ÆäÀÌÁö À̹ÌÁö
PDF
ePub

appellee, sureties, for the faithful perform-, in no way affected the sureties. We cannot ance of the contract. The contract sued up agree with learned counsel for appellant in on was an employment contract, whereby O. this contention. Had the weekly reports been C. Langford was employed by appellant as made in conformity to the contract, it would its sales representative. in Little Rock. O. C. have reflected, at the end of each week, the Langford was obligated in the contract to exact state of the account between Langford pay appellant all sums collected by him for and appellant. Such an account would have it in the prosecution of the business. The served as a check upon Langford and a bond was an obligation in the sum of $500 means for discovering any deficit that might executed by Langford, as principal, and exist in its very inception. A bondsman Marsh and appellee, sureties to appellant, would naturally rely upon such restrictions in conditioned for the faithful performance of a contract, for they tend to protect him from the contract. The contract contained a pro- loss. It cannot be said of a clause in a convision to the effect that Langford should tract which serves as a protection to a surety make weekly reports to appellant showing that it was for the sole benefit of an obligee total sales, cash collected, amount outstand-in the bond conditioned for the faithful pering, and stock on hand and in transit. formance of the contract. The weekly re

[1] The action against the several defend-ports omitted matter which was necessary in ants was submitted on different days.

On June 23, 1922, appellant obtained judgment against O. C. Langford for $606.54, from which there was no appeal.

On June 16, 1922, it obtained judgment by default against R. F. Marsh for $500, the face of the bond, from which no appeal has been prosecuted. On the same day the cause between appellant and appellee was tried, which, at the conclusion of appellant's testimony, resulted in an instructed verdict in behalf of appellee. The judgment was rendered in accordance with the verdict exempting appellee from liability on the bond and dismissing the complaint of appellant, from | which is this appeal. For the purposes of the appeal it is agreed between the parties: "That the principal to the contract, O. C. Langford, furnished weekly reports during the time of his employment up to and including December 20, 1920, but that none of the reports, after the report for the week of September 13. 1920, show 'stock on hand and in transit,' and that plaintiff failed to notify defendant McCormack of this omission."

The court held that the provision in the contract for a weekly report embracing total sales, cash collected, amount outstanding, and stock on hand and in transit, was an essential part of the contract, for the benefit of the sureties in the bond as well as appellant, and that the acceptance by appellant of weekly reports from O. C. Langford which omitted "stock on hand and in transit" amounted to a material change in the terms of the contract without the consent of appellee, thereby discharging him as the surety on the bond. Appellant's contention for reversal is that the provision of the contract referred to was for the sole benefit of appellant, and that a waiver of same on its part

order to ascertain the exact condition of the account between Langford and appellant. Without showing the amount of goods on hand and in transit, it was impossible to determine at the end of any week whether the deficit or shortage existed in fact. In determining the effect upon a surety of a waiver of a stipulation in a contract similar to the stipulation in question by an employer this court, in the case of Singer Mfg. Co. v. Boyette, 74 Ark. 600, 86 S. W. 673, 109 Am. St. Rep. 104, said:

"The stipulation for weekly settlements in this case was an essential part of the contract. The enforcement of it would have made a record of the business transactions of Mrs. Boyette, and lessened litigation as to the same; and would have held her in surveillance, and checked the misappropriation by her of moneys in her hands belonging to the company, and would, probably, have led to the discovery of any misappropriation of money before it could doubtless, was the object of the stipulation; have assumed considerable proportions. This, and its enforcement would, at least, have afforded some protection to the sureties on the bond. Plaintiff, having without their consent acquiesced in the violation and breach thereof, thereby released and discharged them from all liability on the bond."

[2] Appellant's second and last contention for reversal is that the waiver was not pleaded as a defense. It is true appellee did not interpose the waiver as a defense in his written answer; but, without objection on the part of appellant, evidence was introduced, and the case tried, upon the theory that appellee had been released as surety because appellant waived the weekly reports required by the contract.

No error appearing, the judgment is affirmed.

(252 S.W.)

Action by S. B. Locke & Co. against C. E. S. B. LOCKE & CO. v. FORRESTER et al. Forrester and others. Judgment for defend(No. 12.) ants, and plaintiffs appeal. Reversed and remanded.

(Supreme Court of Arkansas. May 28, 1923. Rehearing Denied June 25, 1923.)

[blocks in formation]

to new facts.

The decision of the Supreme Court rendered upon a given state of facts only becomes the law of the case as applicable to the same facts, and, if the cause be remanded for a new trial, the parties may introduce new evidence and establish a new state of facts, and, when that is done, the decision of the Supreme Court upon a former appeal ceases to be the law of the

case, and the trial court is not conclusively bound by the decision of the Supreme Court on the former appeal, but should apply the law applicable to the changed state of facts.

Hill & Fitzhugh, of Ft. Smith, for appellants.

Jos. R. Brown and J. B. McDonough, both of Ft. Smith, for appellees.

HART, J. S. B. Locke & Co. sued C. E. Forrester and others to recover damages for the breach of an implied warranty of quality of 44 bales of cotton bought by the former from the latter. The plaintiffs recovered judgment in the circuit court against the defendants, and upon appeal to this court the judgment was reversed because the lower court erred in holding that the undisputed

evidence showed that S. B. Locke & Co. was a partnership at the time of the purchase of the cotton.

One of the defenses to the case was that S. B. Locke & Co. was a foreign corporation and was doing business in the state of Arkansas contrary to the provision of our statute. Hence the materiality of the issue as to whether S. B. Locke & Co. was a foreign corporation or a partnership.

Because of the error in the circuit court in holding that the undisputed evidence showed that S. B. Locke & Co. was a partner

3. Corporations 673-Evidence held to show a company was partnership and not a for- ship, the judgment was reversed and the eign corporation doing business without complying with law.

cause was remanded for a new trial. Forrester v. Locke, 149 Ark. 225, 231 S. W. 897.

Upon the remand of the case and the reIn an action on contract for the sale of cotton, evidence held to show without sub- trial thereof in the circuit court, the quesstantial contradiction that the company suing tion of whether or not S. B. Locke & Co. was on the contract and to whom the cotton was a foreign corporation doing business in this sold was not a foreign corporation doing busi-state without complying with our statute was ness without complying with the law as claimed by defendant, but was a partnership, at the time of the purchase of the cotton.

submitted to the jury. The jury returned a verdict in favor of the defendants, and the plaintiffs have duly prosecuted an appeal to this court.

4. Corporations 673-Testimony of plaintiff's manager held not to contradict evidence that The only assignment of error is that the plaintiff was not a corporation. court erred in not telling the jury that, under Where the issue was whether plaintiff was the undisputed evidence in the case, S. B. a foreign corporation or a partnership, testi-Locke & Co. was a partnership. S. B. Locke mony of plaintiff's manager that he did not & Co. did not claim to have complied with our know whether there was a corporation in Okla- statute relative to foreign corporations doing homa with a similar name as plaintiffs, but that there used to be, held not sufficient to contradict plaintiff's testimony that plaintiff was a partnership.

5. Appeal and error 1068 (1)-Instruction held prejudicial where appellate court could not determine whether jury's finding was based on erroneous instruction or on merits of case.

Where the appellate court could not tell whether a verdict for defendant was based upon an erroneous instruction or upon the merits of the case, such instruction was necessarily prefudicial to plaintiff requiring reversal.

Appeal from Circuit Court, Sebastian County; John Brizzolara, Judge.

business in this state, and it would be necessarily prejudicial to their rights if the court erroneously submitted to the jury the question of whether S. B. Locke & Co., was a partnership as claimed by the plaintiffs, or whether it was a foreign corporation as claimed by the defendants.

[1] Counsel for the defendants insist that the holding of this court on the former appeal that the undisputed evidence did not show that S. B. Locke & Co. was a partnership at the time it purchased the cotton is the law of the case and is conclusive of that question upon this appeal.

We do not agree with counsel in this contention. Of course, it is well settled in this

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and indexes

state that if a cause be appealed to the Su-f business in Arkansas and was required to preme Court, and the judgment be reversed, file articles of incorporation under our statand the cause remanded to the circuit court ute regulating the doing of business in Arfor a new trial, and a second appeal be taken, kansas by foreign corporations. it brings up for review nothing but the proceedings subsequent to the reversal.

[2] It is equally well settled that the decision of the Supreme Court rendered upon a given state of facts only becomes the law of the case as applicable to the same facts, and if the cause be remanded for a new trial, the parties have the right to introduce new evidence and establish a new state of facts. When this is done the decision of the Supreme Court upon the former appeal ceases to be the law of the case, and the circuit court is not conclusively bound by the decision of the Supreme Court on the former appeal, but should apply the law applicable to the new and changed state of facts. Hartford Fire Ins. Co. v. Enoch, 79 Ark. 475, 96 S. W. 393, and Rushing v. Horner, 135 Ark. 201, 204 S. W. 1145.

[3] This brings us to a consideration of the question of whether or not upon the second trial in the circuit court the evidence on the question of whether or not S. B. Locke & Co. was a partnership or a foreign corporation was in all essential respects the same as upon the first trial of the case.

W. R. Locke was the manager of the business of the plaintiffs at Ft. Smith, Ark., and purchased the cotton in question. Upon the former appeal the court said that the only evidence in the record to the effect that S. B. Locke & Co. was conducting the business at Ft. Smith was that of J. M. Locke, and that J. M. Locke was one of the parties to the suit. The court also said that his evidence was disputed by that of W. R. Locke. The opinion of the court recites that W. R. Locke first testified that S. B. Locke & Co. constituted a partnership and afterwards that it was a corporation in Oklahoma and a partnership in Arkansas. Later on he said that he did not know whether it was doing business in Arkansas as a corporation or as a partnership, although he was the manager of the business in Arkansas.

Upon the present appeal the testimony is much stronger in favor of the plaintiffs and is practically undisputed. S. B. Locke & Co. was organized as a corporation under the laws of the state of Oklahoma on the 6th day of June, 1913. The stockholders were S. B. Locke, J. M. Locke, and J. C. Fahnstock. Subsequently the latter sold his stock to W. P. Cowan. The principal place of business of the corporation was Muskogee, Okl., with authority to establish branch offices at other places. The corporation opened a branch office in Ft. Smith, Ark., in 1915, with W. R. Locke, a brother of S. B. Locke, as manager, and bought cotton there. It first thought that it was doing business at Muskogee, Okl., but It was advised by counsel that it was doing

In 1918, the stockholders of the corporation decided to form a partnership, and under the advice of counsel, in October, 1918, all the stockholders were present at a meeting of the corporation and sold its assets to a partnership of which they became the members with the same interests they respectively had in the corporation, and the partnership was called S. B. Locke & Co. The corporation still retained its entity because of certain unsettled matters. It ceased, however, to buy and sell cotton, and the business was conducted thereafter by the partnership. On the 10th day of September, 1919, a certificate of partnership was filed in the office of the court clerk at Muskogee certifying that the partnership of S. B. Locke & Co. was composed of S. B. Locke, J. M. Locke, and W. P. Cowan, and that their residence was Muskogee. Immediately the bank where the funds were kept was notified of the change from a corporation to a partnership. The bank at Ft. Smith through which the branch office there transacted business was likewise notified of the change. The corporation made its return to the United States government for the year ending August 31, 1920, and showed that all its capital had been retired except $380. The partnership continued to transact the business of buying and selling cotton and the transaction herein sued on began in December, 1919, and continued during that month and in January, 1920. The fact of the change from the corporation to a partnership as stated above was testified to by S. B. Locke, J. M. Locke, and W. P. Cowan.

J. P. Solomon, the cashier of the First National Bank of Muskogee, testified that S. B. Locke & Co. had been a customer of the bank for 10 years. He was advised when the change was made from a corporation to a partnership. He required them to make financial statements to the bank. They made a final statement dated in August, 1918, of S. B. Locke & Co. as a corporation. In September, 1919, they made a statement to the bank as a partnership, and these statements were on file at the bank. The bank extended credit to S. B. Locke & Co. as a partnership since October, 1918, and the funds carried in deposit in the name of S. B. Locke & Co. belonged to them as a partnership since that time. They were so regarded by the bank.

J. P. Solomon was a disinterested witness. His testimony is corroborated by the income tax returns made to the United States government, by the bill of sale of the assets of the corporation to the partnership, and by the certificate of partnership filed in the office of the court clerk, at Muskogee. The reason for the change from a corporation to a partnership is apparent. They had a

(252 S.W.)

branch office at Ft. Smith in which they did a large business, and they did not wish to comply with our laws regulating foreign cor ́porations doing business in this state. Hence the reason for a change from a corporation to a partnership. This they had the right to do, and it was done prior to the time the transactions involved in this lawsuit occur

red.

There is no evidence in the record tending to dispute the testimony as above recited. W. R. Locke was a witness in the case and testified at length as to the merits of the case. It will be remembered that he is the manager of the business at Ft. Smith, Ark., and bought the cotton which is the subject-matter of the lawsuit.

[4] On cross-examination he was asked whether or not there was a corporation under the name of S. B. Locke & Co. in Oklahoma, and he answered that he did not know whether there was a corporation of that name in Oklahoma or not, but that there used to be. This testimony is not sufficient to contradict the testimony of the plaintiffs bearing on this question. Under his testimony it would be only a matter of conjecture as to whether or not S. B. Locke & Co. was a corporation. There is no substantial contradiction in the testimony of the plaintiffs, and it shows that S. B. Locke & Co. was a partnership during the entire time involved by the transactions in question. Hence the court erred in submitting to the jury the question of whether or not S. B. Locke & Co. was a foreign corporation doing business in the state without complying with our laws, and therefore not entitled to recover in the action.

[5] We cannot know whether the verdict of the jury was based upon a finding that S. B. Locke & Co. was a foreign corporation doing business in Arkansas without complying with our laws, and therefore not entitled to sue in our courts, or whether the decision was against them on the merits of the case. Hence the instruction was necessarily prej udicial to the rights of the plaintiffs and the giving of it constituted reversible error.

Therefore the judgment must be reversed, and the cause will be remanded for a new trial.

ASHMORE v. HAYS et al. (No. 14.) (Supreme Court of Arkansas. May 28, 1923. Rehearing Denied June 25, 1923.)

1. Appeal and error 71(4)-Decree granting relief prayed for held final from which appeal would lie.

Where, in suit for unlawful detention of a hotel to recover rent under a forfeiture lease, the court appointed a receiver to make repairs on the building and on April 7th directed de

[blocks in formation]

Hays, the appellee, brought suit against apSMITH, J. On February 1, 1920, James A. pellant, E. B. Ashmore, for the alleged unlawful detention of a hotel in the city of Paragould, alleging the nonpayment of the rent covenanted to be paid under a written lease contained a provision whereby the lescontract existing between the parties. The sor might declare the lease forfeited if the rent was not paid.

Appellant denied a failure to pay rent, and alleged a default upon the part of appellee in making certain necessary repairs which appellee had expressly covenanted to make. On appellant's motion the cause was transferred to equity, where it was tried.

After the transfer of the cause, appellee applied for the appointment of a receiver to collect the rents, and that appointment was made. Upon appellant's objection this receiver was removed and another appointed, who was also removed at appellant's insistence. Thereafter two receivers were ap

For other cases see same topic and KEY-NUMBER in all key-Numbered Digests and Indexes

pointed to act together, one at the instance of each party.

The case remained on the docket until April 7, 1922, at which time a decree was entered which appellee insists was a final decree if, in fact, a final decree has been entered. Prior to the rendition of this decree the court had made orders in which the receivers were directed to make repairs, and the receivers made report of the repairs which they had made.

On April 7, 1922, the court made an order in which it was recited that appellant had not paid the rent since December 1, 1921, and directed him to pay the same within 20 days. The receivers were ordered to make certain additional repairs. Appellant failed to pay the rent, whereupon appellee filed a motion asking the court to issue a writ of possession. To this motion appellant filed a lengthy response. At the hearing on May 10, 1922, the court found appellant was in arrears for rent to the extent of $1,950, and ordered that a writ of possession issue unless he should pay $500 before noon of May 16th and $700 before noon of June 5th and the monthly rental thereafter before the 5th day of each month. The payments so to be made were to be held by the receivers subject to the order of the court. Appellant excepted to said order and thereafter filed a motion to modify the decree of May 10th, alleging that appellee had failed to make repairs. He took testimony on his motion which the court heard on June 10th, and on that date the court found that appellant had not complied with the order of May 10th and refused to modify that order. Appellant prayed an appeal from the refusal of the court to modify its order of May 10th. It appears, from the recitals of the orders and decrees to which we have referred, that neither the plaintiff nor the defendant had fully developed his testimony on the question of damages for failure to make repairs; but appellant insists that the testimony taken shows that his damage was largely in excess of the sum claimed as rent.

After praying and perfecting an appeal, appellant gave a supersedeas bond and has remained in possession, and on August 12, 1922, he filed a petition asking that the receivers be directed to make certain repairs. At the hearing of this motion the receivers were directed to make repairs of an extensive and expensive character.

[1] It is first insisted that there was no final decree from which an appeal would lie. We think there was a final decree from which an appeal was properly taken, and this decree was that of May 10th, as the decree of June 10th was a mere refusal to vacate or modify the decree of May 10th. Oxford Telephone Mfg. Co. v. Arkansas Nat. Bank, 134 Ark. 386, 204 S. W. 1140; Pearce v. People's Savings Bank & Trust Co., 152 Ark. 581, 238 S. W. 1063.

The appeal from the decree of May 10th was perfected on November 10th, which was exactly in time.

The decree of April 7th was interlocutory and did not become final until May 10th, but the decree of the last date was final because it granted the relief sought by the plaintiff, to wit, the recovery of the possession of the premises. Branstetter v. Branstetter, 130 Ark. 301, 197 S. W. 688.

[2] Here the plaintiff insisted the defendant was in default in payment of rent. The defendant insisted that he was not in arrears; that his rents had been more than paid by the damages resulting to him from the plaintiff's failure to repair. This was a valid defense, if true, as defendant could not be required to pay if his damages exceeded his rents; it being his insistence that the repairs were so extensive and expensive in comparison with the rent reserved as that he would not be required to make them on the lessor's default and take credit therefor on his rent account. Brunson v. Teague, 123 Ark. 594, 186 S. W. 78; Johnson v. Inman, 134 Ark. 345, 203 S. W. 836; Young v. Berman, 96 Ark. 78, 131 S. W. 62, 34 L. R. A. (N. S.) 977; Berman v. Shelby, 93 Ark. 472, 125 S. W. 124; Tedstrom v. Puddephatt, 99 Ark. 193, 137 S. W. 816, Ann. Cas. 1913A, 1092.

[3] The order of the court awarding the writ of possession is defended upon the ground that it was merely a method employed by the court to enforce obedience to its decree ordering the appellant to pay rent, but the court should not have made the order awarding the writ of possession. Upon the contrary, the case should have been tried upon its merits, and the fact ascertained whether appellant was in default in the payment of his rents or had paid them by sustaining damages as the result of appellee's failure to repair.

The lease contained the provision that the lessor might declare the lease forfeited for nonpayment of rent, but the question is whether there has been a failure to pay rent. Williams v. Shaver, 100 Ark. 565, 140 S. W. 740.

It is appellant's insistence that he is not in default; and if this is true, the possession should not have been awarded to appellee, the lessor.

In other words, the court granted appellee the relief originally prayed by him and has reserved for decision the very question which must determine whether appellee is entitled to have that relief, which is: Did appellant default in paying his rent?

For the error indicated the decree of the court below is reversed and the cause remanded, with directions to set aside the decree awarding appellee the possession of the property before the final hearing of the cause, and to restore the possession of the

« ÀÌÀü°è¼Ó »