THE SOUTHWESTERN REPORTER (141 Ark. 87) VOLUME 216 HUGGINS v. SMITH et al. (No. 30.) (Supreme Court of Arkansas. Dec. 1, 1919.) 1. SALES 440(2)—EVIDENCE OF GUARANTY OF INVOICE ON SALE OF PARTNERSHIP INTEREST. In action on note given for balance due on purchase of interest in drug store partnership, where defense was that plaintiff guaranteed that the stock and fixtures would invoice at a higher figure than they in fact invoiced, testimony of his représentations as to invoice of stock at the time of buyer's prior purchase of another partner's interest was admissible upon issue of whether plaintiff guaranteed invoice. 2. APPEAL AND ERROR 1001(1)-REVIEW OF VERDICT. On appeal the verdict of a jury will be sustained if there is any substantial legal evidence to support it. 3. SALES 441(1)—EVIDENCE OF WARRANTY OF INVOICE ON sale of partnERSHIP INTER EST. Suit by R. H. Huggins against C. C. Smith and others. Judgment for named defendant against plaintiff, and plaintiff appeals. Re versed, with directions. Calvin Sellers, of Morrilton, for appel lant. J. H. Bowen and John L. Hill, both of Perryville, for appellees. HUMPHREYS, J. Appellant instituted suit against appellees on the 14th day of August, 1917, in the Perry circuit court, to recover $300 and interest at the rate of 10 per cent. per annum from November 15, 1914, on a promissory note executed on the latter date by appellees for a balance due on the purchase price of appellant's one-half interest in a drug store owned by appellant and appellee C. C. Smith, as partners, at the time of the sale and purchase of said interest. Appellees answered, admitting the execu tion of the note, but denying liability on the ground that appellant had guaranteed the In action on note given for partner's in-stock and fixtures would invoice $3,000, terest in drug store business, where defense was that plaintiff guaranteed the stock and fixtures to invoice at a higher figure than the actual invoice, evidence held to sustain verdict whereas they only invoiced $2,200, making a difference of $800, which amount was pleaded as a counterclaim against appellant. Appellant filed a reply, denying any guaranty as to the invoice value of the stock, 4. LIMITATION OF ACTIONS 100(6)—Accru- and pleading the statute of limitations for defendants. AL OF COUNTERCLAIM FOR DAMAGES FROM SELLER'S GUARANTY. In action on note given for partner's interest in drug store business, damages counterclaimed from seller's guaranty that stock and fixtures would invoice at certain figure accrued upon discovery of shortage in invoice value. 5. LIMITATION OF ACTIONS 41-COUNTER CLAIM GOOD FOR DEFENSIVE PURPOSES THOUGH BARRED BY LIMITATIONS. Although counterclaim, by way of cross-bill, for breach of guaranty of invoice value of stock of partnership goods, in so far as it sought a judgment over against the plaintiff suing for the balance due on the purchase of his partnership interest, must, as respects the statute of limitations, be treated as an independent suit, yet it was good for defensive purposes even if the statutory bar had attached when the crossbill was filed, being good for recoupment only as long as plaintiff's cause of action existed. against recovery on the counterclaim. The cause was submitted to a jury upon the pleadings, instructions of the court, and evidence. The jury returned a verdict against appellees on the note for $300 and interest at the rate of 10 per cent. per annum from maturity and against appellant for $700 on the counterclaim. A difference was struck, and judgment rendered against appellant in favor of appellee, C. C. Smith, for $306, from which judgment an appeal has been duly prosecuted to this court. Appellant and J. J. Hunter owned as equal partners a drug store in the town of Casa. On the 1st day of May, 1914, appellee C. C. Smith purchased Hunter's interest for $1,100. Over the objection of appellant, said appellee was permitted to testify that appellant induced him to buy Hunter's interest by showing him an entry of date January 6, 1916, in Appeal from Circuit Court, Perry County; the books of the former partnership, to the G. W. Hendricks, Judge. effect that the stock invoiced $3,615.10, and For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes that of Ralph McBride. The weight and effect of the evidence is a question within the exclusive province of the jury. On appeal the verdict of a jury will be sustained if there is any substantial legal evidence to support it. The evidence just detailed, in our opinion, is sufficient to sustain the verdict. stating that, after the invoice, more goods had, testimony was corroborated in a measure by been put in than sold out of the stock. The business was continued by the new firm, with appellant as the principal manager, and appellee C. C. Smith as helper on Saturdays and rainy days, and occasionally when his farm duties would permit, until November 15th of the same year, at which time appellant sold appellee his one-half interest in the assets of the partnership for $300 cash, and a note signed by appellees for $300, due January 1, 1916, with interest at the rate of 10 per cent. per annum, with the understanding that appellee C. C. Smith should pay the indebtedness of the firm. Appellee C. C. Smith testified that the note bore interest from maturity, and that appellant guaranteed the stock had not been reduced more than $500 below the invoice of $3,615.10, entered in the former partnership book of date January 6, 1914. Appellant testified that the note bore interest from date, and that he made no representation or guaranty as to the invoice value of the stock. Soon after the execution of the note, it was lost, found, and given to appellee C. C. Smith, who carried it in his pocket until nearly worn out, and then destroyed it. Appellant demanded the note from appellee C. C. Smith, who refused to give it to him. On December 27, 1915, appellant sent said appellee a statement, demanding payment of the note and 13 months' interest, to which said appellee replied that he did not owe the note. He made no specific denial of the correctness of the interest demanded. Ralph McBride testified that a short time after the sale appellant, in the presence of himself and others, said either that he had guaranteed, or would guarantee, it to invoice about $3,000; that when Smith was asked what the stock would invoice, his reply was, "Search me." The stock invoiced $2,200. [1] It is insisted that the court erred in permitting appellee to testify that appellant represented the invoice value of the stock at $3,615.10 to him when he purchased Hunter's interest. The contention is made that the statement was incompetent because not pleaded as matter of damages in the counterclaim. We think it competent as a circumstance tending to corroborate the testimony of appellee to the effect that appellant guaranteed the stock had not been diminished more than $500 below the invoice of $3,615.10. The cross-bill clearly tendered the Issue of whether such a guaranty was made by appellant, and we think the evidence tended to establish the issue. [4, 5] Lastly, it is contended that the counterclaim was barred by the statute of limitations, and that it was error to render judgment over against appellant for $306. The damages resulting from the guaranty accrued immediately upon the discovery of the shortage in the invoice value, which was ascertained shortly after the sale, on the 15th day of November, 1914, and a claim for it was not asserted until December 14, 1917, at the time appellees filed their cross-bill. More than three years had elapsed from the accrual of the cause of action before suit was instituted thereon, so the counterclaim, by way of cross-bill, in so far as it sought a judgment over against appellant. must be treated as an independent suit. The cause of action for a judgment over was therefore barred when the cross-bill was filed. This suit was instituted, however, on the 31st day of August, 1917, about 21⁄2 months before the statutory bar attached. The counterclaim was good for defensive purposes even if the statutory bar had attached when the cross-bill was filed. It was said in the case of State v. Arkansas Brick & Mfg. Co., 98 Ark. 125, 135 S. W. 843, 33 L. R. A. (N. S.) 376, that "A breach by the plaintiff, though barred as an independent cause of action, continues to exist for defensive purposes available to the defendant so long as the plaintiff may sue upon any breach by defendant." At the time the decision was rendered from which the above quotation is taken, the law restricted the matter in a counterclaim to that which arose out of the contract or transaction sued upon, and that accounts for the use of the word "breach" in the quotation. Since the passage of Act No. 267, Acts of the Legislature of 1917, amending section 6099 of Kirby's Digest, that restriction is eliminated, and counterclaims may consist of any matter arising either out of contract or tort, whether it arose out of the contract or transaction sued upon or not. Coats v. Milner, 134 Ark. 311, 203 S. W. 701; Smith v. Glover, 135 Ark. 531, 205 S. W. 891. So a counterclaim arising out of tort, even if barred by the statute of limita[2, 3] It is next insisted that the verdict tions, may be used by way of recoupment sustaining the counterclaim to the extent of against a suit for the recovery of money. $700 is not supported by the evidence. Ap- It was error, therefore, for the court to renpellee testified that appellant induced him to der judgment over against appellant for any make the purchase upon the guaranty that sum, as the counterclaim was barred when (216 S.W.) to grant the demand made by appellant to the railroad occupied same status after having reduce the amount of the counterclaim re- been taken over by the government as before. covered against appellant to the amount re[Ed. Note.-For other definitions, see Words covered by appellee C. C. Smith against him. and Phrases, First and Second Series, Carrier.] The counterclaim was available for recoup- 5. CONSTITUTIONAL LAW 299-DUE PROCESS ment only. For that purpose, it existed as OF LAW; LIABILITY OF OWNERS OF RAILROADS long as appellant's cause of action existed. OPERATED BY DIRECTOR GENERAL. For the error indicated, the decree is re- Act Cong. March 21, 1918 (U. S. Comp. St. versed, and decree is directed here, reducing 1918, 88 31154a-3115p), making carriers, the amount of the counterclaim to while under federal control, subject to all laws and liabilities as common carriers, is not unconamount of recovery by appellant against ap-stitutional upon ground that it authorizes the pellees, with direction that the costs be ad- taking of private property without due process judged against appellees. of law in authorizing judgment to be rendered against the corporation for a liability incurred by an act of the federal authorities operating the road, since under Act March 21, 1918, the corporation is guaranteed immunity from loss and a reasonable return upon investment. (140 Ark. 572) MISSOURI PAC. R. CO. et al. v. AULT. (No. 216.) the Appeal from Circuit Court, Hot Spring (Supreme Court of Arkansas. Nov. 17, 1919. County; J. C. Ross, Judge. Rehearing Denied Dec. 8, 1919.) 1. MASTER AND SERVANT 83-PENALTY FOR NONPAYMENT OF WAGES; JURY QUESTION. In an action against a railroad for wages and for penalty for nonpayment thereof under Kirby's Dig. § 6649, as amended by Laws 1905, p. 537, where defendant claimed a breach of contract by refusal to work on Sunday, the question whether an agreement had been made, whereby employé might substitute at his own expense some one else to work on Sunday, held for the jury. 2. Master and SERVANT 83-PENALTY FOR NONPAYMENT OF WAGES ON DISCHARGE. A railroad's refusal to permit a freight trucker to continue to work in such capacity and an offer to retain him as porter at a reduced wage was tantamount to a discharge within Kirby's Dig. § 6649, as amended by Laws 1905, p. 537, § 1, giving a penalty for nonpayment of wages. Action by H. A. F. Ault against the Mis- E. B. Kinsworthy and W. R. Donham, both HUMPHREYS, J. Appellee brought suit against the Missouri Pacific Railroad Company, before D. M. Noble, a justice of the peace in Fenter township, Hot Spring county, Ark., to recover the sum of $50 as wages, and a penalty prescribed by Act 210 of the Acts of the Legislature of 1905, amending section 6649 of Kirby's Digest. The act, in so far as it relates to this case, is as follows: "That section 6649 of Kirby's Digest shall 3. MASTER AND SERVANT 83-PENALTY FOR be amended so as to read as follows: Section NONPAYMENT OF WAGES; REQUEST FOR PAY-6649. Whenever any railroad company or cor MENT. Where a discharged railroad employé, who demanded wages from his immediate employer and timekeeper, was told that money would be at the station in seven days, this was equivalent to a request by the employé to send the money to the station so as to entitle him, where money was not so sent, to the penalty imposed by Kirby's Dig. § 6649, as amended by Acts 1905, p. 537, § 1, for nonpayment of wages. 4. RAILROADS 52, New, vol. 6A Key-No. poration or any receiver operating any railroad engaged in the business of operating or constructing any railroad or railroad bridge, shall discharge with or without cause or refuse to further employ any servant or employé thereof, the unpaid wages of any such servant or employé then earned at the contract rate, without abatement or deduction, shall be and become due and payable on the day of such discharge or refusal to longer employ; any such servant or employé may request of his foreman or the keeper of his time to have the money due him, or a valid check therefor, sent to any station where a regular agent is kept, and if the money aforesaid, or a valid check therefor, does not reach such station within seven days from the date it is so requested, then as a penalty for such nonpayment the wages of such servant or employé shall continue from the date of the discharge or refusal to further employ, at the same rate until paid." The word "carriers," in Act Cong. March 21, 1918 (U. S. Comp. St. 1918, §§ 3115a3115p), subjecting carriers under federal control to all laws and liabilities as common car" riers does not refer to the Director General who took possession of railroads under President's Proclamation of December 26, 1917, pursuant to Act Aug. 29, 1916 (U. S. Comp. St. 1918, Default judgment was rendered in favor § 1974a), and, so far as a suit under the state of appellee in the magistrate's court for $50 statute for nonpayment of wages is concerned, and $2.50 per day as a penalty for nonpay For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes ceeded by E. B. Williams; that, on or about the 27th day of July, appellee received information that Williams had placed him on the roll as porter, or baggageman, at a salary of $45 a month, and intended to pay him only $1.50 per day for the entire time he had worked; that he went to see Williams, who turned to the record, under the heading "porter," and told appellee he could not allow him more than $45 a month, and that it was up to him to accept or refuse that money; that appellee contended he had not been working as porter and could not support his family on that amount; that Williams responded he could not allow more, whereupon appellee informed him he might have the job as soon as he paid him off; that the agent sent a man to take his place, but appellee refused to let the new man go to work until he received his pay. ment of the wages from July 9, 1918, until the payment of said sum. An appeal was taken from that judgment to the circuit court in said county, and on the 20th day of January, 1919, the Missouri Pacific Railroad Company filed an answer, denying the indebtedness or liability for a penalty, the discharge or refusal to continue appellee în its employment, any request or demand by appellee on his foreman or timekeeper to send the amount claimed to be due him as wages, or a valid check therefor within seven days to the agent at Malvern, or that appellee applied to said agent, after seven days, for his wages, or a valid check therefor. On the 29th day of January, following, appellee filed a motion to substitute in his place, as defendant, Walker D. Hines, Director General of Railroads. Over the objection of appellant, the court refused to make the substitution, but made the Director General a party defendant. The cause then proceed-ployé, who advised him that he could not ed to trial and was submitted to a jury upon the pleadings, evidence, and instructions of the court. The jury returned the following verdict: "We, the jury, find for the plaintiff in the sum of $50 as debt for labor; also $2.50 per day as penalty from the 28th day of July, 1918, until the present date. "J. M. Caldwell, Foreman." Thereupon a judgment was rendered against appellants for $50 debt, and $390 penalty. From that judgment, an appeal has been duly prosecuted to this court. [1] Appellants first insist that the undisputed evidence showed that appellee voluntarily quit the service of appellants, and that it was error to render judgment against them for a statutory penalty on the theory of a discharge or refusal to further employ ap [2] The appellee then consulted an old em keep the new man from going to work; that on the next day, Sunday, his substitute was displaced by the new man. We think the refusal of appellants to allow appellee to work longer in the capacity of freight trucker, at 25 cents an hour, and their offer to retain him as porter or baggageman, at a salary of $45 per month, was tantamount to a discharge from and a refusal to further employ appellee in his original position, within the meaning of section 1, Act 210 of the Acts of the Legislature of 1905. Under this construction of said act, as applied to the facts in this case, it cannot be said that appellee voluntarily quit the service of appellants. [3] It is next insisted that appellee was not entitled to a penalty because the undisputed evidence showed that he did not bring himself within that provision of said act which required the employé, when discharged pellee. It is said that, because the contract required appellee to work on Sunday, his or when refused employment, to request his failure to work in person on the Sabbath foreman or keeper of his time to send the day amounted to a breach of his contract. money due him, or a valid check therefor, The evidence tended to show that appellee to a station agent, at a station where a regand his employer had agreed that he might ular agent is kept. Appellee testified that, substitute, at his own expense, some one else after he made up his mind not to prevent to work on the Sabbath day. Under such an the new man from taking his place, he dearrangement, a failure to report in person and manded the wages due him from E. B. Wilwork on the Sabbath day would not consti- liams, his immediate employer, and the man tute a voluntary cessation of appellee's du- who kept his time; that Williams responded ties under the contract. It was a question that the money would be here in seven days. for the jury to say whether or not such an The undisputed evidence also showed that arrangement was made under the contract this conversation occurred in the Malvern of employment. Again, it is said that, be-depot, where appellee had been working and cause appellee refused to accept employment where E. B. Williams was employed as the This court held, in as a porter or baggageman at $45 per month, regular station agent. therefore, he voluntarily quit the service of the case of Biggs v. St. L., I. M. & S. R. Co., said railroad company. The evidence dis- 91 Ark. 122, 120 S. W. 970 (quoting the sixth closed that in the month of July, 1918, appel- syllabus) thatlee was employed by W. W. Jones, station agent at Malvern, as a freight trucker at the rate of 25 cents an hour, or $2.50 a day for a 10-hour day; that, after about ten days, W. W. Jones entered the army and was suc "Where, at the time a servant was discharged by a railway company, his foreman notified him that his money would be sent to a station named where a regular agent was kept, to which the servant acquiesced, this was equivalent to a re |