83 Ark. 240, 103 S.W. 185

Supreme Court of Arkansas.

ARDEN LUMBER CO. v. HENDERSON IRON WORKS & SUPPLY CO.

June 3, 1907.

Appeal from Circuit Court, Little River County; Jas. S. Steel, Judge.

Action by the Henderson Iron Works & Supply Company against the Arden Lumber Company. From a judgment for plaintiff, defendant appeals. Modified and affirmed.

[*185 ]  This was a suit by appellee against appellant on notes given by appellant to appellee for the purchase price of certain machinery consisting of sawmill fixtures, etc., described in the notes. The notes bear interest at the rate of 8 per cent. per annum from their date, July 10, 1905. It is provided in said notes that if default be made in either of them that both notes shall be due and payable at once, and that if placed in the hands of an attorney for collection that defendant agrees to pay 10 per cent. attorney’s fees, which is authorized under the laws of Louisiana under which laws said notes were given and intended to be construed. There were two notes for $676.66, each due in four and six months, respectively. In addition to the notes appellee sued upon an open account amounting to $212.76 for machinery, which is alleged to have been bought in July and August, 1905, and is for a long list of fixtures  [*186]  and supplies for the mill not covered in notes. The total judgment asked is $1,563.45, amount of notes and account, together with interest and all costs. The answer denied all material allegations, and set up breach of warranty and false representations, and alleged that appellant, as soon as it discovered that the machinery did not come up to the guaranty, notified appellee, and that appellee in response to said notice promised that it would put the machinery up to the guaranty, urging appellant to keep the machinery in operation, and leading it to believe that appellee was ready to put said machinery up to the agreement; that appellant first knew of appellee’s intention to the contrary when the suit was brought. Appellant prayed to be released from the contract and the payment of the notes and account, and asked for judgment against appellee for $676.66, the first payment that appellant made at the time of the purchase, the amount of $134 paid for freight with 6 per cent. interest on above amounts from July 10, 1905, and for damages in the sum of $3,835. In response to motion to make answer more definite and certain, an amendment to the answer was filed, setting out specifically the particulars in which appellant alleged that the machinery failed to comply with the alleged contract of guaranty. The appellee replied, denying all the material allegations of appellant’s answer and counterclaim. The cause went to the jury upon the evidence and instructions, and the verdict was in favor of the appellee, and judgment accordingly. Appellant prosecutes this appeal.

The sixth instruction referred to in the opinion was as follows: “If you believe from the evidence that false representations were made by plaintiff to defendants with reference to the value and capacity of the machinery, and that defendants were using at the commencement of the suit any of the machinery, that fact would not deprive them of the right to recover their money paid out in the transaction and damages, if you believe from the evidence that they have been proven.”

J. I. Alley and B. J. Stuart, for appellant. J. T. Cawling, for appellee.

WOOD, J. (after stating the facts).

First. The sale of the machinery for which the notes in suit were executed was evidenced by written contract in the form of a proposal by appellee to furnish appellant certain sawmill machinery, in which each piece is described in detail, giving name, kind, make, and dimensions. The proposition was accepted by appellant June 25, 1905, as follows: “The W. K. Henderson Iron Works & Supply Co., Ltd. Shreveport, La.—Dear Sir: The proposition as written is accepted.” The machinery for the price of which appellee sues on account was likewise bought by appellant on written order to appellee, in which each piece of machinery desired is minutely described, giving name, dimensions, etc. This order was accepted by appellee, and the machinery shipped as ordered. In a supplement to the written proposal to furnish the machinery are these words: “It is also understood that our machinery is guarantied to be as represented, and if not we propose to make same satisfactory.” These writings constituted the completed contracts between appellant and appellee. The only written guaranty was that the machinery should be “as represented” in the written contract. The circuit court might very properly have narrowed the defense of breach of warranty to the question of whether or not the machinery was as represented in the written contract. As to all other matters alleged as breach of warranty, the contract was silent, and appellant could not as to these ingraft upon the written contract a warranty by parol proof. Lower v. Hickman (Ark.) 97 S. W. 681; Johnson, Berger & Co. v. Hughes (Ark.) 102 S. W. 184.

The court, however, did not so construe the contract, and permitted appellant to take a wide range in the proof to show that appellee had guarantied that the machinery sold appellant had a certain quality and capacity not mentioned in the written contract, and that the machinery did not fulfill this guaranty. The court also permitted appellant to go into the question of whether or not appellee had made false and fraudulent representations to appellant concerning the kind, quality, and capacity of the machinery whereby appellant was induced to purchase same. These questions, with an instruction as to the measure of damages in case the jury should find for appellant on the theory of false warranty, were presented to the jury in instructions given at the request of appellant. We are of the opinion that under the pleadings and proof in the case that neither the question of false warranty nor false representations as to the quality and capacity of the machinery except as set forth in the written contract should have been submitted to the jury, under the doctrine of the cases above cited. But, if the court erred in this, it was not error of which appellant could complain. If we concede that the theory of appellant as to false warranty and false representations with intent to deceive and defraud entered into the case, even then, we do not find in any of the instructions error prejudicial to appellant under familiar principles often passed upon by this court. The request of appellant for instruction No. 6 (reporter set forth in note) upon the theory that appellant was entitled to recover upon false representations was not the law according to numerous cases of this court. La. Molasses Co., Ltd., v. Ft. Smith Whol. Gro. Co., 73 Ark. 542, 84 S. W. 1047; Johnson v. St. Louis Butcher Supply Co., 60 Ark. 387, 30 S. W. 429. We find no error prejudicial to appellant  [*187]  in any of the rulings of the court on the question of breach of warranty, or the defense of false and fraudulent representations.

Second. The court instructed the jury at the instance of appellee as follows: “If you find for the plaintiff on the notes sued on, you will add 10 per cent. to the face of said notes as attorney’s fees.” Although the stipulation for attorney’s fees is good and enforceable in Louisiana where the notes in suit were executed and are made payable, yet, in our state such stipulations will not be enforced. They are held to be agreements for a penalty. Boozer v. Anderson et al., 42 Ark. 167. We will not enforce such contracts. Penal statutes are not extraterritorial, and while the rule of comity will impel us to enforce contracts in another state as to the principal and lawful interest on such contracts, it does not require us to enforce stipulations that would be for a penalty under our law, and we will not enforce contracts that are contrary to the policy of our own laws. Crebbin v. Deloney, 70 Ark. 493, 69 S. W. 312. Appellant having sought to enforce its contract for attorney’s fees in this forum, where such contracts are in the nature of a penalty, and cannot be enforced, must be governed by the law of the forum where it seeks the remedy. Therefore the judgment is excessive as to the amount of attorney’s fees, and will be modified deducting that amount.

Third. The remarks of counsel, of which appellant complains, were improper. But we are of the opinion that the ruling of the court in instructing the jury not to consider them, and the withdrawal of the remarks by the counsel who made them, would remove any prejudice that otherwise might have been produced.

The judgment, as modified, is affirmed; appellee paying the costs of this appeal.