Anderson- Tully Co. v. Gillett Lumber Co.

• Decision Date: 16 October 1922
• Docket Number: 194
• Parties: ANDERSON- TULLY COMPANY v. GILLETT LUMBER COMPANY
• Court: Arkansas Supreme Court

244 S.W. 26

155 Ark. 224

ANDERSON- TULLY COMPANY v. GILLETT LUMBER COMPANY

No. 194

Supreme Court of Arkansas

October 16, 1922

Appeal from Arkansas Chancery Court, Southern District; John M Elliott, Chancellor; affirmed.

Decree affirmed.

H B. Anderson and A. G. Riley, for appellant.

A contract entered into must be specifically performed. 143 Ark. 97.

The appellees cannot be held to be innocent purchasers. C. & M Dig. sec. 6979; 132 Ark. 158; 98 Ark. 105; 87 Ark. 60; 75 Ark. 228; 84 Ark. 203. The plea of innocent purchaser was not available, as notice of lis pendens was duly filed. 27 Ark. 6.

The rule against Sunday contracts is not applicable. 29 Ark. 386; 44 Ark. 74.

The defense of the lack of authority of the officers to make the contract was not specially pleaded. 80 Ark. 67; 89 Ark. 435.

The authority of the officers was established and their act in making the contract was the act of the corporation. 62 Ark 7; 74 Ark. 190; 86 Ark. 287; 79 Ark. 45; 79 Ark. 338; 89 Ark. 435; 90 Ark. 301; 103 Ark. 283; 105 Ark. 641; 116 Ark. 520; 132 Ark. 371; 115 Wisc. 583; 92 N.W. 234; 95 Am. St. Rep. 254; 2 Thompson on Corporations (2nd Ed.), Art. 1465; 7 R. C. L. par. 616, p. 621, par. 620, p. 623.

T. J. Moher and Jno L. Ingram, for appellee.

There was no contract between appellant and appellee. Balmer had no authority to enter into the contract. 103 Ark. 283.

Sunday contracts are void. 29 Ark. 386; New York Life Ins. Co. v. Adams, 151 Ark. 123.

Appellees, having fully performed the contract, are entitled to protection as bona fide purchasers. 39 Cyc. 1697.

Bills for specific performance are addressed to the sound discretion of the chancellor. 12 Ark. 421; 19 Ark. 51; 34 Ark. 663.

OPINION

WOOD, J.

The appellant instituted this action against the appellees. The appellant alleged that the Gillett Lumber Company was the owner of Spanish grants Nos. 2358 and 2407, and that on the 12th day of August, 1919, said company, by written contract sold to the appellant all the merchantable timber located and growing on said land, except the pecan and hackberry, for the sum of $ 6,000; that S. S. Colvin, S. R. Williams and J. L. Williams claimed interest in the merchantable timber purchased by the appellant, under a contract entered into between them and the Gillett Lumber Company; that the alleged purchase was subsequent to, and with full knowledge of, the purchase of the timber by the appellant and after notice of lis pendens which had been duly given by the appellant. Appellant prayed for specific performance of the contract and for damages on account of timber cut and removed by the acts of the appellees.

The appellees answered, denying all the material allegations of the complaint, and denying the existence of any contract to sell the timber to appellant. Appellees, Colvin and Williams, set up that they purchased the land in good faith from the Gillett Lumber Company upon a valuable consideration, and without any notice whatever of appellant's alleged purchase.

B. C. Tully, who was secretary of the Anderson-Tully Lumber Company, testified that he conducted the negotiations for his company with one Cal Balmer, who was the secretary and treasurer of the Gillett Lumber Company. Appellant received a letter from Balmer on July 10, 1919, offering for sale the timber on the land in controversy. On the 10th of August thereafter the appellant wired Balmer, "Accept your proposition of $ 6,000 cash for all merchantable timber." On the same day Balmer wired appellant, "O. K. timber sold, will forward abstract to DeWitt at once. Letter follows." On August 13th Balmer wrote appellant affirming telegram of the 10th, and stated in the letter that he had instructed Swineheart, president of the company, to deliver the abstract to W. N. Carpenter for examination, and directing the appellant to close the deal with Swineheart. In the letter Balmer requested the reservation of certain timbers. Appellant replied on August 25th stating that it would be satisfactory to reserve the timbers mentioned, and also stating that it was instructing its agent to make reservations in the deed. On August 27th Balmer wrote appellant stating that Carpenter, appellant's agent, had been instructed to close the deal, and requested appellant to signify the size of the trees to be classed as merchantable. On September 12th Tully received a letter from Balmer, canceling all previous communications with him, and advising appellant to take the matter up with Swineheart, president of the Gillett Lumber Company, since his (Balmer's) authority had ceased. On September 17th appellant wrote to Balmer acknowledging receipt of his last letter, and stating that appellant had sent its representative to see Swineheart, and that Swineheart had advised appellant that Balmer had charge of the sale, and that appellant would have to deal with him, and also advising Balmer that it had accepted his proposition for the sale and purchase of the timber on the terms proposed by him in all good faith, and had expended time and money in making the negotiations, and that, as soon as its attorney approved the title, proper deed, with draft attached, would be forwarded for the lumber company to execute. The appellant, through its agent Carpenter, had the title examined and approved, and forwarded a deed to the bank at Bluffton, Ohio, with its certified check, and also with instructions to the bank to deliver the deed to Balmer, and upon execution of the same to pay over the purchase price agreed upon. The deed was not signed by the Gillett Lumber Company, nor was the purchase price of $ 6,000 paid to it, but the appellant tendered and was ready to pay that amount at any time upon the execution of the deed.

Tully further testified as to the quantity and value of the timber removed from the land after the appellant's purchase and as to the damages sustained by reason thereof. The witness stated that Balmer's correspondence was not written on the stationery of the Gillett Lumber Company, but that Balmer was the secretary of that company and had authority to act for it, according to information contained in his letters. Witness understood that he was dealing with the authorized agent of the Gillett Lumber Company; that Swineheart, the president of the company, had indirectly about the same time offered to appellant the timber for the same amount. Other witnesses testified on behalf of the appellant, and their testimony tended to prove that Swineheart had made an offer of the timber to the appellant upon the same terms as those made by Balmer. It was shown that Swineheart had offered the timber in controversy to other parties for $ 6,000, and had stated that he had authority to sell the same.

On behalf of the appellees, Colvin testified that he and the Williamses were in the cooperage business. They purchased the timber on the land in controversy. The contract for the purchase was entered into in writing on September 15, 1919. This contract was introduced in evidence. Witness stated that they had paid $ 32,500 on the contract; that at the time they entered into the contract for the purchase of the timber they had no knowledge or information of any claim of appellant to the timber. They first heard that appellant claimed some interest in the land about October 1, 1919. Witness stated that he had been negotiating for the purchase since September 12, 1919; that neither he nor the Williamses were interested in the Gillett Lumber Company. Their purchase was made in good faith. They purchased the timber from H. A. Strode, who conducted the negotiations for the Gillett Lumber Company. The deed which the contract of purchase called for was executed and delivered between the 1st, 2nd and 3rd of October, and the cash payment of $ 32,500 was made at the time of the delivery of the deed. Before the cash payment was made witness had heard rumors to the effect that the appellant had filed suit against the Gillett Lumber Company in regard to the purchase of the timber. Witness made no effort to verify the rumors, as he and his associates knew nobody in the transaction except the Gillett Lumber Company. Witness, at the time he made the first deposit, knew that the appellant was making a claim, but they did not know of any claim of the appellant to the timber in controversy before entering into the contract for the purchase of the same. The contract was not fully executed and the same delivered until after October 1st, but witness considered the deal fully consummated before then, except the delivery of the deed.

The testimony of S. R. and J. L. Williams on behalf of the appellees was substantially to the same effect as the testimony of Colvin. The written executory contract for the purchase of the timber was introduced in evidence, showing that the same was executed on the 15th day of September, 1919, and was signed by Strode, as agent for the Gillett Lumber Company, and by Colvin and the two Williamses.

Witnesses who were directors and stockholders of the Gillett Lumber Company testified to the effect that there was never any resolution of the board of directors of the company, a corporation, authorizing its secretary and treasurer, Balmer, or the president, Swineheart, to sell the timber in controversy; that there had been no meeting of the stockholders or the board of directors for the purpose of considering the sale of timber in controversy to the appellant. The corporation was under the control of five directors; that the last meeting of the directors was held in 1919 for the purpose of surrendering the charter of the company and closing up the business; that the last meeting prior to that time was in February, 1918.

Swineheart the president, among other things, testified that Balmer, the...