Court Opinion

ID: 6549873
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:23:13.743711+00
Date Added: 2024-06-11T15:56:04.817562
License: Public Domain

Wood, J., (after stating the facts). 1. Appellee contends that the lease contract was not assignable, and that the assignment of the lease to appellant released appellee from the obligations of his bond. The lease contract provided that “the words trustee and lessee as used herein shall be construed to mean successors, heirs, executors, administrators and assigns.” The use of these words by the parties to the contract clearly evinces an intention to make the contract transferable or assignable. The words “heirs, executors, administrators and assigns,” would not have been used if the parties had not intended that the obligations of the contract would be binding upon the part of the lessee after same had been transferred or assigned. These words, by the terms of the contract, are made applicable alike to the lessee and to the trustee. There) is nothing in the contract to indicate that the term assigns should have reference alone to the assignee of the lessee. No question is raised as to the manner of the transfer. Appellee’s only contention is that the lease contract was not transferable at all. In White River L. & W. Ry. Co. v. Star R. & L. Co., 77 Ark. 130, a lease contract provided that the lessor lumber company should lease to the lessee railway company certain steel rails, etc., on condition that the lessee should pay $550 in quarterly payments. In default of the payments the lessee agreed, upon demand therefor by the lessor or its assigns, to deliver the property at a certain place. There was a bond binding the lessee to pay the rent and to return the property in accordance with the lease agreement. There was an assignment of the lease and bond, and we held that a contract and bond of that nature, under a written assignment, regular on its face, could not be questioned. In that case, as in this, the parties to the contract indicated that it was the intention that the lease be assignable. In the present case, the provisions of the bond which appellee Hill executed made the lease a part of the bond “as fully and completely as if the terms of said lease were set out fully” in the bond. The parties to the lease contract and the bond having expressly agreed that the lease should be assignable, it is unnecessary for us to decide as to whether a lease agreement of the kind under consideration would be assignable in the absence of language showing the intention of- the parties to make it so, for, as we view the’contract, that question does not arise. 2. Appellee next contends that the failure on the part of the appellant to require the payment of royalties on or before the 5th of each month as specified in the lease agreement released the surety. The uncontroverted evidence, shows that the appellant never at any time agreed to relieve the lessee Harp from making monthly payments. When the royalties were due, Harp failed to make the payments as his lease contract required, and the testimony shows that they were constantly insisting on his making such payments. They never at any time agreed.with him that the time for future payments should be extended or that he should not be required to make the payments at the time the contract required him to make them. The only extension of time ever granted to Harp was evidenced by a note for royalties that were past due, and that note was paid, and the amount called for by it is no part of the amount embraced in this suit. The testimony on behalf of the appellant tended to show that Harp was never relieved from his obligation to make the monthly settlements as the contract required. It does show, however, that he failed to make these settlements, but such failure on his part without the consent and against the protest of the appellant could not relieve the. appellee of his obligation under the terms of the bond. As we view the undisputed evidence, there was no agreement upon the part of the appellant, the obligee, to waive the monthly settlements that Harp, the obligor, agreed to make under his lease contract, and therefore the appellant did not change the contract in any particular. The most that could be said of the conduct of the appellant, under the undisputed evidence, was that it simply forebore to sue Harp from time to time on his past due indebtedness; but there was no consideration for such forbearance, and therefore the appellee was not released from the obligation to make good the violation of the contract on the part of his principal, Harp. Appellee relies upon the case of O’Neil v. Kelly, 65 Ark. 552, and Singer Mfg. Co. v. Boyette, 74 Ark. 603. An examination of these cases will discover that the obligee and the obligor, or principal in the bond, altered the terms of the contract without the consent of the surety. No such condition exists here. The appellee insists that the appellant should have declared the lease contract forfeited upon the failure of Harp to make the monthly payments as the contract required him to do, but the lease provided that “in case the lessee fails, neglects or refuses to comply with the provisions of the contract, he may, at the option of the lessor, be deemed to have forfeited all his rights under the lease.” As the forfeiture of the lease was at the option of the appellant, the surety, having signed a bond which made that provision a part of it, can not be released from his obligation because of a failure on the part of the lessor to declare the lease contract forfeited. That was left, by the terms of the contract, to the option or discretion of the lessor. The failure of the lessor to declare a forfeiture and to bring suit for royalties that had accrued, and that were “allowed to lap over more than one year,” were but forbearances for past due indebtedness, without consideration, not binding on appellant, and did not release the surety. Thompson v. Robinson, 34 Ark. 44. See, also, 32 Cyc. p. 196. 3. The testimony shows that Harp pledged his stock in the Young Coal Company to the Fort Smith Bank & Trust Company to secure a loan from the bank. The secretary of the appellant knew that Harp was trying to negotiate this loan, and that he pledged his stock as collateral security. Harp’s stock in appellant company, however, had never been transferred on the books of that company to the bank, and had never been surrendered by it. Harp paid off a note that he had executed to the appellant company for past due royalties immediately after pledging his stock to the Fort Smith Bank & Trust Company for the loan. Harp delivered his original certificate of stock to the president of the bank as collateral security for the loan which he obtained. Appellant, however, never transferred or delivered any of Harp’s stock to the bank. The appellee insists that there was a transfer of Harp’s, stock to the bank as collateral security for the loan, with the knowledge of appellant, which was a waiver by it of its statutory lien and released appellee from the obligations of his bond. We are of the opinion that the testimony is not sufficient for the court to declare as a matter of law that the appellant waived its statutory lien on the stock of Harp for the debt which he was due appellant. It was a question for the jury, under the evidence, as to whether or not appellant waived its statutory lien. Furthermore, the statute only gives a lien for debts due. Kirby’s Digest, § 853; Bankers Trust Co. of St. Louis v. McCloy, 109 Ark. 160; 159 S. W. 205. At the time Harp pledged the stock as collateral security, a considerable portion of the debt herein sued on was not due, and had not been earned. The court therefore erred in directing the jury to return a verdict in favor of the appellee, and for this error, the judgment must be reversed and the cause remanded for a new trial.