Forrester v. Locke

• Decision Date: 13 June 1921
• Docket Number: 50
• Citation: 231 S.W. 897,149 Ark. 225
• Parties: FORRESTER v. LOCKE
• Court: Arkansas Supreme Court

231 S.W. 897

149 Ark. 225

FORRESTER v. LOCKE

No. 50

Supreme Court of Arkansas

June 13, 1921

Appeal from Sebastian Circuit Court, Fort Smith District; John Brizzolara, Judge; reversed.

Judgment reversed cause remanded.

James B. McDonough, for appellants.

1. The general rule is that the vendee of personal property is entitled to recover from the vendor the difference between the fair market value of the goods and the contract price provided the article is not as good as the quality represented in the contract. 121 Ark. 150. Here was but one sale. The contract was an entirety. If plaintiff had any remedy at all, he was entitled to recover only the difference between the fair market value of the entire lot of cotton and the contract price, provided the cotton was not merchantable. 121 Ark. 150. Plaintiffs can not recover, because they kept the whole lot after discovering forty-four "bollies" therein. They had the right to accept or decline; they accepted, and, hence, no recovery.

2. The court erred in directing a verdict for plaintiffs on the issue of whether or not S. B. Locke & Company was a foreign corporation.

3. The court erred in its instructions given for plaintiff and in refusing those asked by defendants. It was error also to take the issue from the jury and direct a verdict. 136 Ark. 135; 113 Id. 190; 82 Id. 86.

4. Where an unimpeached witness testifies directly and positively to a fact and is not contradicted, and there is no circumstance from which an inference against the fact testified to by the witness can be drawn, the fact may be taken as established and a verdict directed on such evidence but the rule is subject to many exceptions, and where the witness is interested in the result of the suit, or facts shown that might bias his testimony, the case should go to a jury. 113 Ark. 190; 82 Id. 86; citing 58 Hun (N. Y.) 121; 92 Id. 491; 42 Ala. 431; 64 Conn. 55; 101 Ind 503; 6 Enc. Pl. & Pr. 696; 100 N.W. 256; 102 N.Y. 93; 118 Ark. 128; 124 Id. 490. See, also, 129 Ark. 369; 139 Id. 236.

5. If the business transacted by S. B. Locke & Company, a corporation of the State of Oklahoma, either directly or indirectly, the paintiff could not recover. 136 Ark. 52; 141 Id. 38; 233 U.S. 16; 246 Id. 500.

6. It was error to permit W. R. Locke to give hearsay testimony as to the existence of a partnership. Hearsay testimony is not admissible. 10 Ark. 638; 16 Id. 628; 22 Id. 477; 103 Id. 522; 79 Id. 204; 186 S.W. 302.

7. It was clearly erroneous for the witness, J. M. Locke, to testify as to the contents and recitals and other matters in the books of S. B. Locke & Company, which were in Muskogee, there being no showing that the books could not be produced. 121 Ark. 150; 2 Id. 397; 57 Id. 257; 117 Id. 442; 79 Id. 338; 72 Id. 275; 134 Ark. 284. Even if the books had been in the courtroom, it would be necessary to prove that they were properly kept, and that the entries were made at the time of the transactions. 65 Ark. 316; 57 Id. 402. The complaint was not sworn to. The answer denied the indebtedness. 113 Ark. 417. It was error to admit this hearsay testimony. 152 P. 468. Even a record is not admissible unless the original is shown to be lost. 11 S.W. 410. The loss of a contract must be proved before oral evidence may be admitted. 116 Ark. 268.

The abstract of an assignment of a patent is inadmissible. 208 F. 145. Freight bills are secondary evidence and inadmissible. 166 P. 96. Secondary evidence of the contents of a writing is not admissible unless it is shown that the original can not be produced. 160 N.W. 15; 190 S.W. 959; 140 N.W. 1006; 71 A. 263. See, also, 229 Ill. 272; 120 F. 925; 55 S.C. 214; 77 Ark. 244. The original must be shown to be lost before copy can be introduced. 122 Cal. 358; 55 P. 132; 45 S.E. 443; 98 Ill.App. 352; 55 Ind. 194; 135 Mo. 608; 60 P. 270, 207; 148 Ala. 659; 41 So. 411. Copies may be excluded where it is not shown that the originals could not be obtained. 72 Ark. 47; 109 Iowa 25; 67 Kan. 787; 40 S.W. 743; 94 Id. 173.

Parol evidence of a written instrument is inadmissible where the instrument itself can be produced. 174 Ky. 665; 192 S.W. 853; 99 A. 619. Entries in books are not admissible until it is shown that the books are correctly kept and contemporaneous with the facts recorded. 65 Ark. 316; 57 Id. 402. The exhibits were not verified, and the complaint contains no verified account, and the evidence does not fall within the rule. 51 Ark. 368; 103 Id. 522; 12 Ark. 775. It was error to permit J. M. Locke to testify as to the contents of these books. 111 Ark. 593; 94 Id. 183.

8. It was error to admit evidence as to interest on. the eight bales of cotton and as to the storage and handling charges on them and also the thirty-six bales.

9. It was error to refuse the peremptory instruction and in refusing instructions 2 and 3, asked by defendants.

Hill & Fitzhugh, for appellees.

1. The evidence shows that bollies were not merchantable cotton, and without an express warranty this action could be maintained. 113 Ark. 169; 78 Id. 327. The law of this case is well settled. The shipment was an interstate one. 87 Ark. 562; 113 Id. 118; 187 U.S. 617. Transactions of interstate commerce are not within the statute prohibiting a foreign corporation doing business in the State. 85 Ark. 278; 113 Id. 505; 136 Ark. 52; 141 Id. 38.

2. There was no error in admitting testimony nor in the instructions given and refused.

OPINION

HUMPHREYS, J.

This is a suit by appellees against appellants, in the circuit court of Sebastian County, Fort Smith District, for damages on an alleged implied warranty as to the quality of forty-four bales of cotton, included in a purchase and sale of 188 bales of cotton. It was alleged, in substance, that appellees, an Oklahoma partnership, maintained an office in Fort Smith, Arkansas, for the transaction of a general cotton business in Arkansas, and, during the cotton season of 1919, purchased 188 bales of merchantable cotton, according to custom, for delivery at Fort Smith, at an agreed price of 36 cents per pound; that there were 44 bales of unmerchantable or "bollie" cotton included in the shipments, which occasioned a total loss of $ 4,383.91 to appellees.

Appellants interposed two defenses--the first being that appellees were not a partnership, but a foreign corporation engaged in the business of buying and selling cotton in the State of Arkansas, in violation of act No. 313 of the Acts of 1907 of said State; and the second being that the cotton was sold and purchased without regard to grade, at an average price of 36 cents for the entire lot, including the "bollie" cotton.

The cause was submitted upon the pleadings, exhibits thereto, the evidence and instructions of the court, which resulted in a verdict and judgment against appellants in the sum of $ 3,846.53, from which an appeal has been duly prosecuted to this court.

The facts reveal by the record, in so far as necessary to determine the vital questions on this appeal, are, in substance, as follows: S. B. Locke & Company, an Oklahoma corporation composed of S. B. Locke, J. M. Locke and J. C. Fahnestock, was organized on May 29, 1913, for the purpose of conducting a general cotton business, with its main office at Muskogee, Oklahoma, and a branch office at Fort Smith. W. R. Locke, an uncle of J. M. Locke, was manager of the organization, and H. B. Hunt, bookkeeper of the branch office at Fort Smith, after 1917, and they had been retained in those positions and paid for their services from the Muskogee office with checks of S. B. Locke & Company. Neither W. R. Locke nor H. B. Hunt filed the articles of incorporation in the office of the Secretary of this State, as required by law before commencing business, or during the time the corporation continued business in Arkansas. J. M. Locke, the vice-president and secretary of the corporation, also testified that he did not file the articles of said incorporation in this State. W. R. Locke testified that S. B. Locke was president, J. M. Locke, vice-president and treasurer, and W. P. Cowen, secretary of the corporation. When first asked whether S. B. Locke & Company was a corporation or partnership, he stated that it was a partnership for about two years before he bought the cotton in question from appellants. He was then shown the articles of incorporation, and stated that it was a corporation in Oklahoma, but a partnership in Arkansas. Being interrogated further upon this point, he made the following answers:

Q. Then you do not know whether you were dealing as a corporation or a partnership?

A. I know what I have done.

Q. That is all you know about it?

A. That is all.

Q. Then you did not know of your own knowledge whether you were dealing as a partnership or as a corporation?

A. No, sir; I did not know. I just knew I was buying cotton.

Later, and on cross-examination, over the objection and exception of appellants, W. R. Locke stated that J. M. Locke told him S. B. Locke & Company became a partnership about two years before the cotton in question was bought.

J. M. Locke testified that, on October 10, 1918, the corporation became dormant, and the business was conducted by S. B. Locke & Company as a partnership, being composed of S. B. Locke, J. M. Locke and W. P. Cowen. He produced an authenticated certificate of the partnership, appearing on the register of the district clerk in Muskogee, which is as follows:

"This is to certify that the partnership of S B. Locke & Company doing business in the city of Muskogee, Muskogee County, Oklahoma, is composed of S. B. Locke, J. M. Locke, and W. P. Cowen, and that each of said partners' postoffice and residence is Muskogee, Muskogee County, Oklahoma.

"Dated this 10th day of September, 1919.

"S....