Ok, now I know what happened. I had my book right here. It was a drunk named Reuben Smith that broke Beauty's knees. It was his second or 3rd owner, he was riding Beauty full speed and was too drunk to notice that he threw a shoe. He was running on rocks, being whipped to go faster, tearing up that foot and stumbled from the pain, landing on his knees.
That book would just make me mad at people.
I remember, I think, that BB felt betrayed and confused because even though the guy was a drunk, he had been pretty good to him. BB didn't understand why all of the sudden he was whipping him and not noticing the thrown shoe.
It's like the pony thing with the boy.... seeing these events through the horse's perspective.