author: Richard B. Adkisson, Chief Justice.

text:
    James W. POWELL v. Wade BISHOP et al
    83-20
    652 S.W.2d 9
    Supreme Court of Arkansas
    Opinion delivered June 6, 1983
    [Rehearing denied July 5, 1983.]

      Lisle ¿r Watkins, for appellant.

      William Jackson Butt 11 of Davis, Cox & Wright, for appellees.
   Richard B. Adkisson, Chief Justice.

Appellee, Wade Bishop, and other property owners filed a petition to create the Appleby Road Street Improvement District with the city clerk of Fayetteville, Arkansas, pursuant to Ark. Stat. Ann. § 20-108 (Supp. 1981). The Fayetteville Planning Commission determined that the proposed improvement district was in keeping with the city’s master street plan, and the proposal was then submitted to the Fayetteville Board of Directors. The Board determined that the petition contained the requisite number of signatures of owners of a majority of the assessed value of real property within the proposed district but that the petition excluded certain property which would receive a substantial benefit from the proposed district; therefore, the Board adopted Ordinance No. 2830 denying the petition for creation of the district.

Thirty-five days later appellee petitioned the circuit court for a writ of mandamus, praying that the Fayetteville Board of Directors be required to adopt an ordinance establishing the Appleby Road Street Improvement District in accordance with the original petition to create said district. Shortly thereafter, appellant, James W. Powell, intervened, alleging that he was a property owner within the proposed district whose interests would be adversely affected and that his interest was different from the existing parties.

The Washington County Circuit Court held a hearing on whether the Board properly denied the creation of the district. Attorneys representing appellees, the city, and appellant were all present. The court ruled that the city should have created the proposed district and issued the writ of mandamus. Appellant brought this appeal, alleging that mandamus is not the proper procedure to compel the creation of the district.

We first note that at the hearing before the trial court it was undisputed that mandamus was the proper remedy. Both the trial judge and the attorney for the city orally agreed that mandamus was proper, without objection by appellant. Although appellant objected to mandamus after the hearing, he in effect agreed at the hearing that mandamus was the proper procedure, thereby waiving his right to make an objection at a later time. See ARCiv.P Rule 46. Under these circumstances we affirm the trial court’s issuance of mandamus, but take this opportunity to correct a widely held misconception that mandamus is a proper method by which to review a city’s decision regarding the creation of an improvement district which arose as a result of our decision in Little Rock v. Boullioun, 171 Ark. 245, 284 S.W. 745 (1926).

In Boullioun the city voted not to annex property to an improvement district and the trial court issued a writ of mandamus to compel the city to do so. This court affirmed the trial court’s holding that the city should have annexed the property, but we did not address the issue of whether mandamus was the appropriate remedy since it was not before us. However, we now decide that mandamus is not a proper method to review a city’s decision regarding the creation of an improvement district because Ark. Stat. Ann. § 20-108 (Supp. 1981) provides for an adequate remedy by way of an appeal to chancery court. See Wells v. Purcell, 267 Ark. 456, 592 S.W.2d 100 (1979).

Affirmed.


source: Caselaw Access Project

author: Frank Holt, Justice.

license: Public Domain

text:
    Walter R. PADGETT and Carol Sue PADGETT v. Peggy A. Haston v. BANK OF EUREKA SPRINGS, Eureka Springs, Arkansas
    83-55
    651 S.W.2d 460
    Supreme Court of Arkansas
    Opinion delivered June 6, 1983

      Epley. Epley & Castleberry, Ltd., by: Alan D. Epley, for appellants.

      Coxsey ir Coxsey, by: Kent Coxsey, for appellee and cross-appellant.

      R. H. Mills, for cross-appellee.
   Frank Holt, Justice.

In 1969 appellant Walter Padgett and appellee Peggy Haston, who were then married and residing in Louisiana, purchased Arkansas realty which is the subject of this partition action. The purchase price of $3,500 was paid from their joint account. They acquired title as tenants by the entirety. In March 1976 Walter and Peggy sold their Louisiana home and divided equally the net proceeds of $14,000. Peggy bought a mobile home in Louisiana with her share. Walter moved to the Arkansas property and contracted for the construction of a house thereon. He expended $5,000 of his share of the proceeds from the sale of the Louisisna home. In addition he borrowed $20,000 from the Bank of Eureka Springs. The construction contract was executed in the names of "Walter R. Padgett and Peggy Padgett, husband and wife” and was signed by both parties. Similarly, the mortgage in favor of the Bank of Eureka Springs, cross-appellee, to secure the $20,000 note was executed in the names of “Walter R. Padgett and Peggy Padgett, husband and wife” and was signed by both parties.

In January 1978 Walter commenced an action for divorce. He alleged there were no property rights to be adjudicated. Eleven days later Peggy’s Louisiana attorney wrote Walter’s attorney stating that she wished to make a property settlement without the necessity of formal legal proceedings. She then entered an appearance and waived process, allowing an entry of a divorce decree without further notice to her. In March, 1978, the chancellor granted Walter a divorce, giving him custody of the parties’ seventeen year old son. The chancellor made a finding there were no property rights to be adjudicated.

In September 1979 Walter married Carol Sue Padgett. Several months later Walter and Carol Sue executed two notes to the Bank of Eureka Springs. One note was in the amount of $14,911 which was the balance remaining on the original $20,000 note. The second note was in the amount of $10,000. Walter and Carol Sue also executed a mortgage in favor of the bank in the amount of $24,911, securing both notes with the property which is sought to be partitioned in this action.

In October 1980 Walter and Carol Sue Padgett were divorced. In December 1980 Walter and Peggy’s son moved from the premises in question at the request of Walter. This action for partition was commenced by Peggy in February 1981. The defenses of unjust enrichment, estoppel, laches, and homestead rights were interposed. The chancellor granted the partition. He held that the tenancy by the entirety was automatically dissolved into a tenancy in common by the 1978 divorce decree. He found that the doctrine of laches prevented Peggy from sharing in the increased value of the premises attributable to $10,364.71 improvements made subsequent to the divorce between Walter and Peggy. He ordered the property sold at public auction and the proceeds divided in the following priority: cost of the sale, Commissioner’s fee and legal costs incurred in this action, including an attorney’s fee of 6% of the sale proceeds to Peggy’s attorney; $13,116.46 principal and accrued interest on the $14,911 note to the Bank of Eureka Springs; $10,364.67 to Walter R. Padgett, subject first to the lien of $5,000 and all accrued interest on the $10,000 note in favor of the Bank of Eureka Springs; $1,795.54 to Walter R. Padgett, the difference in the amount of principal owed the Bank of Eureka Springs, Eureka Springs, Arkansas, on June 26, 1980 and on April 14, 1982, date of trial; one-half of the remaining balance to be distributed to Peggy Haston; the remaining one-half to Walter Padgett. Walter’s portions are subject to federal tax liens. Five points are raised on appeal and three on cross-appeal.

The appellants first argue that the doctrines of estoppel and laches preclude the appellee from claiming any interest in the property in question. This argument is based on the premise that the appellee allowed appellant Walter Padgett to construct a dwelling on the property, thereby greatly increasing its value, without asserting her claim to it until three years after the divorce and five years after the separation. They also contend that the appellee should have asserted her property rights in the divorce action. In Foote's Dixie Dandy v. McHenry, Adm’r, 270 Ark. 816, 607 S.W.2d 323 (1980), we reiterated the doctrine of estoppel as follows:

Four elements are necessary: (1) the party to be estopped must know the facts; (2) he must intend that his conduct shall be acted on or must so act that the party asserting the estoppel had a right to believe it is so intended; (3) the latter must be ignorant of the true facts; and (4) he must rely on the former’s conduct to his injury.

Here, the dwelling was constructed in 1976 and the value of the property was thereby enhanced when the appellant Walter Padgett first moved to the Carroll County property. If Walter relied on Peggy’s conduct to his injury at any time, this would have been the time at which the reliance took place. The evidence clearly shows, however, that, at this time, both Peggy and Walter understood that Peggy shared in the ownership of the property. She had joined in signing the mortgage on the property, at the request of Walter, as well as signing the contract for the construction of the dwelling. We cannot say that Peggy acted in such a manner as to give Walter the right to believe that she was asserting no interest in the property, nor can we say that Walter was ignorant of the critical fact that she had and claimed an interest in it.

In order to apply the doctrine of laches, it must be shown that there was an unreasonable delay in asserting some right and because of the delay the party claiming the protection of laches changed his position to his detriment so as to make it inequitable to enforce the asserted right. Hendrix v. Hendrix, 256 Ark. 289, 506 S.W.2d 848 (1974); and Williams v. Grayson, 224 Ark. 207, 273 S.W.2d 844 (1954). Again, the change of position occurred in 1976 when the dwelling was built. The appellant, Walter Padgett, did not change his position again with respect to the property until after the divorce in 1978, when he expended $10,364.67 to improve the house. Thus, Peggy’s delay between 1976 and 1978 in asserting her claim did not injure Walter. We cannot say that the failure of Peggy to assert her claim to the property immediately in 1976, when the parties were initially separated and no plans were yet made for a divorce, so far as the record indicates, is sufficient to invoke the doctrine of laches.

The appellants next argue that the chancellor erred in awarding Peggy any interest in the value of the property represented by the improvements thereon, because such an award results in the unjust enrichment of the appellee, citing Frigillina v. Frigillina, 266 Ark. 296, 584 S.W.2d 30 (1979). There, we said that a person is unjustly enriched and will be required to make restitution when another person confers a benefit through mistake, whether of fact or law. Here, we find no evidence that the appellant, Walter Padgett, built the dwelling which increased the value of the property under the influence of a mistake as to fact or law. His conduct in obtaining the appellee’s signature on the house construction contract and mortgage to the bank indicates that he was not mistaken with respect to Peggy’s interest in the property. As abstracted, he did not testify that he was under the influence of any mistaken belief as to her claim to the property.

The appellants next argue the chancellor erred in failing to apply the homestead exemption contained in the partition statute, Ark. Stat. Ann. § 34-1801 (Supp. 1981), which provides as follows:

Any persons having any interest in and desiring a division of land held in joint tenancy, in common, as assigned or unassigned dower, as assigned or unassigned courtesy [curtesy], or in coparceny, absolutely or subject to the life estate of another, or otherwise, or under an estate by the entirety where said owners shall have been divorced either prior or subsequent to the passage of this Act, except where the property involved shall be a homestead and occupied by either of said divorced persons, shall file in the circuit or chancery court a written petition in which a description of the property, the names of those having an interest in it, and the amount of such interest shall be briefly stated in ordinary language, with a prayer for the division and for a sale thereof if it shall appear that partition cannot be made without great prejudice to the owners, and thereupon all persons interested in the property who have not united in the petition shall be summoned to appear. (Italics supplied.)

The italicized portion of the statute was added by Acts of Arkansas, 1947, No. 161 § 1. Section 3 of Act 161, the emergency clause, states:

It is hereby found and declared by the General Assembly that the present statute relative to partition of real property in Arkansas, having been enacted many years ago, is inadequate and not broad enough to provide this form of relief in numerous cases in the State of Arkansas, and which are working an unjust hardship upon citizens owning property jointly, in common, or in coparceny, absolutely or subject to the life estate of another or otherwise, under an estate by the entirety, where said owner shall have been divorced either prior or subsequent to the passage of this Act, and that such condition is hindering the alienation of real property and prejudicing the property rights of many citizens. (Italics supplied.)

The appellants contend that the homestead exception should be construed to limit the right to partition with respect to each form of tenancy listed in § 34-1801. We disagree. Act 161 added the portion of the statute creating the right to partition an estate by the entirety where the owners have been divorced and simultaneously added the homstead exception, which on its face applies only to “said divorced persons.” Thus, the express language of the exception refers only to that portion of § 34-1801 creating a right to partition land held as tenants by the entirety by divorced persons. Furthermore, the emergency clause pf Act 161, quoted above, clearly indicates that the legislative intent was to broaden rather than narrow the availability of the remedy of partition. Accordingly, we hold that the homestead exception contained in § 34-1801 applies only to property held by divorced persons as tenants by the entirety and not to property held as tenants in common, as here.

The appellants also argue that the chancellor erred in applying Ark. Stat. Ann. § 34-1215 (Supp. 1981), which states:

Hereafter when any Chancery Court in this State renders a final decree of divorce, any estate by the entirety or survivorship in real or personal property shall be automatically dissolved unless the Court order specifically provides otherwise, and in the division and partition of said property parties shall be treated as tenants in common.

Section 34-1215 was first enacted in 1947. At that time the legislature gave to the chancery courts the authority to dissolve tenancies by the entirety into tenancies in common upon a final decree of divorce. Acts of Arkansas, 1947, No. 340. In 1975 § 34-1215 was amended by substituting the language quoted above for the old statute enacted by the 1947 Act 340. The appellants argue that since the tenancy by the entirety was created in 1969, six years before the dissolution of tenancies by the entirety was made automatic in the absence of specific provision otherwise in the divorce decree, it is an unconstitutional retroactive legislation to apply § 34-1215 in its present form. The appellants rely upon Jenkins v. Jenkins, 219 Ark. 219, 242 S.W.2d 124 (1951), where we held that Act 340 of 1947 could not be applied retroactively. Prior to 1947 our cases held that a decree of divorce could not dissolve an entire estate, so the courts could not divest one spouse of the estate by the entirety. Jenkins v. Jenkins, supra. Thus, in Jenkins, our holding was that a vested estate could not by subsequent legislation be made contingent upon continued marriage and the action or inaction of a court. However, all estates by the entirety created after the effective date of Act 340 of 1947 were made contingent upon continued marriage and the action or inaction of the court in any divorce proceedings. Here, the estate in tenancy by the entirety created in 1969 was, by the terms of Act 340 of 1947, contingent upon continued marriage. The tenancy by the entirety was, from its inception, subject to divestment upon divorce. The 1975 amendment merely changed the procedure by which the divestment might occur. The rule as to changes in procedures is stated in 16A Am. Jur. 2d § 675 (1979) as follows:

Although the distinction between remedial procedures and impairment of vested rights is often difficult to draw, it has become firmly established that there is no vested right in any particular mode of procedure or remedy. Statutes which do not create, enlarge, diminish, or destroy contractual or vested rights, but relate only to remedies or modes of procedure, are not within the general rule against retrospective operation. In other words, statutes effecting changes in civil procedure or remedy may have valid retrospective application, and remedial legislation may, without violating constitutional guarantees, be construed... to apply to suits on causes of action which arose prior to the effective date of the statute ... A statute which merely provides a new remedy, enlarges an existing remedy, or substitutes a remedy is not unconstitutionally retrospective ....

Finally, the appellants made an abbreviated argument that the award of attorney’s fees to appellee Peggy Haston’s attorney was not a “reasonable fee” for bringing the partition action. Ark. Stat. Ann. § 34-1825 (Supp. 1981) provides there shall be an allowance of a reasonable attorney’s fee in a partition action. We have construed this provision as being mandatory. Johnston v. Smith, 248 Ark. 929, 454 S.W.2d 649 (1970); and Cole v. Scott, 264 Ark. 800, 575 S. W.2d 149 (1979). There is no fixed formula in partition actions, unlike probate proceedings, to be applied in the determination of an attorney’s fee. Cole v. Scott, supra. We have said it is within the broad discretion of the trial court, although it must not be abused. Equitable Life Assur. Society v. Rummell, 257 Ark. 90, 514 S.W.2d 224 (1974). Here, suffice it to say that in our opinion the appellants failed to meet their burden of demonstrating an abuse of discretion by the chancellor.

Three points are raised on cross-appeal. The cross-appellant Peggy Haston first argues the chancellor erred in finding her guilty of laches and awarding cross-appellee Walter Padgett $10,364.67 from the proceeds of the partition sale for the improvements he made after the divorce in 1978.

In Avera v. Banks, 168 Ark. 718, 271 S.W. 970 (1925), the court said:

There is no hard and fast rule as to what constitutes laches. It is well settled that a court of equity may, in the exercise of its own inherent powers, refuse relief where it is sought after undue and unexplained delay, and where injustice would be done in the particular case by granting the relief asked. It is usually said that the two most important circumstances in such cases are the length of the delay and the nature of the acts done during the interval, which might affect either party and cause a balance of justice or injustice in taking the one course or the other in so far as it relates to the remedy. (Citing cases).

Here, the parties were divorced in March 1978. The cross-appellant had an opportunity to raise her claim to the property in that proceeding, but she did not do so, though her attorney indicated she wished to resolve the property issues out of court. Instead, she waited three years before instituting this action for partition. During that time, her former husband, Walter, and his second wife, Carol Sue, the cross-appellees, borrowed and expended more than $ 10,000 to improve the property. The cross-appellant was in contact with her son who was living on the premises and she either knew or had opportunity to know of these improvements. Her excuse for the three year delay in asserting her rights is that she wished her son to live in the house. However, that is no justification for sleeping on her rights. The chancellor mitigated the effects of the doctrine of laches by limiting its application to the improvements after divorce. He did not declare that the cross-appellant had forfeited her rights with respect to the title to the property or the improvements made before the divorce. We find no error. For the same reasons we affirm the chancellor’s award of $ 1,795.54 to Walter Padgett, cross-appellee, for the amount of principal reduced on the mortgage after the divorce and the marriage between Walter and Carol Sue Padgett.

Finally, the cross-appellant argues that the court erred in holding her interest in the property to be subject to a mortgage held by the Bank of Eureka Springs. She argues the original mortgage, which she signed, was extinguished when the cross-appellees refinanced the original loan and executed a new mortgage, which she did not sign. The original mortgage was never released of record. By its terms, it secured future or additional debts owed by any person designated “Mortgagor.” Walter Padgett was designated as a “Mortgagor.” The subsequent debts were of the same character as the original debt. They were used to improve the same property as were the proceeds from the original debt. Furthermore, the subsequent debts were incurred during the period of time that the original mortgage was intended to secure the original note. Therefore, in the facts of this case, we hold the original mortgage continued to secure the additional debt incurred by Walter Padgett in 1979, even if, as the cross-appellant argues, the original debt was extinguished at the time the 1979 notes were executed. See Meek, Mortgage Provisions Extending the Lien to Future Advances and Antecedent Indebtedness, 26 Ark. Law Rev. 423 (1973).

Affirmed on direct and cross-appeal.


author: John I. Purtle, Justice.

text:
    SERVICE COMMUNICATIONS, INC. v. Roy WELLS and Floyd McCONNELL
    83-127
    651 S.W.2d 100
    Supreme Court of Arkansas
    Opinion delivered June 6, 1983

      Eldridge & Eldridge, by: John D. Eldridge, III., for appellant.

      David Hodges, for appellees.
   John I. Purtle, Justice.

A White County Circuit Court jury returned a defendant’s verdict upon appellant’s complaint for damages in which it was claimed that appellee was guilty of negligence which proximately caused appellant’s damages. The only argument on appeal is that there was no substantial evidence to support the verdict. We cannot agree with this argument.

Roy Wells, one of the appellees, owned farmland in White County and agreed to lease a portion of his land to appellant who then constructed a radio transmitter tower thereon. Guy wires were fasted to the tower and anchored to the ground. Wells farmed the land for a time but later rented or leased it to Floyd McConnell, the other appellee.

On June 5, 1980, about 8:30 p.m., Wells, working as hired hand for McConnell, drove a farm tractor into one of the guy wires with sufficient force to fell the tower. The complaint alleged that Wells was careless and negligent in the operation of the tractor. During the trial the only evidence of anything causing the tower to fall was the force of the impact of the tractor with the guy wire. Wells testified that he knew the wires were present and was in fact looking back to see if the disk he was pulling would clear one wire when the outside dual wheel of the tractor struck another wire. The left front tire on the tractor struck the wire with sufficient force to topple the tower. Wells stated the sun was getting low and was in front of him when he drove into the guy wire. The wire he struck was in the shade at the time it was struck. He further stated he was acting in exactly the same manner he had on other occasions while farming this same land and he did not know of anything he had failed to do which any ordinary person in the same situation would have done. The trial court overruled appellant’s motion for a new trial.

The only question on appeal is whether the evidence, or lack of it, was sufficient to support the verdict. This court will not reverse a trial court’s denial of a motion for a new trial if the decision is supported by substantial evidence. Landis v. Hastings, 276 Ark. 135, 633 S.W.2d 26 (1982). However, the trial court is guided by ARCP, Rule 59 (a). One of the grounds listed in Rule 59 (a) upon which a trial court can grant a new trial is a finding that the verdict is contrary to the preponderance of the evidence or is contrary to the law. Rule 59 (a) (6) was amended by per curiam on May 17, 1982, to make it read “clearly contrary.” In Clayton v. Wagnon, 276 Ark. 124, 633 S.W.2d 19 (1982), we announced that on appeal the decision of the trial court will not be reversed absent an abuse of discretion. In Wagnon we were dealing with a situation where the trial court granted a motion for a new trial. In Landis v. Hastings, supra, the motion for a new trial was denied. Both cases were affirmed because there was not a sufficient showing of abuse of discretion. The motion for a new trial was denied in the present case. In accordance with the opinion in Landis we find that there was substantial evidence to support the verdict and there was no abuse of discretion. Therefore, we will not disturb the trial court’s action.

The court instructed the jury in accordance with AMI 603 to the effect that the occurrence of a collision is not evidence of negligence. The court also gave AMI 301 which states in part:

To constitute negligence an act must be one from which a reasonably careful person would foresee such an appreciable risk of harm to others as to cause him not to do the act, or to do it in a more careful manner.

At the time of this occurrence, appellee Wells was driving his tractor west into the sun. Also, the guy wire which he strick was in the shadows. Additionally, he stated that he was working in the same manner in which he had worked in past years, and that he had worked this field before. We cannot say that there was no substantial evidence upon which the jury could have made its finding that Wells was not guilty of negligence in striking the guy wire. In Celotex Corp., Inc. v. Lynndale Int'l, Inc., 277 Ark. 242, 640 S.W.2d 792 (1982), we quoted with approval from an earlier case which stated: We think the case of Spink v. Mourton, 235 Ark. 919, 362 S. W.2d 665 (1962) stated the rule appropriately when it said: “ . . . the motion for judgment n.o.v. was properly denied unless it can be said that the trial court should have directed a verdict in favor of the plaintiffs.” The facts before us in this case provide no evidence of error on behalf of the trial court in failing to direct a verdict in favor of the plaintiffs. We feel that the trial court acted properly in denying the motion for new trial.

A verdict upon an issue of fact should not be directed in favor of the party who has the burden of proof with respect thereto, unless such fact is admitted, or is established by the undisputed testimony of one or more disinterested witnesses and different minds cannot reasonably draw different conclusions from such testimony.

Affirmed.


author: Robert H. Dudley, Justice.

text:
    Roger L. GREEN, M.D. v. Edna GOWEN and Curtis GOWEN
    83-132
    652 S.W.2d 624
    Supreme Court of Arkansas
    Opinion delivered June 6, 1983
    [Rehearing denied July 11, 1983.]

      Joseph Philip James, for appellant.

      Charles R. Easterling, for appellees.
   Robert H. Dudley, Justice.

On February 10, 1979, appellee, Edna Gowen, a patient of appellant, Dr. Roger L. Green, suffered a severe fracture of the right femur while in appellant’s waiting room. Appellee and her husband, Curtis Gowen, contended that the fall occurred when an employee of appellant negligently pushed a castered stool into her path. Appellant’s defense was that the appellee fell for no apparent reason. The trial court denied appellant’s motion for a directed verdict and the jury then returned a verdict in the sum of $15,000. The court subsequently denied appellant’s motion for a new trial. Appellant contends the trial court erred in refusing to direct a verdict and in refusing to grant a new trial. We find no error. Jurisdiction of this tort case is in this Court pursuant to Rule 29 (1) (o).

In determining on appeal the correctness of the trial court’s action concerning a motion for a directed verdict by either party, we view the evidence that is most favorable to the party against whom the verdict is sought and give it the highest probative value, taking into account all reasonable inferences deducible from it. The motion should be granted only if the evidence so viewed would be so insubstantial as to require a j ury verdict for the party to be set aside. Pritchard v. Times Southwest Broadcasting, Inc., 277 Ark. 458, 642 S.W.2d 877 (1982).

The appellee testified that her fall and the resulting injury occurred because appellant’s employee pushed a castered stool into her path. Her orthopedic surgeon testified that the line of her fracture was consistent with falling across an object. Such evidence, although disputed, is not so insubstantial as to require the jury verdict to be set aside. A question of credibility of the witnesses was presented and the jury chose to believe the evidence presented by the appellees.

Since the trial court correctly found the evidence was sufficient to deny the motion for a directed verdict, it follows that it also correctly denied the motion for a new trial based upon insufficiency of the evidence. See Landis v. Hastings, 276 Ark. 135, 633 S.W.2d 26 (1982).

Affirmed.


author: Steele Hays, Justice. Steele Hays, Justice.

text:
    BERKELEY PUMP COMPANY v. REED-JOSEPH LAND COMPANY et al
    82-197
    653 S.W.2d 128
    Supreme Court of Arkansas
    Opinion delivered June 6, 1983
    [Supplemental Opinion on Denial of Rehearing delivered July 18, 1983.]

      Atchley, Russell, Waldrop if Hlavinka, by: Victor Hlavinka, for appellant.

      Smith, Stroud, McClerkin, Dunn if Nutter, by: Charles A. Morgan, for appellee Reed-Joseph Land Company.

      Hubbard, Patton, Peek, Haltom if Roberts, by: Phillip N. Cockrell and James R. Hubbard, for appellees S & W Well' Drilling and Irrigation Corporation and Riceland Machine & Supply Corporation.
   Steele Hays, Justice.

This products liability case involves three irrigation pumps consisting of components manufactured by Berkeley Pump Company, appellant, and assembled and installed by Riceland Machine and Supply Corporation and S & W Well Drilling and Irrigation Corporation, appellees. The pumps were purchased in 1978 from Riceland by J. B. Joseph and Clark Reed, appellees, to supply irrigation to Reed-Joseph’s rice and soybean crops on lands along the Red River in Miller County. In addition to relying on the pumps for their own irrigation needs, Reed-Joseph contracted with Agri-Vestors Corporation, appellee, to supply water for Agri-Vestors’ rice crop.

A few years earlier, Reed-Joseph had purchased a pumping system from Riceland with components supplied by Berkeley consisting of three slant-mounted pumping units having a combined capacity of 30,000 gallons per minute. Wanting an increase in capacity, and relying on performance curves published by Berkeley, Reed-Joseph elected to purchase three new Berkeley impellers which were expected to produce 36,000 gallons per minute. The system, installed in April, 1978, performed inadequately, resulting in drought damage to the crops of Reed-Joseph and Agri-Vestors, and springing this litigation.

Riceland initiated this action by suing Reed-Joseph for the value of the pumps and equipment. Reed-Joseph counterclaimed for damages for its crop losses on counts of strict liability, breach of express and implied warranties, negligence and fraud. Riceland brought Berkeley in by third-party complaint seeking contribution and indemnity and tendering to Berkeley the defense of the Reed-Joseph claims. Agri-Vestors intervened seeking recovery for its losses.

The case was submitted to the jury on all theories and a verdict of $684,753.42 was awarded Reed-Joseph. Riceland was awarded judgment of $134,039.15 and indemnified against Berkeley as to any money recovered by Reed-Joseph and Agri-Vestors with responsibility for the total fault apportioned by the jury at 90% to Berkeley, 10% to Riceland. Riceland was granted full indemnification from Berkeley and awarded $134,039.15 as expenses incurred in defending the litigation. Reed-Joseph was also awarded $15,698.15 and prejudgment interest of $126,081.20. Riceland was given judgment against Reed-Joseph for $32,407.22 plus prejudgment interest of $5,833.30.

On appeal, Berkeley alleges numerous errors, some of which must be sustained. It is urged that there was no breach of warranty for a particular purpose as there was no evidence that any particular purpose was communicated to Berkeley; that it was error to submit the case to the jury on the issue of strict liability and on the issue of fraud; that the court should not have awarded Reed-Joseph $15,698.15 and prejudgment interest, nor should it have indemnified Riceland and allowed it to recover the costs of defense.

Riceland argues on cross-appeal that prejudgment interest should not have been awarded to Reed-Joseph and, in the event of reversal, that the jury should not have been instructed with respect to breach of an express warranty because any such warranties were negated by Reed-Joseph’s failure to comply with certain conditions of warranty; that there was no evidence that Riceland knew of any particular purpose intended for the pumps and the jury should not have been instructed on the issue of a breach of warranty of fitness for a particular purpose.

I

We first consider what we regard as the pivotal point, whether under the evidence it was appropriate to submit the issue of strict liability to the jury.

After the immunity of manufacturers to all but the original purchaser was destroyed by MacPherson v. Buick Motor Co., 217 N.Y. 382, 111 N.E. 1050 (1916) the progress of products liability was gradual but deliberate. Producers of food and beverages experienced the first exposure and other manufacturers followed. In 1960 the Supreme Court of New Jersey applied strict liability to the user of a defective automobile, though wholly on the basis of an implied warranty. See Henningsen v. Bloomfield Motor Company, 32 N.J. 358, 161 A.2d 69 (1960).

In 1965, decisions were reached in two significant cases: in February the New Jersey Supreme Court handed down Santor v. A. and M. Karagheusiam, Inc., 44 N.J. 52, 207 A. 2d 305 (1965), upholding a recovery of an economic loss by a consumer against the manufacturer of a defective rug, recognizing a cause of action in tort, independent of fault or warranty. Justice Francis described the cause as hybrid in character, “having its commencement in contract and its termination in tort.” A few months later the Supreme Court of California, through Chief Justice Traylor, rejected the reasoning of Santor, saying “only if someone had been injured because the rug was unsafe for use would there have been any basis for imposing strict liability in tort.” Seely v. White Motor Company, 63 Cal. 2d 9, 403 P.2d 145, 45 Cal. Rptr. 17 (1965). The opinion points out that the tentative draft of 402A, Restatement of Torts (Second) limits recovery in strict liability to physical harm to persons or property.

That same year 402A was formally adopted by the American Law Institute, providing that one who sells “any product in a defective condition unreasonably dangerous to the user or consumer or to his property” is strictly liable. With the approval of 402A, strict liability “swept the country,” JProsser, The Law of Torts, § 98 at p. 567-8 (4th Edition 1971)] and within a decade all but a few jurisdictions had embraced the concept (Berman v. Watergate West, Inc., 391 A.2d 1351 [D.C. 1978]).

In Arkansas the change from fault to strict liability was legislative rather than j udicial, with the adoption of Act 111 of 1973, which provides for strict liability by suppliers of a product “in a defective condition which rendered it unreasonably dangerous.” (Ark. Stat. Ann. § 85-2-318.2). While our act is “substantially verbatim” to 402A (See Woods, Products Liability: Is Comparative Fault Winning the Day1 36 Arkansas Law Review, No. 3, p. 360, at 364), Act 111 broadened the scope of strict liability in two important respects: by substituting “supplier” for “seller” and injury to “persons and property” for “users” or “consumers.” More recently, the legislature enacted the. “Arkansas Products Liability Act of 1979” (Act. No. 511) (Ark. Stat. Ann. §§ 34-2801 — 34-2807 [Repl. 1962]), which makes no substantive changes, but simply codifies certain precepts and evidentiary rules affecting strict liability. (Powell, Survey of Torts, 3 UALR Law Journal 316.)

With that báckground, we turn to Berkeley’s arguments. It contends that strict liability is not applicable: one, where the product, in spite of any defective condition, does not constitute an unreasonable danger to persons or property; or two, in the absence of injury to persons, such defect causes purely economic loss.

We addressed the issue of economic loss only recently in Blagg v. Fred Hunt Co., Inc., 272 Ark. 185, 612 S.W.2d 321 (1981), where by dictum we opted in favor of the reasoning of Justice Francis in the Santor case. We see no need to review that choice. The other phase of the argument, i.e. that the product must be unreasonably dangerous, was not raised in Blagg and accordingly was not decided. Nor was it raised in another recent decision, Southern Company v. Graham, 271 Ark. 223, 607 S.W.2d 677 (1980). Thus, we have not yet considered to what extent a product in a defective condition must be “unreasonably dangerous” so as to render the supplier or manufacturer strictly liable.

We have little doubt that the language of 402A contemplates a type of defect which renders the product not merely inadequate, but one which poses an actual danger to persons or property. That is explicit in the language, “any product in a defective condition unreasonably dangerous”, and is said at least as plainly in our statute, which requires that the defective condition render the product unreasonably dangerous. We construe the wording as requiring a defect that renders the product not simply deficient but dangerous.

In spite of the clear language of 402A, some disagreement has developed over the terms “unreasonably dangerous” and “defective condition”. A few states have placed the emphasis on defectiveness. In Cronin v. J.B.E. Olson Corp., 8 Cal. 3d 121, 501 P.2d 1153, 104 Cal. Rptr. 433 (1972), the California Supreme Court refused to set aside a verdict for a consumer whose injuries were incurred when a defective safety hasp on a bread truck broke, allowing heavy trays of bread to slide forward into the driver. The result is understandable enough, as a defective hasp behind the driver’s seat of a bread truck readily suggests a danger within the scope of 402A. But the trial court had not instructed the jury that it must find the condition “unreasonably dangerous” as well as defective and the Supreme Court declined to reverse. Noting that strict liabilty was adopted in California, not in the aftermath of 402A, but in advance of it, in the form of Greenman v. Yuba Power Company, 59 Cal. 2d 57, 377 P.2d 897, 27 Cal. Rptr. 697 (1962), the Supreme Court reasoned that to require proof that a product is both defective and unreasonably dangerous imposes a greater burden on the plaintiff than was applied in Greenman. Thus, the court concluded that it was not bound by the unreasonably dangerous requirement of 402A because of that history. Cases following Cronin are Azzarello v. Black Brothers Co., Inc., 480 Pa. 547, 391 A.2d 1020 (1978); Mandell v. Gulf Leasing Corp., 250 Pa. Super. 128, 378 A.2d 487 (1977); Glass v. Ford Motor Co., 123 N.J. Super. 599, 304 A.2d 562 (1973); Berkebile v. Brantly Helicopter Corp., 462 Pa. 83, 337 A.2d 893 (1975).

In Arkansas, however, Model Jury Instructions have contained instructions drafted in response to our strict liability act since their approval in 1973. AMI 1008 and AMI 1012 tell the jury that a plaintiff must prove, among other things, that the product was supplied in a defective condition which rendered it unreasonably dangerous, and the defective condition was a proximate cause of the damage. We believe it was not the intent of 402A to make manufacturers insurers of their products, irrespective of danger, fault or warranty, and going beyond foreseeable consequences, and hence to apply strict liability simply on the basis of a finding of “defective condition” widens the scope of 402A considerably. [See Suvada v. White Motor Co., 32 Ill. 2d 612, 210 N.E.2d 182 (1965)]. This is the majority view and is consistent with the views of Dean John W. Wade, who participated in the formulation of 402A. He explains that strict liability under the Restatement “is not to be imposed unless [the defect] makes the product unreasonably dangerous”.

The only real problem is whether the product is “unreasonably dangerous,” because “defective condition”, if it is to be applied at all, depends on that. Strict liability is appropriate for these cases, and it would be better in them not to refer to any requirement of defectiveness. As a matter of fact, even in the first type of cases in which the article was defective because of something that went wrong in the manufacturing process, the true problem in the end is whether that defect makes the product unreasonably dangerous. (Our italics.) (“Strict Tort Liability of Manufacturers”, 19 Southwestern Law Journal 5, at p. 15.)

A majority of cases have taken a position counter to the result in Cronin: Ford Motor Company v. Lonon, 398 S.W.2d 240 (Tenn. 1966); Northern Power Co. v. Caterpiller, 623 P.2d 324 (Alaska, 1981); Vineyard v. Empire Machinery, 119 Ariz. 502, 581 P.2d 1152 (Ct. App. 1978) (expressly rejecting Cronin); Liberty Mutual v. Sears, 35 Conn. 687, 406 A.2d 1254 (1978); Texsun Feedyards Inc. v. Ralston Purina Co., 447 F.2d 660 (5th Cir. 1971) (feed supplement failed to increase weight of cattle, as intended. Strict liability held not to apply where product was not dangerous, simply ineffective). Kirkland v. General Motors, 521 P.2d 1353 (Okla. 1974); Brown v. Western Farmers Assn., 268 Or. 470, 521 P.2d 537 (1974); Heldt v. Nicholsen Manufacturing Company, 72 Wis. 2d 110, 240 N.W.2d 154 (1976); Medham v. White Laboratories, 639 F.2d 394 (7th Cir. 1981); Two Rivers v. Curtiss Breeding Co., 624 F.2d 1242 (5th Cir. 1980); Patthoff v. Alms, Clark Equipment Co., et al, 41 Colo. App. 51, 583 P.2d 309 (1978), (expressly rejecting Cronin as the minority view). Tenney v. Seven-Up Co., 92 N.M. 158, 584 P.2d 205 (Ct. App. 1978); Moorman Manufacturing Co. v. National Tank Co., 91 Ill. 2d 69, 435 N.E.2d 443 (1982). See cases cited in 13 ALR 3d 1057 and in 63 Am. Jur. 2d § 132 p. 138.

Here, we can find no evidence that the defectiveness of Berkeley’s pumps rendered them dangerous — inadequate and dysfunctional, to be sure, but not dangerous. The pumps may have failed to produce the volume of water Reed-Joseph had a right to expect, but those are issues of warranty, negligence, or misrepresentation and do not render them unreasonably dangerous within the meaning of our act.

Reed-Joseph concedes the question to be whether there is sufficient evidence to sustain a finding that the irrigation pumps or parts were in a defective condition which rendered them unreasonably dangerous, but they cite nothing from the testimony or proof to enable us to confirm that this evidence exists. Their brief suggests that the sale of pumps by Berkeley “without adequate submergence data or without a warning that such data was available, made these pumps ‘defective’ and their use ‘unreasonably dangerous’ to the lands, crops and property” of Reed-Joseph. There are two answers to the argument: first, the fact that the pumps failed to produce water at a level desired or expected does not render them dangerous, at worst, merely useless. Moreover, the comments to 402A and our Act 511 define unreasonably dangerous as requiring something beyond that contemplated by the ordinary and reasonable buyer, taking into account any special knowledge of the buyer concerning the characteristics, propensities, risks, dangers, and proper and improper uses of the product. The likelihood that a pump might fail to produce an optimum volume of water on a sustained basis (whatever the river levels and conditions might be) could hardly be thought to be beyond the contemplation of a knowledgeable buyer, such as we have here. The testimony of Mr. Barthell Joseph makes it clear that he was thoroughly familiar with irrigation techniques and aware that pump performances varied, depending on a number of conditions. It would be too much to think that it was beyond his comprehension that a pumping system like this one might not produce the goal of 36,000 gallons per minute, and was, therefore, unreasonably dangerous. The evident fact is that Reed-Joseph watched the results of the new system closely, and Mr. Joseph testified that by May, 1978, soon after the new pumps were installed in April, it was apparent that the new system was not producing as much water as before. Second, the fact that the pumps failed to produce the volume of water expected is not a hidden, latent danger, but an obvious one, which carries no duty to warn. Rost v. C. F. 6-1. Steel Corp., _Mont. __, 616 P.2d 383 (1980); Jacobson v. Colorado Fuel and Iron Corp., 409 F.2d 1263 (9th Cir. 1969); Garrett v. Nissen Corp., 84 N.M. 16, 498 P.2d 1359 (1972).

We conclude that the pumps were not dangerous within the context of strict liability and it was error to submit that issue to the jury.

II

Berkeley insists the jury should not have been instructed with respect to breach of warranty of fitness for a particular purpose because there is no evidence to show that any particular purpose of Reed-Joseph was communicated to Berkeley. Instruction No. 26 explained to the jury the six theories on which the case was being submitted, i.e. strict liability, negligence, breach of an implied warranty of merchantability, implied warranty of fitness for a particular purpose, breach of an express warranty, and fraud.

Comment 2 to Ark. Stat. Ann. § 85-2-315 (Repl. 1961), Uniform Commercial Code, explains how a “particular purpose” may differ from an ordinary purpose:

A “particular purpose” differs from the ordinary purpose for which the goods are used in that it envisages a specific use by the buyer which is peculiar to the nature of his business whereas the ordinary purposes for which goods are used are those envisaged in the concept of merchantability and go to uses which are customarily made of the goods in question.

Berkeley argues that before a supplier can be held liable for a breach of warranty of fitness for a particular purpose, it must be shown the supplier knew that a particular purpose was intended by the consumer. Granted, but it is enough if the supplier is aware of the particular purpose a buyer has in mind and permits the buyer to make the purchase on the assumption that the goods are suitable for his needs. That was our holding in Delamar Motor Co. v. White, 249 Ark. 708, 460 S.W.2d 802 (1970). Nor must actual knowledge-be evidenced; it is enough that under all the circumstances the supplier has reason to realize the purpose intended or that the reliance exists. Lewis v. Mobil Oil Corporation, 438 F.2d 500 (8th Cir. 1971). Wilson v. Marquette Electronics, Inc., 630 F.2d 575 (8th Cir. 1980). We cannot say with certainty there was no evidence arising from the arrangements between Berkeley, as seller, either through Riceland, or direct with Reed-Joseph, as buyer, from which the jury could have inferred Berkeley’s awareness of the purpose intended for these pumping components.

Ill

Two closely related points are that a) the trial court should not have instructed the jury on the issue of fraud, because the evidence failed to show a misrepresentation and an intent by Berkeley to deceive; and b) it was error to give an instruction framed in terms of AMI 601 and 903, that a violation of Ark. Stat. Ann. § 70-904 (Repl. 1979), prohibiting the employment of any deception or the intentional concealment of a material fact in the sale or advertisement of goods, could be considered as evidence of negligence.

Our cases dealing with fraud state generally that fraud is never presumed. Hembey v. Cornelius, 182 Ark. 417, 31 S.W.2d 539 [1930]), and requires that one party intentionally induce the other party to rely on a representation he knows to be false or, not knowing, that he asserts to be true. [Welch v. Farber, 188 Ark. 693, 67 S.W.2d 588 (1934)].

Reed-Joseph concedes that there was no affirmative misrepresentation, rather, they argue, there was an intentional and positive concealment of material facts, though what was concealed is not spelled out in specific terms. They do cite a letter from Berkeley to Reed-Joseph containing information regarding the pumps but evidently this was furnished after the components were purchased by Riceland in 1978 and how the information is misleading, even in retrospect, is not made clear.

Reed-Joseph submits that Berkeley was in a fiduciary relationship, but we cannot agree with that assertion. Two early Arkansas cases are cited: McDonough v. Williams, 77 Ark. 261, 92 S.W. 783 (1905) and Gillespie and Wife v. Holland, 40 Ark. 28, 48 AmRep 1 (1882). Those cases are plainly distinguishable. In Gillespie, a youthful, inexperienced woman was overreached by an older brother who stood in loco parentis to her; in McDonough the decision describes intimate business dealings from which a confidential relationship could be inferred. We find nothing comparable here.

Reed-Joseph quotes a familiar passage of law that there are times when the law imposes a duty to speak rather than remain silent, when a failure to speak is the equivalent of fraudulent concealment (37 Am Jur 2, Fraud and Deceit, § 146). But this rule is based on special circumstances not evident here, such as a confidential relationship, so that a duty to speak arises where one party knows another is relying on misinformation to his detriment. The general rule is to the contrary, and ordinarily, absent affirmative fraud, a party, in order to hold another liable in fraud (as opposed to breach of implied warranty, as in Delamar, supra), must seek out the information he desires and may not omit inquiry and examination and then complain that the other did not volunteer information. (See 37 Corpus Juris Secundum, Fraud, § 15, p. 242 and Smith, “Law of Fraud”, § 8 p. 18.) We find nothing in the abstract suggesting circumstances from which that rule of law might be found applicable. If fraud exists, whether affirmatively or by concealment, it ought not to be difficult to isolate and cite it. We conclude that the evidence of fraud was not sufficient to warrant submitting that issue to the jury.

Assuming at a second trial that fraud is established so as to constitute a submissible issue, we find no error in the instruction to the jury framed in terms of AMI 601 and 903. We have often said that violation of a statute is evidence a jury may consider in determining whether a defendant is guilty of negligence. Bridgforth v. Vandiver, 225 Ark. 702, 284 S.W.2d 623 (1955); Bussell v. Missouri Pacific Railroad Co., 237 Ark. 812, 376 S.W.2d 545 (1964). Moreover, our rule gives the defendant the benefit of the more favorable view, notwithstanding a majority view to the contrary [See Prosser, Law of Torts, at 200 (4th edition)], i.e. that such violation is merely evidence of negligence and not negligence per se. Here, the statutes were designed to protect the public from deceptive marketing and advertising practices and there is sound authority that such statutes imply a right of enforcement by civil action by persons injured by their breach. (Id. at § 36, p. 191.) We have upheld the giving of a comparable instruction to AMI 601 in civil litigation based on the violation of a criminal act. Rogers v. Stillman, 223 Ark. 779, 268 S.W.2d 614 (1954). Similar instructions have been upheld in consumer acts. See Sellinger v. Freeway Mobile Home Sales, Inc., 110 Ariz. 573, 521 P.2d 1119 (1974); Rice v. Snarlin, Inc., 131 Ill. App. 3d 434, 266 N.E.2d 183 (1970); Young v. Joyce, 351 A. 2d 857 (Del. 1975).

IV

Berkeley’s argument that the trial court erred in augmenting the judgment awarded Reed-Joseph by the added sum of $15,698.18 in accordance with a stipulation between the parties is rendered moot by the remand of this case and may or may not be relevant to a second trial.

V

Berkeley’s argument that it was error to allow Reed-Joseph prejudgment interest of $126,081.29 is also rendered moot by this decision, but because the issue may confront the trial court on retrial, we need to consider it. While we have approved prejudgment interest on claims involving specific amounts or for the recovery of damages to property where values were susceptible of exact determination, it has been the rule in this state, and in most jurisdictions, that prejudgment interest is generally not recoverable where damages are inexact and uncertain. Lovell v. Marianna Federal Savings and Loan Association, 267 Ark. 164, 589 S.W.2d 577 (1979). There are exceptions, and no hard and fast rule has emerged.

Both sides cite Lovell, where we reversed and remanded an equity case for the allowance of prejudgment interest. The dispute was over a refusal by a savings and loan association to pay a certificate of deposit totalling $36,000.00. Noting that the CD’s had an exact value on the date payment was wrongfully refused, we ruled prejudgment interest should have been allowed. The Lovell opinion reviewed earlier decisions of this court in an attempt to reconcile conflicting cases and draws several conclusions: a) that the test of the recoverability of prejudgment interest is whether there is a method of determination of the value of the property at the time of the injury; b) where the damages cannot be ascertained at the time of the loss, prejudgment interest should not be allowed; c) where damages cannot be measured until some future date, as with personal injuries, prejudgment interest is not recoverable; d) if the damages are not by their nature capable of exact determination, both in time and amount, prejudgment interest is not an item of recovery.

Reed-Joseph asserts that because it carefully compiled production records of other crop yields in its farm system, which were not deprived of water, it was possible to show exact damages. The argument has some merit, in that it removes some of the uncertainty of crop damage claims, but that is only half the test, at best, as it is clear that for interest to attach, the loss must have occurred at a specific time. That was the case in Dickerson Construction Co. v. Dozier, 26b Ark. 345, 584 S.W.2d 36 (1979), where we allowed prejudgment interest for damage to "knee-high” soybeans totally destroyed by heavy rains within a forty-eight hour period, resulting from the defendants having wrongfully dammed a drainage ditch. Here, no matter how carefully comparable records were compiled, drought damage to crops because an irrigation system produced less water per minute than expected, results in losses that cannot be specifically determined as to time, certainly not during the growing season, as the damage is a gradual process brought on by the deprivation of a necessary element.

We note, too, that the damages alleged in Reed-Joseph’s pleadings were not exact amounts, but stated in broad terms typical of general damage claims: in the counterclaim against Riceland damages of $1,000,000.00 were claimed and by amendment against Berkeley, $750,000 (filed September 29,1980) for crop losses and additional sums for interest and coincidental expense.

Cases decided since Lovell have stressed the requirement of certainty as to time and amount. See Brown v. Summerlin Assoc., Inc., 272 Ark. 298, 614 S.W.2d 227 (1981); Wooten v. McClendon, 272 Ark. 61, 612 S.W.2d 105 (1981) and Taylor v. Jones, 495 F.Supp. 1285 (E.D. Ark. 1980). In Wooten, we said:

Prejudgment interest is compensation for recoverable damages wrongfully withheld from the time of the loss until judgment. This interest must be allowed for any injury where, at the time of loss, damages are immediately ascertainable with reasonable certainty.

VI

Berkeley contends evidence of its financial condition should not have been introduced and we sustain the contention. Proof of financial condition where punitive damages are claimed is allowed as against a single defendant [Holmes v. Hollingsworth, 234 Ark. 347, 352 S.W.2d 96 (1961)]; however, we have held that because of the obvious prejudice that results when one of several defendants is singled out by the introduction of his financial condition, the right to make such proof is waived where there are two or more defendants. See Life and Casualty Insurance Co. v. Padgett, 241 Ark. 353, 407 S.W.2d 728 (1966). We adhered to that principle in two recent decisions: Dalrymple v. Fields, 276 Ark. 185, 633 S.W.2d 362 (1982) and Curtis v. Partain, Judge, 272 Ark. 400, 614 S.W.2d 671 (1981). On retrial, evidence of Berkeley’s financial condition should not be received in evidence.

VII

Berkeley contends the court erred in refusing to give an instruction on intervening cause. However, the instruction is not abstracted and we have consistently held it is appellant’s duty to furnish us with an abridgement of the record, including the instructions, where appropriate, as will enable us to follow the arguments. Hurley v. Owens, 238 Ark. 874, 385 S.W.2d 636 (1965); Jacobs and Garrett v. Bentley, 86 Ark. 186, 110 S.W. 594 (1908); St. Louis, Iron Mountain and Southern Railroad Co. v. Boyles, 78 Ark. 374, 95 S.W. 783 (1906).

VIII

Another assertion by Berkeley is that it was error to award judgment in favor of Riceland for costs of defending the litigation and for any amounts recovered from Riceland by either Reed-Joseph or Agri-Vestors on the basis of indemnity. While these issues are mooted by our reversal, it should be said for the purposes of another trial the jury’s finding the plaintiff’s damage was the result of active fault by Riceland, which the jury apportioned at 10% by Riceland against 90% by Berkeley, renders the problem one of contribution, and not of indemnity. See Prosser, Law of Torts, 4th Edition, § 51 p. 310. If retrial should result in similar findings, Riceland would be entitled to contribution from Berkeley for any amounts recovered from it by Reed-Joseph in excess of Riceland’s portion of the fault, but Riceland would not be entitled to indemnity from Berkeley for any amounts paid in satisfaction of the judgment, nor for expenses incurred in connection with the litigation. We believe interrogatory No. 2, encompassed within the instruction labeled Court’s 3A, is overly broad and should not have been given.

Riceland argues on cross-appeal that it was error for the trial court to give instruction No. 26 on the theory of a breach of express warranties as it related to Riceland, because any express warranties were negated by Reed-Joseph’s failure to meet Riceland’s conditions of warranty. Riceland cites three Texas cases [Fetzer v. Haralson, 147 S.W. 290 (Tex. Civ. App. 1912), Londen v. Curlee, 336 S.W.2d 836 (Tex. Civ. App. 1960) and Elanco Products Co. v. Akin-Tunnell, 474 S.W.2d 789 (Tex. Civ. App. 1971), on appeal after remand, 516 S.W.2d 726], for the rule that a purchaser of goods covered by an express warranty, must show that he complied with any conditions to which the warranty was subject. But we think the court’s instruction No. 27 recognized that any express warranties made to Reed-Joseph may have been subject to certain conditions and told the jury, first, that it was Riceland’s burden to prove those conditions and if the jury so found, then it was Reed-Joseph’s burden to prove such conditions were satisfied. It would require an independent search of the testimony to determine the existence of evidence of compliance with conditions of warranty, and we are unwilling to do that where Riceland has omitted in the first instance to point to the evidence that such conditions were, in fact, imposed.

Riceland’s other argument, i.e. prejudgment interest and breach of warranty for a particular purpose, coincide with Berkeley’s points of error and have been dealt with earlier in this opinion.

Reversed and remanded.

Supplemental Opinion on Denial of Rehearing delivered July 18, 1983

1. Damages — punitive damages — proof of financial responsibility. — Although a plaintiff who claims punitive damages from several defendants waives theright to introduce evidence of the financial worth of one defendant, where punitive damages are claimed from only one of several defendants, that right to introduce evidence of financial condition is not waived when the alleged improper conduct is different from, and greater than, that of the other defendant.

2. Damages — proof of financial responsibility — admonition to jury. — If the evidence on retrial is sufficient to submit the issue of punitive damages to the jury, the plaintiff may introduce evidence of Berkeley’s financial condition, with the jury admonished to consider such evidence only in connection with the claim of punitive damages.

3. Damages — harmless error to submit punitive damage ISSUE TO JURY ON INSUFFICIENT EVIDENCE. — It ÍS usually harmless error to submit the issue of punitive damages to the jury where there is insufficient evidence to support such an instruction.

4. Damages — reversible error to submit issue of punitive DAMAGES TO JURY ON INSUFFICIENT EVIDENCE WHERE PROOF OF FINANCIAL CONDITION ALSO INTRODUCED. — If evidence OÍ financial condition is also introduced, then the error of submitting the issue of punitive damages to the jury absent sufficient proof becomes reversible because a verdict for compensatory damages is tainted by the improper evidence.

Steele Hays, Justice.

In its motion for rehearing, Reed* Joseph contends first, that there was sufficient evidence of misrepresentation and intentional deceit by Berkeley to sustain the submission of the issue of punitive damages to the jury and second, that our opinion erroneously assumed that punitive damages are being claimed against Berkeley and Riceland, when in fact punitive damages are claimed only against Berkeley. Reed-Joseph insists that the trial court carefully adhered to the requirements of Dalrymple v. Fields, 276 Ark. 185, 633 S.W.2d 362 (1982), and Curtis v. Partain, Judge, 272 Ark. 400, 614 S.W.2d 671 (1981), and on retrial Evidence of Berkeley’s net worth should be permitted. We concede the merit of the argument with respect to the introduction of Berkeley’s financial condition and modify our opinion accordingly.

While we have held that a plaintiff who claims punitive damages from several defendants waives the right to introduce evidence of the financial worth of one defendant (see Life and Casualty Insurance Co. v. Padgett, 241 Ark. 353,407 S.W.2d 728 [1966] and Dalrymple v. Fields, supra), we have not held that where punitive damages are claimed from only one of several defendants, the right to introduce evidence of financial condition is waived, where the alleged improper conduct is different from, and greater than, that of the other defendants. None of the cases cited in the original opinion reached that holding. In Curtis v. Partain, Judge, supra, we granted prohibition against the introduction of financial condition as against only one of several defendants, but it was done because that one defendant was plainly being singled out for a claim of punitive damages for conduct for which all were chargeable. We conclude that if the evidence on retrial is sufficient to submit the issue of punitive damages to the jury, the plaintiff may introduce evidence of Berkeley’s financial condition, with the jury admonished to consider such evidence only in connection with the claim of punitive damages.

As to the other argument, i.e. misrepresentation and deceit, the issue is moot as to the first trial, and we need not belabor the point except to say that our comments in the original opinion were intended to alert the parties and the trial court, for purposes of a second trial, to the fact that the proof of intentional misrepresentation, or fraud, seemed to be too weak to support the issue. Reed-Joseph argued that the fraud was to be found in Berkeley’s deliberate failure to disclose data with respect to the performance of its pumps which was material to Reed-Joseph’s intended use. We could not say categorically, without an independent search of the record, that the proof was lacking; however, we can say it was not demonstrated in the briefs to our satisfaction. Whether the issue will be sufficiently proved on retrial we have no way of predicting.

It should be noted that several cases have contained error because the issue of punitive damages was submitted to the jury when the evidence did not support it [see Life and Casualty Insurance Co. v. Padgett, supra, and Dalrymple v. Fields, supra, for example.] Ordinarily, it is merely harmless error for the issue of punitive damages to be wrongly submitted; however, if evidence of financial condition is also introduced, then the error becomes reversible because a verdict for compensatory damages is tainted by the improper evidence. This is what happened in Padgett and Dalrymple. Thus plaintiffs’ counsel generally would be well advised to use restraint in urging the submission of punitive damages where the evidence is marginal and, especially, in offering proof of financial condition, as reversible error is the likely result if the punitive issue fails on review.

Other points in the petition constitute reargument and need no discussion.

Rehearing denied.

       By stipulation, $45,000.00 went to Agri-Vestors.


author: Steele Hays, Justice. George Rose Smith, Justice,

text:
    In the Matter of the Estate of Charlie Frank SARGENT, Deceased v. BENTON STATE BANK, Administrator of the Estate of Charlie Frank SARGENT, Deceased
    83-73
    652 S.W.2d 10
    Supreme Court of Arkansas
    Opinion delivered June 6, 1983
    [Rehearing denied July 5, 1983.]

      Perroni ir Rauls, P.A., by: Samuel A. Perroni and Stanley D. Rauls; and William R. Wilson, Jr., for appellant.

      Hardin & Hardin, P.A., by: Joe K. Hardin and Robert N. Hardin, for appellee.
   Steele Hays, Justice.

Charlie Frank Sargent was fatally shot on February 18, 1980. His wife Kate, and his three sons Donald, Roy and Cecil were all charged with first degree murder. The charges against Cecil and Roy were dismissed, Donald was convicted of first degree murder and Kate Sargent of second degree murder.

Charlie Sargent died intestate and the administrator of his estate petitioned to exclude the wife and sons from inheriting because of their involvement in his death. The Chancellor found that all four had participated in the murder and excluded them from the estate. Cecil Sargent is appealing the order on the grounds that the evidence is insufficient to show his participation in his father’s murder. We agree with appellant and reverse the Chancellor.

Appellee’s petition charged that Cecil had participated in a conspiracy to murder the father. He argues that the evidence would support Cecil’s participation as an accomplice or an accessory after the fact, as well as a conspirator in the wrongful and unlawful death of his father. Under Arkansas law for reasons of sound public policy one who wrongfully kills another is not permitted to profit by the crime. Wright v. Wright, 248 Ark. 105, 449 S.W.2d 952 (1970). Horn v. Cole, 203 Ark. 361, 156 S.W.2d 787 (1941).

We believe the evidence presented in this case was not sufficient to find involvement by Cecil on any theory. The trial court’s findings that related to Cecil are as follows: 1) Donald Sargent had discussed killing the father with other members of the family; 2) Donald shot his father while all of the family members were in the home; 3) the wife and three sons removed the father from the home after the shooting; while he was still alive, and took him to the place where the body was found. The deposition of the Medical Examiner reflects that when the body was doused with kerosene Mr. Sargent was dead at the time. Mr. Sargent lived a very short time after receiving the four wounds. The only way the Court can reconcile the testimony of the parties to Dr. Malak’s report and deposition is that after Mr. Sargent was taken in the truck to the place where the body was found, one or more bullet wounds was inflicted at that time. Mr. Sargent died before the kerosene was poured on him; 4) the wife and all three of the boys participated in the murder of the father.

With nothing more, the first two findings tell us nothing of Cecil’s participation. The third adds very little and is tempered by other considerations surrounding the incident which we will discuss further on. The last finding is simply conclusory. The appellee cites the following evidence in support of the trial court’s findings: Cecil was at the table with his father when Donald first shot him; Cecil testified that his father asked him to call an ambulance but Cecil said he didn’t know the number, and that he also helped carry his father to the truck; Cecil, Roy and the mother followed the truck in their car; Roy had placed gasoline in a firebomb in the car before the left to follow Donald; Roy saw Cecil keep the father in the truck as Donald was pouring gasoline on him; Donald watched as the truck in which his father was placed was set on fire with the firebomb; Cecil helped push the truck after the firebomb didn’t work; Roy testified that all four family members discussed what to tell the police; Cecil did not tell the police the whole truth when first questioned.

We believe the disputed factual issue here is to be decided by a preponderance of the evidence, as in civil cases generally. [See Vesey v. Vesey, 237 Minn. 10, 53 N.W.2d 809 (1952)]. Still, it may be well to examine relevant criminal laws. Ark. Stat. Ann. § 41-707 requires that one have the purpose of promoting a criminal offense and agrees with another that he will engage in that activity or will aid in planning it. None of the evidence appellee offers goes at all convincingly to any of these elements. Cecil’s presence at the home at the time of the shooting tells us nothing of his purposefulness or indicates any agreement. Nor is mere association or presence at the scene sufficient to prove conspiracy. U.S. v. James, 528 F.2d 999 (5th Cir. 1976). As to Donald discussing the killing of the father, the appellee points to no evidence that goes beyond mere discussion. Evidently, Donald was given to loose talk about his intentions, but the indications are that no one took him seriously. More importantly, there is no evidence that shows with whom Donald had discussions and no evidence that Cecil was present. Nothing points to anything even suggesting that Cecil was involved in any agreement to purposefully murder his father.

The activities Cecil was involved in that followed Donald’s shooting Sargent leave us with many questions. Absent any evidence of conspiracy, even assuming the father was still alive at the time the family moved his body in the truck, we can’t say that there were conspiratorial acts. The Commentary to § 41-707 emphasizes this point by noting that the statute excludes from its provisions “application to persons who engage in conduct that furthers the ends of a conspiracy but who have no purpose to do so. This is so even if the persons knows his conduct assists in the accomplishment of the criminal objective.” Nor could we say that Cecil’s acts made him an accomplice. Ark. Stat. Ann. § 41-303 requires one have the purpose of promoting the offense and that he solicits or encourages another in committing the offense or aids or attempts to aid another in committing the offense. Cecil’s actions themselves, with no evidence of conspiring, or any other evidence of purpose to commit the crime coupled with the fact that Donald had already delivered the fatal wounds leaves an accomplice theory unsupported. The offense of accessory after the fact has now been abolished (see Commentary to Ark. Stat. Ann. § 41-302) and such activity now comes under the authority of Chapter 28, Obstructing Governmental Operations. Cecil’s activities might constitute such an offense, but the competing considerations surrounding his acts, and the acts themselves make his involvement far too attenuated to sustain the results of the court’s decision.

In sum, it was the burden of the appellee to show that Cecil was aware of a plan to kill his father and that he participated in the furtherance of that plan, or, at least, he concurred in it. Failing in that, there must be evidence of Cecil’s actions after the shooting from which those same conclusions can be rationally inferred. Here, there is nothing in the evidence before the shooting to implicate Cecil, except that he happened to be in the house where he lived eating supper along with the rest of the family. Moreover, Cecil’s actions after the shooting are as consistent with a fear of his older brother, as with a desire to carry out a murder scheme. The two explanations are equally plausible. That being so, when the circumstances in their entirety are weighed, i.e. Cecil’s immaturity, Donald’s threats and occasional physical abusiveness of his brothers, the fact that Cecil was said to be close to his father, the absence of any motive by Cecil, and the state of shock and confusion which may well have accompanied the witnessing of those extraordinary events, they lead us to the conclusion that a finding that Cecil knowingly participated in the death of his father is clearly against the preponderance of the evidence. (ARCP 52).

The decree is reversed and the cause remanded for further orders not inconsistent with this opinion.

Adkisson, C.J., and George Rose Smith and Dudley, JJ., dissent.

George Rose Smith, Justice,

dissenting. My strong disagreement with the court’s opinion is based on two considerations: First, as the opinion itself recognizes, this is a civil case in which the controlling question is whether the trial judge’s finding that Cecil Sargent participated in the murder of his father is clearly against the preponderance of the evidence. Whether he was technically a principal, an accomplice, or an accessory is immaterial. Second, we must view the evidence in the light most favorable to the trial judge’s decision, deferring to his judgment in matters of credibility.

This murder was planned in advance, with a homemade gasoline bomb and two gallons of gasoline in readiness for the burning of the body. Donald shot his father at the house, apparently striking a major artery in the arm, but that was not the fatal wound, though it would eventually have caused death if not treated. Dr. Malak testified, and the trial judge indicated, that the immediate cause of death was two bullet wounds in the chest, making two holes in the lungs and one in the heart. Dr. Malak said that the lung wounds caused massive bleeding in the chest cavity within ten minutes and that the victim could have lived only a very, very short time. Yet some 45 minutes elapsed between the first shooting and the consummation of the crime three miles away in the truck. For that reason the trial court found, with justification, that one or more bullet wounds were inflicted at the place where the wife and three sons tried to burn the body. Death occurred there; so Cecil participated in the killing and could not have been merely an accessory after the fact.

Cecil Sargent is not exactly an immature and innocent child. He was 15 years old at the time, criminally responsible under the law. He was no longer going to school, but was working at a garage instead. He was his father’s favorite son, but when his father in his agony appealed to Cecil for help three times, Cecil ignored his pleas each time. When Cecil was charged along with the other three survivors with murder, he successfully bargained for immunity in return for turning state’s evidence and testifying against his own mother and his older brother. He has admittedly told so many lies about his connection with the homicide that the trial judge was fully warranted in disregarding his self-serving statements at the hearing below — a hearing at which he was repeatedly evasive in his testimony, professing not to remember incriminating facts until he was confronted with his own testimony at the trial of his mother and brother.

As for Cecil’s participation in the murder, soon after the first shooting Sargent appealed to his favorite son, Cecil, to call an ambulance, but Cecil gave the ridiculous answer that he didn’t know the number — as if a person had to know a telephone number to call an ambulance or the fire department in an emergency. After the shooting the group stayed at the house for a considerable length of time. Sargent was not able to walk, but Cecil and Donald held him upright between them and forced him to stumble with them to the truck. The father again begged his favorite son to help, to knock Donald in the head, but again Cecil refused to help him.

Despite Cecil’s supposed fear of Donald, not asserted until weeks later, Cecil willingly got in the car with his mother and brother and followed Donald’s truck for three miles. There Sargent got out of the truck, but Cecil and Donald pushed him back in. Sargent was still alive when Donald threw gasoline on him. Sargent again appealed to his favorite son, screaming for help. In Cecil’s own words in his taped statement to the police: “Yeah, he screamed. He told me to knock him [Donald] in the head, please Cecil knock him in the head.” Later on, when the fire failed to spread from the bed of the truck to the cab, where Sargent was, Cecil helped the others try to push the truck down the embankment by the road, presumably to create the appearance of an accident. When a car was seen approaching, all four of the survivors “piled” into their car and “took off,” leaving Sargent apparently still alive and suffering. At the hearing below Cecil piously testified that when he got home he went to bed. “I was so upset and in a strain____It upset me real bad____Yes, sir, I was upset for about two weeks after my daddy died.”

Not so upset, however, that he was unable to join with the other three in deciding what to tell the police. When he was finally questioned, more than two weeks after the murder, he first said that after the shooting he went to bed, thinking Donald had taken his father to the hospital. An hour later, after the officers had questioned the others, Cecil admitted that he had helped carry his father to the truck. At still a third interview, some four hours later, he finally revealed his part in the murder. In that long interview, conducted in his mother’s presence and taped, Cecil said not one syllable about being afraid of Donald or having been threatened by him. That came later, but when he was asked at the hearing below just what were Donald’s prior acts of violence, he said Donald threw a screwdriver at Roy once, hitting him in the knee, and that he himself and Donald had a couple of fist fights. That was all. I find no independent support in the record for Cecil’s statements that he was afraid of Donald or had been threatened by him. Quite evidently the trial judge, who had the advantage of observing Cecil’s manner on the witness stand, did not believe him.

The administrator of the estate, which consisted primarily of a house and two acres, plus over $30,000 in life insurance, filed this petition to exclude the widow and the three sons from inheriting the estate and receiving the insurance money. The widow and Donald were hardly in a position to resist, having already been convicted of Sargent’s murder. Roy had scant grounds for a defense, having admitted to the officers that he helped plan the murder by making the gasoline bomb two or three days before the murder and having melted the gun with a blowtorch afterwards. That left only Cecil to disclaim any responsibility for what was in fact a group murder. He now appeals from the adverse judgment in the hope of being declared to be the sole eligible beneficiary, thus keeping the money and property in the family. I am dismayed that the strategy has proved successful.

Adkisson, C.J., and Dudley, J., join in this dissent.

       41-707. Criminal conspiracy. — A person conspires to commit an offense if with the purpose of promoting or facilitating the commission of any criminal offense he:
      (1) agrees with another person or other persons:

        (a) that one or more of them will engage in conduct that constitutes that offense; or
      (b) that he will aid in the planning or commission of that criminal offense; and
      (2) he or another person with whom he conspires does any overt act in pursuance of the conspiracy.

       41-303. Criminal Liability for conduct of another — Accomplices. (1) A person is an accomplice of another person in the commission of an offense if, with the purpose of promoting or facilitating the commission of an offense, he:
      (a) solicits, advises, encourages, or coerces the other person to commit it; or
      (b) aids, agrees to aid, or attempts to aid the other person in planning or committing it; or
      (c) having a legal duty to prevent the commission of the offense, fails to make proper effort to do so.
      (2) When causing a particular result is an element of an offense, a person is an accomplice in the commission of that offense if, acting with respect to that result with the kind of culpability sufficient for the commission of the offense, he
      (a) solicits, advises, encourages or coerces another person to engage in the conduct causing the result; or
      (b) aids, agrees to aid, or attempts to aid another person in planning or engaging in the conduct causing the result; or
      (c) having a legal duty to prevent the conduct causing the result, fails to make proper effort to do so.


author: Steele Hays, Justice.

text:
    Erma Jean FONTENO v. The Estate of Booker T. MATTHEWS and Mary Bell JAMES
    83-88
    651 S.W.2d 466
    Supreme Court of Arkansas
    Opinion delivered June 6, 1983

      Macom, Moorhead, Green ér Henry, by: /. W. Green, Jr., for appellant.

      Eilbott, Smith, Eilbott & Humphries, by: Zachary Taylor, for appellees.
   Steele Hays, Justice.

Booker Matthews died intestate in 1975. Several persons asserted an interest in the estate, including Mary Bell Matthews, as widow, asking to be declared the sole distributee and claiming all statutory allowances to which she would be entitled. The last petition was filed by Nelson Thomas, claiming to be an heir, denying that petitioners Dorothy Friends and Erma Fonteno were legal heirs, or that the widow, Mary Bell Matthews, was entitled to more than a dower interest. All petitions were filed in 1975.

By order dated October 19, 1981, the probate court found Mary Bell Matthews was the widow and Erma Fonteno, Dorothy Friends and Ernestine Caldwell were daughters. On January 26, 1982, an order was entered approving the final accounting and payment of fees. On February 9, 1982, Mary Bell Matthews petitioned for dower and on March 3,1982, a response was filed by Erma Fonteno alleging that dower rights should be denied because at the time of Booker Matthews’ death the dower statute was unconstitutional under our decisions in Stokes v. Stokes, 271 Ark. 300, 613 S.W.2d 372 (1981) and Hess v. Wims, 272 Ark. 43, 613 S.W.2d 85 (1981). The probate court granted the dower petition, finding that dower should be granted pursuant to the statute in force at the time of death because the widow’s dower rights had vested at that time. Erma Fonteno has appealed, arguing that the Stokes and Hess cases were controlling at the time the court made its decision and, therefore, Mary Bell Matthews is precluded from any dower rights in the estate. We agree with the decision of the trial court but affirm on grounds not specifically addressed by the court.

Recent changes in the law of dower have led to some confusion in dealing with those cases where the husband had died prior to the Stokes and Hess decisions. The circumstances of each case must determine the outcome and we look for direction in this case to the later decisions of Hall v. Hall, 274 Ark. 266, 623 S.W.2d 833 (1981) and Mobley v. Estate of Parker, 278 Ark. 37, 642 S.W.2d 883 (1982). In Hall we stated that the Stokes and Hess decisions have never been completely retroactive in the sense that a widow who was awarded her statutory dower some years before those cases could not be stripped of her estate by a disgruntled heir. (Hall at 267). In Mobley, a case factually similar to this case, we relied on that statement in Hall and applied it to the facts of that case. We pointed out that the widow and heirs of Parker had treated the dower interest as if it had vested. The trial court had found that the attorney for the appellant had expressly recognized the widow’s dower interest in November, 1980, and we held that the principle of estoppel was properly applied against the appellant when later raising the constitutional issue after the Stokes and Hess decisions were handed down.

Here, soon after the death of the husband in 1975, conflicting petitions were filed by the widow and persons claiming to be heirs. The petition of Nelson Thomas alleged that the only legitimate interest of Mary Bell Matthews was that of dower and not of the entire estate. Not until March 3, 1982 was any constitutional issue raised as to the right of dower. The Stokes and Hess cases had been decided over a year earlier. In the interim, the right to dower remained unchallenged. In October, 1981, upon the order finding Mary Bell Matthews widow, no objection of any kind was made, nor after the order approving the final accounting and payment of fees was any objection made. We find here as we did in Mobley that the facts indicate that all parties treated the dower interest as having vested and under the principle of estoppel enunciated in Mobley, we find the appellant is precluded from raising the issue at this time.

Affirmed.