398 FAYETTE R. PLUMB,- INC., V. PHABB. {174 PAYETTE R. PLUMB ' , IN C., V. • PHARR. • • Opinion delivered June13, 1927. BILLS AND •NOTES=RENEWAL NOTES.-: r-In an actiOn on:notes-secured . by a vendor's lien against timber, evidence held to support a find-Ang that new ; unsecured notes were -not given in satiafaction of the original secured notes, where the original notes were not taken up. 2. BILLS AND NOTES = RENENVAL NOTES. Without an agreement to that effect, the renewal of a note will not operate as a paYinent of an original note.: 3. ESTOPPEL-1 -VENDOR'S LIEN.—The payee of a note secured by: a vendor's lien on timber is not estopped from setting up its claim against the purchaser's grantee, by allowing timber to be removed without objection, where the timber deed Was recorded, since leniency on a part of the vendor in collecting til e purchase money cannot relieve the purchaser or his grantee reinoving the timber ,.from paying for it. 4. LoGs AND LOGGING—VALUE OF i'IMBER RBMOVED.In an action on notes secured by vendor's lien , on timber, evidence held sufficient to support a finding that defendant, who was the purchaser's grantee, had rbmoved timber exoeeding $4,000 in value. Appeal from Prairie Chancery Court, Northern District ; J. S. Gatewood, Special Chancellor ; affirmed. Bogle & Sharp, for appellant. Emmet Vaughan, for app'ellee. HUMPHREYS, J. This suit was instituted on the 8th day of June, 1922, in the chancery court of Prairie County against H. C. Argo, Bank of Brinkley, Fayette R. Plumb, Inc., and D. II. Echols' as receiver' foi H. A. Daggett & Conipany, to recover $4,000 and interest on two promissory notes evidencing the purchase : money for the timber on 2,30,0 acres of land in Prairie and Woodruff counties, particularly described in the complaint, which timber they sOld to H. C. Argo on the 8th day of October, 1919; and to enforce a vendor 's lien against such of the timber as had not been removed when the suit was brought, which lien they reserved in the timber deed they executed to H. C. Argo. It was alleged in the complaint that H. C. Argo sold said timber to H. A. Daggett & Company, and that H. A. Daggett & Company sold the timber
ARK.] FAYETtE R. PLUMB, NC.; V; PHARR. 399 on ,said tract and on another tract of about the same acreage to , appellant, ' Payette R. Plumb, Inc., for $15,000; that appellants had removed large quantities of timber from the land without paying the notes, , not' leaVing sufficient timber in vallie to pay same The Bank of Brinkley•had no interest in the Suit:further , than that the said 'Daggett & 'CoMpany had given them a lien' on the timber to . secure note. IL C. 'Argo •filednu answer. D. H. EchOls, as receiver for ri. A. Dag-gett & Cornpany, filo:I l an answer, and denied liabilitY, and pleaded payment of the notes sued on; and appellant, Fayette R•Plumb, Inc.; filed an answer, in which it denied all liability; and . 'pleaded . Payment of the noteS. g The latter-named appellant is the onlY one who Made Any \ defense to the action. , II. C. Argo and H. A. Daggett & Company are, and were, insolvent on the date of , the filing of the suit. ' . ' The cause Was submitted upen the 'pleadings and tes, thhony addhced by the respectife parties, which reShlted in a finding by the court that H. C. Argo and II. A. Dag-gett -4 'Company were insWent, and that appellant, Fayette It: Plunib, Inc., had reMoVed timber eceeding in Valhe the aihount Sued kir, and Were liable to apPellees to • the . amOhnt of their 'claiih in' the Shin of $4,000; with interest thereon at'the rate of 6 per . cent.'per annum from the -1 8th day 'Of 046ber; 1919, to' the .date of the trial; and a consequent judgment in favor of appellees against appellant, FaYettd,R. Plumb, Inc., ' in the tOtal sum Of $5,577.33, froth' 'Which is thiS appeal. ' . . • : Appellant first . cOntends for a reversal,of the decree I ) on the . alleged ffround that accordin c, to the undisputed testiniony, *the lien . noteS executed "by Argo , to ; appellee§ fOr the tiniber Were paid . and the lien eXtinguished ,by theit •ac'copWfee.-of . .the notes from him , sechred by ,other c011aferal. Ilie.testimonY , : referrecl to and relied upon by ' then]: to * sustain this contention censists:of a letter writ- fn 't(i II; C. A l.r 0. 6 bY , ''ViT : 1 M.' Pharr On . jun e . 192.1' acknowled _ ging, the, receipt of the $4,000 . note and , four hithdred shares of A i . Daggett CoMpany stock, to o e . ther
400 FAYETTE R. Ptums, hi. O.-, ; V: PHARR. [174 with Argo's statement that the , stock had a par value of $10,000 at the time it was placed 'as *security to Pharr ; and the two following excerpts -from the testimony • of Mr. Argo.: • "At the request of:W. R.*Pharr my personal notes were given withoot . security in satisfaction and in lieu of the lien notes referred to, and; as nearly as I can recall, the transaction occurred shortly after the maturity of the lien notes; as, according to Mr. Pharr, the•personal notes yvere wanted in order to substitute them for- the lien notes." . • , "I do not remember the- date of the unsecured notes. They were mailed to W. R. Pharr at Memphis, Tennessee. Upon. arriving at the conclusion later, that my financial responsibility was insufficient to , afford security for payment of the substituted personal notes, I voluntarily gave W. R. Pharr all the shares of stock representing my interest in the H. A. Daggett Company. This was accepted by him and understood at the time as being. ample *security.". . We think learned counsel are mistaken in.concluding that the testimony of Mr. Argo stands in the,record undisputed, to the effect that he paid the notes . sued upon by giving his personal note in lieu of said lien notes. It is reflected by the record that the notes sued upon, or lion notes, were never sUrrendered .by W. R. Pharr to Mr. Argo in exchange for his personal note with new collat7 eral attached. W. R. Pharr testified• in substance that the o'riginal notes were never paid or intended to: be,paid bythe subsequent notes given to him by H. , C . Argo; that the subSequent notes.*ere renewal notes ' giVen Plia ' ,. hlin rr by so'that be might pledge them from time to'time to his banker as . collateral ; that theY were merety aCCOMmodation p,aper, because he cOuld not pledge past due . paper to' the bank as collateral; that, after' he had nsed 'the renewal notes from time to time, the bank refused to take them, and W. R. Pharr, attached the H. A. , CoMpany stock'as collateral Daggett & g o.that he could Use saine with his banker ; that, soon 'after the stock was attached, it was ascertained that it waS .Worthless, and he' was
If FAYETT. E li,. Piiiimu, hic.; v. PHARR. 401 unable to use the . renewal notes • as -collateral security with his banker. The following questions and answers appear in „ th . e te , s t . i . m on - y o . f W. B. Pharr : ' • ", f. • - Have . you 'eVer hYpotheeated . -it? (Referring to the 'first renew4 Mite): A...Yes, I Used' it , as collateral ) from time to time'. ' - AS the notes Would fall, due and payments were not paid; • they •wmildhave to be renewed, and when the note would fall due it would , have to be returned, and Argo would send me a new note for 90 days, and i . 1 from time to time that -one would be reneWed, but never waS there a payment made, and they were renevied so many times and I bad so many notes that one of them got misplaced.- Neither of ' the notes, principal or interest, have been paid. Q. Mr. Argo delivered to you some , stock of the H: A, Daggett Company as security, did he . -not? • A. These noteS' as , they -fell due• and I was unable to Collect', I was'able to use as collateral for a while, but \• they being refused:so many times, they 'soon lost any value theY might have at the bank, and , I told Mr. Argo , that I Wduld not push him in any : way, 'and if he was not k able to Makeuny payments, I would renew the notes, but , f ' the bank refused to accept thena as collateral, then he said heWould give me some additional security. . The stock in a short time was not worth the paper it was written .on, as the concern went outof businesS.":. In the letter relied upOn the new notes referred to 1 are called renewal notes.' The fact that the 'original noteS ) • were , not taken up *but left in the possesSion of W. R. -Pharr is . a strong cireuthstance tending to 'support the theory that the new notes' Were mot : intended ifS payine4 \ \, of the . old . notes.' Another . strong . circumstane-e , tending tO support . the theory that the new notes were not given in 11 satiSfaction of the old notes is that it ,would he unreasonable for one' to' accept Unsecured 'notes. : in payment . of secured notes.. • . After a careful -reading-of the 'reeord we are 'unable to say that the finding of the chancellor to the effeet that \ the new notes were not given in 'liquidation of the cirig.: inal or seeurednotes is contrary to a clear preponderance
402 FAY.ETTE B. PLUMB, INC.,'V. PHARR. 1174 of the evidence. The governing rule of law is that, Without an agreement to that effect, the renewal of a note will not operate as payment . of -the original note. Grif-fin-v. Long, 96 Ark. 272, 131 S: W. 672, 35 L. R A. (N. S.) 855, Ann. Cas . .-1912B, 622 ;-First National Bank of Helena v: Solonion,-170 Ark. 555, 280 S. W. 659. Appellant's next . contention for a reversal of the decree is that the appellees estopped themselves from setting up any claim against appellant, Fayette R Plumb, Inc., by allowing it and its-predecessors to remove the-timber without objection by providing in the timber- deed that the timber should be removed and the land turned back from time to time for agricultural purposes, before the maturity of the lien notes. A lien -was retained in the deed upon the timber for the purehase . money,- and it was the duty of those removing the timber to pay the purchase money or to reserve enough out of the proceeds to satisfy the lien. Leniency, on the part of appellees in the collection of the purchase money did not and could not have the effect of relieving the parties who removed, the timber from -paying, the purchase money therefor: .The timber deed was on record, and the appellants-had constructive notice of the existence of the lien. None of them were innocent purchasers. There . is nothing in the record tending to show that 'appellees induced appellants to buy the timber on representation that they . had waived or released their claim to the purchase money therefor. ,Appellant's last contention for a reversal of the -decree is that the testimony fails to' show that appellant, Fayette R. Plumb, Inc., cut and removed as much as $4,000 worth of timber off the land. Said appellant put up a mill on the property and cut and removed the hick-. ory timber off the land for two or three years. The testimony reveals that they paid $15,000 for hickory timber on this tract and an adjoining tract of about the same size, and that there was about the same amount of hickory timber on each tract. The logical inference is that appellant cut and removed practically all of the hickory timber off.the land,.for which it paid $7,500 in- the tree. • No error appearing, the decree is affirmed.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.