author: Mehaffy, J.

text:
    Arkebauer v. Falcon Zinc Company.
    Opinion delivered January 21, 1929.

      Dave Partain, for appellant.

      E. L. Matlock and G. M. Wofford, for appellee.
   Mehaffy, J.

The appellee, Falcon Zinc Company, owns and operates a zinc smelter located near the city of Van Burén, in Crawford 'County, Arkansas. Each of the appellants brought a separate suit against the appellee, each of them alleging that he owned a farm in the immediate vicinity of appellee’s smelter. The suits were filed in August, 1927. The smelter had been built for several years, and appellants had alleged that the appellee had operated this smelter for a period of something more than three years, smelting large quantities of ore in its furnaces each day; that their lands, before the location and operation of the said smelter, were fertile and productive farming lands of great value, but that the appellee, during and throughout the past three years immediately preceding- the filing of the suits, by and with the operation of said smelter has thrown great quantities of noxious gases, sulphur and sulphates, oxide of lead, carbon dioxide gases, and other poisonous products, the exact character being unknown to the appellants, but well known to appellee, upon and over said lands, and thereby killed the crops and vegetation growing thereon, so that, when appellants grazed stock on said lands and stock ate the grasses on which these poisonous deposits had fallen, the stock became ill and injured; and that, by reason of the conduct of the appellee, the said appellee has rendered the lands of the appellants barren and unproductive, and has greatly injured the appellants, and that plaintiffs have been damaged in the amount sued for.

The smelter filed answer, denying the material allegations in the complaint, and alleging that it began operation in March, 1923, and operated the smelter continuously up to the time of the commencement of the suits ■, that, if it had damaged plaintiff’s land, the injury was original, and plaintiff’s right of action, if any ever existed, accrued immediately, and the statute of limitations began to run against the same at said time, and that the right of action was barred because not begun within three years after they began the operation. Appellee also asked for damages in the sum of $500 for wrongfully suing out of an attachment.

There was come conflict in the testimony, but there was • ample testimony to authorize the court to submit the question to the jury as to whether the operation of the smelter caused injury. While the evidence was in conflict, it was a question for the jury as to whether the smelter caused the damage. It would serve no useful purpose to set out the testimony at length.

At the request of the appellee the court gave to the jury the following instruction:

“The defendant in these cases pleads the three-year statute of limitation as a bar to recovery. If you find from a preponderance of the evidence that plaintiff’s lands have been damaged by the operation of defendant’s smelter1 and that the injury to the land began when defendant started the smelter in operation in March, 1923, and continued as long as the smelter was in operation, and if you further find that the damage to plaintiff’s lands was original, then your verdict must be for the defendant, as plaintiff’s causes of action would be barred because these suits were not commenced within three years after defendants commenced to operate said smelter. ’ ’

The court also gave instruction number two, requested by appellee, which is as follows:

“If you find from a preponderance of the evidence that plaintiff’s lands have been damaged by the operation of defendant’s smelter, then you will find whether each tract has ¡been permanently rendered unfit for all reasonable natural uses by the operation of said smelter, and if yon find that said lands have been completely and permanently destroyed for all reasonable natural uses, you will find the difference between the market value of the lands before they were permanently damaged and the present market value of. the same after being so damaged, taking into consideration the general conditions affecting the market values then and now, and your verdict should be for each of the plaintiffs for such sum as you find that each has been so damaged. If you find from a preponderance of the evidence that plaintiff’s lands have been permanently damaged in part for all reasonable natural uses by the operation of defendant’s smelter, then you will find the difference in the market value of each tract before it was so damaged and the present market value of the same, taking into consideration the partial permanent damage to the same, and your verdict will be for each of the plaintiffs for such sum as you find their respective lands to be damaged. If you find from a preponderance of the evidence that plaintiff’s lands have been damaged only temporarily, wholly or in part, by the operation of defendant’s smelter, and that, if the operation of the smelter should not be resumed, the injury to their said lands has ceased, then you will find the difference, if any, in the rental value of each of their said tracts of land before and since the injury occurred, and your verdict will be for each of the plaintiffs for such sum as you so find each has been so damaged in the rental value of their respective tracts of land. If you find from the evidence that plaintiff’s lands have not been damaged, wholly or in part, permanently or temporarily, by the operation of defendant’s smelter, then your verdict must be for the defendant.”

There was a verdict for the defendant, and the plaintiffs prosecute this appeal to reverse said .judgment.

It is first insisted by appellant that instruction number one was erroneous. That instruction, it will be observed, told the jury, if they found that plaintiff’s land had been damaged by the operation of the smelter and that the injury to the land began when the defendant started the smelter in operation in March, 1923, and continued as long as the smelter was in operation, and i,f they further found that the damage to plaintiff’s land was original, then they must find a verdict for the defendant, as plaintiff’s, cause of action would be barred because these suits were not commenced within three years after defendant commenced to operate the smelter.

This court has in numerous cases held that, notwithstanding the damage or injury might be original, the action was not necessarily barred. The rule announced by this court and followed by many cases, in speaking of the construction of a plant alleged to have caused damage, is as follows:

“If it is of such a construction as that damage must necessarily result, and the certainty, nature and extent of this damage may be reasonably estimated and ascertained at the time of its construction, then the damage is original, and there can be but a single recovery, and the statute of limitations against such cause of action is set in motion upon the completion of the obstruction.”

But the court has uniformly held that, if it was known merely that damage was probable, or even if it is known that some damage is certain, and the nature and extent of that damage cannot be reasonably known and fairly estimated, but would be only speculative and conjectural, then the statute of limitations is not set in motion until the injury occurs. In other words, where a plant is constructed, even though it may be known that some damage will be caused by its operation, still the action is not barred within three years from the time of the construction of the plant unless the nature and extent of the damage can be reasonably known and fairly estimated.

The instruction complained of, while it stated that, if the damage was original, there could be no recovery, also stated that, if the jury find that the damage to plaintiff’s lands was original, they should find for the defendant, because the plaintiff’s cause of action would be barred. The court told them, that the suits would be barred because not begun within three years after the defendant commenced to operate said smelter. There is no contention that the appellee was negligent, either in the construction or the operation of its smelter; but the contention is that the fumes and deposits on the land killed the vegetation and injured and destroyed the value of the land, but that the nature and extent of the damage was not 'known at the time of the construction of the smelter.

This court recently approved an instruction as follows:

“You are instructed that, if you find from a preponderance of the evidence that the defendant caused the plaintiff to suffer damage from the operation of its plant within three years prior to the date of the filing of the complaint herein, plaintiff’s cause of action is not barred by the statute of limitations, unless you further find that the construction and operation of said plant was such that damage must necessarily result in such manner that the certainty, nature and extent of the damage could have been reasonably estimated and ascertained at the time _of its construction and the beginning of operations. In other words, if it was known merely that damage was probable, or that, even though some damage was certain, the nature and extent of that damage could not be reasonably known and fairly estimated, but would be only speculative and conjectural, then the statute of limitations was not set in motion until injury occurred, and in such case there may be as many successive recoveries ■ as there are injuries. ’ ’ Brown v. Arkansas Central Power Co., 177 Ark. 1064, 9 S. W. (2d) 325.

Original, as used in the instructions, means original construction. That is, the damage results or is caused by the operation of the plant as it was originally constructed. And therefore all the damage that resulted or was caused by the operation of the plant was in that sense original. There was no charge of negligence in the construction or the operation. Original damage means that damage that was caused by the operation of the plant as it was originally constructed. An ‘ ‘ original construction” is defined by Bouvier’s Law Dictionary, vol. 3, 2427, as follows: “This term, as distinguished from repairs, has a technical meaning in relation to railroads, and is that construction of bridges, etc., that is necessary to be done before the railroad can be opened, not such structures as are intended to replace wornout counterparts.”

Instruction number one was erroneous as given. Brown v. Ark. Central Power Co., 174 Ark. 177, 294 S. W. 709; C. R. I. & P. Ry. Co. v. Humphreys, 107 Ark, 330, 155 S. W. 127, and cases there cited.

“Original means pertaining to the beginning or origin. An original damage here means damage by the operation of the smelter as originally built.” The appellee contends that the instruction given in the case of Brown v. Ark. Central Power Co., above referred to, differed only in verbiage from instruction number one in the instant case, and insists that instruction number one clearly conveyed to the jury appellee’s plea of limitations. And the question as to whether the evidence showed appellant’s damage, if any, was original, was a question of fact to be determined by the jury. It is true that, whether the damage was original or not, if there is any dispute about it, it would be for the jury, and it is also a question for the jury, under the facts in this case, whether the nature and extent of the damage could be reasonably known and fairly estimated, and this question was not submitted to the jury. Instruction number one ignored this question, which is a question of fact and which should have been submitted to the jury.

“When the original act or cause of injury is paramount in its nature and the damages, both present and prospective, may be recovered in one action, the statute will generally be regarded as attaching .at the time the act complained of is done. But, where a wrongful act results in a recurring- or continuing injury, there is a cause of action not only for the injury consequent upon the original act hut also for such successive ones as may result in the future, in which case the statute attaches at the time of the 'occurrence of the injury.” 17 R. C. L. 785; Bartlett v. Grasselli Chemical Co., 92 W. Va. 445, 115 S. E. 451, 27 A. L. R. 54.

It is also contended by appellee that a general objection to this instruction is not sufficient. We do not agree with appellee in this contention. If an instruction is inherently wrong, an incorrect statement of the la.w, as instruction number one in this case is, a general objection is sufficient. First National Bank v. Peugh, 160 Ark. 517, 255 S. W. 4; M. P. Ry. Co. v. Johnson, 167 Ark. 464, 268 S. W. 31; Yaffee v. Ft. Smith Light & Traction Co., 153 Ark. 416, 240 S. W. 705; Missouri Valley B. & I. Co. v. Malone, 153 Ark. 454, 240 S. W. 719.

Appellant also contends that the court erred in refusing to permit the appellant to cross-examine expert witnesses. It is true that an opportunity ought to be given for a thorough cross-examination, and especially is this true where witnesses are testifying as experts, but the trial' court has much discretion in conducting the examination and cross-examination, and we cannot say that its discretion was abused in this case, and this question will probably not arise in another trial.

For the error in giving- instruction number one the judgment is reversed, and the cause remanded for a new trial.

Mr. Justice Smith dissents.


source: Caselaw Access Project

license: Public Domain

text:
    Watts v. Tidwell.
    Opinion delivered January 21, 1929.

      Bush, Bush & Bush, for appellant.

      H. B. McKenzie, for appellee.
   Mehaffy, J.

On the 31-st day of March, 1928, Mattie Bowman made a will, and afterwards, on the 12th day of May, died. On the 16th day of May, 1928, the will was filed in the probate court of Nevada County, and admitted to probate and record. On the 25th day of May, J. A. Zacikery was. appointed executor under the will, and his letters issued and recorded. On the 6th day of July, 1928, John Tidwell and Sid Tidwell perfected an appeal to the ¡circuit court of Nevada County.. On the 10th day of July, 1928, they filed their objections as follows:

(1) They deny that Mattie Bowman signed the alleged will. (2) They deny it was witnessed as therein stated. (3) They allege that the said will was fraudulently prepared and executed. (4) They allege that Mattie Bowman, at the time said will was executed, was mentally incapable of making a will.

The case was tried on the 10th day of July, 1928, before a jury, and a number .of witnesses testified that Mattie Bowman was incapable of making the will, and others testified that she was mentally capable of making the will.

James Stevens and W. A. Stevens, witnesses to the will, testified that Mattie Bowman signed the will in their presence, and requested them to sign it, and they did sign it in her presence and in the presence of each other.

This testimony of James Stevens and W. A. Stevens is not contradicted by any direct testimony, but Virgil Alexander testified that he knew Mattie Bowman; that she lived at his house from the Monday after the fourth Sunday in November until just before the 14th of January, 1927. She had a stroke of paralysis, and was there alone, and he got her to come and stay with him. She was not able to take care of herself. This witness also said that Mattie Bowman asked his daughter to do her writing, and said that she could not write on account of the paralysis.

Annie Alexander testified that Mattie Bowman told her that, before she had the stroke, she could write a little, and witness wrote letters for her. This witness testified that Mattie Bowman said she could not write.

The testimony showed that, after the time mentioned by the -witnesses when Mattie Bowman said she could not write, her condition gradually grew worse.

Leola Alexander also testified that Mattie Bowman could not write. In addition to this, it is undisputed that the will was signed “Mattie Bomama,” and not Mattie Bowman.

Appellant’s first contention is that the court erred in giving- instruction No. B, which reads as follows:

“If you find from, the evidence in this case that the deceased, Mattie Bowman, did not sign the instrument of writing- which has been introduced in evidence as her will, then you will find against the will.”

It is argued that the undisputed evidence shows that she did sign the will, and it is therefore contended that it was error to submit that question to the jury.

Appellant cites the case of High v. Sharp, 166 Ark. 424, 265 S. W. 638. The court in that case instructed the jury as follows:

“I give you in charge § 10494 of Crawford & Moses’ Digest, which I here read to you: ‘ Section 10494. Every last will and testament of real or personal property, or both, shall be executed and attested in the following manner: (1). It must be subscribed by the testator at the end of the will, or by some person for him, at his request. (2). Such subscription shall be made by the testator in the presence of each of the attesting witnesses, or shall be acknowledged by him to have been so made to each of the attesting witnesses.”

There were other instructions in that case, but it is unnecessary to set out the others, except number three, •which is as follows:

“You are to determine from all the facts and circumstances in evidence whether a compliance with these requirements has been shown by a preponderance of the evidence. ’.’

The court said: “Instruction No. 2 declares the statutory requirements of the modes in general for the execution of wills. The appellants offered a general objection to the giving of this instruction. The instruction was in five paragraphs. The undisputed evidence showed that the instrument had been subscribed by the testatrix and that it was made by her in the presence of the attesting witnesses. Therefore there was no issue to submit to tlie jury on the first and second paragraphs of the instruction. There was likewise no contention that the entire body of the will was written by the testatrix, and therefore there was no issue to be submitted to The jury under the fifth paragraph. There was an issue on the third and fourth paragraphs, and the court correctly submitted these issues in its instructions Nos. 4 and 6. But the court erred in telling the jury, in its instruction No. 3, that they were to determine, from all the facts and circumstances in evidence, whether the requirements of the statute as set forth in its instruction No. 2 had been shown by a preponderance of the evidence. The appellants duly excepted to the giving of this instruction, and the effect of it was. to allow the jury to determine from the evidence whether the requirements, in the first, second, and fifth paragraphs of instruction No. 2 had been complied with, when, under the evidence, there was no issue of that kind to be submitted to the jury. The instruction, in this form, authorized the jury to speculate 'concerning matters about which there was no dispute. ’ ’

If appellant was. correct in his statement that the undisputed evidence shows that she did sign the will, it would, of course, have been error to submit this question to the jury.

In the case relied on by appellant there was no proof, no issue as to whether she signed the will, and-there was. no evidence introduced tending to show that she did not sign the will. If that were true here, appellant’s contention would be correct. But we do not agree with appellant in this contention. The appellees denied that she signed the will, and witnesses testified that she could not write, and, if she could not, she could not sign the will. And while there is no direct evidence that she did not sign it, there is evidence that she could not write, and this evidence fends to show that she did not sign the will. She certainly knew her name, and, if she could write at all, the presumption is that she could write her name, and spell it correctly. But she did not spell the name correctly, if she wrote it, and the fact that her name was misspelled and that witnesses testified that she conld not write, was sufficient evidence to submit the question to the jury.

“The courts need not discredit what the common experience of mankind relies upon. Judge 'Cooley once said that ‘courts would justly be the subject of ridicule if they should deliberately shut their eyes to the sources of information which the rest of the world relies upon.’ Lastly, wherever there is any serious doubt in the law as to whether certain proof is or is not permissible, a safe rule to pursue is to permit the testimony to go to the jury.” 10 R. C. L. 862.

If a person should sign an instrument by mark, then evidence that such person could not.write would be no evidence that he did not sign the instrument. But, when the instrument is alleged to be signed by the party, and that she wrote her own name, then proof that she could not write is admissible to show that she did not write her name.

Other testimony that tends to prove that she did not sign the will is the physician’s testimony that she gradually grew worse after her stroke of paralysis.

“Ofttimes it is necessary to weigh the probative force of evidence offered, 'compare it with the practical inconvenience of enforcing a rule to admit it, and decide whether, as a matter of good policy, it should be admitted. But to exclude relevant evidence by any positive and arbitrary rule must be not only absurd in a scientific view, but, what is worse, frequently productive of absolute injustice. It may safely be laid down that the less the process of inquiry is fettered by rules and restraints, founded on supposed 'Considerations of policy and convenience, the more certain and efficacious will it be in its operation. * * * The admission of every light which reason and experience can supply for the discovery of truth, and the rejection of that only which serves not to guide but to bewilder and mislead, is the great principle that ought to be the foundation of every system of evidence. Common experience rather than technical rules should be adopted as the test.” 10 R. C, L. 861.

It was therefore proper to submit to the jury the question of whether Mattie Bowman signed the will, and this instruction was justified by the evidence of her physical condition, that she could not write, and that the testimony of the physician showed that her condition was gradually growing worse after the time witnesses testified she could not write and before the date of the will.

Appellant next contends the argument of counsel for appellees was improper and prejudicial. It is stated by appellant that the attorney for appellees, in his closing argument, said that Mattie Bowman did not sign the will; that, if she did, she did not know how to spell her name,, and if her mental condition was such that she did not know how to sign her name, she was not competent to make a will. Attorney for appellees then said: “If this, is her signature, why did they not bring witnesses to prove her handwriting?” and “They should have had letters or other writing showing her signature to compare with the signature to the will.” This was simply an argument to the jury, and was a proper argument, based on the testimony. Hall v. Jones, 129 Ark. 18; Ark. Central Ry. Co. v. Goad, 136 Ark. 437, 195 S. W. 399; Des Arc Oil Mill v. McLeod, 137 Ark. 615, 206 S. W. 655; Booth v. Racey, 171 Ark. 561, 285 S. W. 29.

The appellant contends that the appellees’ exceptions to the will did not say that Mattie Bowman could-not write, but it is admitted that the first exception is a denial that the said Mattie Brown signed the alleged will. Doubtless they expected to prove that she did not sign it bjr proving* that she could not write. At any rate, that was a sufficient allegation that she did not sign it and a sufficient allegation to admit the evidence that she could not sign it because she could not write.

The judgment for costs should not have been against J. A. Zaekery personally. He was not a party to the suit in any way except in a representative capacity. But Della Watts was a party to the suit, and the cost will be charged against her and against Zaekery as executor.

Except as to the charging the administrator with the cost personally, the judgment is affirmed, and the costs charged against appellants. It is so ordered.


text:
    Brunswick-Balke-Collender Company v. Culberson.
    Opinion delivered January 21, 1929.

      Silas W. Rogers, for appellant.
   Mehaffy, J.

Appellant brought this suit in the Union Circuit Court in replevin, alleging that it was the owner and entitled to the possession of certain described property of the value of $1,317.58; that Culberson had possession and unlawfully detains same, after demand for the property. Prayer was for the recovery of the property, costs, etc. Proper affidavit was made for the delivery, bond was filed, and thereafter appellee filed bond to retain the property.

Appellee filed an answer, denying the allegations of the appellant’s complaint, and also filed a counterclaim. In his answer and counterclaim appellee stated that he made a contract for certain pool tables and equipment, agreeing to pay $2,616.80, that he paid cash thereon the sum of $695.80, and then paid a number of installments. He also alleged that the appellant was to carry fire insurance, and was to- have it written and taken out for a period of 17 months, the time in which appellee was to pay for the property; that appellee was to pay the premiums, and that the change of agreement for the appellant to take out the policy was indorsed on the policy and appellee charged with the first year’s premium. He alleged that he relied on the appellant keeping the insfuranee in force, and that appellant, without notice to him, failed to keep the insurance in force, and that the property was destroyed by fire, resulting in a loss to appellee of $2,600; that the fire occurred and said property was destroyed within the time in which appellant had agreed to keep the property insured against loss by fire. Appellee prayed judgment against appellant for $2,600, and that, if appellant secured judgment against appellee, such judgment or claim against him be set-off against any sum due the appellant.

To this cross-complaint appellant filed a reply, and admitted that the contract was entered into between the parties, but denied that an oral contract was entered into varying the terms of the written contract, and appellant denied all the material allegations in appellee’s cross-complaint.

The case was tried by the jury, and a verdict returned in favor of the appellee, and judgment was entered accordingly. Motion for a new trial was thereafter filed by appellant, which was overruled by the court, and the case is here on appeal. Appellee has filed no brief.

The evidence showed that the parties entered into a written contract by which the appellant sold to the appellee certain property described in the contract for the sum of $2,616.80, and that of this amount $695 was paid at the time the contract was entered into, and that the balance was to be paid in monthly installments, with interest, and that said payments were evidenced by seventeen promissory notes of even date with the contract. It was agreed in the contract that the title to the property sold should not vest in the vendee until paid for in full. The contract also provided for appellant repossessing itself of the property, and that, when this was done, it should advertise and sell said property. It was further provided that the amount realized from the sale should be applied first to the remaining indebtedness and the expenses o:f sale, and that whatever remained should be turned over to the appellee, or sufficient to equal the amount he had paid to the appellant. It also provided that the appellant might purchase at the sale. It was also provided in the contract that the injury or destruction of the property would not operate to release the appellee from the payment nor from any conditions in the agreement. The contract provided also that the appellant might take any legal action which it deemed fit for the recovery of the money agreed to he paid under said contract. It was also stipulated that the appellee agreed to insure said property promptly against loss or damage by fire, in the sum of $2,500, and that the policy should be payable to appellant as its interest might appear, the policy to be delivered to it as soon as the insurance was effected. It was also provided that, in case appellee neglected to insure said property within ten days after the receipt of the property, appellant anight effect such insurance and charge it to the appellee, and that it should be payable on demand.

After the suit was begun and appellee had given, bond to retain possession of the property, after he had filed his answer and cross-complaint,- but before the trial of the case, the property was destroyed by fire.

Appellee testified that, at the time of the sale,- the insurance was discussed, and that he told the representatives of appellant that he wanted the contract of insurance to be a long contract, that is, he wanted the insurance to be for the life of the contract, and he testifies that this was the agreement. He also told the appellant’s representatives that he could not get insurance .at Norphlet, and that they were to carry it, that this was the understanding, and that appellee was to pay the premiums, but appellant was. to procure the insurance, and appellee says that appellant was to carry the insurance for as long as the contract went, for seventeen months, and that before the seventeen months had expired the property was destroyed by fire.

The appellant contends that the insurance was to be for twelve months only, and not for the life of the contract, and it did procure a policy of insurance for twelve months, and the property burned after the expiration of twelve months. Appellant also disputes the testimony of appellee with reference to the insurance.

Appellant’s first contention is that the court erred in refusing to direct the jury to find for the appellant, and bases its contention upon the following reasons: First, in permitting the appellee to present oral testimony to alter or vary a written contract. We cannot agree with appellant in this contention. The oral testimony did not alter or vary the terms of the written contract in any way. The written contract itself provided, of course, that the purchaser should have the property insured, but that, if he did not have it done, then the vendor might have it insured and the purchaser pay the premiums; but the oral testimony shows that appellee could not get insurance on the property in Norphlet, and that it was agreed between the parties at the time that the appellant would have the property insured under a blanket policy, and that appellee would pay the premium. The parties had the right to make this agreement, and it did not vary the terms of the written (contract. The written contract provides:

“Vendee agrees to insure said property, promptly upon receipt thereof, against loss or damage by fire, in one or more solvent insurance companies, to be approved by the vendor, in the sum of $2,500, paying the expenses thereof, and making them payable to appellant. a.s its interest may appear, the said policy or policies to be delivered to the vendor as soon as said insurance is effected. In case the vendee fails or. neglects to procure such insurance within ten days after the receipt of the property above described, then vendor may effect such insurance, and any premiums therefor shall be and become a debt payable under this contract on demand.”

The vendee not only failed to procure the insurance, but told the vendor at the time of the ‘Contract that he coula not procure the insurance. He then failed to procure the insurance, and the appellant itself'procured it. In fact, the written contract, instead of being altered or contradicted by the oral contract testified about, provided for the very thing the parties did. It provided for the insurance policy to be taken out by the appellant, and be paid for by the appellee.

Appellant calls attention to the case of Harrower v. Insurance Company of North America, 144 Ark. 279, 222 S. W. 39, and quotes from that opinion. In that case, however, the court holds that prior oral agreements and antecedent writings forming a part of the negotiations for a contract become merged in the subsequent written contract, and are incompetent as evidence for the purpose of enlarging the scope of the written contract. But the parol contract did not enlarge the scope of the written contract. It did not alter Or vary its terms in any way.

It is next ‘contended by appellant that the court erred in permitting appellee to interpose a set-off or counterclaim in a replevin suit, where damages were not asked. The oases, however, referred to by appellant are cases where the only issue was the title to the property. Appellant calls attention to a number of authorities to the effect that a counterclaim is not allowable in actions for replevin, but only in actions for money. This is the doctrine announced by this court in the case of Smith v. Glover, 135 Ark. 531, 205 S. W. 891, where the court said:

“We do not, however, share the views of learned counsel for defendants in the contention that'the statute allows a counterclaim in an action other than one for the recovery of money. In the very nature of the subject the term 'counterclaim’ means a cross demand which may be asserted in liquidation or reduction of the claim made by the plaintiff, and this is necessarily limited to actions for the recovery of money, for there could be no such thing as a cross demand asserted against a cause of action for the recovery of specific property. A counterclaim is defined to be 'a claim presented by a defendant in opposition to or deduction from the claim of plaintiff. ’ ’

Appellant’s action in this case was in form an action in replevin, but it was in reality an action to recover the balance due on the purchase price of the property, which appellant alleged to be $1,317.58. It sued to recover the property for the sole purpose of selling it to pay this debt. The contract itself provides that, if the appellant takes the property, he shall sell it, and first pay the balance of the indebtedness and the expenses and then turn the balance over to the appellee.

Again, in suits in replevin for property under -conditional sales contracts the plaintiff must show a balance due on the contract to entitle him to recover. Our statute provides:

“In any action in a justice court or circuit court of this 'State, where it is attempted to foreclose any mortgage, deed of trust, or to replevy under such mortgage, deed of trust, or other instrument, any personal property, the defendant or defendants in said action shall have the right to prove or show any payment or payments or set-off under such mortgage, deed of trust or other instrument, and judgment shall be rendered for the property or the balance due thereon, and the defendant may pay the judgment for the balance due and costs within ten days, and satisfy the judgment and retain the property.” Crawford & Moses’ Digest, § 8654a.

It will be noticed that the statute itself authorizes a set-off. The reason for this is that the plaintiff is seeking to recover the balance due on the property rather than the property itself, although the form of his action is replevin. If one brings a suit in replevin claiming to be the owner of the property, and the defendant claims the property, and it is not a question of indebtedness from the defendant to the plaintiff for the purchase price of the property, the issue is simply the possession of the property. Then, under the decisions of this court, a set-off is not allowable. But, where replevin is brought for the purpose of collecting the balance of the debt due, either under a mortgage or other instrument, the defendant has a right to set-off any claim he may have against the plaintiff. The statute expressly so provides. So we hold that, under the statute, wherever one seeks to replevin property,under a mortgage or other instrument like a conditional sales contract, the purpose being to collect a debt, the defendant may set-off any claim he has against the plaintiff, or may file a counterclaim, while in actions of ordinary replevin, as this court has already said, a counterclaim is not allowed. But, if the statute did not authorize a set-off or counterclaim, it would be admissible in a case of this kind, for the reasons we have mentioned; that is, if it is a suit to recover a debt, and replevin is brought for that purpose, the party bringing the suit must show indebtedness, and if the other party has a claim against the party bringing the suit, equal to or greater than the plaintiff’s claim, then the plaintiff would not be entitled to recover the property.

In a suit in a Virginia court, where a distress warrant had been issued and levied and a forthcoming bond had been given, the Virginia court said:

“It having 'been agreed between said plaintiff and said defendants that any such debt might be urged by way of offset to the said bond, if evidence of such debt should be admissible, and the plaintiff thereupon objecting to the admissibility of the said evidence, the court rejected it, upon the ground that the defense of such offset was inadmissible in a motion upon a forthcoming bond taken under a warrant of distress. To this ruling of the court a bill of exceptions was taken, which presents the only question which we have to decide in this case. The question, as already shown, is whether an offset, or a set-off, as it is more commonly called, is a good defense to a motion on a forthcoming bond taken under a distress warrant. ’ ’

The court then discusses the action of replevin and the statutes and the English cases which hold that a set-off could not be pleaded to an avowry for rent. The court continued:

“In a suit for any debt the defendant may, at the trial, prove and have allowed against such debt any payment or set-off which is so described in his plea, or in an account filed therewith, as to give the plaintiff notice of its nature, but not otherwise.”

“The reasons on which the English decisions, that a set-off is not a good defense to an avowry for rent in an action of replevin, were founded, is that the statutes make mention only of mutual debts; therefore the demand, as well of the plaintiff as of the defendant, must be a debt; and a set-off is not allowed in actions for torts, as upon the case, trespass, replevin, or detinue. In other words, the action of replevin was regarded in this respect as an action ex delicto, as it certainly is in form, and so not within the terms of the statutes. Our courts, on the other hand, regarded the action, after the defendant’s avowry for rent, as in substance an action ex contraotu by the defendant against the plaintiff for the rent, and as therefore coming within the true intent and meaning, if not the literal terms also, of the act.” Allen v. Hart, 18 Grattan’s Reports (Virginia), 722.

The action in the instant case, as we have said, is in form an action in replevin, hut in substance it is an áction in debt.

In a case decided by the Supreme Court of Pennsylvania it was held that the defendant could not interpose a counterclaim in an action because the property in question was rented to the defendant, with certain stipulations in the contract, among others, providing that, at the end of the term for which the boiler and engine were rented, it should be restored to the owners, and that, if the defendants would comply with all the conditions of the contract and make all the payments therein stipulated when due, they might, and not otherwise, purchase at their option said boiler and engine at the end of the time for which it was rented. The law is well settled in Pennsylvania that a set-off cannot be pleaded and allowed in replevin. The court said:

“The transactions between the knitting company and Deibert, and the latter and Sprenger, did not involve a sale of a chose in action. The legal title to the boiler and engine, with the right to the rental and to take possession in case the defendants failed to pay, was what each of the purchasers in turn acquired.” Eureka Knitting Co. v. Snyder, Penn. Superior Court, vol. 30, p. 336.

It will be observed upon reading the above case that the court expressly distinguished the above case from a case where there was a conditional sale. Of course a replevin of property the defendant had not purchased but had merely rented would not be such a case as would entitle the defendant to file a counterclaim. The plaintiff in the above case was the absolute owner of the property, had never sold it. The party was not seeking in any way to recover the debt, but the property. In the instant ease the contrary is true. While replevin is prayed to recover possession of the property, it is only for the purpose of collecting the debt, and we therefore conclude the counterclaim was proper.

Again, if the defendant has a counterclaim, whether-growing out of contract or tort, and could not file a counterclaim or set-off in a case like this, then there would necessarily be at least two suits, when the whole matter could be settled in one. There is no reason why a counterclaim is not proper in a replevin suit where it is simply replevin in form and is an action in debt in reality.

We find no reversible error, and the judgment of the circuit court will be affirmed.


text:
    Republic Power & Service Company v. Continental Credit Corporation.
    Opinion delivered January 21, 1929.

      G. E. Garner and Rose, Hemingway, Cantrell & Loughborough, for appellant.

      Thompson, Tyrrell & Chambers and George A. McConnell, for appellee.
   Mehaffy, J.

The Continental Credit Corporation filed an intervention in the case of A. J. Silver et al. v. Republic Power & -Service Co. et al., in the Pulaski Chancery Court, alleging that the. Republic Power & Service Company entered into a written contract with the Howe Ice Machine Company for the purchase of certain machinery, agreeing to pay therefor $28,000, and executed notes to said Howe Ice Machine Company for the purchase price. The notes provided that the title to the machinery-should remain in the vendor until the purchase price was paid. It was alleged that certain payments had been made, but that two of the notes were unpaid and past due, one for $14,000 and the other for $3,833, and that there was a balance due upon both notes of $15,852.45; that the notes were indorsed to the intervener before maturity, and that it was a holder in due course. The machinery sold was one 87-ton refrigerating system, including compressors, tanks, coils and connections complete, two 50-ton compressors, and one 125 horse-power electric motor. 'Said machinery was being used in the plant of the Republic Company in North Little Rock. That it was depreciating in value, and was the only security the intervener had for its indebted-' ness. It was alleged that it was depreciating in value so rapidly that it would soon become worthless. The intervener demanded possession of the machinery, which was refused, and it asked for immediate possession or payment of the amount due.

All of the material allegations in the intervention were denied, and it was alleged that the notes were given for a patented article and no reference was contained in the notes, as required by statute.

It was also alleged in the answer that the Howe Ice Machine Company agreed to pay $100 a day as liquidated damages for delay in delivery. The Morgan Utilities Company succeeded to the contract of Republic Power & Service Company. The seller failed to deliver some parts of the machinery, and the Morgan Utilities Company had to go into the open market and buy them at a cost of $3,500. It was also alleged that the interveners sent agents to North Little Rock and stole parts of the machinery, and that it was impossible to operate it without these parts, and, that in an effort to recover the parts it was out the sum of $4,000; that this damaged the Morgan Utilities Company in the sum of $4,000. That the Morgan Utilities Company was forced to suspend business for several days, to its damage in the sum of $2,500. The statements and allegations of the answer to the intervention were denied.

It would serve no purpose to set out the testimony. There was a sharp conflict in the testimony on all the disputed points in the case. There is no controversy about the contract nor about the seller retaining title, and there is really no controversy about the fact that some of the parts were not delivered, and had to be purchased in the open market.

Appellant’s first contention is that the credit corporation is not an innocent purchaser of the notes. It is contended that, because the notes were not assigned simply by indorsement in the ordinary course of business, and because the note and contract were both assigned to it, this makes the credit corporation stand exactly in the shoes of the Howe Ice Machine Company. The assignment is as follows:

“For value received, the undersigned hereby sells, assigns and transfers to Continental Credit Trust at Chicago, 111., its successors or assigns, all right, title and interest in and to the within note or agreement, the amount payable thereunder and the property therein described. The undersigned warrants that this note or agreement was executed in connection with the sale of merchandise described in the within sales contract, said merchandise having been delivered to and accepted by the buyer named therein, and that there is now owing thereon the amounts as set forth therein, the payment of which, in accordance with all the terms and conditions herein mentioned, is hereby guaranteed by the undersigned, together with interest, attorney’s fees, court costs or other expenses in connection therewith, and the undersigned hereby waives notice of default of payment and notice of acceptance by Continental Credit Trust.

“Howe Ice Machine Co.,

“H. B. Howe, President.”

The intervener is the successor of the Continental Credit Trust. It is argued that this assignment of the contract, together with the indorsement of the note, being one transaction, they must be construed together, and that they are all parts of the same contract, and that the purchasers of the note, with notice and knowledge of the relation of the contract to the note, is bound by it the same as if it were attached to the note or written upon the same piece of paper. In other words, that the assignee of the contract became obligated for the performance and acquired notice of everything that the contract contained, and that, this being true, it is not an innocent purchaser.

Appellant quotes a part of § 273, in 3 R. C. L. 1028. The part of the section immediately preceding that part quoted by appellant reads as follows:

‘ ‘ The courts universally hold that knowledge that a note was given in consideration of the executory agreement or contract of the payee, which has not been performed, will not deprive the indorsee of the character of a holder in due course, unless he also has notice of the breach of that agreement or contract.. 'So knowledge of a warranty on a sale in which a note was given is held not to affect the rights of a purchaser of the note for value before maturity, if he had no knowledge of the breach of the warranty. A recital in the instrument respecting such agreement or warranty is not sufficient of itself to advise him that there was, or would necessarily be, a failure of consideration. The presumption of law would be that the contract would be carried out in good faith and'the consideration performed as stipulated. Of course, if the transferee had knowledge of the breach of contract or warranty before taking the instrument, the defense may be interposed. ’ ’

The part quoted and relied on by appellant immediately follows the above, and is as follows:

“And on the principle that several instruments made at one and the same time, and having relation to the* same subject-matter, must be taken to be parts of one transaction, and construed together for the purpose of showing the true contract between the parties, it has been held that an agreement made at the time of the execution of a note, forming its real consideration, and to be performed before its maturity, is a part of the same contract, and, between the original parties to the note, cannot be enforced until maturity, and before the time of performance of the agreement, with notice and knowledge of its relation to the note, is bound by it the same as if it were attached to the note or1 written upon the same piece of paper.”

The agreement made at the time that these notes were executed is unquestionably a part of the same contract, but there is no complaint or argument that that contract'was not performed, except as to the failure to furnish some of the parts, and these parts were purchased by the vendor in the open market, and he is allowed credit for them. But it is the things that were done after the contract was entered into that the purchaser complains about, the delay in shipping material. The evidence on the part of the intervener shows that the delay was caused by the purchaser’s failure to pay the amount due. While there is some conflict in the testimony with reference'to this issue, the preponderance of the evidence shows this to be true. Therefore, construing the note and the contract together, we do not think there is anything in the contract or note or the evidence that would disentitle even the original vendor to recover.

A person is an innocent purchaser when he purchases without notice, actual or constructive, of any infirmity, and pays a valuable consideration and acts in good faith, and in this case there is no evidence tending to show that the intervener did not aet in good faith. The proof conclusively shows that it paid a valuable consideration, and the evidence fails to show that it had any notice, either actual or constructive, of any defect or infirmity in the contract. The intervener was therefore an innocent purchaser, and if it had actual notice of everything that is contended for by appellant in this case, it would not affect its right to recover, because the failure to deliver parts and the delay in delivering parts of the machinery was caused by the failure and delay of the purchaser to pay the indebtedness it owed the vendor. At least there was evidence tending to show this, and the finding of the chancellor on this issue is supported by a preponderance of the evidence.

It is next contended by the appellant that the notes are void because they were given for patented articles. Section 7959 of Crawford & Moses’ Digest provides: ‘ ‘ This act shall not apply to merchants and dealers who sell patented things in the usual course of business.”

In the first place, the evidence shows that this was not a patented machine, but the parts that had been patented, which were a part of the machinery, are not now and were not at the time of the sale patented machine, because the patents had expired. Moreover, this court has held that the sale of an article that may have some minor portions of it patented is not such a machine as is re;ferred to in the section quoted, and the vendor in this case was a dealer, and sold the machine in the usual course of business, and, for that reason, the section relied on by appellant does not apply.

It is next contended by the appellant that it is entitled to damages for delay in complying with the contract. We agree with the appellant that the rule is that one who first breaks a contract cannot maintain a suit to recover upon it, and that such breach releases the other party from the performance, and this unquestionably means, in the sense it is used, the same contract. In this instance, however, there seems to have been a failure not only to pay on other contracts or for other purchases, hut a failure to meet the obligations of this contract by payments. However, there was no claim in the pleadings for this item, and all these matters were submitted to the chancellor on the evidence, and the decree of the chancellor will not be disturbed unless it is ag-ainst the preponderance of the evidence.

We have reached the conclusion that the decree of the chancellor is supported by a preponderance of the evidence, and the decree is therefore affirmed.


author: McHaney, J.

text:
    Arkansas Power & Light Company v. Lewis.
    Opinion delivered January 21, 1929.

      Robinson, House & Moses, for appellant.

      Dave Partain, G. C. Carter and Patterson & Patterson, for appellee. .
   McHaney, J.

In June, 1921, appellant, being- the owner of the Denning- Coal Company properties, entered into a lease agreement with W. H. Lewis and Gr. A. Sly, by which it leased to them “its coal mine located in Franklin County, near the town of Denning, known as the Denning Coal Company’s mine, and all accessories, equipment, and appurtenances thereto, including engines, boilers, machinery, two mules, and such other equipment of every nature now used in the operation of said mine.” The lease agreement made no reference to any particular mining lease it owned, and it and its precedessors had mined coal from the Bussell & Butts lease, the Bourland lease and the Western Coal & Mining Company lease, near Denning. Its lease to Lewis & Sly required them to operate the mine and to produce not less than one thousand tons of coal per month.

In 1922 appellee James A. Lewis, father of appellee W. H. Lewis, bought out the interest of Sly, and the property was thereafter operated by them. Appellees became delinquent in the payment of royalties of 15 cents per ton on coal mined from the lease of the Western Coal & Mining Company, and also delinquent in the payment to appellant of the stipulated sum of 35 cents per ton for the use of its mining equipment. In the latter part of November, 1924, on account of the alleged negligence of the appellees in the mining of coal from their lease, the Western Coal & Mining Company gave notice to appellant and appellees that, at a later date, they would ask for a temporary injunction restraining them from the further operation of their lease. Some time later, after their respective attorneys had consulted, a compromise agreement was reached between appellant' and the Western Coal & Mining Company, whereby appellant would pay all back royalties due by appellees, and would agree to save the Western Coal & Mining Company harmless from improper or negligent operations of appellees in the future.

The Western company agreed to make a new lease, and appellees were notified that a new lease would be made, and to go ahead with the work of mining, which they did until the early spring of 1925, but neglected to pay any royalty to the Western company or appellant on the coal mined, and apparently ceased operations. Beginning in the latter part of 1923, and running through 1924 and up until May or June of 1925, the appellees were almost constantly complaining that they were losing money on their operations, asking for reduction in- the royalties provided for in their lease contract, complaining of the bad price they were getting for coal, and asking áppellant to come up, check them out and stop operations. For instance, in a letter dated November 10, 1924, they wrote appellants as follows: “Now, Mr. Garrett, I think it would he better for you to send some one up here and set a price on your equipment, look the situation over and see what you have here, and put a price on it, so we can dispose of it when we mark what we can get, for we will be compelled to close down as soon as the price of coal goes down, as we have lost too much money already. I lost a thousand dollars last run, and we sure cannot lose any more.”

On April 4, 1925, they wrote appellant as follows: “You will please find inclosed royalty report for February and March, but not any money. It does seem like that when we pay the labor and expense we have nothing left. Now, Mr. Baker, I don’t see why we cannot get some adjustment on this royalty. If we cannot, we would be better to shut down and move the equipment. We cannot sell coal with the other mines in the field. * * * We think you all could cut your royalty to fifteen cents and the Western to fifteen and insurance five would make thirty-five cents, the highest in the field. But that will give us a chance to get into the market with other coal dealers. Now, Mr. Baker, think this over, and tell us now just what you are willing to do. If we cannot get some relief, we will be compelled to close down and find relief, or close down and get other work. Let me know right away, so as I can get out and hunt some business.”

Again, on April fi, they wrote appellant in part as follows: “I am going to take another trip tomorrow and see what I can do, and if I cannot get some ¡business, I will be compelled to seek other work and let the mining go, as we cannot afford to stay and lose any more money now. ’ ’

Under date of May 8, 1925, they wrote appellant in part as follows: “Since arriving home I have been working to get some one to lease the mines. I have not got any one yet that wants to go in the mining business right now, as it is so dull there is not very much coal going out of this field at this time, only some very cheap coal, cheaper than we can produce it. * * * Now, Mr. Garrett, you all can use your best judgment about what to do. with your property here, as most eoal men think .that there will not be very much coal business for this field for some time. * * * Now, Mr. Garrett, let me hear from you as soon as you can, and I will keep trying to get some men to take the mines over and keep trying to get some business, and then I will have a better chance to work on a lease, as no one wants to lease a mine if he cannot work it.”

Under date of May 9 they wrote appellant in part as follows: “Not hearing from you in regard to coming or sending some one here to check this mine equipment and assess the value of it, I will write you again. Now, Mr. Garrett, I don’t know why you have not attended to this matter, as I think it is of importance to both of us, as I have told you in my last letter that I was not going to operate the Denning Coal Company any more, and have informed the Western Coal & Mining Company to that effect, as you have not got any coal here that can be worked at this mine. Now I have been staying here all of this week thinking you would be here or send some one to check me out, but have not heard from you. ’ ’

■On May 20 he wrote appellant that: “I am very sorry to say that I have not got the money to pay up this back royalty. The longer I try to run this property the further I get behind, and I cannot waste any more time with it, and have asked you to send some one to check it up so you can dispose of it or junk it, whatever you want to do with it. * * * Now, Mr. Garrett, you have not got any coal leased here that can be worked without a high cost, and the mine run coal is too cheap to try to work it any more, and I want you to get your mines back in your hands right away.”

He wrote many other letters to the same effect.

In June, 1925, appellant’s witness, Shores, was sent to Denning, and made a check and inventory of the property turned over to Lewis & Sly, and the property turned back to appellant, and the valuation placed on the property that was missing and not returned by appellees totaled $4,229.93, and both appellees signed the list attesting its correctness. Appellant’s traveling auditor testified that appellees were indebted to it for unpaid royalties. and other obligations, exclusive of the unreturned-property above mentioned, in the sum of $3,757.15.

The case was tried to a jury on the complaint of appellant and the cross-complaint of appellees, which resulted in a verdict and judgment for the appellees on their cross-complaint in the sum of $6,750.

Appellant requested the court to instruct the jury that appellees were not entitled to recover any damages on their cross-complaint in this action, and that their verdict on this point should be in favor of appellant. The court refused to grant this request, and this is the first assignment made by appellant for a reversal of this case. We think the court should have granted this request, for the reason that the undisputed testimony of appellees shows a voluntary surrender and abandonment of the property and their rights under the lease with appellant. The appellee James A. Lewis admits that he wrote all the letters heretofore set out and many others too numerous to set out herein, but attempts to explain the meaning of them. However, their meaning is obvious, and needs no explanation. They show conclusively that appellees have not been damaged, but, on the contrary, were losing money in the operation of the mines. We are therefore of the opinion that there was nothing to submit to the jury on appellees’ cross-complaint, for the reason that they had already abandoned the mine long before they claimed to have been evicted by virtue of an injunction issued in June, 1925. The junior Mr. Lewis had quit the mines and gone to work on the highways, and the other Mr. Lewis was constantly begging to be relieved.

For this error1 the judgment will be reversed, and the cause remanded for a new trial on the issue as to the amount of appellees’ indebtedness to appellant on its complaint.


text:
    Wildwood Amusement Company v. Stout Lumber Company.
    Opinion delivered January 21, 1929.

      Mahony, Yocum <& Saye, for appellant. •

      Marsh, McKay & Marlin, for appellee.
   McHaney, J.

This appeal questions the correctness of the decree of the Union Chancery Court enforcing a mechanic’s lien against the surface lease and the improvements on certain suburban real estate some two or three miles north of the city of El Dorado. The facts, briefly stated, are as follows:

On May 28, 1925, William Goodwin and wife executed the lease in question to Dave Reid for a term of five years, beginning June 1 thereafter, which lease was properly recorded. On June 6, 1925, Reid and his wife assigned the same lease to appellant, Wildwood Amusement 'Company, a corporation, which assignment was duly recorded. Certain improvements were placed on the lease for amusement purposes. Thereafter, on April 7, 1926, the Wildwood Amusement Company entered into a contract of sale thereof with .Stell & Chapman for a consideration of $20,000, evidenced by 27 notes, the last of which matured on July 1, 1928. The contract and notes provided that, if default should be made in the payment of one note, all remaining notes should become due and payable at the option of the holder. The contract of sale also obligated the purchasers to erect a dancing pavilion on the lease, at a cost of approximately $2,000, and to make certain expenditures for other purposes. Title to the property was retained by the seller until all notes were fully paid, and the purchasers contracted that they would not permit any liens of any nature to be incurred on the property. The purchasers went into possession, and proceeded to make the improvements required by the contract, and, in doing so, became indebted to appellee, the balance of which, at the time this suit was brought, amounted to the sum of $1,094.06, for which the chancery court entered a decree, together with interest at 6 per cent, from July 3, 1926.

Appellant challenges the correctness of this decree on two grounds: First, that no notice of a mechanic’s lien was served on the Wildwood Amusement Company, the corporation, and second, that the title of the Wild-wood Amusement 'Company is superior to the lien of the appellee.

Relative to the first proposition, it appears from the evidence that the notice that appellee claimed a lien on the property was served on each of the stockholders of the corporation, there being only three, and necessarily on all of the officers of the corporation, and the notice itself was addressed to and served on the persons operating under the name of the “Wildwood Amusement Company.” While no notice addressed to the Wildwood Amusement Company was served upon it as a separate, distinct entity, the notice was served upon the stockholders and officers, and the corporation could only take notice through them if a notice had been addressed to it personally. We hold this to be a substantial compliance with § 6917, C. & M. Digest, requiring such notice. This court has many times held that the mechanics’ lien statute should he liberally construed in favor of the lien claimant, and that a substantial compliance with its terms is all that is necessary. Conway Lumber Co. v. Hardin, 119 Ark. 43, 177 S. W. 408, and the cases cited therein.

The next contention as to the priority of rights, we think the court correctly held that the lien of appellee on the lease and the improvements thereon was superior to the title of appellant. As we have already stated, the contract of sale required the purchasers to make the improvements which were made, and at their own expense. The title to the whole property was retained in appellant, including all improvements to be erected on the lease by Stell & Chapman, the effect of which was to constitute Stell & Chapman the agents of the Wildwood Amusement Company for this purpose, as it required them to make these improvements to their property, and which was to remain their property until’ all the purchase money notes had been paid in full. Under these conditions we think it would have been no different had the Wildwood Amusement Company itself erected these improvements before the sale and required the purchasers to pay therefor in the contract of sale. This court has held that, where property is leased under a contract with the lessee to make certain improvements, to be paid by the lessor, the property itself is subject to the lien for materials furnished. Whitcomb v. Gans, 90 Ark. 469, 119 S. W. 676; Langston v. Matthews & Lawton, 117 Ark. 626, 173 S. W. 397; Davis v. Osceola Lumber Co., 168 Ark. 584, 270 S. W. 960. In the last case mentioned the court said:

“While the materials were charged on the books of appellee to the lessee, they were bought by him under authority from the lessor, to be used for making permanent improvements on her property, which had the effect of constituting him her agent in law for the purr-chase of the materials. The principle announced in the case of Whitcomb v. Gans, 90 Ark. 469, 119 S. W. 676, is applicable in the case at bar.”

While it is true in the cases cited that the lessor agreed to pay the cost of the repairs or improvements made by the lessee, still we think the same principle is applicable to the case in hand, for the reason that the seller required the purchaser to make the improvements, which were to be his until the purchase money was fully paid.

. Counsel for appellants cite the cases of Fine v. Dykes Bros., 175 Ark. 672, 300 S. W. 375, and Morrilton Lumber Co. v. Groom, 176 Ark. 520, 3 S. W. (2d) 293, in support of their contention in this regard, but the principle announced in those cases can have no application here. In those cases they merely permitted the improvements to be made, or had knowledg’e that they were being made, but had no contract obligating the purchasers to make them.

We find no error, and the decree is affirmed.


author: Hart, C. J.

text:
    Rose v. State.
    Opinion delivered January 28, 1929.

      J. C. Brookfield, for appellant.

      H. W. Applegate, Attorney General, and John L. Carter, Assistant, for appellee.
   Hart, C. J.

This appeal is prosecuted from a judgment of conviction for the statutory crime of selling intoxicating liquor.

The only ground relied upon for a reversal of-the judgment is based on the ruling of the trial court with reference to summoning a special venire to try appellant before the regular panel of the jury was exhausted. When the case was called for trial, twelve of the regular panel had' been selected to try a companion case to the present one. The case in question was based ¡on the same facts as was the case at bar. The trial of that case was temporarily suspended to take up the present one. The other regular panel of the jury had also been selected in part to try another case. Five members of the regular panel had been selected in the case, and seven ¡of them had been excused. When the present case was called for trial, the court first called a special venire, and a part of the jury was selected from it. Before the jury was completed, however, all of the seven of the regular panel which had not been selected in the other two cases referred to were- examined by the court and excused for cause. Another special venire was summoned, from which the jury in the present case was completed. No objection was made to any of the -special venire except that it was not regularly selected.

Appellant had no right to have a jury exclusively selected from the rest ¡of the regular panel of .jurors. Such a rule would impede the progress of the -court in the trial of cases and would result in unnecessary delay both in the trial of civil and criminal cases. Frequently such a rule would subordinate the business of the entire court to the demands of the defendant in a particular ease, and we do not think such was the intention of the Legislature in passing ;our statute with reference to the selection of a special venire to try oases.

Upon the practice of impaneling a trial jury under our statute, this court is •committed to the rule that the trial court should be possessed of a large measure of discretion in such matters, in order that the business of the court may be dispatched expeditiously, and this court will not interfere with its action where it is not in violation of ^some mandatory provision of the law, unless it is shown to operate to the prejudice of the party complaining. Mabry v. State, 50 Ark. 492, 8 S. W. 823; Pate v. State, 152 Ark. 553, 239 S. W. 27; and Sullivan v. State, 163 Ark. 11, 258 S. W. 643. _ .

_ Appellant was not entitled to have any particular jury to try his case. It does not appear that he challenged any of the jurors for cause, nor does he make it appear that any of them were prejudiced against him. Hence, he was in no attitude to complain of the manner in which the jurors necessary to complete the full panel were selected, in the absence of any showing that the members of the special panel were prejudiced against him. Johnson v. State, 97 Ark. 131, 133 S. W. 596; and Rogers v. State, 133 Ark. 85, 201 S. W. 845. In this connection it may be stated that the presumption must always be, until the contrary is shown, that the trial court did not abuse its discretion in the manner of impaneling the jury. Bennett v. State, 161 Ark. 496, 257 S. W. 372.

In the application of the rule announced in the above oases, and others which might be cited, we are of the opinion that the trial court 'did not err in the manner of selecting the jury. As we have already seen, twelve members of the regular panel had been selected to try a case dependent upon the same facts as the present one. This case had been temporarily suspended by the trial court, and no abuse of its discretion in so doing has been shown. Five members of the other panel of the jury v^ere engaged in the trial of another case at the time the present case was called for trial. It is true that there were seven members of this panel present in the courtroom, but tírese were all examined and excused for cause by the trial court before the jury was completed in the ease at bar. While some of the special venire were examined before the members of the regular panel, this amounted to an irregularity merely. All the members of the regular panel not engaged in the trial of other cases were examined, and excused for cause by the trial court before the jury in the present case was completed. No abuse of discretion in excusing these members of the regular panel is shown; and we hold that no prejudice resulted to appellant from the action of the court in the premises. Therefore the judgment will be affirmed.


author: Hart, C. J.,

text:
    Sharp v. Oates.
    Opinion delivered January 28, 1929.

      Edward Gordon, and Colvin & Sellers, for appellant.

      Strait & Strait, for appellee.
   Hart, C. J.,

(after stating the facts). The record shows that the appellants are the collateral heirs of Lela Van Winkle, deceased, and are entitled to whatever estate she left. At the outset it may be stated that the right to cancel a deed obtained from the grantor by mistake, fraud, duress or undue influence descends to the heirs, if it exists in the ancestor, unimpaired at the time of his death. Reaves v. Davidson, 129 Ark. 88, 195 S. W. 19; case-note to 2 A. L. R. at p. 431; and note to 33 A. L. R. at p. 53.

This brings us to a consideration of the merits of the case. To invalidate a deed on the ground of the grantor’s mental incapacity, the evidence must show that the grantor did not have sufficient intelligence to comprehend and act upon the affair in question, and that he did not understand and comprehend the nature and consequences of his act. Bilyeu v. Wood, 169 Ark. 1181, 278 S. W. 48.

Counsel for appellants rely upon two grounds to avoid the deed of Lela Van Winkle at the time she executed it. One is that she was mentally incapacitated on account of the excessive amount of narcotics which had been given her in her treatment for tuberculosis. On this point the divorced husband of Lela Van Winkle testified that she was addicted to the use of drugs on account of having tuberculosis, and that this rendered her mentally incompetent to comprehend any business transaction of an extended 'character. We do not attach much importance to his testimony, for he is not shown to have been a man of any decided character himself. The parties did not live together long, and the record shows that Lela Van Winkle was a woman of as much or more intelligence than her divorced husband. Appellants also introduced the testimony of two experts, who examined the chart of the last illness of Lela Van Winkle, showing the amount of narcotics given her during the last few months of her life. Judging from the amount shown from the chart, they testified that she could not have been mentally competent to comprehend the nature of the transaction which she entered into with Dr. Oates on the Sunday morning in question, and that she was not mentally competent to execute the deed on the following morning. On the other' hand, several physicians for appellee testified that the amount of narcotics given her at that time was not excessive, and that she fully understood the nature of the transaction, and was mentally capable of executing the deed on the next morning after she had agreed upon the terms of the trade with Dr. Oates. Dr. Laws was one of these witnesses. He testified that Lela Van Winkle was a young woman of an unusually bright mind, and that she was only weakened physically by disease. She had contemplated selling the land in controversy for some time, and wished to do so in order to set her mind at rest concerning her future finances. She knew that she would have to remain in the sanatorium near El Paso, and her land was situated more than 1,000 miles away, in Conway County, Arkansas. She wished to sell it in order that she might invest the proceeds in such a way that she might invade the principal at any time she deemed it advisable for her physical and mental comfort.

Several business men of Conway County of acknowledged good repute testified that appellee gave an adequate consideration for the land. A careful consideration of the testimony leads us to the conclusion that $20,000 was a fair value for the land, instead of $36,000 as testified to by witnesses for appellants. These disinterested witnesses placed the value of the land at about $20,000, and gave their reasons for so doing.

Dr. Oates is not contended to have practiced any fraud on Lela Van Winkle, but it is contended that, by reason of his relationship to her, he unduly influenced her in-the premises. There is nothing in the record tending to show that he said or did anything to cause her to sell the land against her will. While he had gone there for the purpose of purchasing the land for his wife, he did so after receiving a letter from the financial adviser of Lela Van Winkle, informing him that she wished to sell the land. There was no relation of trust or confidence between the parties, and no reason why Lela Van Winkle should have been unduly influenced by the mere presence of Dr. Oates.

As we have already seen, the land was sold for an adequate consideration, and Lela Van Winkle had evidently made up her mind in advance of seeing Dr. Oates that she wished to sell the land. It was not a jumped-up transaction, in which she acted hastily and without any advice upon the subject. She had contemplated selling the land for some time, and the sale was made to one of the parties to whom she had written concerning the purchase of the land. The burden was upon appellants to establish mental incapacity upon the part of the grantor, or that she was induced to execute the deed by undue influence. Atwood v. Ballard, 172 Ark. 176, 287 S. W. 1001.

■ It is well settled in the cases above cited, and in many others that might be cited, that, if a person has mental capacity to execute a deed, in the absence of fraud or undue influence, mental weakness, whether produced by old age or other physical infirmities, will not invalidate the deed. Pledger v. Birkhead, 156 Ark. 443, 246 S. W. 510; McCulloch v. Campbell, 49 Ark. 367, 5 S. W. 590; and McDonald v. Smith, 95 Ark. 523, 130 S. W. 515.

It cannot be said that the findings of fact by the chancellor are against the preponderance of the evidence, and therefore, under the settled rule of this court, the decree will be affirmed.


author: Smith, J.

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    Clay County Bank v. First National Bank.
    Opinion delivered January 28, 1929.

      Frank Weldin and W. E. Spence, for appellant.

      M. P. Huddleston, for appellee.
   Smith, J.

The First National Bank of Paragould brought this suit against the Clay County Bank of Piggott, and for cause of action alleged that, on or about December 20, 1926, A. & S. Bertig Company had on deposit with the Clay County Bank, hereinafter referred to as the defendant, the sum of $857.88, which belonged to the plaintiff bank, and was deposited by A. W. Hanf, manager of the Bertig- Company, without the knowledge or consent of the plaintiff. It was further alleged that the said Bertig* Company, for the purpose of transferring said funds to the plaintiff, issued to plaintiff against said deposit numerous small checks, and while said deposit remained with the defendant bank in the name of the Bertig Company, Hanf, its manager, notified defendant that he had so issued said checks to the plaintiff, and furnished defendant a list thereof. Hanf, at the time of leaving the list with the defendant, notified it that $857.88 of the Bertig Company’s deposit with defendant was' for the purpose of paying said checks.

It was further alleged that, on or about December 24, 1926, when the checks so drawn to plaintiff’s order were presented to defendant for payment, the checks, were dishonored, for the reason that the deposit of the Bertig Company had been appropriated and applied to the payment of a past-due note of the Bertig Company to the defendant bank.

In support of these allegations Hanf testified as follows: Bertig* & Company owned a store in Piggott, which witness ran as manager. "Witness made deposits in the defendant bank daily of moneys belonging* to Bertig & Company, and drew checks against these deposits, signed “ A. & S. Bertig Company, by A. W. Hanf.”

The Bertig* Company furnished plantation supplies to numerous persons in and around Piggott, from whom notes were taken covering the accounts, and these notes had been sold to the plaintiff bank. Hanf kept copies of these notes, which he called “dummy” notes, and as he made collections he would make indorsements on the dummy notes, and when a note was paid in full he would remit to plaintiff bank the amount thereof and secure the original note for surrender to the maker. These collections were made in the fall of the year.

In June, 1926, the Bertig Company borrowed $5,000 from the defendant bank, without security, so far as the record before us shows.

Hanf began the collection of these notes owned by the plaintiff bank on November 11, and it was his practice, when he made a collection, to draw a check for the amount thereof on defendant bank in favor of plaintiff bank, but, instead of remitting the check to plaintiff, it was placed in a drawer and kept with similar checks until December 20, when he had accumulated 41 checks, totaling $857.88. On this date Hanf presented to the cashier of the defendant bank a list of the checks so drawn, and directed the cashier to take care of these checks when they were presented. The account of the Bertig Company with the defendant bank exceeded the amount of the checks shown on the list left with the cashier. The defendant bank did not know that Hanf had made collections from the makers of' notes owned by the plaintiff bank.

Oh December 22,1926, and on December 24,1926, before the checks were presented by plaintiff bank for payment, the defendant bank credited the note of the Bertig Company to its order with the sums of $856.9|8 and $750, respectively, and, after these sums had been so appropriated, there did not remain to the credit of the Bertig Company’s account sufficient funds to pay the checks held by the plaintiff, and they were dishonored upon presentation, whereupon this suit was commenced.

The cashier of the defendant bank testified .that he did not know that Hanf had collected and deposited money belonging to the plaintiff bank, and that fact appears to be undisputed. He further testified that Hanf brought the list of checks to the window and said: “There is a list of checks I want protected,” and gave as his reason for the request that “Hurt Grocer Company had a trade acceptance for seven or eight hundred dollars that they had sent there for .collection, and they had been calling every day to know about its acceptance, and Mr. Hanf presented that list of checks for us to protect, and asked us to tell Hurt Grocer Company that they had no funds, that there were checks out to cover it.” The witness was not asked to certify the checks; indeed, only a list of the checks was presented to him. Hanf was accustomed to make requests of this kind, and witness did not pay much attention to him, and “-We always told Mr. Hanf that we would do the best we could, and that if he had the money in there we would pay for him, and if he didn’t, we couldn’t,” and that the witness did not make any agreement at all. The testimony of the cashier, in its entirety, ¡makes, it clear that he understood Hanf was anticipating a garnishment proceeding on the part of the grocer company, and desired to defeat it by having the cashier answer that he had no funds belonging to Bertig Company without actually withdrawing the funds, and witness did not enter into the agreement. He testified that “We would not make any agreement at all.”

The testimony of the cashier and that of Hanf cannot be reconciled upon the controlling question of fact whether the cashier agreed to pay the checks upon presentation. The cashier’s denial of this ag’reement, and his statement that he understood Hanf was endeavoring not to pay plaintiff but to defeat the garnishment of the grocer company, finds substantial corroboration in the cross-examination of Hanf himself. Upon being interrogated about the garnishment, Hanf testified as follows: “Q. But the moving cause was that the funds were about to be tied up, wasn’t it? A. I suspected it; yes sir. Q. Did you at that time say one thing to that bank that this was. a trust fund and belonged to the First National Bank? A. I don’t remember:. Q. Don’t you know you didn’t tell them that? A. I don’t think I ever mentioned a trust fund. Q. Or that it belonged to the First National Bank? A. I told them I had collected it for them. Q. That was after it was all gone? A. (No answer).”

In the case of Causey v. Eiland, 175 Ark. 929, 1 S. W. (2d) 1008, 56 A. L. R. 529, we held that, where a check is certified by a bank, the funds of the drawer are, in legal contemplation, withdrawn from his credit and appropriated to the payment of the check, and the bank becomes the debtor of the holder, and is absolutely liable for the, payment of the check when presented. In deciding the instant case in favor of the plaintiff, the chancellor applied this principle, in effect, holding that the direction of Hanf to the cashier of the defendant bank constituted the funds of the Bertig Company a special deposit to the extent of the amount of the checks contained in the list filed with defendant’s cashier.

We do not, however, find the facts, as the court below did. We accept the statement of the defendant’s cashier as the correct version of the transaction, and therefore find that no special deposit was created. Although Hanf claims, in effect, that the .collections which he made for the benefit of the plaintiff, beginning in November, and which were deposited with defendant, were in the nature of a trust fund, the account was overdrawn from November 16 to November 29 and from December 8 to.December 17, 1926, so that practically all of the alleged trust fund had been withdrawn before the list of .checks was delivered to defendant’s cashier, at which time, it is true, there were sufficient funds derived from other sources to have paid the checks mentioned on the list had the existing balance of. the Bertig Company been made a special deposit. But, as. we have said, we find the fact to be that there was no agreement to that effect.

A bank has the right to set-off against an overdue note of a depositor so much of the deposit as is required to discharge the note. Carroll County Bank v. Rhodes, 69 Ark. 43, 63 S. W. 68; Boone County Bank v. Byrum, 68 Ark. 71, 56 S. W. 532.

In the annotator’s note to the case of Arnold v. San Ramon Valley Bank, 13 A. L. R. 320, it is said that: ‘ ‘ The decided weight of authority, is to the effect that, where the bank in which funds in which third persons have an interest are deposited in the individual name of the depositor, has neither actual knowledge nor-notice of facts sufficient to put it upon inquiry as to the true character of the deposit, it may apply the deposit to the individual debt of the depositor. ”

The court below found the fact to be that defendant bank had no knowledge of the wrongful acts of Hanf in checldng against deposits which had been, in fact, for the benefit of plaintiff bank, but which collections had been deposited in the name of the Bertig Company. But, as has ■been shown, these funds had been practically consumed by checks drawn by Hanf in the name of the Bertig Company, as he had authority to do, before the list of checks was filed with defendant bank.

In the case of Covey v. Cannon, 104 Ark. 550, 149 S. W. 514, it was held (to quote a syllabus): “Where a bank has mingled trust money with its own funds, money paid from such fund for its own purposes will be presumed to have been paid from its own money and not from the trust funds; but where the mingled fund is at any time reduced below the amount of the trust fund, the latter must be regarded to that extent as dissipated, and sums, subsequently added from other sources cannot be treated as a part of the trust fund.”

We conclude therefore that the court below was in error in holding defendant liable for the conversion of a special deposit by the payment of a past-due note payable to its own order, for the reason that there was no special deposit, and the decree appealed from will therefore be reversed, and the cause of action dismissed.


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    Austin Bridge Company v. Vaughan.
    Opinion delivered January 28, 1929.

      Buzbee, Pugh & Harrison, for appellant.
   Smith, J.

Appellee broug'ht suit against the Austin Bridge Company, without allegation as to defendant’s character as being the business, of some individual, or a copartnership, or a corporation. As an incident to the suit a writ of garnishment was served on the White & Black Rivers Bridge Company. The garnishee filed an answer, admitting that it was indebted to plaintiff in a sum exceeding the amount sued for; but the defendant made no answer, and judgment was rendered against both the defendant and the garnishee for the amount sued for.

The return upon the summons reads as follows:

“State of Arkansas, County of Prairie — ssi. I have this 30th day of March, 1928, duly served the within by handing a copy of the same to the within named Austin Bridge Company, by Shannon Miller, eng. and agt., in charge of Austin Bridge Company’s business in ‘Des Arc, Ark., as therein commanded. * * * Ceo. J. Screeton, sheriff, by E. J., deputy sheriff.”

This appeal is from the judgment rendered upon the return of service above set out.

It obviously appears that the instant case is substantially identical with that of Moreno-Burkham Const. Co. v. Thorpe, 152 Ark. 560, 237 S. W. 427, and the instant case may be decided by quoting from what was there said as follows:

“The return of service on the writ of garnishment in this .cause shows no sufficient service on the garnishee, Moreno-Burkham Construction Company. It does not appear from the record whether the Moreno-Burkham Construction Company was a foreign or domestic corporation, or a partnership. If it was a domestic corporation, the return is not sufficient, because it does not show that service was had on the agent of the corporation during the absence of the president of the company, as required by § 1147 of Crawford & Moses’ Digest. If appellant was a foreign corporation, the return is not sufficient because it does not show that service was had upon the agent designated by the corporation in the manner provided by § 1829 of Crawford & Moses’ Digest. See Arkansas Construction Co. v. Mullins, 69 Ark. 429, 64 S. W. 225, and Southern Building & Loan Association v. Hallum, 59 Ark. 583, 28 S. W. 420. Neither does the return show that the summons was served upon the agent, servant or employee in charge of a branch office or other place of business of the corporation in Washington County, Arkansas. Hence the return is not sufficient as covering the matter of service of process ;on domestic and foreign corporations who keep or maintain a branch office or other place of business in any of the counties of this 'State. See Fort Smith Lbr. Co. v. Shackleford, 115 Ark. 272, 171 S. W. 99, and Terry Dairy Co. v. Parker, 144 Ark. 401, 223 S. W. 6.

“If appellant was. a partnership, service must have been had upon the individual members composing the partnership, and the return is insufficient because it does not show that fact.

“The effect of the above decisions is that no presumption can be indulged upon an appeal from a judgment by default that there was some other and different service had from-that which appears in the record.”

The judgment appealed from must therefore be reversed, and the cause remanded with directions to proceed in the cause, the appellant having entered an appearance by appealing.

As the judgment against the defendant debtor falls, that against the garnishee must fall also.


author: Humphreys, J.

text:
    Stafford v. First National Bank.
    Opinion delivered January 28, 1929.

      William M. Ball, Brewer é Cracraft and J. G. Broohfield, for appellant.

      Ogan & Shaver, for appellee.
   Humphreys, J.

This suit was brought by appellants in the circuit court of Cross 'County, against appellees, to recover $1,346.37 alleged to be a partnership fund, which appellees appropriated to pay an individual debt due them by appellant, H. H. Stafford, and to recover damages for the alleged misappropriation of said fund. The individual debt was in the form of a judgment which appellees procured against H. H. Stafford on the 28th day of April, 1921, and which they have been unable to collect.

It was alleged that appellants were partners, doing a general building business under the firm name of H. H. Stafford; that on July 17, 1924, they opened an account with appellee bank in the name of H. H. Stafford for the purpose of depositing school warrants advanced to them by Special ’School District No. 4 of Barton, Arkansas, for the express purpose of paying for material and labor in the erection of a School building for said district, which appellants had contracted to build; that on December 22, 1925, appellees procured a writ of garnishment in.their favor against H. H. Stafford, and had the sheriff serve same upon appellee bank, and paid the amount specified in the writ out of their deposit to appellee bank in- satisfaction of said judgment; that the name of the clerk of said court was signed to the writ of garnishment, in his absence, by a lady stenographer under twenty-one years of age, who had not been regularly deputized, and, for that reason, the writ was illegal and v-oid; that, on account of the issuance and service of the garnishment, they were unable to pay for material and labor, and lost their contract, to their damage in’ the amount of 15 per cent, -on the contract price, and expenses in the sum of $25 in going from Helena to Wynne in order to raise money to take up the dishonored checks on account of the misappropriation of their deposit.

Appellees filed an answer, denying that appellants were partners and that said fund was partnership money, that the fund was a special deposit, or that the writ of garnishment was void.

The cause was. submitted upon the pleadings, the testimony introduced by the parties, and the instructions of the court, resulting in a verdict against appellants and a consequent judgment dismissing their complaint, from which is this appeal.

It will be unnecessary to set out the substance of the testimony relative to the validity of the writ of garnishment, as the court did not submit that issue to the jury on his own motion, and no request was made by appellants for him, to do so.

The trial court refused to submit the issue of whether the money garnished was a special deposit, although requested to do so by appellants. The requested instruction of appellants upon that issue is as follows,:

“If you find the money in question was a special deposit for the purpose of paying labor or material, or for any other payment, and that the bank and C. B. Bailey so understood it, then the fund was, not subject to garnishment. ’ ’

This instruction should have been given, as appellant’s testimony, corroborated by the school warrants, furnished a sufficient basis to submit the issue to the jury for determination. He testified relative to this issue, in substance, as follows:

“When I put the money there it was deposited in warrants of this, school district, and the bank cashier and O. B. Bailey all knew that I was giving checks down at Barton and then bringing these warrants or sending them on to the bank before the checks got there. I know Bailey and the cashier knew all about this money being turned over to our firm to pay for the material and labor, because we had been doing this all along through this contract; and one time some of.the checks beat the warrants there and they held the checks until I got the warrant on in. And Bailey was the active vice president, and knew all about it. I also understand that Mr. Ellis, the assistant cashier, knew beforehand of this plot to garnishee our account, as Mr. Ellis stated that he asked Dr. Hare not to garnishee same if he deposited the school warrants to our account, and, with his assurance that he would not, placed same to our credit.

“Q. Did the defendant bank refuse to honor your checks at a time when there was a greater amount on deposit than the garnishment herein was for? A. They did, and later they gave me the money, and I took up some of the checks they had turned down with it. The school district had not issued warrants enough to pay up everything due. All the money on deposit was partnership money in so far as it was. any of our money. But it was money turned over to us to pay up claims for which liens could be filed against the building. Our profit would have come out of the per cent, held back until the completion of the building, which we did not get on account of the garnishment. Lost money on the school job and other jobs. The school district got sued for some of these debts which weren’t paid, and refused to pay us the balance on the job, -which would have been our profit.”

In submitting the issue of whether funds on deposit were partnership money, the court instructed the jury as follows, over appellant’s objection and exception:

“A partnership is a collection of two or more individuals who enter into a mutual agreement to conduct a joint venture or enterprise and share in the profit and losses arising therefrom, as may be agreed upon.”

This instruction was an erroneous declaration of law, because it is not essential to every partnership that each man share in the losses. By agreement it may be otherwise. Bearing upon this point, appellant testified that he and his two sons formed a partnership, but that one of his sons furnished necessary money to begin their business, with the understanding that he should participate in the profits, if any, but should not suffer any part of the losses they might sustain. The court subsequently withdrew the instruction, and submitted the issue whether there was a partnership in the form of an interrogatory propounded to the jury, for it to answer either in the affirmative or negative, without defining a partnership other than the definition first given and afterwards withdrawn. In withdrawing the definition of partnership, the court did not tell the jnry he had withdrawn it because it was erroneous. In answering the interrogatory the jury may have labored under the impression that the definition of a partnership as first announced by the court was correct, notwithstanding the fact that the instruction had been withdrawn. In stating and submitting the issue of partnership the court should have correctly defined a partnership, in view of the fact that he had theretofore incorrectly defined the same as applicable. to the testimony introduced.

On account of the errors indicated the judgment is reversed, and the cause is remanded for a new trial.