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(134 Ark. 254) HARBOTTLE V. CENTRAL COAL & COEXE CO. et al. (No. 344.)

(Supreme Court of Arkansas. May 6, 1918.)

1. APPEAL AND ERROR & 242(3)—RESERVATION OF GROUNDS OF REVIEW–OBJECTIONS To JURISDICTION.—WAIVER, Where defendant did not call for a ruling on his demurrer, setting up that the court was without jurisdiction, but, on the contrary, filed a cross-bill asking for affirmative relief, he cannot object to the jurisdiction of the court, having proceeded to final adjudication on the issues joined. 2. MoRTGAGES @:594(1)—REDEMPTION-PERSONS WHO MAY REDEEM – “LEASE”- “LICENSE.” A contract, whereby a coal company owning coal lands in fee licensed an individual to mine coal from certain designated places thereon, shown on a map made a part of the contract, on payment of royalty, agreeing to supply him with certain necessary materials, but not conferring upon him the exclusive right to the possession of the lands, was not a “lease,” giving the individual an interest or estate in the land, constituting him a junior incumbrancer, with right to redeem from mortgage foreclosure, but was a mere “license,” for, though no specific words are necessary to create or describe the relation of lessor and lessee, and to constitute a “lease,” which is a term of technical import, words must be used which have the effect to divest the owner or lessor of possession and right to possession, and to invest the lessee with the subject-matter of the lease (citing Words and Phrases, Second Series, Lease; quoting Words and Phrases, Second Series, License). 3. MoRTGAGES G->434 – FoRECLOSURE - PARTIES—PERSON WITHOUT INTEREST. Where no estate or interest in a mortgagor's coal lands was vested in a third person by the mortgagor's contract with him, the mortgagee,” in foreclosure proceedings, was not bound to take notice of his possession of the lands, and to make him a party. 4. MORTGAGES @:594(1) - FORECLOSURE RIGHT TO REDEEM. One who has an interest in mortgaged land, and would be the loser by foreclosure proceedings, has a right to redeem.

Appeal from Sebastian Chancery Court; W.A. Falconer, Chancellor.

Suit by the Central Coal & Coke Company and others against Thomas Harbottle. From decree for plaintiffs, defendant appeals. Affirmed.

Some time prior to 1904 the Bolen-Darnall Coal Company were the owners in fee of coal lands in Oklahoma and Arkansas. During the year 1904 they executed a mortgage on these lands to Secure a loan obtained from the Fidelity Trust Company of Kansas City, MO. On February 16, 1911, Bolen-Darnall Coal Company (hereafter designated Darnall Company) entered into a contract with Thomas Harbottle, Which is as follows:

“Contract.

“This contract made and entered into this 16th day of February, 1911, by and between Bolen-Darnall Coal Company, party of the first part, and Thos. Harbottle, party of the second part, witnesseth:

! slope on the land owned by the party of the first part in the town of Hartford, Sebastian county, state of Arkansas, about half way between the No. 2 mine of the party of the first part, and the Midland Valley Railroad, for the purpose of producing coal. “It is expressly stipulated, understood and agreed by and between the parties of this contract that all implements, timbers, cars, rails and mining material furnished by the party of the first part to the party of the second part, shall be and remain the property of the party of the first part, and at the expiration of this contract to return all such cars, rails and material to the party of the first part in good condition, on top of the ground near the mouth of the slope. “It is stipulated, understood and agreed that the party of the second part shall mine coal according to his own plans and methods, with two exceptions: “First, the party of the second part agrees to protect the ventilation of mine No. 2 belonging to the party of the first part, by putting up and keeping in repair all doors and stoppings between the slope operated by him and mine No. 2 of the party of the first part. “Second, the party of the second part agrees to mine coal only in places pointed out and designated by boundary lines as shown on map marked Exhibit A and made part of this contract as the places and coal which they are to mine under this contract; however, the BolenDarnall Coal Company, party of the first part, shall exercise no discretion whatever in the methods used by the party of the second part in mining coal, nor in the control exercised by the party of the second part over the men mining Coal for them. “It is further stipulated, understood and agreed that in mining coal from this slope, that the party of the second part will commit no waste, nor wantonly injure the property of the party of the first part. “It is further stipulated, understood and agreed by and between the parties of this contract that the party of the second part agrees to sell to the party of the first part, at the option of the party of the first part, the entire output of the mine, and the party of the first part, if it exercises its option to buy said coal, shall pay for all mine run coal loaded from said mine, the sum of per ton for all merchantable coal, railroad weights to govern, and said coal shall not contain more than 30 per cent. slack over 1%" screen 8' long. “If the party of the first part does not exercise its option to buy the coal from the party of the second part at the above price, and the party of the second part agrees to pay to the party of the first part, twice a month on regular pay days, cents per ton royalty on all coal produced from said mine. “It is also stipulated and understood that all orders for custom coal and all other coal shall come through the Bolen-Darnall Coal Company's office at Hartford, Ark., and pay't thereof shall be made through said ofce. “The party of the second part agrees to turn all entries in a proper and workmanlike manner, and to place all rails that are now in the first north entry, or may be in other north entries within the boundary lines of his lease, on top of ground, at the expiration of this Contract. “The party of the first part agrees to furnish to the party of the second part 10 pit cars in their present condition, and enough lumber and bolts for the proper repair of said pit cars and other machinery which he may have in his possession belonging to the party of the first part. in proper condition.

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“That the party of the first part agrees to permit the party of the second part to sink a

“The party of the second part agrees to mine

and move all available coal as shown within the boundary lines on map marked Exhibit A above referred to. “Upon failure of the party of the second part to keep up the mine in a workmanlike manner for a period of ninety days, this contract shall be null and void, except such suspensions be caused by strikes or unavoidable accidents. “Witness our hands this 16th day of February, 1911. Bolen-Darnall Coal Co., by Jas. A. Bolen, Vice Pres., Party of the First Part. Thos. Harbottle, Party of the Second Part. Witnesses: M. K. McCoubrey, W. S. SampSOI.1. After the adoption of the federal Judiciary Act a suit was brought in the federal court of Oklahoma against the Darnall Company, in which all its property, including the coal lands in Arkansas, were placed in the hands of a receiver. An ancillary bill was filed also in the federal court of Oklahoma by the mortgagee for the foreclosure of its mortgage. A decree of foreclosure was rendered, and the property of the Darnall Company, including its coal lands in Arkansas, Was Sold to Paxton and James, who received a deed to the property. Harbottle entered into possession, and operated the mine under the terms of the contract, paying Darnall Company royalty for the coal that he took out and disposed of himself, or the Darnall Company received the coal from Harbottle, and paid him satisfactory price for the same. After the receiver Was appointed Harbottle continued to operate the mine under the contract with the Darnall Company, but paid royalty to the receiver instead of that company. Harbottle was not made a party to the suit in the federal court for the appointment of a receiver and for the foreclosure Of the mortgage. On the 11th of April, 1917, James and Paxton, the purchasers of the land at the foreclosure sale, entered into an agreement to lease the coal lands in controversy to the Central Coal & Coke Company. On the 14th of June, 1917, that company instituted this suit against Harbottle in the chancery court of Sebastian county, alleging in its complaint. that it had leased the lands in COntroversy (describing them) from Paxton and James, who were the owners thereof, and Who Were also made plaintiffs. It was alleged in the complaint that the Darnall Company while operating a coal mine upon the property had left mine pillars of coal standing to prop the roof of the mine; that Thomas Harbottle, without any right or authority, Was removing these coal pillars, and had been requested to desist therefrom, and had refused to do so, and that unless he was restrained from removing the pillars and coal, the roof would fall in and prevent plaintiff from removing its coal from the mine, or from going through the mine, which Harbottle Was Operating under his contract, to remove coal from plaintiff’s mine adjacent; that the acts of Harbottle in thus removing the pillars and coal Was daily and continuous; and that plaintiff

had no adequate remedy at law, and unless Harbottle was enjoined, that the plaintiffs would suffer irreparable injury. They prayed for temporary restraining order and upon a final hearing for a perpetual injunction. Harbóttle filed demurrer, setting up that the court was without jurisdiction, because the plaintiff had an adequate remedy at law, and also that the plaintiffs had not alleged a title at law, and that the plaintiff did not allege that the defendant was insolvent. The defendant, Harbottle, without calling for a ruling of the court on the demurrer, answered denying the material allegations of the complaint, and alleged that he was in possesSion of the lands under a contract With the Darnall Company, the Original owners, which contract was placed on record On the 5th of April, 1913. He averred that he had a right under his contract to continue mining coal on this land until same had been removed; that he had been Operating under the terms Of the contract (which he designated as a lease) from the date of its execution until he had been temporarily enjoined; that he had not been made a party to any foreclosure proceedings; that by reason of his lease from the Darnall Company, he had an estate in the land described and the coal therein, and was therefore entitled to right of redemption. He offered to pay what might be necessary to redeem the lands, and asked that the court Order a new foreclosure in Order that he might be made a party and be allowed to redeem. He alleged that he had been damaged in the sum of $50 per day since the injunction, and if the temporary injunction were continued in force, he would be prevented from extracting 30,000 tons of coal Which he had opened up and to accomplish Which he had expended large Sums of money; that he had a market for the coal, which he could mine under existing contracts, and Consequently would suffer great and irreparable injury if the injunction were made perpetual. He asked that the temporary injunction be dissolved, and that he be awarded costs and damageS. Much testimony was taken which it becomes unnecessary for us to set forth and discuss in View of the conclusion we have reached concerning the proper construction to be given the contract under which Harbottle claims. The trial court found that Harbottle was not entitled to mine or remove any coal from the lands in controversy, and that all his rightS under his contract With the Darnall Company had ceased; that he Was not entitled to redeem from the mortgage foreclosure, and entered a decree granting plaintiff a perpetual injunction. This appeal seeks to reverse that decree.

Tellier & Biggs and Fred L. Satterfield, all of Little Rock, for appellant. Rose, Heming Way, Cantrell, Loughborough & Miles, of Little Rock, for appellees.

WOOD, J. (after stating the facts as above). [1] 1. The appellant is not in an attitude to object to the jurisdiction of the court, even if the complaint had failed to state a cause of action, because the appellant did not call for a ruling of the court on his demurrer, but, on the contrary, waived all objections to the jurisdiction by filing a crossbill asking for affirmative relief, and upon the issues thus joined proceeded to final adjudication. See Kiernan v. Blackwell, 27 Ark. 235; Greer v. Vaughan, 96 Ark. 524, 132 S. W. 456; Polack v. Steinke, 100 Ark. 283, 139 S. W. 538; Pratt v. Frazer, 95 Ark. 405, 129 S. W. 1088; Plunkett v. State Nat. Bank, 90 Ark. 86, 117 S. W. 1079. [2] 2. While the allegations of the appellees' complaint as to ownership are sufficiently denied in the appellant's answer to raise that issue, yet the undisputed evidence in the record shows that the appellees James and Paxton Were the OWnerS, and had COntracted to lease the lands in controversy to the appellee Central Coal & Coke Company, and that the latter was entitled to the poSsession thereof, unless the appellant's contract with the Darnall Company gave him Some interest or estate in the land Which would constitute him a junior incumbrancer, with the right to redeem. Appellant's right, if he has any, to defend, or to affirmative relief, is predicated entirely upon the written contract which he designates in his brief as a lease. We are unable to discover after a most critical analysis of the language of this instrument that it bears any indicia of a lease. “An estate for years,” says Mr. Washburn, “is one that is created by a contract technically called a lease, whereby one man, called a lessor, lets to another, called the lessee, the possession of lands or tenements for a term of time fixed or agreed upon by the parties to the same.” 1 Washburn on Real Property, $608. “Lease is a COnVeyance of lands or tenements to a person for life, or years, or at will, in consideration of a return of rent Or recompense.” 1 Devlin on Real Estate, § 13. “A lease is a contract by which one person divests himself, and another takes possession of lands or chattels for a term, whether long or short.” Wood, Landlord and Tenant, § 203. See, also, Cruise, Digest, tit. “Lease”; Words and Phrases, “Lease,” p. 56 et Seq. While the term “lease” is One Of technical import, yet no specific Words are necessary to create or describe the relation of lessor and lessee, but words must be used which have the effect to divest the OWner or lessor of the possession and right to the possession, and which invests the lessee with the subjectmatter of the lease, for the term contemplated by the contract, whether long or short. True, the words “his lease” occur once in the Contract under reView, but these WOrdS When

text and with all the other Words of the instrument do not have any effect in fixing its legal character. When the instrument is construed as a Whole it contains all the elements of a license, but none of the characteristics of a lease. “A license is a personal revocable and nonassignable privilege Conferred either by writing or parol to do one or more acts on land Without possessing any interest therein.” Words and Phrases, “License,” p. 116 et seq. In Joplin Supply Co. v. West, 149 Mo. App. 78–93, 130 S. W. 156, 161, it is said: “There is a marked difference between a license and a lease. Under the lease, the right of possession against the world is given to the tenant, while a license creates no interest in the land, but is simply an authority or power to use in some specific way.”

Judge Burnett, Speaking for the court of the Third appellate district of California, gives a very accurate definition of “license,” and a Very clear test for determining the difference between a license and a lease, as follows:

“A license in respect to real estate is an authority to do a particular thing upon the land of another without possessing an estate therein. The test to determine whether an agreement for the use of real estate is a license or a lease is whether the contract gives exclusive possession as against all the world, including the owner, in which case it is a lease, or whether it merely confers a privilege to Occupy under the owner, in which case it is a license.” “This,” he adds, “is a question of law arising out of the construction of the instrument under which a lease or a license may be created.”

In Wheeler et al. V. West et al., 71 Cal. 126, 11 Pac. 871, it is said:

“There is a broad distinction between a lease of a mine, under which the lessee enters into possession and takes an estate in the property, and a license to work the same mine. In the latter case the licensee has no permanent interest, property, or estate in the land itself, but only in the proceeds, and in such proceeds not as realty, but as personal property, and his possession * * * is the possession of the owner.”

NOW, when the instrument under consid

"eration is subjected to the above definitions

and test, it will be observed that it does not vest any interest whatever in the freehold for any length of time in the appellant. It does not confer upon appellant the exclusive right to the possession of the lands in controVerSy; it only gives him the right to enter upon the land at a certain designated place, and to remove coal from certain designated places Which Were shown on a map that Was made a part of the Contract. The places thus designated were separated by areas Which appellant had no license to mine, but Which he had Only the right to pass OVer in Order to reach the places that were embraced in his license. There is not One Word in the contract to indicate that the appellant was to have an estate Or interest in the land Or in the COal until he had mined the render to appellant the exclusive right of pOSSeSSion. [3] The Writing under consideration certainly did not create the relation of landlord and tenant, and the duties and obligations growing out of it were entirely perSOnal to the parties to the contract. The appellant had no right that he Čould transfer to another. Since no estate or interest in the land was vested in appellant by the contract, the mortgagee in the foreclosure proceedings was not bound to take notice of his possession, and to make him a party. Whatever may have been his rights Or remedies as against the Darnall Company, the mortgagor, they were acquired subsequent to the mortgage, and the character of these rights was not such as to constitute him in any respect a junior incumbrancer, with an equity of redemption. [4] Counsel for appellant assumes that the writing is a lease, and therefore an incumbrance upon the land. They cite and rely upon the cases Which hold to the general doctrine that one who has an interest in land and would be a loser by a foreclosure proceeding has a right to redeem. Having decided that the instrument does not Vest appellant with any interest in the land, of course these authorities are not applicable, and we know of no authority for holding that the mere licensee of a mortgagor has any right of redemption. It follows that the decree of the court is correct, and it is therefore affirmed.

(134 Ark. 284) ARRANSAS SHORT LEAF LUMBER CO. V. McINTURFF. (No. 330.)

(Supreme Court of Arkansas. April 29, 1918.)

1. FRAUDS, STATUTE OF @->129(1) – SALE OF GOODS-PART PERFORMANCE. Where lumber was ordered by plaintiff, if eight cars shipped to him by defendant were shipped in part performance of the whole contract in its entirety, the contract was taken out of statute of frauds.

2. TRIAL Q-9234(4)—INSTRUCTION-DIRECTION OF VERDICT.

In an action by the buyer for refusal to deliver lumber ordered, where it was undisputed that the contract was not in writing, and that the controversy arose over the price of the remainder of the lumber undelivered, an instruction that, if when six cars were ordered some time after the contract was made, if one was entered into at all, a controversy arose over the price of the remainder, the shipment of the six cars about which there was no controversy did not take the case out of the statute of frauds, was properly refused, since it in effect directed Verdict for defendant.

3. SALES @->391(2)-REMEDIES OF BUYER—RECOVERY OF VOLUNTARY PAYMENT. Where the seller of lumber for $26.50 per thousand refused to deliver at the price, but offered to deliver at $27, if the buyer had taken the lumber and paid the $27 he could not have recovered the excess exacted from him.

4. SALES @:418(7)—BREACH BY SELLER-REMEDIES OF BUYER—DAMAGES. Where the seller of lumber at $26.50 a thousand refused to deliver except for $27, the buyer was under no duty to take the lumber at $27, and his damages were not limited to $.50 a thousand, but he could recover the difference between the contract and the market price of the lumber which the seller refused to deliver, since one is not required to abandon the assertion of a legal right in Order that the party making an illegal and unauthorized exaction may not be required to pay an increased sum as damages. 5. EVIDENCE Q->113(2)—VALUE OF PROPERTYPLACE OF VALUATION. In an action by the buyer against the seller of lumber for failure to deliver, where there was no market for the lumber at the seller's mill, the place specified for delivery, except for the purpose of shipping to some one of the markets to which such lumber was ordinarily shipped, it was proper for witnesses, including plaintiff, to testify what prices in Chicago one of such markets for the lumber were. Appeal from Circuit Court, Jefferson County; W. B. Sorrells, Judge. Suit by S. J. McInturff against the Arkan. sas Short Leaf Lumber Company. Judgment

for plaintiff, and defendant appeals. Affirmed.

Danaher & Danaher, of Pine Bluff, for appellant. Coleman & Gantt, of Pine Bluff, for appellee.

SMITH, J. Appellee brought this Suit to recover damages On account Of the breach Of an alleged contract for the sale of lumber. He alleged in his complaint that he and the appellant lumber Company, hereinafter referred to as the company, entered into a contract on December 28, 1916, whereby he purChased tWO CarS Of green White Oak lumber, with the further agreement that if the two cars should prove Satisfactory the company would sell and deliver him 500,000 feet in all of Such lumber at the prices shown in the following list, to be delivered on cars at the company’s mill at the rate of 100,000 feet per month, to wit:

“33%-inch and 4-inch No. 1 common at $31.00 per M feet. 3%-inch and 4-inch No. 2 common at $19.50 per M feet. 3-inch No. 1 common at $29.00 per M feet. 3-inch No. 2 common at $17.50 per M feet. 2-inch No. 1 common at $26.50 per M feet. 2-inch No. 2 common at $16.50 per M feet.”

The complaint alleged that it was further agreed that appellee should have 30 days after the delivery of said first two cars of lumber in which to notify the company. Of his acceptance of the remainder of Said 500,000 feet of lumber, and that appellee within the time and as agreed upon notified the company that he would accept and purchase the remainder of said 500,000 feet of lumber, and an Order for 102,000 feet, to be delivered Within two Weeks, Was given and accepted, and that Order was filled before the company failed and refused to furnish and deliver the remainder, although Specific directions in accordance With the terms of the

Q: For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

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contract were given, and that on Or about June 18, 1917, the manager of the company notified appellee that the remainder of the Order would not be filled, and this Suit Was brought to recover the difference between the Contract price and the market price On the portion of the lumber which the Company refused to ship. The Suit Was brought by appellee upon the theory that the company refused to comply with the contract because lumber had advanced rapidly in price after the acceptance Of the Order, and in support of the allegations of the complaint appellee testified subStantially as follows: That he received the last Of the Sample cars On February 3, 1917, and on February 17, 1917, gave notice that he would take the remainder of the 500,000 feet, and at the Same time gave an Order for 34,000 feet of 3-inch, 34,000 feet of 3%inch, and 34,000 feet of 4-inch stock, and this Order is referred to as the Six-Car Shipment. This order was accepted, and it was then agreed that as SOOn as it could be filled specifications for the remainder would be given. The last car of the lumber ordered on February 17th was not delivered until June 18, 1917, and after that time the company refused to make further deliveries. It is insisted On behalf of the company that the minds Of the parties never met, and that the Order for the lumber was not given within the time limited by the contract; that the COntract Was Void under the Statute Of frauds; and that the company had, in fact, filled all that part of the order upon the price of which the parties had agreed. A Mr. Murphy represented the company in the transaction, and he testified that a controversy arose over the price of the remainder of the lumber and that appellee demanded the Shipment of this remainder in 2-inch No. 1 common at $26.50 per thousand, whereas the company insisted that the contract price was $27 per thousand. The court instructed the jury that there could be no recovery of any damages unless they found that the contract price was $26.50 per thousand, and not $27, so that this issue is concluded by the Verdict of the jury. There was also an issue of fact as to Whether the Orders Were placed within the time limited by the contract, but an instruction was given which told the jury that there could be no recovery unless the contract in that respect Was complied with, so that that question, too, passes out of the case under the verdict of the jury. The court refused to give instructions numbered 6, 7, and 9, requested by appellant, which are as follows: “6. The delivery of the first two sample cars was not sufficient to take the contract out of the statute of frauds. “7. If you find from the evidence that the two cars of lumber first purchased by plaintiff were sample cars, the receipt of same by plain

tiff was not sufficient to take the contract out

“9. If you find from the evidence that at the time the six cars were ordered the defendant and plaintiff got into a controversy as to the price of the remainder of the lumber wanted, plaintiff contending for a price of $26.50, and defendant for a price of $27 per thousand for No. 1 common, and that the defendant offered to fill the order at $27, but plaintiff refused to accept same at $27, and at that the six cars about which there was no controversy were delivered, then the six cars cannot be held to have been delivered as and for a part of the whole 500,000 feet, and the delivery thereof does not take the case out of the statute of frauds, and was not sufficient to bind the bargain.”

[1] We discuss these instructions together. The case was not tried upon the theory that the shipment of the two cars took the transaction Out of the statute of frauds, although it is argued that such would be the effect of their shipment if they were shipped in fulfillment of the contract. The question in the case is that of the entirety of the contract, and the instructions upon which appellee predicated his right of recovery required a finding that the parties “entered into the contract mentioned in the complaint” and that the company “in pursuance and in part performance thereof delivered a portion of the lumber sold.” If this predicate was true, then the contract was taken out of the statute of frauds by the part performance resulting from the shipment of the eight cars of lumber. It is undisputed that eight cars were Shipped, and the instruction submitted to the jury the question whether they were shipped in part performance of the contract. If they Were, the Contract was taken Out Of the Statute of frauds. Walnut Ridge Mercantile Co. v. Cohn, 79 Ark. 338, 96 S. W. 413.

[2] Instruction numbered 9 was properly refused, because it, too, leaves out of account the entirety of the contract. There Was either a contract for the 500,000 feet of lumber or there was none, and the jury had already been told that there could be no recovery unless appellee was correct in his contention about the price. Yet this instruction told the jury that, if at the time the Six cars were Ordered, which Was Some time after the contract was made (if one was entered into at all), a controversy arose over the price of the remainder of the order, the shipment of the Six Cars, about which there was no controverSy, did not take the case Out of the statute of frauds. This instruction, in effect, directs a verdict, as it is undisputed that the contract was not in Writing, and it is also undisputed that the controversy arose over the price of the remainder; yet to meet the requirements of other instructions the jury must have found that the company was Wrong in its contention and that it had contracted to sell this lumber at $26.50 per thousand and that the contract had been partly performed when the company interposed an objection to its further performance which contraVened the terms Of the contract. The

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