Stewart v. Scott

| Ark. | Feb 7, 1891

Cockrill, C. J.

1.- set-off— Unliquidated damages, It is conceded that the only questions arising upon this appeal relate to Scott’s set-off to Stewart s action against him. The set-off is based upon an agreement for the sale of timber to be delivered at the stump by Scott, the vendor, to Stewart. The purchase price was to be the cost of cutting and an agreed sum per thousand feet. The contract was in writing. After its execution, Stewart concluded that he could have the timber cut cheaper than Scott could, and expressed a determination to undertake it. Scott acquiesced. Stewart cut and appropriated about one-half of the quantity agreed upon, and refused to take the residue. The court,' against Stewart’s objection, received evidence of the number of feet of timber in the trees covered by the contract which were rejected by Stewart and left growing upon the land; and charged the jury that they might return a verdict against him for a sum equal to the contract price of the timber they contained. These rulings are assigned as error.

Without laying stress upon the want of a certain description, in the written contract, of the lands upon which the trees stood, it is enough to say that it was an executory contract to sell timber which (in part) was never completed by delivery. After the vendee refused to proceed in execution of the contract, the vendor did not make an offer of delivery in accordance with the terms of the written contract, but retained the trees in their natural state. The measure of his recovery therefore would not be the contract price of delivered timber, but the damages sustained by reason of the vendee’s breach of contract. But these damages are unliquidated, and unliquidated damages, even when arising from breach of contract, are not the subject of set-off, though they may be recouped in a proper case. Gerson v. Slemons, 30 Ark., 50; Bloom v. Lehman, 27 ib., 489; Clause v. Printing Company, 118 Ill., 612" date_filed="1886-11-13" court="Ill." case_name="Clause v. Bullock Printing Press Co.">118 Ill., 612; Holland v. Rea, 48 Mich., 218" date_filed="1882-04-25" court="Mich." case_name="Holland v. Rea">48 Mich., 218; Carter v. Jaseph, ib., 615.

The court erred in admitting the testimony and giving the instruction referred to.

2. Trespass ‘by mortgagor. When the contract for the sale of the timber was entered into, Scott, the owner, was in possession of the land, but there was a subsisting mortgage upon it, executed by him to secure a debt due to a non-resident firm. It is argued that the contract of sale is void, and that no recovery can be had, because it was made in contravention of the statute enacted to punish persons who fell trees upon another’s land without his consent. Two provisions of the law are appealed to, to sustain the contention, viz., sections 1658 and 1659 £l se$-> Mansfield’s Digest. But it is not apparent that the legislature intended that either provision should embrace a mortgagor in possession. One section is directed at “every person who shall wilfully commit any trespass * * * upon the lands of any other person” (sec. 1658, sup.); and the other against those who, “ without lawful authority, wilfully and knowingly enter upon lands belonging to this State,” or to any corporation or person, other than the party accused. Secs. 1659, 1663, supra.

The mortgagee is in common entitled to the possession of the mortgaged lands; but until he takes it legally, the possession of the mortgagor is not illegal, and his entry is not in itself a trespass. He is not therefore within the letter of the statute. Moreover, the expressed intent of the legislature is to visit punishment only upon those who cut trees upon the lands of another. .

In popular acceptation the mortgagor remains the owner of the land, and the popular belief is not far from legal accuracy.

It is common to say that the legal title vests in the mortgagee, but his interest is regarded as a title only for the purpose of enforcing his equities. It lacks many of the essentials of a title. He has no interest that can be sold on execution, and his widow does not take dower in his interest in the land, notwithstanding the statute makes every substantial interest in real estate subject to sale under execution, and the subject of dower. A power to sell is not necessarily a power to mortgage, nor is a power to mortgage a power to sell, and it is held that giving a mortgage upon land by one who has already conveyed his title by deed is not disposing of the land, within the meaning of a statute which made it a felony to make a fraudulent second sale. People v. Cox, 45 Cal., 342" date_filed="1873-07-01" court="Cal." case_name="People v. Cox">45 Cal., 342. Payment of the debt at its maturity destroys the estate, without a reconveyance or release by the mortgagee. Schearff v. Dodge, 33 Ark., 340. Equity always regards the mortgagor as the owner of the land, and the mortgagee as holding a security only for his debt; and a court of law, in a controversy between the mortgagor and a stranger to the mortgage, does not regard the mortgage as a conveyance. For example, in a suit by the mortgagor for possession, it is no answer for a stranger to say that the title is in another by virtue of the mortgage. “It is an affront to common sense,” said Lord Mansfield in Rex v. St. Michaels, 2 Doug., 632, “ to say the mortgagor is not the real owner.” If then, in popular and legal acceptation, the mortgagor is the owner of the land, there is no reason for attributing to the legislature the intent to punish him under the provision of the law referred to.

There is a limit upon his right, as against the mortgagee,, to cut trees growing upon the mortgaged premises, but the statute does not purport to punish waste as distinguished from trespass. A rational construction of the act does not require an expansion of its terms to meet that class of cases.

3. illegal contract to sell mortgaged property. It is a statutory crime also to sell mortgaged property ^ t-v with intent to deiraud the mortgagee. Mansf. Dig., sec. 00 & ’ 1693, as amended by Acts 1885, p. 120. As the mortgage hen continues to bind the trees grown upon the land after they are severed from the soil, a sale of them made for the. purpose of defrauding the mortgagee would be in the face of the statute. A.contract for that purpose would therefore be void, and the courts would refuse to enforce it. O' Bryan v. Fitzpatrick, 48 Ark., 487.

But there was no evidence at the trial which conclusively stamps the transaction as a fraud upon the mortgagee. It was proved only that 1560 acres of land had been mortgaged to secure a debt of $2500. The value of the land without, the timber may have been so greatly in excess of the mortgage debt that no intent to defraud the mortgagee could be.presumed. The court was not asked to direct the jury to-consider the question of fraud; and there was no error in the refusal to charge, as requested, on the theory that the-contract contravened the other sections of the statute first cited above. But for the errors indicated it is ordered that the judgment be reversed, and the cause remanded for a. new trial.