floyd, for appellee.
    1. There is no equity in appellant’s bill on cross-complaint. The material allegations and averments are all specifically denied, and there is no proof of' fraud or collusion or conspiracy to defraud Linton. There is nothing in our law that would prevent a foreign corporation, although not having complied with the laws of. our State, from making defense in an action of conspiracy and collusion, as charged in appellee’s crossrcomplaint, and the lease contract from appellee to Childs complained of or its validity or invalidity is not involved or referred to in the cross-complaint or appellee’s answer. The prohibition against the maintenance of actions unless the corporation has complied with statutory conditions is confined expressly or by implication to actions on contracts, and does not extend to actions for torts committed in the State or to other actions growing out' of the invasion of rights of property. Cook on Corporations 789; 60 Ark. 325; 30 S. W. 350; 28 L. R. A. 82.
    2. The evidence sustains the allegations of forfeiture by appellee, and there is no error in cancelling the lease contracts.
    The material allegations of forfeiture in the appellee’s cross-complaint are not specifically denied and are therefore to be taken as true, and no proof is necessary. No evidence was offered to show that any work was done under the lease given to Childs or the sublease.executed by 'Childs after Linton was dispossessed. Kirby’s Digest, § 6137; 41 Ark. 17; 46 Id. 132; 25 S. W. 73; 60 Fed. 254. Appellant’s argument is wholly untenable.
    The record shows affirmatively that at the time of the execution of the lease to W. A. Childs, appellee was not doing any business in the State and had not for several years prior thereto. 19 Cyc., p. 1267; 67 Kan. 599; 73 Pac. 909; 67 S. W. 45; 84 Id. 810; |85 Id. 31; 13 Id. 431; 55 Ark. 163; 54 Ark. 566.
    A foreign corporation, although not having complied with our laws authorizing it to do business, may still own and hold property in the State, including lands, and it may sue to quiet title against a tax deed. Cyc. Dig. Ark. Dee., vol. 2, p. 655; 150 S. W. 398; 55 Ark. 635; 185 S. W. 1055; 95 Ark. 6; 128 S. W. 348; 19 Cyc. 1246,1267-8.
    In a suit by a foreign corporation to enforce a contract for lease of lands it is not a defense that the corporation has done business in the State and has not complied with the act of April 4, 1887. 55 Ark. 625; 18 S. W. 1055, cited in 24 L. R. A. 289.
    It does not appear that the contract in this case was made in this State or in the course of business in this State. See, also, 183 N. Y. 98; 45 L. R. A. 538; 176 Mo. 179; 238 U. S. 185; 227 Id. 218; 90 Ark. 73; 19 Cyc. 1267-8. Appellee was not doing business in this State. 55 Ark. 163; 18 S. W. 43; 60 Ark. 120; 29 S. W. 34; 63 Ark. 268; 38 S. W. 902; 69 Id. 572; 117 Id. 775.
   Hart, J.

(after stating the facts). The principal issue raised by this appeal is as to the correctness of the decree of the chancery court canceling the original lease made by the Erie Ozark Mining Company to W. A. Childs and his assignees. It will be remembered that Linton took a sublease from the assignees of Childs to the original lease. By the terms of the lease it was provided that the mine should be worked to a reasonable extent continuously during the term of the lease and that the lessee should account to the lessor every three months for the products mined and deposit in the Bank of Yell-ville, ten per cent, of the amount of the sales thereof to the credit of the Erie Ozark Mining Company.

The cashier of the bank testified that nothing had been-deposited with the bank for the Erie Ozark Mining Company since the 1st day of March, 1916. Linton seeks to excuse the nonperformance of the lease in this respect by saying that the products of the mine were sold to pay the wages of the laborers who got out the ore. This was no excuse for the nonperformance of the contract. By the terms of the lease it was the duty of the lessee and his assignees to pay the expenses of operating the mine and to account to the lessor for its rent or royalties once every three months. This was not done, and the lessor, under the terms of the lease, had a right to give notice that it declared the lease forfeited for nonperformance of its terms and conditions by the lessee and his assignees.

Again it is insisted that the lessee was excused from nonperformance because the mining machinery got out of repair, and it was necessary to close down the mine in order to repair the same. Permission was granted to his lessee by Childs to close down the mine for a given number of days, in order to repair the machinery. But the chancellor was justified in finding that the mine was closed down for a greater length of time than agreed upon, and that there was no valid excuse for so doing.

It is also contended that the decree should be reversed because appellee is a foreign corporation and was not authorized to do business in this State. Appellee leased its mine and was not doing business in this State. In Buffalo Zinc & Copper Co. v. Crump, 70 Ark. 525, it was held that the institution and prosecution of an action was not doing business in this State within the meaning of the statute.

It follows that the decree will be affirmed.


author: Smith, J.

text:
    Simmons v. American Railway Express Company.
    Opinion delivered February 7, 1921.
    1. Carriers — penalty for express company’s failure to pay damages. — Under Acts 1905, p. 659, §§ 1, 2, imposing a penalty for failure of an express' company to pay damages for lost goods within 20 days after notice of the loss or damages has been given, an express company is not liable for the penalty where the amount demanded in the notice exceeded by five cents the amount recovered for the loss or damage; the doctrine of de rrumiTrws not being applicable.
    2. Carriers — recovery of penalty. — Neither the right to recover the penalty nor the amount of the penalty recoverable under Acts 1905, p. 659, is dependent on the value of. the shipment.
    3. Statutes — penal statutes strictly construed. — Penalty statutes are to be strictly construed, and no one can invoke the benefit of such a statute who does not bring himself strictly within its terms.
    Appeal from Woodruff Circuit Court, Northern District; J. M. Jackson, Judge;
    affirmed.

      W. J. Dtmgcm, for appellants.
    The court erred in its findings, and the judgment should be reversed and judgment entered here for $235, the penalty and costs. The act is not void, but constitutional and valid. 90 Ark. 538; 207 U. S. 73; 204 Id. 311; 203 Id. 284; 205 Id. 60; 211 Id. 539; 8 Cyc. 1058-60. See, also, 89 Ark. 496; 94 Id. 394.

      J. F. Summers, for appellee.
    1. The act is void because contrary to section 1 of the Fourteenth Amendment to United States. Constitution, ’but, if constitutional, the record does not warrant a recovery of the penalty. 94 U. S. 104; 207 Id. 73.
    2. The notice provided in the act is too short, compelling a settlement without time or opportunity for proper investigation. 207 U. S. 73; 165 Id. 150; 20 L. R. A. (N. S.) 126. See, also, 19 S. W. 910.
    3. The shipment being interstate, appellant can not recover the penalty. 226 U. S. 491; 222 Id. 370,

      4. Notice was not given as required by the act. The act must be strictly complied with. 69 Ark. 584. Furthermore, appellant can not recover because the amount ■for which he obtained judgment is less than his alleged claim. 224 U. S. 352; 92 Ark. 84; 93 Id. 84. The decision is in accord with the law.
   Smith, J.

This cause was tried in the court below on an agreed statement of facts, from which it appears that the suit is one to recover a penalty on account of the failure of the express company to deliver t'o appellants, the consignees, and plaintiffs below, a case of eggs of the value of $15.90.

The suit was brought before a justice of the peace, and the penalty claimed amounts to $220. It is recited in the agreed statement of facts that written notice was given the express company of the nondelivery of the eggs, and payment of $15.95 was demanded in the notice on that account. Before the rendition of judgment in the justice court the express company tendered into court $15.90, the admitted value of the shipment, and $6 to cover the costs to the date of tender. The circuit court, on appeal, rendered judgment for the sum thus tendered, and denied the consignees’ right to recover the, statutory penalty.

The suit was brought under act 250 of the Acts of 1905, page 659. Section 1 of this act provides that all express companies organized or doing business under the laws of this State shall settle within twenty days with the owner of the goods after notice has been given for the damage or loss of goods incurred in transit on the lines of the express companies. Section 2 provides that any express company which shall fail or refuse to pay for the damages or loss of goods within twenty days after notice is given “shall be liable in damages to the owner of the goods to the amount of damages 'sustained or lost, and also the sum of two dollars for each day that they fail and refuse to settle after the twenty, days’ notice has been given.”

The constitutionality of this act is attacked on several grounds. In addition, it is insisted that the consignees did not bring themselves within its terms, inasmuch as the sum demanded in the notice to the company exceeded, by five cents, the sum to which they were entitled.

As the express company appears to be correct in its second contention, we need not pass upon its first. The excess demanded is a small sum; but the doctrine of de minimis does not apply. The right to recover the penalty is not dependent on the value of the shipment; nor is the amount which may be recovered as penalty depend-ant on value. The loss of, or damage to, a shipment subjects the express company to the penalty of the statute, whether the article damaged or lost is a case of eggs, or a dozen eggs. B. & M. White Laundry Co. v. Charleston & W. Ry. Co., 18 A. & E. Ann. Cas. 690.

It is a rule of construction, of universal application, that these penalty statutes are to be strictly construed, and no one can invoke the benefit of such a statute who does not bring himself strictly within its terms.

The General Assembly of 1907, by act 61 (page 144), amended section 6774 of Kirby’s Digest to provide that a railroad company shall be liable for double damages for failure to pay for stock killed within thirty days after notice so to do is served on the railroad company by the owner. This act was upheld by this court in the case of St. L., I. M. & S. Ry. Co. v. Wynne, 90 Ark. 538; but upon appeal to the Supreme Court of the United States (224 U. S. 352), our decision was interpreted as having held that it was not essential that the sum recovered should equal the sum demanded and, under this apprehension as to the effect of our decision, that court held the act unconstitutional. It is unimportant to inquire whether the Supreme Court of the United States misapprehended the effect of oiir decision or not, as its own decision was based upon a holding that the judgment recovered must equal the sum demanded, and that it amounted to a taking of property without the due proeess of law to enforce a statute which authorized the imposition of a penalty where the judgment recovered did not equal the sum demanded.

The court, therefore, properly refused to allow the penalty, and the judgment to that effect is affirmed.