text:
    Root Refineries, Inc., v. Forrest E. Gilmore Company.
    Opinion delivered March 31, 1930.

      Marsh, McKay & Marlin, for appellant.

      Mahony, Yocum S 8aye, for appellee.
   Humphreys, J.

This suit was instituted on August 1, 1926, in the Second Division of the chancery court of Union 'County, by appellee against appellant to recover $18,442.75, the alleged balance due it for furnishing the material and constructing an absorption gasoline plant, known as the Gilmore Gasoline Plant, for appellant adjoining its refinery plant near El Dorado, for the- purpose of taking the -gas arising from the other parts of its refinery plant and extracting the gasoline contents therefrom, and converting it into a merchantable article. Appellee agreed to furnish the material and construct the plant for $24,000, payable 25 per cent, on presentation of invoices, 25 per cent, in thirty days from date of the first payment, 25 per cent, sixty days from the date of the first payment, and 25 per cent, ninety days from the date of the first payment; the final payment to be dependent, however, on the plant showing by a ten-day test, conducted by appellant under the supervision of appellee, an efficiency of 105 per cent, as determined by standard charcoal tests.

The contract was made the basis of the suit; ap-pellee alleged that it had complied, therewith in every respect, but that appellant had failed and refused to make the three, last payments provided for therein.

Appellant had refused to make the payments or conduct the test provided for in the contract on account of thirty-five alleged defects in the construction !of the plant specifically set out in a letter delivered by it to appellee on June 13, 1926.

The contract provided that the plant should be constructed out of new materials, and specified the kind of equipment to be used iu the construction thereof which included 1 Bubble-Type Absorber.

Appellant did not file an answer to the original complaint referred to above for the reason that, after filing the complaint, the parties met to discuss and adjust, if possible, their differences, which meeting resulted in a supplemental contract providing for a ten-day test run which appellee guaranteed would produce certain results. The supplemental contract provided that, in case such results were not obtained by the ten-day test run, appellee should have the right to make a thirty-day test run to determine whether such results could be produced. One of the warranties on the part of appellee in the supplemental contract was that the test run would produce gasoline of good odor. At the conclusion of the ten-day test run on October 13, 1926, the appellant, acting through its vice-president, D. P. Hamilton, made the following indorsement upon the supplemental contract:

“Referring to above contract, of which this is a copy, at this date all obligations of Gilmore 'Company have been complied with, except odor. Gilmore is hereby granted an extension of thirty days from this date, or until November 12, to meet the odor requirement. Root Refineries, Inc. By D. P. Hamilton, V. P.”

Immediately after this indorsement was made, ap-pellee conducted the thirty-day test run in an effort to correct the odor of the gasoline, and the gasoline produced convinced appellant by actual use of same in two automobiles that the defect in odor had been cured, whereupon it directed appellee to call at its office in New Orleans, and get the balance of the-purchase price for the plant. It did so, and on November 12, 1926, received $10,000, and on November 30, 1926, $5,000 more, leaving a balance due if on the contract price of $3,000. Subsequently, and, after making the last two payments, appellant discovered that the odor in the gas being produced by the plant had not been corrected, and refused to pay the unpaid balance of the purchase money.

Appellee then amended its original complaint praying judgment for $2,922.33 instead of $3,000, due to the fact that it had theretofore omitted to give a few small credits to which appellant was entitled.

Appellant filed an answer to the amended complaint denying any liability under the provisions of the contract, and a cross-complaint for $4,325 on account of deficient material used in the construction of the plant, $24,302.95 on account of losses sustained by reason of gasoline lost on account of being off color and of bad odor, penalties, etc., and $21,000, which had been paid upon the purchase price, making a total claim of $49,627.95.

Appellee then filed an answer denying the material allegations in the cross-complaint.

The cause was submitted to the trial court on June 24,1929, upon the pleadings and testimony adduced from which the court found that appellant owed $2,922.33, representing the balance of the purchase price which it had not paid, but that appellant was entitled to an off-set amounting to $1,800 for the cost of a Bubble-Type Absorber which had not been used in the construction of the plant as provided in the original contract. A different kind of an absorber had been used which leaked and failed to give complete satisfaction. It was not discovered until after the last thirty-day test run, and after the last two payments had been made that the absorber used in the construction of the plant was not a Bubble-Type Absorber. As soon as this was discovered, the absorber used in the construction Avas torn out and a Bubble-Type Absorber installed by appellant at an expense of $1,800. After installing the new Bubble-Type Absorber appellant continued to use the plant.

Both appellant and appellee have appealed from the decree of the court, appellant contending that it should have been alloAved $9,194.64 of its counterclaim from which should have been deducted a balance of $2,922.33 due on the contract price, and a judgment rendered in its favor against appellee for the sum of $7,272.30; and appellee contended that the cross-complaint should have been dismissed for the want of equity, and judgment rendered in its favor for $2,922.33 with interest thereon at the rate of’6 per cent, per annum from November 12, 1926.

Appellant construes the contract as one expressly warranting the kind and 'character of materials to be used in the construction of the plant, and that when installed it would produce gasoline of water white color and of good odor, and relies for a reversal of the decree and a net recovery upon its cross-complaint of $7,272.30 under the rule or doctrine that a purchaser may retain machinery or other articles purchased under warranty, and either sue on the warranty for his. damages or recoup damages when sued for the purchase price. The rule relied upon is a correct statement of the law, so announced in the cases of Courtesy Flour Co. v. Westbrook, 146 Ark. 17, 225 S. W. 3, and Keith v. Fowler, 169 Ark. 176, 273 S. W. 706, and reaffirmed in the case of Siegel-King & Co. v. Penny & Baldwin, 176 Ark. 336, 2 S. W. (2d) 1082; but, of course, the rule would have no application to acceptances or retentions of property by purchasers after tests had been made pursuant to provisions in the contract showing the fulfillment of the warranties or compliance with them; the test would conclude the purchasers right to a recovery upon the warranties except for defects not discoverable by the test. The very purpose of the test in the instant case was to determine whether appellee had complied with its warranties as shown by the contract itself, and- the indorsement of appellant on the supplemental contract. It is not contended that any fraud was practiced by appellee upon appellant in making either the ten-day or the thirty-day test run. Appellant agreed to, and was bound by the result of the tests showing- full compliance with its warranties, except as to latent defects not discoverable bjr the- tests. The failure of appellee..to .install a ¡Bubble* Type Absorber was not discoverable by the test: In order to determine whether a Bubble-Type Absorber was installed in accordance with the' contract, it was necessary to take it out and break it in two. The absorber installed leaked and failed to give satisfaction, so appellant took it out and installed a Bubble-Type Absorber, and in doing so discovered that it was not the type contracted for. This discovery was not made until long after both tests had been made, and after it had made the second and third payments on the contract price. Appellant was not estopped from recouping its damages in this suit for the balance of the purchase price on the warranty that appellee would use a Bubble-Type Absorber in the construction of the plant. The undisputed testimony showed that the cost of such a Bubble-Type Absorber was $1,800, so the trial court properly allowed the cost thereof as an off-set against the balance due on the contract price.

The decree is therefore in all things affirmed.


source: Caselaw Access Project

author: ICirby, J.,

license: Public Domain

text:
    Hoyle v. Hoyle.
    Opinion delivered March 31, 1930.

      Wilson <& Martín and Compere & Compere, for appellant.

      Clary Ball, for appellee.
   ICirby, J.,

(after stating the facts). The deed from C. T. Hoyle, to whom Chas. L. Hoyle and appellant, his widow, had conveyed the lands by a regular warranty deed, reconveying the land to C. L. Hoyle was not recorded until two or three years after C. T. Hoyle and his wife had conveyed the same tract of land to R. L. Hoyle by a warranty deed duly recorded for a recited consideration of $1,500. Appellant, the widow of Chas. L. Hoyle, the father of these two sons and the former owner of the land, was not entitled to the land in controversy as the homestead of decedent, her husband, since decedent was not the owner or in possession of same at his death if the deed from C. T. Hoyle to R. L. Hoyle was a valid conveyance of the property as' it appeared to be.

She brought suit to cancel the conveyance and to secure possession of the property claimed as a homestead and her dower right therein, and the court decreed a cancellation of the deed from C. T. to R. L. Hoyle and her right to a homestead therein, as the widow of C. L.' Hoyle, deceased, and also her dower.

The court did not err ill holding she was not entitled to rents for use of the land, of which she was not in possession and the title of which appeared to be in R. L. Hoyle, until after she established her right thereto, and procured the cancellation of the deed to R. L. Hoyle, and a decree for the possession of the homestead premises.

We find no error in the record, and the judgment is affirmed.


author: Kirby, J.,

text:
    Parker v. Keenan.
    Opinion delivered March 31, 1930.

      Parker & Parker and W. P. Strait, for appellant.

      Majors & Robinson, for appellees.
   Kirby, J.,

(after stating the facts). Appellant insists that the court erred in not giving her requested instruction No. 1, directing a verdict in her favor for the amount of rent due, taking into consideration the contract price and adding to that amount, if they found the market price of cotton was 15 cents or more on October 1, 1928, the amounts additional as stipulated in the written contract.

The court properly refused to allow the terms of the written contract, unambiguous in its provisions, abrogated, contradicted or varied by the parol evidence. The undisputed testimony shows that the lessees, Keenan and Oowger, were familiar with the leased premises and had been for sometime, one of them owning lands in the immediate vicinity and both of them traveling the public roads through the lands.

The husband of appellant, her agent who made the contract and prepared the written instrument, testified that there were no terms of the contract other than as included in it, and that no representations whatever were made about the character of the lands rented or assurances given that they were above overflow, or high and well drained.

Keenan testified that he had only discussed the matter of renting the lands with Mr. Parker, appellant’s husband and agent, and that Cowger talked it over with him and did not think they should have to pay 24 bales of cotton as rent, suggested that 21 or 22 would be a reasonable rental, and told him to take up the matter of the price again with Parker, but also to agree to lease the lands if he could not get them for a less price than the 24 bales of cotton.

Keenan owned and cultivated lands within one and one-half miles of the lands leased herein, and Cowger did not dispute having made the statement and agreement with Keenan to rent the lands at the price at which Keenan told him they could be had, '24 bales of cotton, if he could not procure a less price, without ever having seen or discussed the matter of the rental with the landlord or her agent. Keenan was unable to procure it for a less price and agreed to take the lands for 24 bales of cotton rent, and the written contract- -was prepared and executed by the parties accordingly.

There is nothing in the contract indicating that the landlord gave any assurances about the quality or kind of land as it is now claimed was done, and certainly it was a matter of such great importance as would not have been left out of the contract for rental of the place, if. it was agreed on. Keenan did not testify that any such warranty or guaranty of the condition or quality of the land was made before the agreement upon the terms of the contract, and it is shown from the undisputed testimony' that there were no terms agreed on or representations made save those provided in the contract as executed.

The court erred in not directing a verdict in accordance with instruction No. 1, as requested, and the judgment will be modified accordingly, and a judgment will be entered here for the amount the jury found was due appellant without any deduction therefrom of any amount of damages for alleged false warranty made as an inducement to the execution of the contract by ap-pellees, and, as modified, will be affirmed. It is so ordered.


author: Mehaffy, J.

text:
    Missouri Pacific Railroad Company v. Foresee.
    Opinion delivered March 31, 1930.

      Thomas B. Pryor and Harvey G. Combs, for appellant.

      V. D. Willis, for appellee.
   Mehaffy, J.

This action was begun by appellee against appellant to recover damages for killing a dog. .It was alleged that the dog was killed in the night time and no one saw it killed. The evidence however, showed that it was found on the track, and there was blood and hair on the rails, and there seems to be no douibt that it was killed by the train. The evidence showed that the value of the dog was from $60 to $100. Neither the engineer nor fireman saw the dog at any time.

The jury returned a verdict for $25, and judgment was entered accordingly. Motion for new trial was filed, overruled and this appeal is prosecuted to reverse the judgment of the circuit court.

If the dog was killed by the operation of the train, this made a prima facie case, and was sufficient to take the case to the jury unless the railroad company offered some evidence that it was at the time in the exercise of care and did not negligently kill the dog. The engineer operating the train, testified that he was keeping a lookout and saw no dog at the place where this dog was killed. He also testified that there were weeds growing up by the side of the track, and, if so, a dog* might have come out of the weeds immediately in front of the engine and been killed without the engineer seeing him. Another witness, however, testified that there were no weeds, that there had been, but they had been removed. If the only negligence relied on was failure to keep a lookout, then the appellant would have been entitled to a verdict because the appellant offered evidence which overcame this presumption. One witness testified that he heard the train, and that there was no warning given, no bell nor whistle. The fireman testified, that it was the duty of the engineer to give the signal, but that he did not remember whether it was given or not.

We said in a case recently decided: “If the dog was killed by the operation of the train as the jury found, this made a prima facie case, and was sufficient to take the case to the jury unless the railroad company offered some evidence that it was at the time in the exercise of care, and did not negligently kill the dog.” Mo. Pac. Rd. Co. v. Berry, 179 Ark. 437, 21 S. W. (2d) 631.

The statute of Mississippi with reference to injuries caused by running trains was similar to the Arkansas statute, as was also the statute of Georgia. Each of these statutes was construed by the Supreme Court of the United States recently. The court held in the Mississippi case that: “The only legal effect of the inference is to cast upon the railroad company the duty of producing some evidence to the contrary. When that is done, the inference is at an end, and the question of negligence is one for the jury upon all of the evidence. The statute does not fail in due process of law, because it creates a presumption of liability, since its operation is only to supply an inference of liability in the absence of other evidence contradicting- such inference. * * * The Mississippi statute created merely a temporary inference of fact, that vanished upon the introduction of opposing evidence. * * * That of Georgia, as considered in this case, creates an inference that is given effect of evidence to be weighed against opposing testimony, and is to prevail unless such testimony is found by the jury to preponderate. ’ ’

“The presumption raised by [Georgia Civ. Code] § 2780 is unreasonable and arbitrary, and violates the due process clause of the Fourteenth Amendment.” Western & A. R. R. Co. v. Henderson, 279 U. S. 639, 49 S. Ct. 445.

In the instant case, if the only evidence of negligence was failure to keep a lookout, the verdict would have had to be for the appellant under the engineer’s testimony, but, since there was proof of failure to give the signal, and the appellant offered no evidence tending to show that it exercised care in this regard, the jury was justified in finding that, if the appellant had performed its duty by giving the signals, the injury might not have occurred. The statute creating a presumption authorizes a verdict only in cases where the company does not introduce evidence contradicting the presumption raised by the statute, and since the presumption of negligence in failure to give the signal is not contradicted, it was sufficient to justify the verdict, and the judgment is therefore affirmed.


author: McHaNey, J.

text:
    Moffett v. Texarkana Forest Park Paving, Sewer and Water District No. 2.
    Opinion delivered March 31, 1930.

      T. B. Vance, for appellant.

      Gusta/uus G. Pope, for appellee.
   McHaNey, J.

Appellants brought this action in the chancery court attacking the validity of the organization of appellee district. The prayer was that it 'be declared void; that the commissioners he enjoined from proceeding further with the district; that the assessment of benefits be set aside and a levy of a tax thereon enjoined; that the water line proposed as a part of said improvement be eliminated, in the event the district be sustained; and that no assessments be levied for said purpose. The facts are that, in the summer of 1928, a petition, purporting to contain a majority in value of the owners of real property in the proposed rural improvement district, adjacent to the city of Texarkana, was filed with the clerk of the county court of Miller County, praying an order of said-court establishing the district for the purpose, 1st, of paving that part of County Avenue and 37th Street within the district; 2nd, of constructing a sewer system for the district; and 3rd, of building a water system therein, and to connect the water and sewer systems with those in the city of Texarkana. Thereupon the county clerk published a notice to property owners that the court would hear the petition on September 17, 1928. On that date the hearing was by agreement postponed to the 24th. Appellants appeared at the hearing, protested against the formation of the district, and the court denied the petition on the ground,-that a majority in value had not signed. An appeal was duly prosecuted to the circuit court, where, after a hearing, judgment was rendered establishing the district and naming the commissioners, which was certified back to the county court for further proceedings according to law from which no appeal was taken. Thereafter an assessor was appointed who -made an assessment of benefits against the property, filed it, and notice was published that on a certain date the board would meet to equalize such as§essments. This suit was brought prior to this meeting.

The chancery court entered a decree dismissing the complaint for want of equity as to the attack on the legality of the organization of the district. It found that the district was legally organized and not open to collateral attack. It further found that the assessment of benefits made by the assessor was arbitrary and void, and enjoined the commissioners from making any levy against the lands in the district, and from making any collection thereon. From this decree, both parties have appealed.

We think the court correctly held the organization of the district valid on collateral attack, and this suit constitutes a collateral attack on the judgment of the circuit court. The district was organized under act 126 of 1923, p. 84, and acts amendatory thereof, which provide an orderly course of procedure in the law courts to be pursued in the establishment of the district. Appellants did not pursue the remedy provided. -Instead of appealing to this court from the judgment and order of the circuit court, as provided in said act, they -elected to abandon their direct attack by appeal and to substitute therefor this collateral attack in the chancery court. In Crittenden Lumber Co. v. McDougal, 101 Ark. 390, 142 S. W. 836, this court said, relative to a collateral attack upon a domestic judgment of a court of general jurisdiction, that “It is well settled that every presumption will be indulged in favor of the jurisdiction of such court, and the validity of the..judgment it enters. Unless it affirmatively appears from the record itself that the facts essential to the jurisdiction of such court did not exist, such collateral attack against the judgment rendered by it will not prevail. * * * It is true that a judgment may be attacked collaterally when, by the record, it is shown that there was want of jurisdiction in the court rendering it, either of the subject-matter or of the person of the defendant.” Not only does the record in this case fail to show want of jurisdiction in the circuit court of either the subject-matter or the partms, but it affirmatively appears that it did have such jurisdiction, given it by statute and by the voluntary appearance of all the parties therein. Hence appellants are concluded relative to the regularity of the organization of the district.

Many interesting questions are argued which, on appeal or other direct attack, might be fruitful of results, but which, on collateral attack, cannot be considered.

Another argument made is that the regular circuit judge being ill, a special judge, Judge Arnold, was elected to hold the June term of court. .He being disqualified to try this particular case, another special judge, Judge Jones, was elected. By consent of all parties Judge Jones heard the evidence and argument in the grand jury room while Judge Arnold was proceeding with the regular business in the court room. The court took this case under advisement, and some weeks later in the June term of court, Judge Arnold vacated the bench and Judge Jones announced the judgment of the court in this case. This was a valid judgment under the authority of Cox v. Gress, 51 Ark. 244, 11 S. W. 416, where it was said, “that a trial had by consent before a special judge at his chambers, while the regular judge is upon the bench, may be the foundation for a subsequent valid judgment, when the special judge assumes the functions of his office in court.”

It is also argued that the act under which the district was organized is unconstitutional. The act has been held to be constitutional and valid by this court in the following cases: Moyer v. Altheimer, 168 Ark. 271, 270 S. W. 91; Newton v. Altheimer, 170 Ark. 376, 280 S. W. 641; Reed v. Paving Dist. No. 21 of Jefferson County, 171 Ark. 710, 286 S. W. 829; and Morehart v. Mabelvale Rd. Imp. Dist. No. 29, 178 Ark. 219, 10 S. W. (2d) 856.

Other questions are argued by counsel for appellants, which we have examined and find not open for consideration on collateral attack.

The district has appealed from the decree canceling the assessment of benefits. The statute provides the procedure to correct the assessment by hearing before the board of commissioners and the assessor as a board of equalization. Section 6 of the act provides that they shall hear all complaints against the assessment, and shall equalize and adjust the same, and further that “their determination shall be final, unless suit is brought in the chancery court within thirty days to review it.” Appellants did not follow this procedure, but brought this suit attacking the district and the assessment without waiting for. a meeting of the equalization board, without presenting their complaints to it, and without having a hearing thereon. We are therefore of the opinion that appellants attacked the assessment prematurely, and that they should have followed the procedure provided by statute by first attempting to have the assessment corrected by the board of equalization, and, if not satisfied. to have then had it reviewed in the chancery court. This we assume they may still do.

The decree will he affirmed on direct appeal, and reversed and remanded with directions to dismiss the com-plaiiit for want of equity on the appeal of the district. It is so ordered.


author: Butler, J.

text:
    Kory v. East Arkansas Lumber Company.
    Opinion delivered March 31, 1930.

      W. E. Beloate, Jr., 'and Robert G. Powell, for appellant.

      Smith & Blackford and G. M. Gibson, for appellee.
   Butler, J.

In the early part of 1917, W. E. Beloate became the agent of Ida Less Kory, then Mrs. Ida Less, to conduct for her certain litigation, and to take charge of her property, consisting principally of a farm, and to rent and manage the same for her. A written contract was entered into between them by which the authority of Beloate was set out, and a power of attorney executed authorizing him to perform the acts and duties mentioned in said contract.

On the 15th day of May, 1921, the following note was executed:

“$648.40 Walnut Ridge, Arkansas, May 15, 1921.
“November 1, 1921, after date, for value received, I, we, or either of us, promise to pay to the order of the East Arkansas Lumber Company six hundred forty-eight and 40/100 dollars at the office of Bast Arkansas Lumber Company, at Walnut Ridge, Arkansas, with interest at ten per -cent, per annum from date until paid, and with costs of collection or an attorney’s fee in case payment should not be made at maturity. If the interest be not paid when due, to become as principal and bear the same rate of interest. The consideration hereof is lumber and materials furnished the maker.hereof for improvements upon.in the city of .., county of.....and State of., the property of..-.,the last materials of this account being furnished on the...day of .._........*., 19. It is hereby expressly understood and agreed that, in the making or in the accepting of this note, the rights of a lien for the consideration hereof are not waived, but may be filed to preserve and enforce the same. The makers and indorsers of this note hereby severally waive presentment for payment, notice of nonpayment, protest and consent that the time of payment may be extended without notice thereof.
“(Signed) Ida Less,
“By W.E. Beloate.
“W. E. Beloate.
“Due November 1,1921. P. 0. Walnut Ridge, Ark.”

At the time of the filing of the suit hereinafter mentioned the above note bore the following indorsements on the back thereof:

“Paid October 31, 1921, $63, interest $29.88.
“Paid October 2,1922, $25.88.
“Paid November 13, 1922, $40, interest $60.
“Paid February 28, 1927, $75.”

Suit was brought against Mrs. Ida Less Kory and W. E. Beloate. Mrs. Kory being a nonresident, notice of the suit was given by warning order, and a garnishment issued and served on J. D. Doyle personally and as receiver, it being alleged that he was indebted to Mrs. Kory at the time of the filing' of the suit in a sum equal to or in excess of the amount sued for. Mrs. Kory answered denying any indebtedness to the plaintiff, ap-pellee here, or that the note sued on was executed with her authority or knowledge or that any person, iby her order or with her authority or knowledge, received any of the several payments indorsed on the note, or that the same had been paid; that she had no knowledge of any of the alleged transactions until after the suit had been filed on the 8th day of February, 1928. As a further defense to the action, she pleaded the statute of limitations in bar of plaintiff’s cause of action.

Witnesses for the appellee testified that the note sued on was a renewal note, and that at the time the original note was executed and at the time the renewal note was made W. E. Beloate stated that he had authority to sign the same, and that he had a power of attorney giving him such authority. There was testimony to the effect that Beloate was the agent of Mrs. Kory for the management of her farm. in Lawrence County, and that he executed rent contracts, and also a building contract with one Rosooe Carty, and that from time to time he had maintained actions on behalf of Mrs. Kory with respect to controversies arising over the transactions had relating to the plantation which he managed.

J. W. Trieschman, a witness for the appellee, testified that he was secretary and general manager of the appellee company, and that once a year for the last three years the books and accounts of the appellee had been audited by a firm of auditors, Ernst & Ernst; that this firm had sent out verifications of the accounts due the appellee; that directions had been given the auditors to send accounts or statements to all persons indebted to the appellee as shown by its books, and that it had been the custom of the auditors to report to the appellee any account or statement which had been returned to them as undelivered; that it was the custom to send out these statements with the return card of the auditors in the upper left-hand corner, and that they had made no report showing that any statement addressed to Mrs. Ida Less Kory had been returned. The 'witness did not himself mail the notices, but gave instructions that they should be mailed, and the witness testified that the records showed that they were mailed out. The letters were not written by the witness but were made up from a form letter by the stenographers with directions to mail them to those whose names appeared on the books as being indebted to the appellee company. According to this witness, the appellee did not know where Mrs. Ida Less Kory lived, but the postoffiee to which the notices were addressed was Walnut Ridge.

Mrs. Kory testified that no notice of any indebtedness claimed to be due the appellee were ever forwarded to her at St. Louis, her place of residence or elsewhere, from Walnut Ridge and that she never received from any source any such notices, and did not know until after suit was filed that tlie appellee claimed she was indebted to it. She attached to her deposition a copy of the contract entered into between her and Mr. Beloate in 1917, and testified that after the execution of this contract and power of attorney, which was of record in the 'office of the recorder afc the county seat of Lawrence County, she had never visited Walnut Badge but on one occasion, remaining there only a few hours, and that she knew nothing of the details of Beloate’s transactions with respect to the management of her farm.

The contract, in so far as it is material to the issues involved in this suit, after providing for the employment of Beloate to attend to litigations affecting Mrs. Kory’s dower and homestead rights, contains the following provision:

“And after the said one-third interest for life in said real estate is so set off, he shall rent, lease, repair, collect rents, pay taxes, both general and special, and manage the life interest in said real estate to the best interests of her, the said Mrs. Ida Less, and act and do all things necessary and expedient for and in her behalf as her business manager in the promotion, care and protection of the same, looking to the best financial returns thereon, * * * *.
“He shall obtain and reserve, and in her name and behalf, enforce for her until duly satisfied under -the terms and spirit thereof, a landlord’s lien on all crops to protect her interest in rents. He shall make all rent contracts in his name as her agent, and may bring such actions as may be necessary or expedient, and shall defend all suits that may be brought against said Ida Less growing out of the ownership and control of her rights in the estate of said Isaac Less, deceased, and is to do any and all things necessary for the proper care and protection of said estate and her interest therein in having the same properly and expediently set off to her. He shall pay and advance all necessary repairs, court costs and taxes, both general and special, out of the yearly rents hereinafter referred to, and take credit therefor ont of the annual return of said property.”

On the same day upon which the above contract was made a power of attorney was signed by Mrs. Less, and duly filed and, recorded in the office of the circuit clerk and ex-officio recorder of Lawrence County, which is as follows :

“Know all men by these presents: That I, Ida Less, for and in consideration of the sum of one ($1) dollar, by cash in hand paid, and other considerations, do hereby appoint and constitute W. E. Beloate my agent and attorney-in-fact, subject to the conditions of a certain contract entered into this day between us, to represent me in the estate of my late husband, Isaac Less, and to collect all interest I have in said estate, and to collect all rents that may be due me for lands that may be set aside to me as dower.
“This power of attorney, subject lo conditions of said contract, which is made a part hereof, as if set out in full, it being understood that each party has a copy of the same.
“Witness my hand and seal this 21st day of February, 1917.
“(Signed) Ida Less (Seal)”

The power of attorney was duly acknowledged before a notary public in the city of St. Louis, and recorded as aforesaid in Deed Record No. 27 at page 253.

It is the contention of the appellee that W. B. Beloate was the general agent of Ida Less Kory in the management of her real properties in Lawrence County, and that the execution of the note sued on was within both the real and apparent scope of Beloate’s authority, and in addition, that the action of W. E. Beloate in signing the name of Mrs. Ida Less to the note was ratified by her for the reason that notice of the execution of the same was given her, and that she had received the benefit of the materials, purchase price of which was represented by the note in question, and that the appellee was looking to ber for payment of said note. In support of the first contention the appellee quotes from 21 R. C. L. 853, where a distinction is made between the power of a general and special agent to bind tbe principal, and that a general agent is usually authorized to do all acts in connection with the business and employment in which he is engaged, and “where it appears that an agent has done an act for the benefit of his principal, and that the latter has not questioned the authority of the agent to bind him, it will be presumed, until the contrary appears, that the agent was duly authorized. Though the agent exceeds his authority, the principal will be bound to the extent that he has acted within the powers conferred on him. * * * And this permits him to adopt any authorized usage or mode of dealing. An agency to manage property implies authority to do with the property what has previously been done with it by the owners or others with their express or implied consent or to do with it what is usual and customary to do with property of the same kind in the same locality. ’ ’

The appellee further quotes from the same volume, supra, pages 854, 855 and 856, where the well recognized rule is stated that all acts of an agent within the apparent scope of the authority conferred are also binding upon the principal, and that where the principal knowingly permits the agent to exceed the powers actually granted and receives the benefit thereof, such acts will bind the principal because within the apparent scope of his agent’s authority, and “whenever the principal has placed an agent in such a situation that a person of ordinary prudence conversant with business usage and the nature of the particular business is justified in assuming that such agent is authorized to perform in behalf of his principal the particular act, and such particular act has been performed, the principal is estopped from denying- the agent’s authority to perform it.”

This rule has been recognized and followed by this court in a number of cases which have been cited by counsel for the appellee and to which we give our full assent. However, they have no application to the facts in the instant case. While Beloate might be said to be the general agent of Mrs. Ida Less Kory, his agency was one of limited power not arising from implication but from the express language of the written contract, the source and limit of’ his authority, and any declaration that he might have made with reference to his agency or his power could not be binding upon the principal. Patten v. Robbs, 175 Ark. 784, 300 S. W. 388. It was the duty of the appellee, in dealing with Mr. ¡Beloate, to ascertain the extent of his authority, and this it could readily have done by calling upon him to exhibit the contract which by the express terms of the power of attorney, was made a part of that instrument. The agency was created by a written contract, and the nature and extent of the agent’s authority must be ascertained from it, and such authority cannot be extended by the declarations of the agent himself or his conduct while in the performance of his duties, except where such conduct is shown to be known to the principal who having received the benefits of such conduct, has acquiesced therein. American Agricultural Chemical Co. v. Bond, 177 Ark. 164, 6 S. W. (2d) 2. By necessary implication the contract under which Beloate acted precluded him from pledging the credit of his principal, for it was expressly stipulated that “he shall pay and advance all necessary repairs * * * out of the yearly rents hereinafter referred to and take credit therefor out of the annual return of said property.” Therefore, when Beloate executed the note in controversy to the appellee in the name of Mrs. Ida Less, he exceeded the authority conferred by the contract and the note had no binding effect in so far as Mrs. Less was concerned. Before the appellant could be said to have ratified this unauthorized act of Beloate, it must first be shown that she derived some benefit from the transaction. As to this, the record is altogether silent. If, in fact, building material was purchased and a note given for the purchase price thereof, there is no showing that the material so purchased was used in the repair or construction of buildings on Mrs. Kory’s farm. The most that is shown is the hearsay statement of W. E. Beloate, Jr., who, in a letter to Mr. Robert C. Powell of St. Louis, used the following expression: “I am advised that this is an action of debt for material purchased and used in building a tenant bouse on the farm.” Further, it would be necessary to show that Mrs. Kory knew and acquiesced in the action of Beloate in purchasing the material, if in fact he did purchase it, and in using it on her farm. She testified positively that she knew nothing of this until long after the suit had been filed on February 8, 1928, and that she did not authorize Beloate to make the purchase or to execute the note. There is nothing in the record to contradict this statement. At most, there is the testimony of Mr. Treischman as to what he believed was done by his employees in mailing out the notices. If he is correct in his assumption that the notices were mailed to Mrs. Kory, there is a total lack of evidence that the same were ever forwarded to her.

We think the evidence wholly insufficient to sustain the contention that Mrs. Kory received the benefit of the transaction, and knew of and assented to the same. In our view of the evidence, the trial court erred in its finding and judgment in favor of appellee.

On the question of limitation, it might be said that with the exception of the notations on the note in question there is nothing to show that any payment has been made thereon. There is no evidence showing by whom the notations were made, ox*, indeed, if any payment had been made at all. No witness testified that any payments had been made, and in view of the appellant’s testimony, we do not think the indorsement alone would be sufficient to establish the alleged payments. Slagle v. Box, 124 Ark. 43, 186 S. W. 299; Johnson v. Spangler, 176 Ark. 328, 2 S. W. (2d) 1089, 59 A. L. R. 899.

The decree of the trial court is reversed, and the case is dismissed.


text:
    Mississippi Valley Power Company v. Hubbard.
    Opinion delivered March 31, 1930.
    Hill, Fitshugh & Brissolara, for appellants.

      J. F. O’Melia and G. L. Grant, for appellee.
   Butler, J.

The appellants, Isaac Lewis and James A. Lewis, were a partnership owning’ and operating a coal mine near Alix in Crawford County, Arkansas, which they had purchased together with the equipment from Ben and Howell Douglass. Over the shaft leading to the interior of the mine was erected what the witnesses have designated as a “tipple.” This appears to be a structure composed of four large uprights slightly inclined toward the center from the perpendicular, braced at intervals and extending upward a considerable number of feet. Tbe manner of construction is not disclosed by the evidence or the purpose for which it was to be used, but from the photographs and references made by the witnesses we presume that it was a derrick-like structure used for affording means by which things might be raised or lowered into the mine. Within the tipple and near the shaft on sills laid upon the ground were three electrical devices called transformers. The mine was electrified, the electricity coming over the wires of the appellant, Mississippi Valley Power Company, strung on poles to a large pole about eighteen feet away from the tipple. Prom this pole the wires were carried into the tipple at a certain distance .from the ground — one of the witnesses stated at about twelve feet from the ground — and fastened to one of the up-rights and there brought down the side of the up-right and connected with the transformers. One of these wires was called a high-tension wire, carrying a charge of about forty-four hundred volts. The other wires were called secondary wires, all of which were plainly in view. An iron pipe about 1^4 inches in diameter led horizontally from a boiler at a point outside the tipple to within the enclosure made by the same where it was attached by an elbow to a pipe of like dimensions extending downward through the shaft into the mine and there connected with other equipment, the pipe being used for the transmission of steam. This pipe was leaking steam at a point below the entrance to the shaft, and on the morning of the 22d day of September, 1927, Isaac Lewis, who was the foreman in charge of the operations of the mine, caused to be detached the pipe within the mine at a point about seventy feet below where it entered the shaft for the purpose of raising the pipe in order that the leak might be stopped. When this was done, the pipe was detached from the connections leading from the tipple outside, leaving about four feet of the horizontal pipe still attached to the elbow. The foreman then called to his assistance two miners and one Andy Hubbard, and tbe four raised the perpendicular pipe several feet upward — estimated from three to seven feet — where it was tied to prevent its slipping down.. The purpose of this was to raise the pipe so the leak would be above the mouth of the shaft in order that it might be closed by a clamp. This work was to be done by Andy Hubbard who was a blacksmith, and' the general repair man of the coal company.

The pipe was raised at about 7:30 or 8:00 o’clock in the forenoon. After it was raised and tied, the foreman, in the presence óf the two miners who were helping him to raise the pipe, told Hubbard, who was to close the leak, to be careful with it and not to turn the pipe— that there was no danger ;if he did not turn the pipe. The elbow on the pipe at that time, and the piece of pipe about four feet long projecting therefrom were in an opposite direction and north' from where the wires were installed on the south side of the tipple. After having raised the pipe and given the precaution to Hubbard, the foreman and his helpers descended into the mine where they' remained. Hubbard also descended into the-mine for some purpose and afterwards came back presumably to place the clamp on the pipe which was leaking. 'Later’on, between 11:00 and 12:00 o’clock in the morning, the foreman, on- coming to the bottom' of the shaft, noticed a smoke and odor;' and getting'in the cage came up to the top where he -'discovered 'Hubbard lying" dead, the pipe wás turned with'the "projecting horizontal part against the'wire-and'dir an opposite'direction from the point to which it extended when he had last seen it. An examination of- the body of Hubbard disclosed'the fact that the current of electricity had passed into his body at' some place on' his right shoulder- or arm. Whether the point of contact was-at the-shoulder or -below-on the arm is not clearly shown- by the testimony. The arm was burned to the bone, the current passing through the body and going out -through his left foot, bursting the foot and burning- off'one of -the toes. -The wire with which tho-pipe had come in contact was the high tension wire carrying about 4,400 volts of electricity, which was sufficient to, and doubtless did, cause instant death.

The testimony is in dispute regarding the manner in which the tipple was enclosed — whether it ivas boarded up or not. However, the evidence is clear that the wires, after they reached the inside of the tipple as they were brought down by the uprights, were not enclosed so as to prevent a contact with them and in this condition were dangerous. Hubbard was a man of mature years, having been in the employ of the appellants Lewis since 1924, and working in and around electrified mines since 1926. He was a blacksmith by trade, and, as before stated, he was the general repair man for the coal company. He had used electricity in connection with his work, and could not be said to be inexperienced with reference to the uses and the dangers attendant upon it.

It is insisted by the appellee, administratrix of the estate of Andy Hubbard, and the plaintiff in the action in the court below, that the defendant, Mississippi Valley Power 'Company, and the defendants Isaac and .James A. Lewis, who were partners doing business under the name of -Lewis Coal Company, were concurrently negligent in the installation and maintenance of the electric wires leading from the telephone post into the tipple and down one of its uprights, in that these wires were not properly insulated or guarded so as to prevent contact with them, and that this negligence was the proximate cause of the death of Andy Hubbard; and that the appellants were further negligént in not properly boarding up the tipple in order to prevent persons from coming in contact with the electric wires and devices installed within the same.

The defense óf contributory negligence is interposed, and it is also contended by the appellant, Mississippi Valley Power Company, that whatever negligence might have existed with respect to the maintenance and placing of transformers and wires within the tipple, it is not responsible therefor,- as its wires extended only to a pole about 18 feet away from the place where the injury occurred.

It is not necessary for us to discuss or decide these questions, for the facts show that the injury and death of Hubbard was the result of a risk assumed by him. It is true employees do not ordinarily assume risks created by the negligent act of the master, and that he has a right to require of the master to provide suitable appliances and a safe place in which to do his work, and to do such is the clear duty of the master. St. L. I. M. & S. R. Co. v. Touhey, 67 Ark. 209, 54. S. W. 577, 77 Am. St. Rep. 109; Pettus & Buford v. Kerr, 87 Ark. 396, 112 S. W. 886; St. L. I. M. & S. R. Co. v. Holmes, 88 Ark. 181, 114 S. W. 221. But it is equally true that where the danger arising from the negligent conduct of the master is so apparent and obvious in its nature as to be at once discoverable to one of ordinary intelligence, an employee, by voluntarily undertaking to perform his work in such a situation, assumes the hazards which exempts the employer from liability on account of injury to the employee. Wisconsin & Ark. Lbr. Co. v. McCloud, 168 Ark. 352, 270 S. W. 599; C. R. I. & P. Ry. Co. v. Allison, 171 Ark. 983, 287 S. W. 197; Ward Furniture Co. v. Weigand, 173 Ark. 762, 293 S. W. 1002. Especially is this true where, in addition to the information he may gain by the casual exercise of his senses, he is expressly warned of the dangers incident to his situation. We think, in view of the age, occupation, and experience of the deceased, the readily discoverable nature of the dangers incident to his work and the warning he had received, that Hubbard assumed the risk incident to his work. Hunt v. Dell, 147 Ark. 95, 226 S. W. 1055; River, Rail & Harbor Co. v. Goodwin, 105 Ark. 247, 151 S. W. 267; Williams Cooperage Co. v. Kittrell, 107 Ark. 341, 155 S. W. 119.

The judgment of the court below is reversed, and the cause remanded.


author: Pee Curiam.

text:
    Hicks v. State.
    Opinion delivered April 7, 1930.

      Harney McGehee, for appellant.

      Hal L. Norwood, Attorney General, for appellee.
   Pee Curiam.

Tom Hicks prosecutes this appeal to reverse a judgment of conviction for the crime of uttering a forg'ed instrument. There is no bill of exceptions, and the sole reliance for a reversal of the judgment is that the court erred in overruling the defendant’s motion in arrest of judgment. Under our statute, a judgment can only be arrested on the ground that the facts alleged in the indictment did not constitute a public offense within the jurisdiction of the court. Dover v. State, 165 Ark. 496, 265 S. W. 76; and Lewis v. State, 169 Ark. 340, 275 S. W. 663.

The indictment contains the essential elements of the crime charged as defined in Ferrel v. State, 165 Ark. 541, 265 S. W. 62. There is no error upon the face of the record, and the judgment will be affirmed.


author: Hart, C. J.,

text:
    Campbell v. Hargraves.
    Opinion delivered April 7, 1930.

      Mcmn & Harr els on, for appellant.
   Hart, C. J.,

(after stating the facts). The receiver was appointed upon application of the mortgagee. After his appointment, the receiver gave bond as required by the court and duly qualified as such receiver. After this, the property which he was ordered to take charge of was deemed to be in custody of lav. The court acquired jurisdiction over the property when the receiver was appointed, the judicial process served upon the mortgagor, and the receiver duly qualified as such, although he did not in fact take charge of the property. 23 R. C. L. par. 68; Buchanan v. Hicks, 98 Ark. 370, 136 S. W. 177, 34 L. R. A. (N. S.) 1200; and Palmer v. Texas, 212 U. S. 118, 29 S. Ct. 230.

It will be noted that the receiver was appointed and qualified on October 29, 1925, and that he did not report his pxvoceedings to the court xxxxtil March 28, 1927. It is true that he testified that he examined the live stock soon after his appointment axxd reported to the attorney for the mortgagee that the live stock was so old and worthless that it woxxld not pay to keep them, axxd that he understood from the acquiescence of the attorney for the mortgagee that he accepted his x*eport and did not wish him to take charge of the live stock. This, however, did xxot exempt him from liability to the mortgagor. He was appointed by the court, axxd the mortgagor woxxld not have the right to ixiterfere with his possession of the live stock without permission of the court. It was his duty to have x’eported the matter to the coxxrt and to have secured his discharge to the end that the mortgagor might have been notified that he might retake possession of the live stock. Not having done so, the receiver was guilty of negligence in the discharge of his duty, and was liable to the mortgagor for any loss or damages occasioned thereby.

We are of the opinion, however, when the evidence is carefully considered, that the chancellor erred in finding the amount of damages in favor of the mortgagor in the sum of $920. It is true that he was justified in so finding under the evidence adduced in favor of the mortgagor; hut we think that, when all the attendant circumstances are considered, this amount was too much. The mortgagor had not seen the live stock for some time prior to the appointment of the receiver. The testimony of the sheriff who was appointed receiver was that when he went to examine them they were poor and were not worth feeding. There was only one young horse in the number, and this one had the fistula, and soon died from that disease. The other four head of live stock were old, and either died from starvation or old age, or a combination of both. Hence the mortgagor could not recover any sum for their usable value. Two of the mortgaged animals were afterwards taken charge of and sold by him for what appeal’s to have been their worth. This left only three animals to be accounted for; and, according to the testimony of the mortgagor, they were only worth $230.

We also think the preponderance of the evidence shows that the.plow tools and farming implements were greatly overvalued by the mortgagor. The evidence is not very clear as to whether the amount of fanning tools and farming implements testified to by-the mortgagor were in-use on the farm when the receiver was appointed. In any event, according to the testimony of the tenants on the farm they were very old and were practically worn out. Two of the-tenants testified that they were not worth more than $50 or $60. Without 'any further discussion of the evidence or reviewing it in detail, we are satisfied, after a careful consideration óf it as it appears in the transcript, that the live stock and farm implements were not worth in the aggregate more than $500. Inasmuch as chancery cases are tried de novo in this court, the decree will be modified, and judgment will be rendered in favor of S. S. Hargraves against J, M. Campbell, receiver, and T. A. 'Burford, the surety on his bond, for the sum of $500, and this sum shall bear interest from this date at the rate of six per cent, per annum, if the same is not paid within thirty days.

It is so ordered.


text:
    Arkansas Foundry Company v. Poe.
    Opinion delivered April 7, 1930.

      Busbee, Pugh & Harrison, for appellant.

      Sam T. Poe, Tom Poe and McDonald Poe, for appellee.
   Hart, C. J.,

(after stating the facts). It is first insisted that the judgment of the probate court removing B. C. Barnes as administrator of the estate of Orby King and substituting in his place H. H. Morris, and abrogating the contract whereby B. O. Barnes, as administrator, had made a contract with Sam T. and Tom Poe to file and prosecute a damage suit against the Arkansas Foundry Company was correct, and that Sam T. and Tom Poe no longer had any right to represent the plaintiff in the damage suit.

We cannot agree with counsel in this contention. B. C. Barnes was duly appointed administrator of the estate of Orby King, and his contract with Sam T. and Tom Poe was approved by the probate court. Sam T. Poe then went to the State of Tennessee .to see Jimmie King who was the father of Orby King, and his sole heir at law about the matter. They both testified in positive terms that Jimmie King’ ratified the appointment of Barnes and his contract with the appellees. Their testimony was corroborated by that of the attorney of Jimmie King in the State of Tennessee. He stated that Poe and Barnes came to his office with Jimmie Krug and told; him all about the appointment of Barnes as administrator, and the suit which Poe had brought for damages. This attorney approved of the suit and advised Jimmie King and his brother to go to the State of Arkansas to see about the prosecution of the suit. According to the testimony of Tom Poe, after they arrived here, they ratified the appointment of Barnes as administrator and his ‘contract with them to prosecute the damage suit.

It is true that this testimony is contradicted by that of Jimmie and Quinton King, his brother, who both testified that they did not know of the appointment of Barnes as administrator, and his contract employing Sam T. and Tom Poe to represent him in the damage suit. Their testimony, however, is inconsistent in itself. There could be no reasonable ground upon which to base the action of Barnes and Poe in going to the State of Tennessee and consulting him about the prosecution of the damage suit" if they were not in some wa3r interested in it. Jimmie King .was the father of Orby King, and the sole beneficiary of his estate. He was entitled to all of the proceeds of the suit, (because there were no creditors of his son’s estate. Then, too, the testimony of Jimmie King is weakened on cross-esamination. He testified that he did not remember Barnes and Poe saying anything about the appointment of Barnes as administrator and Poe as his attorney when they came to Tennessee to see him. We think the evidence in the record clearly shows that Jimmie King ratified the appointment of Barnes as administrator of his son’s estate and Barnes’ employment of attorneys to prosecute the damage suit. Therefore, the decision of the -circuit 'court on this branch of the case was correct. St. Louis Southwestern Ry. Co. v. Terral, 178 Ark. 475, 11 S. W. (2d) 763.

The undisputed evidence shows that Jimmie King was to recover the sum of $2,500 for signing a release of his claim for damages against the Arkansas Foundry Company, and that the company agreed to pay in addition whatever sum he would be required to pay Sam T. and Tom Poe or to Barnes. In other words, the effect of the evidence is that the defendant in the damage suit settled the case by paying Jimmie Kang the sum of $2,500, and also agreeing to pay his attorneys in the case.

This brings us to a consideration of the amount the attorneys were entitled to under their contract. We have copied that part of the contract in bur statement of facts and need not repeat it here. B. C. Barnes, as administrator, agreed to pay Sam T. and Tom Poe fifty per cent, of all sums collected from the Arkansas Foundry Company or from any other person for it by reason of the claim for damages whether by suit, compromise, or otherwise.

In Louisville, Evansville & St. Louis Rd. Co. v. Wilson, 138 U. S. 501, 11 S. Ct. 405, the court quoted with approval the following: “The principle has long been established that a party should not run away with the fruits of a cause without satisfying the legal demands of his attorneys toy whose industry and expense these fruits were obtained. ’ ’

Counsel for appellant claim that the case falls within the rule announced in St. L. I. M. & So. Ry. Co. v. Hays & Ward, 128 Ark. 471, 195 S. W. 28, and cases cited. In that case it was held that a plaintiff has the right to settle a suit; but in making the settlement he must take into consideration, that his attorney has a lien upon the cause of action, and under our statute may enforce it so that the plaintiff may not settle and deprive him of his rights under the contract with his client. In that case the client settled the suit without the consent of his attorneys, but there was no agreement upon the part of the railroad company to pay in addition the attorney’s fee. Hence, the court held that the attorneys were only entitled to recover one-half of the amount that the client had received in the compromise settlement, because that was the amount of attorney’s fee to which they were entitled under their contract.

Here the facts on this point are essentially different. We have a case where the defendant settled by paying the client a sum of money, and' in addition agreeing with him that he would also pay his attorneys. On this question the cases are in conflict. All of them recognize the rule to be that the amount for which the parties agreed in good faith to settle is binding on the attorney, but they differ as to what this amount is. Case notes to 3 A. L. R. 481, and 40 A. L. R., p. 1533.

The leading case relied upon by appellant is Proctor v. Louisville, Nashville Rd. Co., 156 Ky. 465, 161 S. W. 518, 3 A. L. R. 461. In that case, it was held that an amount which an attorney having a contract for a contingent fee on the percentage basis may recover in cases like this is to be computed as though the amount paid by way of compensation constituted the entire recovery. The court said that the amount the attorney was entitled to receive was absolutely fixed by the amount paid to the client. It was further said that, if the attorney received one-half of the amount his client received, it does not concern him whether he was paid that amount by his client or by any other person.

The leading case, on the other side of the question is Johnson v. Great Northern Rd. Co., 128 Minn. 365, 151 N. W. 125, L. R. A. 1917B, 1140. It was there said that the agreement to pay the attorney was part of his settlement, and that the amount to ¡be paid the client was not the whole of the settlement but only the client’s part thereof. Therefore, it was held that the whole amount of the settlement on which the attorney’s percentage is to be computed is that amount bearing such a proportion to the amount paid to the client as the whole bears to the portion representing the client’s part. We think the rule there announced is in accord with the better reasoning.

In the case at bar, the defendant in the damage suit settled with the plaintiff for the sum of $2,500 with the agreement at the time that the company would pay B. C. Barnes, administrator, or 'Sam T. and Tom Poe, his attorneys, under the terms of their contract which had been approved by the probate court. The defendant had notice of this contract and the rights of the attorneys under it and expressly agreed to settle with the plaintiff and pay the attorneys whatever they were entitled to under the contract. Jimmie King, the beneficiary under the contract, did not attempt to settle the whole liability against the defendant. As we have already seen, the defendant knew that the attorneys were entitled to fifty per cent, of all sums collected from the defendant, and the release recites that it is executed in consideration of the payment of $2,500 to Jimmie King, and also releases all claims that he may have as the father and sole heir at law of the said Orby King, deceased, on account of the injuries which led to the death of Orby King, while he was working for the defendant. In addition, the defendant agreed to pay whatever amount was due the at-' torneys. The defendant knew that the client and the attorneys both had rights under their contract; and, when it settled with the client for a stipulated sum to be paid him for his release, it also 'became liable for a like amount to the attorneys. Neither party was mistaken as to the facts of the case. The defendant knew the terms of the contract, and cannot be heard to interpose its erroneous interpretation of it as a defense to this action. The contract required that the fee should equal the amount of the client’s share of the proceeds of any settlement, and it was evidently the intention of the parties that each receive an equal amount, so that when the defendant settled with the client for $2,500 and agreed to pay the attorneys ’ fees, it must be deemed to have agreed to pay them the same amount which it had paid the client. Therefore, the judgment will be affirmed.


author: Smith, J.

text:
    Boone v. Trezevant.
    Opinion delivered April 7, 1930.

      Ben F. Reinberger, for appellant.

      Price Shofner, Ada Marett Carter and Owens S Ehrman, for appellee.
   Smith, J.

On September 28, 1927, Henry Johnson obtained a loan from the Eagle Bond & Mortgage Company for $3,250 and executed a note therefor, and to secure the payment of the note he executed to Stanley H. Trezevant, as trustee for the mortgage company, a deed of trust on a certain lot which he owned in the city, of Little Nock. This note and tlie deed of trust securing it were acquired by 'Crump & Trezevant, who brought suit to foreclose the deed of trust when default was made in making payments as the note required.

The complaint in which foreclosure was prayed made W. H. Boone a party defendant, it being alleged that on January 3, 1928, Boone had entered into a contract with Johnson to purchase the mortgaged property, and had later done so, and had agreed to assume the payment of the note secured by the deed of trust.

There was a prayer for judgment against both Johnson and Boone, and that foreclosure of the lien be decreed. A receiver was appointed pending the foreclosure with directions to collect the rents on the house standing on the lot, and to hold these rents subject to the final decree.

Boone filed an answer, in which he admitted that on January 3,1928, he had agreed with Johnson to purchase the property, the contract therefor contemplating the exchange of a quarter-section of land in Conway County for the said lot, but that he had rescinded the contract because of the failure of Johnson to comply with the terms of the contract for the exchange of the properties.

Boone filed a cross-complaint against his co-defendant Johnson, in which he alleged the following facts: His land was worth $2,000, and was assumed to be of that value in the trade. It was represented by the agent of Johnson that the city lot was worth $5,500, and that it could and would be sold by the agent representing Johnson for that amount, whereas the city lot was worth not exceeding $3,500, and when Boone became so advised he rescinded the contract on account of the false and fraudulent representation of value which had induced him -to make the trade. He admitted that he had delivered a deed to his land to Johnson, but denied that he had received a deed to the city lot, and, after alleging that Johnson had sold the land, he prayed .judgment against Johnson for $2,000, its alleged value.

Johnson filed an answer, in which he admitted all the allegations contained in the trustee’s complaint. He filed an answer to Boone’s cross-complaint, in which he denied that any false or fraudulent representations had been made to Boone; and also filed a cross-complaint against Boone, in which pleading the following allegations were made. That he had sold the city lot to Boone in consideration of a deed to Boone’s land, and the assumption by Boone of the mortgage debt due the mortgage company, and the note of Boone in the sum of $250. That this contract had been fully carried out by the execution and delivery of deeds, and the execution and delivery of the $250 note. Johnson prayed that the court retain jurisdiction of the cause for the purpose of rendering judgment in his favor against Boone for any balance which anight remain due upon the note to the mortgage company after the sale of the city property under, the decree of foreclosure.

The testimony shows that the negotiations between Johnson and Boone were opened by the submission to Johnson of the following written offer:

“December 28, 1927.
“Beal Estate Department,
“Central Bank,
‘ ‘ Gentlemen:
“I herewith submit to you the following offer of trade for the Henry Johnson place, at 219 North Monroe, on which there is a $3,250 loan, which I agree to assume, and for Mr. Johnson’s equity in said place I will agree to give 160 acres, located in Conway County, Arkansas, within 3 miles of Martinsville, described as follows: NE.% of Sec. 8, Twp. 8 N., B. 14 W., containing 160 acres, more or less. This 160 acres free and clear of all incumbrances. It is understood and agreed that Mr. Johnson will have electric light fixtures installed at 219 North Monroe and the gas line run to the house from the street. It is further agreed that each owner will furnish an abstract showing good title to said properties mentioned herein.
“It is understood that Mr. Johnson is to pay Central Bank, Beal Estate Department, $250 sales commission.
“Yours very truly,
(Signed). “W. H. Boone,
(=Signed) “Addie L. Boone.
“Will trade and your $250 note due 90 days.
(Signed) “W. H. Boone.”

Johnson had never had any communication with Boone prior to the submission of this offer, and it is very clearly the fact that the employee of the real estate department of the (bank who submitted this offer was acting as the agent of Boone, who admitted that before authorizing this offer he had inspected the city property he was proposing to buy.

Indorsed upon this offer submitted to Johnson was an acceptance in the following terms:

‘ ‘ 12-28-27. I will trade on a basis of $5,500 for the house, and $2,000 for land. This will leave a balance due me of $250. I agree to pay the commission. Allowance to be made of ($45) forty-five dollars for fixtures (Elec.).
('Signed) “Henry Johnson.”

The explanation of the figures appearing in Johnson’s acceptance of Boone’s offer which the testimony clearly establishes is this. A valuation of $5,500 was placed on the city lot, against which there was a loan of $3,250, leaving a net value of $2,250. Boone’s land was accepted at a valuation of $2,000, leaving still a balance in Johuson’s favor of $250, for which sum a note was executed to Johnson’s order, and which was indorsed by him to the bank in payment of its commission for negotiating the sale.

Deeds were executed but not immediately delivered; in fact, both deeds were left at the bank pending the examination and approval of the titles. The $250 note was executed by Boone to Johnson, and by him indorsed and delivered to the bank.

Boone now complains that no abstract of title to the city lot was ever submitted to him for his examination or approval. It does not appear, however, that he ever made any such demand. The abstract was in possession of the mortgage company, and Boone -knew, of course, that the mortgage company had approved this title when it made the loan, and he appears to have waived his right to have an abstract of the title submitted to him.

Boone submitted an abstract of the title to his land, and objections to the title were made, which were later removed. This examination of Boone’s title appears to have delayed the delivery of the deeds, but the deed from Boone was finally delivered by the bank when the title to the land had been approved. The 'bank retained possession of the deed to Boone until May 8,1928, at which time it mailed him the deed, but he declined to receive it and returned it to the bank, and stated that he had been defrauded and would rescind the contract.

It appears, however, that prior to this incident possession of the house and lot had been delivered to Boone, who agreed that the bank might collect the rents thereon and apply them to the payment of his $250' note, and the rents were so collected and applied, so that on March 4, 1929, a .balance of only $74.98 remained unpaid. Boone admitted that he did this because he knew he was obligated to pay the note. It further appears that on Sep.-tember 19, 1928, Boone made a payment of $50 to the mortgage company, and on October 18, 1928, made a second payment of the same amount, and the managing officer of the mortgage company who received these payments testified that when they were made Boone told him he had purchased the city lot, but when he later made demand upon Boone for additional payments Boone said he had rescinded the sale.

The chancery court rendered a decree foreclosing the mortgage, and found the fact to be that Boone had assumed. the payment of the note which it secured. Judgment was rendered in Johnson’s favor for the $74.93 balance due on the $250 note, and it was adjudged that Johnson should have judgment against Boone for any deficiency remaining due on the mortgage note after the sale of the city lot.

The commissioner appointed in the decree of foreclosure to make the sale reported that the property had been sold to Crump & Trezevant for $2,800. A petition was filed by Boone protesting against the confirmation of this sale, 'but the testimony taken on the hearing of this protest does not appear in the record, and the report of sale was confirmed.

The testimony establishes the fact that both Johnson and Boone placed excessive valuations upon their property in making the exchange. Johnson testifies that he sold the land he had received from Boone for $850 in second mortgage paper, which he thought was worth something less than $600, and which he would be glad to sell for that amount.

The only real question in the case is one of fact whether Boone had the right to rescind, and. he bases his right so to do upon the alleged false representations made to him by the employee of the real estate department of the bank that the city property could be sold for $5,500, and that a sale was about to be closed at that price, of which Boone would have the benefit, whereas the property was not worth $5,500, and no offer of that amount had been received for it.

It would unnecessarily extend this opinion to review all the testimony, and it will suffice to say that the court was warranted in finding, as it no doubt did find, that no fraud was practiced upon Boone, who inspected the property before buying’ it, and that it was substantially his own proposition, which Johnson accepted, as appears from the writings hereinabove set out.

Moreover, it appears. that Boone brought suit ag’ainst Johnson to cancel his deed to Johnson, but this suit was dismissed by Boone on his own motion. Boone testified that he dismissed the suit, because it was then represented to him by the officers of the real estate department of the bank that a sale of the city lot could and would be made at $5,500; (but this testimony was denied. On the contrary, the manager of the bank’s real estate department testified that Johnson and Boone discussed their differences and shook hands, and it was agreed that the suit to cancel the deed should be dismissed upon Johnson doing certain work on the house, which appears not to have been quite completed when the exchange was made, mid Johnson testified that he had done this work and had paid for it. It does not appear to be denied that Johnson did do this work and had paid for it, and, if so, this was a new consideration moving from him to Boone.

This testimony, which was evidently credited by the chancellor if he found there had been fraud, would be an affirmation of the contract. The chancellor made no findings of fact except that Boone had assumed the payment of the mortgage, but his decree must have been predicated upon the finding either that there had been no fraud, or, if so, that the sale had been ratified notwithstanding that fact, and either finding would not, in our opinion, be contrary to the preponderance of the evidence.

If the exchange of the property is not to be rescinded, and we affirm the chancellor’s action in denying that relief, the liability of Boone subsists to discharge any deficiency judgment resulting upon the sale under the decree of foreclosure, for the law is as stated in a headnote to the case of Wallace v. Hammonds, 170 Ark. 952, 281 S. W. 902, that “where a purchaser of mortgaged lands from the mortgagor assumes and agrees to pay the mortgage debt, he becomes personally liable therefor, which liability inures to the benefit of the mortgagee, who may enforce it in an appropriate action.” See, also, Kirby v. Young, 145 Ark. 507, 224 S. W. 970; Walker v. Mathis, 128 Ark. 317, 194 S. W. 702; Felker v. Rice, 110 Ark. 70, 161 S. W. 162.

As the finding of the chancellor does not appear to be against the preponderance of the evidence, the decree must be affirmed, and it is so ordered.


author: Humphreys, J.

text:
    Vaughan v. Screeton.
    Opinion delivered April 7, 1930.

      W. H. Gregory, Ross Mathis and J. F. Hottzendorff, for appellant.

      W. A. Leach, for appellees.
   Humphreys, J.

This suit was brought by appellees against appellant in the chancery court of Prairie County, Northern District, to recover a personal judgment against him on a note for $14,420 and interest; and to foreclose a deed of trust of even date therewith conveying certain real estate in said county, executed by him to appellee, George J. 'S'ereeton, trustee, to secure the payment thereof. In aid of the collection of the note separate allegations and interrogatories and bonds were filed to obtain writs of garnishment against a number of persons supposed to be indebted to appellant.

The garnishees filed separate answers, some admitting and others denying indebtedness to appellant.

Appellant filed an answer admitting the execution of the note and deed of trust, but as defenses thereto pleaded want of 'consideration; and that if a complaint which had been filed in said court by the People’s Bank of 'Searcy against PL C. Brown, the beneficiary in said deed of trust, EL 'L. Brown, and appellant as garnishee, should be sustained, then said note and deed of trust was executed to defraud creditors of El. L. Brown, and on that account was void. The complaint of the People’s Bank was made a part of appellant’s answer, and is as follows:

“On July 20, 1916, the bank recovered judgment against EL L. Brown and J. S. Yarnell in the sum of $4,500, with interest at the rate of 8 per cent, per annum; that shortly thereafter the defendant Yarnell died insolvent and nothing was recoverable from his estate; that the sum of $6,638.45 is now due upon said judgment, and that the same was revived on the 9th day of August, 1922. That, since said judgment was rendered, the defendant, H. L. Brown, made a loan to Emmet Vaughan of $14,420; that for the purpose of placing said funds beyond the reach of, his creditors and in fraud of plaintiff’s rights herein, the said EL L. Brown caused the Vaughan note to be made in the name of his son, EL C. Brown; that said note was secured by deed in trust sued on by the said EL C. Brown; that said loan was not made by the said EL C. Brown, but that the money belonged to EL L. Brown; that foreclosure proceedings have been instituted by the said EL C. Brown, and that the suit is now pending in this court; that the note executed by the said Emmet Vaughan and the deed of trust to secure it was made for the deliberate purpose of covering up the property of defendant H. L. Brown and defrauding his creditors.
“Prays that the amount of its indebtedness be declared a valid and subsisting judgment against H. L. Brown; that H. C. Brown be declared a trustee for his father, and that writ of garnishment be issued against the said Emmet Vaughan to answer what sum he has in his hands or under his control belonging to the defendant, H. L. Brown.”

Appellant filed a motion to quash the writs of garnishment as well as a demurrer to them, each of which was overruled over his objection and exception.

The cause was submitted to the court upon the pleadings and testimony, resulting in a decree against appellant in the amount claimed, a foreclosure of the deed of trust, and judgment against Dr. J. H: Gipson as garnishee for $100 to be applied as a credit upon the judgment rendered against appellant, from which is this appeal.

Appellees introduced the note and deed of trust and in addition thereto the testimony of appellant, who testified in substance that in 1913 he entered into a contract with '0. B. Brown through her husband H. L. 'Brown, to purchase and handle lands for them upon a basis of a division of the profits, they to advance the purchase money and he to render all services necessary in the purchase, handling and sale of the land; that in the progress of the business he became indebted to H. L. and O. B. Brown in proportions best known to them in the sum of $14,420; that on July 1, 1925, in payment thereof and at the direction of II. L. Brown, he executed the note and deed of trust in question to the son of H. L. Brown who was also the stepson of C. B. Brown, in order that, in the case of the death of H. L. Brown, the son would have something upon which to live; that as fax-as he knew C. B. Brown had no notice of this arrangement; that at the time he executed the note and deed of trust in question he owed H. C. Brown nothing, and that the whole amount constituted an indebtedness which he owed O. B. Brown and H. L. Brown growing- out of the contract for the purchase, handling and sale of the lands aforesaid; that, after making the note and deed of trust H. C. 'Brown at the instance of PL L. Brown, lie loaned H. C. Brown $150'; and that during all of the time, and at the present time he was and is solvent, owning- much •unencumbered property.

Appellant contends for a reversal of the decree upon the following grounds:

First: That the note and deed of trust is void 'for the want of consideration.

Second: That if the People’s Bank should prevail in its action it must do so on proof that the deed of trust was given for the purpose of covering up the property of H. L. Brown, through his son H. C. 'Brown, so as to defraud the bank out of the value of its judgment and is, therefore, fraudulent and void.

Third: That the payment to H. 0. Brown with the knowledge that the debt belonged to his father and stepmother would be no protection to appellant.

Fourth: That the garnishment proceedings were and are unlawful.

(1) There is no merit in the contention of appellant that the note and deed of trust are void for want of consideration. H. L. and 'C. B. Brown had a perfect right to give the indebtedness which appellant owed them to their son PI. C. Brown, and in perfecting the gift to direct that appellant execute the note and deed of trust to their son. There is no principle 'better settled than that a maker’s liability to a payee may be supported by a consideration coming from a third person who is not a party to the instrument. 8 C. J. 213, § 348; 7 Cye. p. 691.

(2) The contention of appellant that the note and deed of trust were executed to defraud the creditors of H. L. Brown, and that same are void for that reason is not sound. The contention is not supported either by allegation or proof. Appellant did not allege in his answer that they were executed to defraud the creditors of H. L. Brown, but said that the People’s Bank of Searcy had filed suit against H. L. and H. C. Brown and gar-nislied appellant, in wliioh such an allegation was made by said bank. The allegation in appellant’s answer was to the effect that, if the bank’s suit was sustained, then and in that event the note and deed of trust in question would be void because executed for an immoral purpose and contrary to public policy. Appellant did not testify that the note and deed of trust were given for such purpose. We do not think, therefore, that the contention that the note and deed of trust were executed for an immoral purpose and contrary to public policy is supported by the contingent allegation in the answer, and certainly not supported by the proof when there was no proof introduced to sustain even the contingent allegation. The bank was not made a party to the instant suit, and, as far as this record reflects, there has never been any adjudication in favor of the bank to the effect that the note and deed of trust were executed for an immoral purpose.

The record is entirely silent relative to any fraud having been practiced upon Mrs. C. B. Brown by the execution of the note and deed of trust. According to the record, it seems that Mrs. C. B. Brown was perfectly willing for her stepson to have the note and deed of trust as she signed his bonds to procure writs of garnishment in the instant case.

(3) The record reflects that in the progress of the trial .appellant suggested to the attorney for appellees that he make IT. L. and C. B. Brown parties to the suit, because they were the real' beneficiaries in the note and deed of trust instead of H. O. Brown. This would not be the case if it was the purpose of IT. L. Brown and C. B. Brown to make a gift of the indebtedness to H. C. Brown. If, however, appellant was fearful, payment to the trustee for EL C. Brown would not protect him against a suit on the part of EL L. and C. B. Brown to recover the indebtedness .from him, and to protect him against payments already made to them, he was a,t liberty to have made them parties himself, and to have paid the money into the registry of the court to be paid to the true owners thereof. This he failed to do.

(4) We cannot agree with appellant that, because the complaint in the instant case did not allege the insolvency of appellant, or that the real estate described in the deed of trust was insufficient to pay the debt, the motion to quash the garnishment proceedings and the demurrer thereto were erroneously overruled. Such allegations in the complaint were not jurisdictional. Bank of Eudora v. Ross, 168 Ark. 754, 271 S. W. 703, is conclusive of this question. We find nothing in the law requiring a plaintiff to exhaust his security in the mort-. gage before resorting to other proceedings. A plaintiff creditor may prosecute all remedies against a debtor with the right, of course, to only one satisfaction of the debt. 1'n pursuing’ the remedies by garnishment it was not necessary to make the garnishees parties in the complaint. The proceedings by garnishment are only ancillary or additional rights to remedies of a creditor against his debtor, and it is not necessary to make garnishees parties to the suit or to pray relief in the complaint against them. Tiger v. Rogers Cotton Cleaner & Gin Co., 96 Ark. 1, 130 S. W. 585, 30 L. R. A. N. S. 694, Ann. Cas. 1912B, 488.

No error appearing, the decree is in all things affirmed.

Per Curiam. Counsel for appellant claims that we have ignored the provisions of § 1101 of the Digest relat-ting to bringing in new parties, as construed by this court in C. O. & G. Rd. Co. v. McConnell, 74 Ark. 54, 84 S. W. 1043; Westmoreland v. Plant, 89 Ark. 147, 116 S. W. 188; and Thompson v. Grace, 91 Ark. 52, 120 S. W. 397, to the effect that it was the duty of the court to have brought into the case any party who does not willingly come and whose presence is necessary in order to project the rights of those then before the court. In each of these cases the trial court was asked to bring in the newr parties and refused lo do so. Tn the case at liar, appellant only suggested that H. L. and C. B. Brown be made parties, but did not ask the court to make them parties, and did not even seek a ruling of the court on his suggestion to counsel for plaintiff H. C. Brown to have them made parties.

In Paris Mercantile Company v. Hunter, 74 Ark. 615, 86 S. W. 808, it was held that the objection for want of necessary parties can not be raised on appeal if not raised in the trial court. In Peeples v. Hayley-Beine & Co., 89 Ark. 252, 116 S. W. 197, it was held that where the beneficiary in a crop mortgage sued in equity to enforce a lien upon the surplus of the crop in the hands of a prior lienor, without making the trustee in his mortgage a party, the defect was waived unless the objection was made in the trial court. Again, in Chapman & Dewey Land Co. v. Wilson, 91 Ark. 30, 120 S. W. 391, it was held that a defect of parties is waived by failure of the appellant to object thereto in the trial court. So if appellant had a counterclaim or setoff against H. L. and C. B. Brown, as now claimed by him, as to transactions involved in this suit with H. C. Brown, he should have made a motion'to make them parties in the lower court, so that the interest of all parties in the subject-matter of the suit could be settled. This appellant did not do, and he cannot now complain that the court below erred in not making on its own motion H. L. and C. B. Brown parties because appellant had suggested to counsel for H. C. Brown that he should make them parties.

We adhere to the views expressed in the original opinion, and the petition for rehearing must be denied.


text:
    St. Louis San-Francisco Railway Company v. Manning.
    Opinion delivered April 7, 1930.

      E. T. Miller, E. L. Westbrooke, Jr., and E. L. West-brooke, for appellant.

      J. H. Townsend, for appellee.
   Kirby, J.,

(after stating the facts). Appellant insists that the court erred in allowing the introduction of testimony of witnesses stating their opinion of the amouut of damage to the lands. These witnesses, however, stated their means and opportunity for knowing the value of the lands, and then their opinion of the value, and it was competent for them to do so. St. L. I. M. & S. R. Co. v. Ayers, 67 Ark. 31, 55 S. W. 159; Railway Co. v. Morris, 35 Ark. 622; Standard Oil Co. v. Goodwin, 174 Ark. 603, 299 S. W. 2.

The hypothetical question asked the witnesses was virtually the same as that approved in St. Louis I. M. & S. Railway Co. v. Magness, 93 Ark. 46, 123 S. W. 786, and the witnesses answering the question qualified themselves to do so by showing their familiarity with the lands and condition surrounding them before and after the waters of the river were diverted by the cut through the natural barrier allowing them to flow through and over appellee’s land.

Appellant insists that it not only had the right to get rid of the surface water on its right-of-way, but was required to do so by statute {% 8480, C. ’& M. Digest); that it caused no obstruction of any water course or diversion of any waters from a natural channel, and was not liable for any damages alleged to have been caused by waters flowing across appellee’s lands. Although it is true appellant cut through the high bank of the ravine on its own right-of-way, which protected appellee’s land on the west, and did not divert the water from any natural channel, nor change or disturb the natural flow of water in Spring River, the testimony tends to show that, before the cutting of the natural barrier protecting the west ■boundary of appellee’s lands from the overflow waters of Spring River, her lands were not subject to over-flows that were injurious because of the waters washing or cutting through, the overflows before being only back-water without current — still or dead water, and that her lands were not subject to overflow at all except during the extremely high water. Appellant’s testimony on the other hand tended to show that the opening or cut through the natural barrier or embankment on the west of appellee’s land could not have had effect to cause any damage to these lands in the years complained of, because it is undisputed that the water during these overflows was higher than the natural embankment and would have flooded in any event the lands north and south of it, the overflow water -being* high enough to cover the track of appellant which was 5 or 6 feet higher than any part of the lands between it and the river. The jury found, however, that the lands of appellee would not have been injured by the 'current from, the overflow but for the opening made in the bank or barrier1 on the west, and could have found that, because of it, they were now subject to be inundated by overflow from the river across the lower lands upstream at a stage of water from 5 to 6 feet lower than could have reached them before the opening was made. If appellant had diverted the waters of a stream or obstructed and collected surface water and turned it in injurious quantities through appellee’s lands, he would have been liable to the payment of the resulting damages, and we can see no difference in principle between this case where its cutting or opening the natural barrier had the effect to release the waters in a swift current overflowing and injuring the lands below, 'and, the jury having found, under proper instructions and upon conflicting testimony that the lands were damaged thereby, its verdict will not be disturbed, and the judgment is accordingly affirmed.