{ "id": 1446976, "name": "Johnston v. Missouri Pacific Railroad Company, Thompson, Trustee", "name_abbreviation": "Johnston v. Missouri Pacific Railroad", "decision_date": "1942-03-16", "docket_number": "4-6679", "first_page": "1036", "last_page": "1040", "citations": [ { "type": "official", "cite": "203 Ark. 1036" }, { "type": "parallel", "cite": "160 S.W.2d 39" } ], "court": { "name_abbreviation": "Ark.", "id": 8808, "name": "Arkansas Supreme Court" }, "jurisdiction": { "id": 34, "name_long": "Arkansas", "name": "Ark." }, "cites_to": [ { "cite": "100 Atl. 945", "category": "reporters:state_regional", "reporter": "A.", "opinion_index": 0 }, { "cite": "256 Pa. 481", "category": "reporters:state", "reporter": "Pa.", "case_ids": [ 1030742 ], "opinion_index": 0, "case_paths": [ "/pa/256/0481-01" ] }, { "cite": "89 S. W. 233", "category": "reporters:state_regional", "reporter": "S.W.", "opinion_index": 0 }, { "cite": "28 Ky. Law Rep. 325", "category": "reporters:state", "reporter": "Ky. L. Rptr.", "opinion_index": 0 }, { "cite": "121 Ky. 374", "category": "reporters:state", "reporter": "Ky.", "case_ids": [ 1322977 ], "opinion_index": 0, "case_paths": [ "/ky/121/0374-01" ] }, { "cite": "91 App. Div. 202", "category": "reporters:state", "reporter": "A.D.", "case_ids": [ 7670111 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/nys/86/0315-01" ] }, { "cite": "117 Atl. 765", "category": "reporters:state_regional", "reporter": "A.", "opinion_index": 0 }, { "cite": "140 Md. 395", "category": "reporters:state", "reporter": "Md.", "case_ids": [ 2133884 ], "opinion_index": 0, "case_paths": [ "/md/140/0395-01" ] }, { "cite": "100 S. W. 680", "category": "reporters:state_regional", "reporter": "S.W.", "opinion_index": 0 }, { "cite": "123 Mo. App. 249", "category": "reporters:state", "reporter": "Mo. App.", "case_ids": [ 1569674 ], "opinion_index": 0, "case_paths": [ "/mo-app/123/0249-01" ] }, { "cite": "37 So. 270", "category": "reporters:state_regional", "reporter": "So.", "opinion_index": 0 }, { "cite": "140 Ala. 444", "category": "reporters:state", "reporter": "Ala.", "case_ids": [ 8488792 ], "opinion_index": 0, "case_paths": [ "/ala/140/0444-01" ] }, { "cite": "176 S. W. 689", "category": "reporters:state_regional", "reporter": "S.W.", "opinion_index": 0 }, { "cite": "118 Ark. 438", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1562533 ], "opinion_index": 0, "case_paths": [ "/ark/118/0438-01" ] }, { "cite": "14 S. W. 2d 1104", "category": "reporters:state_regional", "reporter": "S.W.2d", "opinion_index": 0 }, { "cite": "179 Ark. 110", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 8719175 ], "opinion_index": 0, "case_paths": [ "/ark/179/0110-01" ] }, { "cite": "145 S. W. 556", "category": "reporters:state_regional", "reporter": "S.W.", "opinion_index": 0 }, { "cite": "103 Ark. 473", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1351949 ], "opinion_index": 0, "case_paths": [ "/ark/103/0473-01" ] }, { "cite": "163 S. W. 785", "category": "reporters:state_regional", "reporter": "S.W.", "opinion_index": 0 }, { "cite": "111 Ark. 223", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1540401 ], "opinion_index": 0, "case_paths": [ "/ark/111/0223-01" ] }, { "cite": "37 Am. Dec. 769", "category": "reporters:federal", "reporter": "Am. Dec.", "opinion_index": 0 }, { "cite": "4 Ark. 76", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 8728347 ], "opinion_index": 0, "case_paths": [ "/ark/4/0076-01" ] } ], "analysis": { "cardinality": 538, "char_count": 7613, "ocr_confidence": 0.511, "pagerank": { "raw": 1.575668563421259e-07, "percentile": 0.6794463692670886 }, "sha256": "3a162cff1aaee0457b181b02c1c4d67df1e5df413932d9b1e0e28f181bacec05", "simhash": "1:782ce51fd05d050b", "word_count": 1250 }, "last_updated": "2023-07-14T23:00:45.785345+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "Johnston v. Missouri Pacific Railroad Company, Thompson, Trustee." ], "opinions": [ { "text": "Griffin Smith, C. J.\nTwo questions are presented: (1) Is the bond of a'corporation engaged in manufacturing wood products void for want of consideration, such bond having been executed to guarantee the railroad company against loss by reason of the corporation\u2019s failure to \u25a0fully perform under a contract whereby the shipper was billed at reduced rates on inbound rough materials upon its agreement to utilize the carrier in transporting finished products ! (2) Did bankruptcy of the corporation and its consequent inability to ship in refined form relieve sureties on the bond!\nThe carrier\u2019s suit was hoard on an agreed statement, a jury having been waived. The sureties have appealed from a judgment for $919.09,\nThe agreed statement is that prior to 1935 Fort Smith Body Company manufactured automobile body parts and other commodities. Lumber and supplies were purchased at distant places and brought to the company\u2019s plant in appellee\u2019s freight cars. The carrier\u2019s tariffs were on file with interstate commerce commission.\nApril 13,1935, the shipper contracted with the carrier in respect to the carrier\u2019s freight tariffs 5023-AG and 5683-AB. The shipper\u2019s engagement was to fulfill all requirements of a so-called rough material tariff: (a) By utilizing the carrier\u2019s rail facilities in transporting to destination beyond the switching limits of Fort Smith such outbound tonnage as should meet requirements of the rough\u25a0 material tariff, (b) By keeping records of rough materials received and outbound tonnage and furnish to carrier the information so compiled, (c) By \u201c[paying] to the carrier, within thirty days following presentation of bill, freight at full local rate or rates on any portion of rough material shipped into said plant . . . for which the percentage of tonnage required to be shipped outbound by rough material tariff shall not, within the time limit prescribed thereby, have been shipped as aforesaid.\u201d (d) \u201c. .' . execute for benefit of carrier ... a written bond of indemnity, in the penal sum of $2,000, and having as sureties thereon two individuals acceptable to carrier, conditioned for performing of shipper\u2019s undertakings herein.\u201d\nThe bond was delivered the day contract was executed, with I. H. Nakdimen and Ben B. Johnson as sureties. Johnson was president of the body company. Nakdimen had no connection with it. The shipper received, from time to time, rough lumber on which the special inbound rates permitted by the tariffs were charged. It is conceded that the carrier did not receive the reshipment o.f finished products on inbound shipments as provided by tariff. Difference between rates paid on inbound lumber \u201cand the regular rates account not reshipped aggregates $919.09.\u201d\nMarch 6, 1939, the body company was adjudicated a bankrupt. It then had on hand 300,000 pounds of unprocessed lumber and an equal amount of finished'materials. All of these commodities and supplies were disposed of by the trustee. A stipulation was : \u2018 \u2018 The amount of the credits, if allowed on said materials on hand, would be $500.\u201d\nThe railroad company\u2019s claim was allowed by the referee, but nothing has been paid on it.\nAppellants say it is elementary that a contract, to be binding, must be based upon some consideration, and cite Lane v. Levillian, 4 Ark. 76, 37 Am. Dec. 769 ; also First National Bank v. Nakdimen, 111 Ark. 223, 163 S. W. 785, Ann. Cas. 1916A, 968. While the abstract rule of law stated by appellants is correct, neither of the cases referred to sustains the conclusion contended for here. There ivas consideration. The contract was for the mutual benefit of those who made it. Rates on rough inbound lumber were fixed by tariff regulations; but, with sanction of interstate commerce commission, the carrier was allowed to make concessions on condition that it receive the manufactured article for shipment.\nThe arrangement is a permissive one through which the carrier, by reducing its inbound charges, is assured of additional traffic that might, but for the contract, go to a competitor. At the same time the shipper benefits to the extent of the lower rate on its rough materials.\nThe bond is an incident of the contract, and clearly each is supported by a valuable consideration. It is true a surety\u2019s promise, like any other contract, must rest upon consideration; but the surety need -not be benefited. The surety\u2019s promise may repose upon the consideration received by the principal, or it may rest upon a disadvantage resulting to a creditor. Kissire v. Plunkett-Jarrell Grocer Co., 103 Ark. 473, 145 S. W. 556.\nThe second contention is that bankruptcy was an intervening cause preventing manufacture of merchandise from 300,000 pounds of rough lumber, and shipment of 300,000 pounds of processed stocks. Williams v. Maners, 179 Ark. 110, 14 S. W. 2d 1104, is presented as authority. A headnote is that a contractual provision in favor of a money lender, specifying that the lender should collect the indebtedness from rents on c.ertain property, became unenforceable when the borrower\u2019s bankruptcy placed him in position preventing performance. The transaction was one between principals, rather than sureties. The case is therefore not applicable.\nTitle 11, USCA, \u00a7 34, provides that liability of a person who is a co-debtor with, or guarantor, or in any manner a surety for, a bankrupt, shall not be altered by the discharge of such bankrupt.\nIn Polk v. Stephens, 118 Ark. 438, 176 S. W. 689, it was held that Stephens\u2019 oral promise to pay a note, and a credit of one dollar, did not have the effect of reviving the obligation: \u201c. . . the [circuit court] properly held that the plaintiff\u2019s cause of action against [Stephens] was barred by the discharge in bankruptcy.\u201d However, in the following paragraph Mr. Justice Hart said: \u201cThe right of the creditor against third parties liable jointly with the bankrupt or secondarily for him are not impaired by the bankrupt\u2019s adjudication nor by the bankrupt\u2019s discharge.\u201d Remington on Bankruptcy, 2d ed., v. 2, \u00a7 1510, was cited. This seems to be the rule. Leader v. Mattingly, 140 Ala. 444, 37 So. 270; D. C. Wise Coal Co. v. Columbia Lead & Zinc Co., 123 Mo. App. 249, 100 S. W. 680; Maryland Casualty Co. v. Jones, 140 Md. 395, 117 Atl. 765; Witthaus v. Zimmerman, 91 App. Div. 202, 86 N. Y. S. 315; Dersch v. Walker, 121 Ky. 374, 28 Ky. Law Rep. 325, 89 S. W. 233; Rafferty v. Klein 256 Pa. 481, 100 Atl. 945.\nIt is finally insisted by appellants that in any event they should be allowed $500 as a credit on the materials not shipped.\nThis is not a suit for damages for failure to perform outbound obligations of the contract. It is an action against the sureties to collect the difference between tariff on inbound shipments and the rate actually paid under the contract induced by the promise to ship manufactured products. Expressed differently, the body company paid $919.09 less than regular rates on the inbound lumber. The complaint says: \u201cBy reason of said failure [to reship] the plaintiff is entitled to local rates instead of the rough material tariff rate because of the failure [of the body company]- to ship said finished products in the quantity required by said rough material tariff.\u201d\nWith discharge of the judgment, appellants will be entitled to subrogation in respect of the railroad company\u2019s claim to the extent of any payments made by the trustee in bankruptcy.\nAffirmed.", "type": "majority", "author": "Griffin Smith, C. J." } ], "attorneys": [ "Hardin <& Barton, for appellant.", "Thos. B. Pryor and Thos. B. Pryor, Jr., for appellee." ], "corrections": "", "head_matter": "Johnston v. Missouri Pacific Railroad Company, Thompson, Trustee.\n4-6679\n160 S. W. 2d 39\nOpinion delivered March 16, 1942.\nHardin <& Barton, for appellant.\nThos. B. Pryor and Thos. B. Pryor, Jr., for appellee." }, "file_name": "1036-01", "first_page_order": 1054, "last_page_order": 1058 }