رَأَيْتُ الطَّالِبَ مُبْتَسِمًا
Translation: I saw the student while he was smiling.
رَأَيْتُ: past verb with subject -tu.
الطَّالِبَ: definite accusative object; ḥāl referent.
مُبْتَسِمًا: accusative ḥāl describing the seen student.
The speaker is the subject, but the circumstance belongs to the direct object.