White River, Lonoke & Western Railway Co. v. Star Ranch & Land Co.

McCulloch, J., (after stating the facts.) The two instructions numbered six and nine, given by the court at the request of appellee, were both incorrect, and should not have been given. In the first place, they improperly put the burden upon appellants of showing by evidence "clear and conclusive” that the decree of the chancery court was intended as a final settlement between the parties. This need only have been established by a fair preponderance of the testimony. The effort of appellants was not an attack upon the decree, but to show that it was agreed upon as a final adjustment of all matters between the parties, and that it operated as a release of the sureties from any further liability. The instructions were also erroneous in leaving out of account the contention of appellants that appellee, through its agent and attorney, had elected to accept the property where it was then located (on the track of the railway company), instead of requiring a delivery at the place stipulated in the lease contract. The testimony of the two witnesses (Trimble and Wooley) tended to establish the fact that appellee had released its lessee, the railway company, from that part of the contract, and elected to accept the property there on the railroad track, because of advantages then expected to be derived by appellee in the sale of it. The testimony was conflicting on this point, and it should have been submitted to the jury upon proper instructions. These two instructions#ignored that question altogether, and permitted the jury to find against the sureties for expenses thereafter incurred in removal of the property and for rent thereafter accruing, even though they might have found that appellee had agreed to accept a return of the property at that time and place, which was in effect a termination of the lease. If appellee saw fit to waive the requirement of delivery of the rails at the place named in the contract, and agreed with its lessee to accept them at another place, it could not thereafter hold the sureties liable for the expense of taking the rails up and removing them to the original place of delivery named in the contract. Nop could it claim rent after the date of acceptance, because the contract was then at an end. The agreement to accept the rails where they were then located on the track of the railway company (if such agreement was made as claimed by the witnesses for appellants) put an end to the contract of the railway company which appellants had stood surety for, and they can not be made liable for any expense subsequently incurred in removing the rails, or for rent accruing after that time. O’Neal v. Kelley, 65 Ark. 550, and authorities cited. We do not mean to say that this alleged agreement was such a change in the original contract as released the sureties from liability for rent payments which had already .accrued. 1 Brandt on Sur. & Guar. § 443. It operated, not as an alteration or .abrogation of the contract, but as a termination of the lease, and as an acquittance of the principal, as well as the sureties, from that part of the contract requiring a delivery of the rails at the place named therein. The court also gave an instruction, over the objection of appellants, permitting appellee to recover attorney’s fees expended, and the jury included in their verdict the sum of $500 On that account. We do not think that attorney’s fees are recoverable in this case. The language of the contract is not sufficient to indicate that the'parties had that in contemplation as an item of possible expense in recovering possession of the property at the end of the lease, or default in payment of rent when due. The clause of the contract which it is claimed covers attorney’s fees is as follows: “The said lessee .agrees to pay all taxes, license -or charges of any kind whatsoever that may be levied, assessed or become payable on said rails, and to reimburse said lessor, its successors or assigns, for any expense that may be by it incurred, attending the execution, acknowledgment, filing or recording of this agreement, as required by law, or the retaking or recovering possession of said property, leased as aforesaid, at the expiration of this lease, or upon any default of the payments as herein provided.” It cannot be said to have been reasonably within the contemplation of the parties that the lessee should pay the fee of attorneys in case the lessor should be drawn into litigation with third parties concerning the ownership or right of possession of the property. Yet that is precisely the basis of appellee’s claim here for recovery of attorney’s fees. The fee was charged and paid for services in a suit brought by a mortgagee to foreclose a mortgage lien on the property of the lessee, and appellee intervened therein to claim the rails and rent therefor. Attorney’s fees are not ordinarily held to be an element of damages which may be recovered for breaches of contract. Jacobson v. Poindexter, 42 Ark. 97; 13 Cyc. pp. 80, 81, and cases cited; Haverstick v. Erie Gas Co., 29 Pa. St. 254; Henry v. Davis, 123 Mass. 345. Nor could the parties have had in mind the repayment of attorney’s fees in a suit by the lessor against the lessee for the recovery of possession of the property at the end of the lease or upon default in payment of rent. This would be a penalty upon the right of the lessee to litigate. Boozer v. Anderson, 42 Ark. 167; Jarvis v. Southern Grocery Co., 63 Ark. 225. Appellants attack the right of appellee to sue upon the contract because (1) such contract was not within the charter powers of appellee’s assignor, McLeod Lumber Company, and (2) that the charter of that corporation had expired by limitation under the laws of Missouri when it attempted to assign the contract to appellee. Appellants are not in position to raise either of these questions. Having contracted with the above-named corporation, and received the benefit of such contract, they can not dispute its power to enter into the .contract. Minneapolis F. & M. Ins. Co. v. Norman, 74 Ark. 190.* Appellee being the undisputed holder de facto of the contract and bond under written assignment, regular on its face, from the McLeod Lumber Company, appellants cannot question it. Castle v. Lewis, 78 N. Y. 131; The Prussia, 100 Fed. 484; Blackford v. Westchester Fire Ins. Co., 101 Fed. 90; 4 Cyc. 62, and cases cited. The liability of appellants, as sureties, for the amount of rent up to time of the alleged acceptances of the property was not discharged by the alleged agreement to make the decree a final settlement between the parties. The rent then due was a fixed liability of the principal and sureties, and the alleged agreement to terminate the contract by acceptance of the property did not release them. According to the undisputed facts, appellee is entitled to recover the amount of rent agreed upon, $423.42, with interest from June 19, 1901. If it elects to accept a judgment for that amount, and will, within ten days from this date, enter a' remittitur down to that sum, the judgment will be affirmed. Otherwise, it will be reversed, and remanded for a new trial. It is so ordered. Footnotes [*] See also 5 Thomp. Corp. § 6021.' — Rep.