State v. Miller-Butterworth Co. ( 1924 )

McCulloch, C. J.

The State of Arkansas instituted an action at law in the Pulaski Circuit Court against Miller-Butterworth Company, one of the appellees, to recover the rental price under a lease contract executed by the State Highway Department with said appellee for the use of three motor trucks and a locomotive derrick and steel crane, the last mentioned piece of machinery being designated as a Drave-Doyle locomotive derrick and steel crane, which is a piece of machinery used for hoisting purposes. All of the machinery specified in the contract had been received by the State Highway Department-from the United States Government as unused war material donated to the State under the act of Congress approved March 15, 1920, entitled, “An act to authorize the Secretary of War to transfer certain surplus motor-propelled vehicles * * * and road-making materials to various services in the departments of the government and for the use of the States.” 41 Stat. at L., p. 530.

It is undisputed that the title to the three trucks embraced in the lease contract is still in the State Highway Department, under the donation from the Federal Government, but the title to the crane mentioned in the rental contract is in dispute. Another action involving the title to the crane was consolidated with the suit against Miller-Butterworth Company, and. both actions were transferred to the chancery court and tried together. Gregory & "Wilson, the claimants to the title to the crane, were parties to the action, and the chancery court decided in favor of Gregory & Wilson and against the State as to the title to the crane, and decided in favor of Miller-Butterworth Company and against the State as to the right of the latter to recover rent.

The real issue in the case concerns the title to the crane, for the Miller-Butterworth Company paid the rentals as long as it used the property, and offered to return the trucks. Gregory & Wilson purchased the trucks from the State Highway Department, and after-wards contracted to sell the same to the Miller-Butter-worth Company, but, when the title became in dispute, the sale was rescinded and the property and machine were returned to Gregory & Wilson. It was embraced in the lease contract, but the contention of Miller-Butterworth Company is that the State had no title to the crane, and that it was surrendered to Gregory & Wilson under paramount title. The real issue in the case therefore is, as before stated, concerning the title to the crane.

■The act of Congress, supra, constituted a donation of the title m praesenti by the Federal Government to the State. State v. Cox, 154 Ark. 493. Section 5 of the act of Congress provides that the vehicles and equipment donated “shall be and remain vested in the State for the use and improvement of the public highways,” and the section embraces the further condition that “no such vehicles and equipment in serviceable condition shall be sold or the title to the same transferred to any individual, company or corporation.” The case turns on the proof as to whether or not the machine is one which falls within the condition stated in the Federal statute with respect to serviceability. The testimony in the case is very voluminous, many witnesses being' called to testify as experts and as to their experience in the use of such machine on the question as to its serviceability. The testimony is overwhelming, if there is, indeed, any dispute at all, that the crane is not serviceable for general road-building purposes on account of the fact that it is too wide for a standard-gauge railroad track, and therefore cannot be moved about without being taken down. There is proof to the effect that it is adapted to a very limited service at central points for the purpose of loading or unloading gravel or rock to be used for road purposes. The proof shows that the machine was constructed and purchased by the Federal Government as a hoisting machine for loading and unloading vessels at dock, and, as before stated, it was not serviceable for general road-building purposes. That being the state of the case, it is controlled by the decision of this court in the case of State v. Cox, supra. The testimony in the two cases is substantially the same, each involving the same kind of a machine, and in that case we construed the statute to mean that the language of the exemption referred to serviceability in a practical sense for road-building purposes. We based the decision upholding the sale by the State on the ground that “a preponderance of the evidence shows that the property in controversy at the time of its sale to appellee was' unserviceable and not suitable for general road-building purposes in this State.” In the opinion it was also said: ‘ ‘ The equipment was entirely too heavy, not of standard gauge, and was impractical to be used in building highways in the State of Arkansas.” While the proof shows that the equipment was virtually new, nevertheless it was not serviceable for the building of highways in this State.

The legal title to the machine was, and is,- in appellees, Gregory & "Wilson, and, as' the Miller-Butterworth Company surrendered possession to them under paramount title and offered to return the trucks under the option clause in the lease contract, the latter is not liable to the State for the rent.

The decree is therefore affirmed.