266 ROGERS V. SNOW. [191 • ROGERS V. SKOW. 4-3939
Opinion delivered July 8, 1935. EVIDENCE—ADMISSIBILITY OF LETTER.—In an action by seller of a wholesale oil agency on notes given for the purchase, where it was agreed that unmatured notes should be cancelled if the oil company cancelled the agency for other reason than dishonesty, insubordination or violation of rules, a letter of the oil company advising defendant of the company's intention to cancel the agency held competent to establish cancellation of the agency. 2. APPEAL AND ERROR—HARMLESS ERROR.—Admission of incompetent evidence would be harmless where the fact sought to be established was proved by uncontradicted evidence. 3. SALES—BURDEN OF PROOF.—In a seller's action on notes given for the price of a wholesale oil agency, in which defendant pleaded as a defense a contract whereby the unmatured notes would be void if the agency should be cancelled by the oil company for reasons other than dishonesty, insubordination or violation of the company's rules, and that the agency had been cancelled by the oil company, held that the burden of proving that the agency was cancelled, but not for the reasons excepted, was upon the defendant. Appeal from Sebastian Circuit Court, Fort Smith District ; J. Saon Wood, Judge; reversed. Roy Gean'and Hardin & Barton, for appellant. Pryor & Pryor, for appellee. BUTLER, J. On the 2d day of Augast, 1932, the ap-pellee, G. W. Skow, purchased from the appellant R. Kay Rodgers, with the consent of the Louisiana Oil Refining Corporation, a wholesale commission agency Which Rodgers had with the oil corporation and certain equip-
ARK.] ROGERS V. SKOW. 267 ment •used in emmection therewith for an agreed price of $7,500: Of this sum $3,500 . was paid in cash, and the remaining $4,000 to be paid in installments of $200 each to be evidenced by.promissory notes which were duly executed on that date. At the same time and as a- part of the transaction,. a Contract was entered into betWeen the said Skow and the oil corporation by which Skow was constituted general agent.of the corporation fcir the Fort Smith territory: .The'.Contract proVided that it should continue for a period of twelve months unless sooner terminated. • The • parties to the agreement expressly reserved the right to either of them to terminate the.contract upon fifteen days' written notice without assignment of cause. Skow, .by the contract, undertook the performance of certain duties and agreed to devote his entire time to the, business of the agency, and not to become interested in any business which might in any manner conflict with the business of • the corporation. At the same time that the notes were executed and the contract between Skow and, the oil corporation was entered into, an agreement. was executed as a part of the transactiOn by Rodgers. and Skow providing " that, if at any time before all said notes shall have matured; that is, within twenty months froM - September 1, 1932, the Louisiana Oil Refining Corporation should cancel its agency contract or discontinue its agency with the buyer without his consent, for - any reason other than .his dishonesty, insubordination or his violation of any of the terms of his contract with said corporation, then it is agreed that any : of •said notes then unmatured but maturing thereafter shall be canceled and . become void." On the 29th day of April, 1933, Rodgers brought suit for the collection of eleen of 'said promissory notes which were due and- unpaid, 'aggregating the sum of $2,200, for which amount judgment was prayed with interest. Skow answered . admitting the. execution of the notes, and that they were unpaid, setting up as an affirmative defense that on March 2, 1933, the oil corporation canceled the agency' contract -without his consent, and that, under the terms of the contract between himself and Rodgers,. this action on the part of the corporation in-•
268 ItOGERS V. SKONV. [191 validated all of said notes unmatured on that date. The provision of the contract to this effect Was -set out in his answer, and is. the one:quoted supra. On the trial - of the case . Rodgers identified the eleven notes sued on• and- testified that they were executed •and delivered to him by Skow, that they were past duo and unpaid,• that he -was still the owner thereof, and tbat . Skow admitted their execution and delivery. Skow, testifying in his own behalf, identified and introduced in evidence the contract between himself and the oil corporation, 'and •also .the contract between himself and ,the plaintiff, •Rodgers. He offered in •evidence • a letter purporting to have been written to him on March . 2, 1933, signed by the oil corporation, "By J. D. Flynn, Manager Arkansa.s Division," . notifying . him of . • the intention .of the corporation to- cancel his agency agreement. This letter was adrnitted over the objection and exception of the plaintiff Rodgers..' Skowfurther testified that, in pursuance , to the advice contained in the - letter, the agency agreement was canceled without his consent, of. which. fact . he • notified Rodgers • in writing on . March .28, 1933, and demanded : the • cancellation. and • return of 'the un-matured notes. ..: • • ; • • - • • The . above was all of the 'evidence in the .case.- Each party asked a directed verdict, whereupon the •jury was discharged, and the court :sustained. the motion of the defendant Skow and entered a judgment finding the issues in his favor. •. . On appeal it is insisted that the letter frorn .. the oil corporation to Skow advising him of its intention to. cancel the agency contract was incompetent. We do not think so. It was competent for the purpose f or which it was offered—namely, to establish the cancellation of the Agency agreement: The letter was. not identified as -an authentic letter from the oil corporation. • The identification, however, would seem not to have been difficult. The contract between; the oil corporation and Skow was ad-• mated in evidence without objection, and appears to have been signed by J. D. Flynn,. the same officer of the corporation who signed the letter objected to, and, if the handwriting of the two signatures was similar, this wOuld
Amt.] • ROQERS V. -S:KOW. • 269 have been sufficient. evidence to warrant the court in finding that othe'letter was . genuine. But the adMission of . the ; letter was • not prejudicial becanse the cancellation of the ' agency agreenient waS proved by the uncontra-dieted : testimony of :Skow, and , the letter therefore becomes immaterial. • . • We are' of,: the opinion-, however,' that the evidence wasinsufficient to : sustain the finding and judgment of the• trial court... The- execution and delivery of the notes-was admitted; and the defendant, as an affirmatiVe defense, pleaded the zontradt between himself and Rodgers, which proided. that -the : nnmatured notes should be Canceled and be void if "the Louisiana shouhEcancel -his contract, • before the notes had all matured without his conSent and forany other 'reason or cause, except his dishonestyjn-subordination' or his . violation of any of the terms of his contract with said corporation: 'An examination 'of this pleading makes it Clear that, •if the above' allegation be stricken from the , plea, there 'would be no defense to the action, and 'therefore, the bnrden , of proving the,Isame Would necessarily rest upon the defendant. Janies V. Orrell, 68 Ark. 284, 57 S. W. 931 ; Henderson V. Emerson; 105 Ark. 697, 151 S. W. 257; Vanfloozer v. Grattis, 139 Ark. 390, 214 S. W. 44. Counsel for the appellee erroneously contend in support of the court's action that, since the corporation did not advise Skow of the 6atis0 of the cancellation of his contract, the defendant i8 relieVed from proving that the dismissal . did , not ,come within the exceptions mentioned in the contract between himself 'and ROdgers. - This contention is based oh the provision in the contract between the corporation and SkOW . Which permitS either party to cancel the same"'witlionCgiving any :reason for such action.. The contract involved; . ' however, is hot that'bdtween the .corporation and Skow, but the one between. Skow.and - Rodgers, and, in order to escape liability:on the. notes, it was Skow's duty to • establish, 'not . only: that the , agency: contract was canceled without his conseiit but alsO that it was not on account of dishonesty, insnbordinatithr, or violation of any of the terms Of the contract dn . his-part. It is no answer to say that this would -impose upon the
270 [191 defendant the burden of proving a negative. No one has charged him with any dishonesty or any breach of his contractual obligations with the oil corporation. For this reason, the presumption of law that all men are presumed to be honest bas 110 application; and the authorities cited by appellee are not in point. It is the appellee who by his plea must kely on the fact that his discharge as agent of the cOrporation did not coine within the exceptions named in the contract, and in order to establish this it is essential that he make negative proof. Austin v. Derntott Canning Co., 182 Ark. 1128, 34 S. W. (2d) 773 ; Hopper v. State, 19 Ark. 143 ; 22 C. J., p. 70. As appellee argues, it is true tha.t no one but the oil corporation would know the particular reason influencing it to terminate the agency contract, but Skow would have known whether it was not on account of dishonesty, insubordination, or breach of the contract on his part, and, as these conditions must not have existed, if Skow is to be relieved of the payment of his notes, the burden is upon him to make proof of the nonexistence of those facts. The judgment of the trial court must be reversed, and the cause remanded for a, new
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