author: Conley Byrd, Justice. John A. Fogleman, Justice,

text:
    Bettye Walker YARBROUGH v. Clara A. COATS et al
    5-5937
    483 S.W. 2d 194
    Opinion delivered July 10, 1972
    [Rehearing denied August 28, 1972.]

      Williams ér Gardner, for appellant.

      Laws & Schulze, for appellee.
   Conley Byrd, Justice.

This is an action by Bettye Walker Yarbrough, the only surviving heir of A. C. "Jack” Walker, to set aside a deed executed August 20th and delivered to appellees Clara A. Coats and Artie Lee Bernard by Walker as a gift on October 13th before his death on November 12, 1969. For reversal of the Chancellor’s decision upholding the deed, Mrs. Yarbrough contends that her father A. C. "Jack” Walker was mentally incompetent at the time and that the deed is void for want of a definite description of the land to be conveyed.

The test of mental competency to execute a deed is stated in Donaldson v. Johnson, 235 Ark. 348, 359 S.W. 2d 810 (1962), in this language:

“If the maker of a deed, will, or other instrument has sufficient mental capacity to retain in his memory, without prompting, the extent and condition of his property, and to comprehend how he is disposing of it, and to whom, and upon what consideration, then he possesses sufficient mental capacity to execute such instrument. Sufficient mental ability to exercise a reasonable judgment concerning these matters in protecting his own interest in dealing with another is all the law requires. If a person has such mental capacity, then, in the absence of fraud, duress, or undue influence, mental weakness, whether produced by old age or through physical infirmities, will not invalidate an instrument executed by him.”

The proof shows that Mr. Walker was an eccentric man who retired early in life. He divorced his first wife, the mother of appellant, in 1950, married a second wife, from whom he was shortly divorced, and thereafter lived with different people. He would “pop-in” and abruptly depart from visits with his relatives. In doing so he often carried a milk goat with him. He apparently met Lydia Breckenridge who was looking after him at the time of his death, at an organic food store a number of years ago. He distrusted his daughter’s business judgment so much that he had the house in which she lives and for which he paid put in the name of her aunt.

On August 5th he executed a power of attorney to appellant and her mother to execute deeds to a portion of the property involved. Thereafter he left appellant’s home and drove to North Carolina to visit appellees. While there on August 20th he acknowledged the deed in question before a notary public but returned to Arkansas with the deed. Sometime in September appellant checked him into the hospital but he left sometime in the night and woke her up in the early morning hours by pulling on her toes. On October 11, 1969, he arranged for his longtime friend and nurse Lydia O. Breckenridge to fly in from California to Hot Springs, Arkansas. About 3:00 a.m. October 12, he and his nurse departed Hot Springs to go to his ranch at Russellville, Arkansas. Monday morning, October 13 th, he borrowed Roy Dennis’ car and he and his nurse drove to a bank in Russellville where he got the deed and asked his nurse to mail it to Artie Lee Bernard in North Carolina. After returning from the bank in Russell-ville he told his nurse that they left Hot Springs just in time because “they’re after both of us. If we hadn’t gotten out we would have both been killed.” While in Russellville they used Roy Dennis’ car because Mr. Walker didn’t want his car recognized.

Lydia Breckenridge testified that when Mr. Walker was getting around so early to go to the bank, she told him that the bank would not be open to which he replied that while the bank might not be open, he still knew how to get in. When they arrived before banking hours he went in a side door and came back with the deed.

Dr. Richard E. Walters, a psychiatrist, treated Mr. Walker from October 24th to October 31st. He referred to Mr. Walker’s “perseverating or overly concentrating on keeping the control of his property.” After relating that Walker brought up these statements spontaneously the record shows the following:

“Q. What was this theme?
A. That there was someone, some group of people, that was attempting to take his property away from him; and that he had desired to preserve it by giving it away to some charitable organization.
This was not what I would call an organized delusion, in that he did not believe that a specific person or group was plotting to take it away in the terms of the communist party or foreign agents or someone of a bizarre or fantastic nature. It was more of a feeling and a sense and a fear that somehow he would not be able to control his property.
I would say it was a borderline delusion.”. . .
“Q. Doctor as a result of your examination, did you reach an opinion that is to a reasonable medical certainty as to what his mental condition was at that time?
A. The diagnosis that I made at that time was a non-psychotic — that is he was not psychotic in terms of frank distortion of reality — non-psychotic organic brain syndrome due to circulatory disturbance, that is arteriosclerosis.”

Other testimony in the record shows that while visiting with the appellees in North Carolina, Mr. Walker carried on normal conversations, located a supply of goat milk and gave his usual advice on investments. In fact Mrs. Coats followed his financial advice and obtained a $1900 short term profit on the purchase of some Federal Reserve notes. Two days after Mrs. Bernard received the deed in the mail, Mr. Walker called to see if she got the deed and advised her to have it recorded.

All parties agree that appellees visited in appellant’s home after Mr. Walker got out of the hospital. On those visits Mr. Walker recognized appellees and on one occasion took a $20 bill and sent after some fried chicken to feed them.

When the record is considered under the law set out above, we cannot say that the Chancellor’s holding that appellant had failed to show her father’s mental incompetency is contrary to a preponderance of the evidence.

We find no merit in appellant’s contention that the quit-claim deed is void for want of a definite description. The deed in question recites:

“That I, A. C. (Jack) Walker an unmarried person, Grantor for and in consideration of the sum of One and No/100 Dollars ($1.00) to me cash in hand paid, the receipt of which is hereby acknowledged, do hereby grant, sell, and quitclaim unto Clara A. Coats and Artie Lee Barnard share alike on West Side Grantee, and unto ...h...heirs and assigns forever, the following lands lying in the County of Yell and State of Arkansas, to-wit:
The South Half (Sh) of the Northwest Quarter (NW.K); the North Half (N V>) of the Southwest Quarter (SW Vi), of Section One (1), Township Five (5) North, Range twenty-one (21) West of the Fifth Principal Meridian, containing one hundred sixty (160) acres, more or less.”

As we view the deed, it definitely conveys the land to the appellees. How they may hold the land among themselves is not a controversy before this court.

Affirmed.

Brown, Fogleman and Jones, JJ., dissent;

John A. Fogleman, Justice,

dissenting. If mental competency at the time of the execution of the deed in question were ail that was in issue, I could well agree that we could not say that the chancellor’s finding was clearly against the preponderance of the evidence. In this case, however, delivery was not made at the time of the execution, and Walker took the deed home with him and made no effort to deliver it until October 13, 1969, nearly two months after its execution. It seems to me that there is an overwhelming preponderance of the evidence to show that Walker was mentally incompetent at the time of the delivery of the deed, and if he was subject to both lucid and irrational intervals, he was certainly in one of the latter at the time of the alleged delivery.

I give little weight to the testimony of appellant, who is certainly an interested party, or that of her mother, Walker’s former wife. But when the testimony of disinterested witnesses is placed on the scale with theirs, the preponderance seems so clear that it seems to me to leave little room for dispute.

Roy Dennis, whose wife was a niece of Walker, and who had known him for 18 or 20 years, moved into Walker’s house in September 1969. Dennis stated that his association with Walker, after he moved into the house, was close. This witness said that thereafter he had a very close relationship with Walker. Walker and Lydia Breckenridge arrived home from Hot Springs about 5:00 a.m., Sunday. On the following Monday, Walker arranged to borrow Dennis’ automobile and Dennis, having first declined, telling Walker that he was incapable of driving, finally loaned the car upon the condition that Mrs. Breckenridge go along and do the driving. He testified that Walker agreed, saying if Dennis would let him have the car, maybe he could get through and “they” wouldn’t catch him. According to Dennis, “they” had been increasingly a part of Walker’s conversation over a period of a year, and included people from the Mafia, the President of the United States, the local sheriff, and attorneys in Pope County, who Walker said were trying to get his money and his life. Dennis stated there were times when Walker would talk about nothing else. Dennis said that such a loan of his automobile was made to Walker five or six times after Walker and Mrs. Breckenridge came from Hot Springs, always because Walker said that “they” knew his car and he didn’t want “them” to see it.

Dennis also related that before moving into Walker’s house he visited Walker one night and saw that Walker had a .22-caliber rifle beside his bed. The witness said he asked Walker why he had a loaded gun at his bedside, and that Walker replied “That’s so I can keep them away from me, so they won’t kill me.”

Mrs. Lydia Breckenridge, a California resident, who was a registered nurse both in Arkansas and California, had lived in Arkansas from 1955 to 1965, when she became acquainted with Walker. At Walker’s request she came to Arkansas and stayed with him during the last few weeks of his life. She arrived in Hot Springs on October 11, 1969, and stayed there with Walker until about 3:30 the next morning, Sunday, October 12, when they left because Walker wanted to go to his ranch at Russellville. She said that Walker got up Monday morning wanting to go to the bank, and that, on this occasion, as well as several subsequent ones, she and Walker traveled in Dennis’ car because Walker did not want his car to be recognized. After their return from the bank, she stated that Walker told her that they were just in time because “they’re after both of us. If we hadn’t gotten out we would have both been killed.”

Mrs. Breckenridge also testified that she discovered that Walker kept his bathrobe over the bathroom window, and, knowing that in former years he would not even allow a curtain over the window, asked him about this. She stated that he explained “I have got them blocked out now” and cautioned her about standing in the kitchen near the window, saying “Get away from there, they are coming in, they’re going to get you right from there.” Mrs. Breckenridge said that he had a complex that someone was after him and at one time or another identified “they” or “them” to include attorney Young, Bolton Harris, his wife’s brother, his first wife, Winthrop Rockefeller, Mr. Fulbright of Arkansas and the banker with whom he did business. This registered nurse, who was with Walker from the time of her arrival in Hot Springs on October 11, 1969, almost continuously until his death, except for the week he spent in the psychiatric ward in St. Vincent’s Hospital, after relating these facts, expressed the opinion that he was never at any time mentally capable of handling his business affairs or transferring his property, because he was not mentally stable for a long enough period of time to conduct any kind of business. She also said that she did not believe Walker knew what he was doing when he gave her the deed to forward to Artie Lee Bernard.

The testimony of Dr. Richard E. Walters, the psychiatrist to whom Walker was referred on October 24, 1969, and who observed Walker during his stay at St. Vincent’s Hospital, gave considerable support to the testimony of Mrs. Breckenridge. Walker related to this doctor that there was a non-specific group of people attempting to wrest his property from him, and, even though he did not know any of them by name, had not seen or talked with any of them, claimed to have certain indications that they were plotting to take his property, so he wanted to deed his property as a gift to a children’s home, in spite of his daughter’s determination to preserve the property for herself. Walters did not recall Walker’s ever mentioning any recent disposition of any of his property, and said that he did not mention that he had executed a deed to two relatives in North Carolina. This witness did remember that Walker wanted his daughter to get hold of some deed to some property and bring it to the hospital. Dr. Walters found a slowing and sluggishness of Walker’s mental and physical activity and stated that, on each visit, whenever left to spontaneous conversation, without specific questions, Walker repeatedly returned to the theme that some group of people was attempting to take his property from him and that he desired to preserve it by giving it to some charitable organization. The physician said that the fear was pretty constant and classified this as a “borderline” delusion. Later he added that if there were no forces trying to get Walker’s property, this belief was a delusion. He stated that Walker was extremely emaciated, that if Walker had been able to drive his car to North Carolina and back in August, his condition was much better than it was in October and did not feel that Walker could have deteriorated physically without also having done so mentally. The condition, according to the doctor, was a direct result of organic changes. The diagnosis was nonpsychotic (in terms of frank distortion of reality) organic brain syndrome due to arteriosclerosis. The doctor explained that Walker’s arteriosclerotic brain disease was such that there were periods of lucidity but very sudden shifts of mental operation, which could very suddenly alter his functions in terms of being oriented and especially his judgment. Dr. Walters testified that at the times Walker would tell someone that “they” were trying to get his property, he would not consider Walker functioning at his normal level, and would have a “high question” about his mental state at such a time. He found Walker’s mental operations always clouded, at best, so that, even when functioning at his best, his judgment was not clear.

Other significant testimony was given by Dr. Roy I. Millard, who had known and treated Walker from 1929 until about 1964. Dr. Millard had formed the opinion that Walker was deteriorating from observing Walker’s action the last few times he had seen him. It should also be noted that appellant never attempted to act under the authority of a power of attorney to sell some land that Walker gave her and her mother on August 5, 1969. She explained that she was of the opinion that he did not know what he was doing at the time.

I doubt if this court has ever before sustained a deed in the face of such strong evidence of a lack of mental capacity at the very moment of action by the grantor. On the other hand, we have reversed the decree of a trial court on a finding of mental capacity upon no more convincing evidence of incompetency than is before us here. In McEvoy v. Tucker, 115 Ark. 430, 171 S.W. 888, we reversed a finding that the grantor’s deed was valid, because the preponderance of the evidence was that for a few months prior to the execution of the deed and particularly during the month of the execution, the grantor was incapable of exercising rational judgment about such matters, that he had gradually deteriorated mentally and physically, growing worse all the time until his death. There was evidence there that one talking to the grantor casually might not notice his condition and that he might have seemed to a stranger to have retained his faculties. There is such a close parallel between that case and this that it should govern our action here.

I would reverse the decree of the chancery court, because I think that appellant’s burden of proving lack of mental capacity of Walker to make an effective delivery of the deed was met not only by a clear preponderance of the evidence, but also by evidence so clear and convincing as to leave no reasonable doubt.

I am authorized to state that Mr. Justice Brown and Mr. Justice Jones join in this dissent.


source: Caselaw Access Project

author: Conley Byrd Justice.

license: Public Domain

text:
    ST. PAUL FIRE and MARINE INSURANCE COMPANY v. U. C. SMITH
    5-5993
    482 S.W. 2d 122
    Opinion delivered July 10, 1972

      Wright, Lindsey & Jennings, by: William R. Wilson Jr., for appellant.

      Robert D. Ridgeway, for appellee.
   Conley Byrd Justice.

The front wheel came off a passing automobile and caused $253.90 damages to appellee U.C. Smith’s building. Appellant St. Paul Fire and Marine Insurance Company, for reversal of a summary judgment in favor of Smith, contends that Smith’s building was not struck by a “vehicle” within the policy definition.

The policy issued by appellant of Smith provided extended coverage to Smith “. . .against direct loss by. . .vehicles,. . .except as hereinafter provided.” The provision of the policy applicable to vehicles provides:

“The term ‘vehicles,’ as used in this endorsement means vehicles running on land or tracks. . .Loss by aircraft or by vehicles shall include only direct loss resulting from actual physical contact of an aircraft or a vehicle with the property covered herein or with the building(s) containing the property covered hereunder, except that loss by aircraft includes direct loss by objects falling therefrom. . .”

Since the policy insures only against’'direct loss resulting from actual physical contact of. . .a vehicle,” appellant argues that there is no indication of coverage for loss from damage by a detached wheel. As we read the language of the policy that “loss resulting from actual contact of . . .a vehicle” obviously includes, at least, those substantial and integral parts of an automobile necessary to its propulsion while being propelled along a highway. See Annotation 12 A.L.R. 2d 598, as to meaning of “Vehicles” within exception or coverage of insurance policies, icies.

In its reply brief appellant argues that the mention of detached objects with regard to airplanes, coupled with the lack of such mention with regard to vehicles, clearly implies that the policy provides coverage in the one case (airplane objects) but excludes coverage in the other (vehicle objects) which is here involved. The fallacy in this argument is that the policy language does not refer to items becoming detached from an airplane but only to objects falling from a plane. In view of such cases as Brown v. Life & Casualty Ins. Co., LA. App., 146 So. 332 (1933), this language was necessary to provide coverage for cargo falling from an airplane.

Affirmed together with the allowance of an additional attorney’s fee of $500.


author: Frank Holt, Justice.

text:
    JOHN DEERE COMPANY v. Robert Lee ATKINSON and Mabel ATKINSON, Administratrix
    5-5941
    482 S.W. 2d 115
    Opinion delivered July 10, 1972

      John C. Calhoun Jr. and Owens, McHaney & McHaney, for appellant.

      Felver A. Rowell Jr., for appellees.
   Frank Holt, Justice.

The appellant brought this action to collect from appellees the balance allegedly due on the purchase price of a combine machine. Appellant, also, sought possession of the combine for sale and application of the proceeds of the sale to any judgment on the alleged indebtedness. The appellees, by a counter claim, sought to off-set the indebtedness by invoking the terms of a credit life insurance policy issued to the debtor through appellant at the time of the purchase. The undisputed balance due on the purchase price is $9,654.31. The jury resolved the issues in favor of appellees’ asserted counterclaim as a setoff, or the jury agreed with appellees’ contention that the indebtedness was covered by the purchaser’s credit life insurance policy issued by appellant. For reversal of that judgment the appellant contends the trial court erred in refusing to grant appellant’s motion for a directed verdict upon its complaint; a similar motion upon appellees’ counter claim; and further that the verdict is contrary to the law and the evidence'; Appellant consolidates its points for argument.

The appellant, the manufacturer of the combine machine, purchased from its local retail or selling dealer a secured note and contract of purchase signed by appellee, Robert Lee Atkinson, and secondly, his father, Virgil Atkinson. After the down payment and a subsequent annual payment was made, the father died. Appellees, Robert Lee Atkinson and Mrs. Mable Atkinson, the administratrix of Virgil Atkinson’s estate, refused to pay the balance due on the note on the basis that the credit life insurance policy covered the indebtedness.

The insuring certificate (and contract of purchase) reads in pertinent part:

“Eligible Debtor: When the note is signed by two or more persons, the eligible debtor shall be that person whose signature appears to the left or uppermost on the note except if both husband and wife are signers of the note, the husband shall be the eligible debtor. Where in the case of a corporation indebtedness, the officer who signs for for the corporation also signs a second time as a co-debtor, such officer shall be the eligible debtor.”

Appellees presented evidence and make the argument that the real purchaser of the equipment was the deceased, Virgil Atkinson, and not Robert Lee Atkinson, the son, who was only a co-signer. According to the son, he was not physically present at the time the contract was orally negotiated; that his father conducted all the dealings in the purchase of the combine; and that he, Robert Lee Atkinson, and his father, Virgil Atkinson, signed one contract with his father signing it first; further, at a later time he signed some other papers. Appellees assert that since the deceased signed the note first that the deceased would be the eligible debtor according to the terms of the policy.

We cannot agree with appellees’ interpretation of the language in the policy. There is no provision in the insurance policy relating to which debtor actually first signs the note or instrument. The pertinent provision proves that the eligible debtor in the case at bar is the one “whose signature appears to the left or uppermost on the note. . .” It is undisputed and the pertinent exhibit reflects that the signature of appellee-Robert Lee Atkinson appears on the note or instrument in the left uppermost part and above his father’s signature. In this situation the contract provision is clear and unanbiguous; nor is there any allegation asserting misrepresentation, fraud, or mutual mistake that might justify or permit the reception of parol evidence to vary the terms of this unambiguous written language.

Since the balance allegedly due is undisputed, the judgment is reversed and the cause remanded with directions to render judgment for the appellant.

Reversed and remanded.


author: PER CURIAM

text:
    RELIABLE FINANCE COMPANY v. James H. R RHODES et al
    5-5963
    483 S.W. 2d 187
    Opinion delivered July 10, 1972
    [Rehearing denied August 28, 1972.]

      Wayne Jewell, for appellant.

      James J. Calloway and Denver L. Thornton, for appellees.
   PER CURIAM

In disposing of this rather complicated case the trial court made seven separate findings, some of law, some of fact, some of mixed law and fact. The decree of the chancellor is not abstracted and therefore we are left without the benefit of those conclusions. The omissioh violates our Rule 9 (d) because an abstract of thé decree in this case is “necessary to an understanding of all questions presented to this court for decision..."Tudor v. Tudor, 247 Ark. 822, 448 S.W. 2d 17 (1969); Weir v. Hill, 237 Ark. 922, 377 S.W. 2d 178 (1964); Pyramid Life Ins. Co. v. Hamilton, 237 Ark. 797, 376 S.W. 2d 555 (1964); Davidson v. Messing, 214 Ark. 227, 215 S.W. 2d 138 (1949); Ransom v. Warner, 193 Ark. 1179, 103 S.W. 2d 629 (1937).

Affirmed under Rule 9 (d).


author: Carleton Harris, Chief Justice.

text:
    Sara L. TALIAFERRO v. William TALIAFERRO
    5-5946
    483 S.W. 2d 189
    Opinion delivered July 17, 1972
    [Rehearing denied August 28, 1972.]

      Terral, Rawlings, Matthews ¿r Turtle, for appellant,
    No brief for appellee.
   Carleton Harris, Chief Justice.

On April 2, 1971, William Taliaferro and Sara L. Taliaferro were divorced, the court granting a divorce to each from the other. Custody of the three minor children was given to the father with reasonable visitation rights in the mother. It was further ordered that William Taliaferro, appellee herein, pay to Sara Taliaferro, appellant herein, the sum of $10.00 per week to assist her when she had the children for visitation purposes. Both parties were restrained from removing the children from Pulaski County, Arkansas, without first obtaining approval of the court. In addition, the parties were restrained from threatening and harassing each other, and it was further ordered that the property of the parties should remain “as it was prior to the last marriage of the parties and as it was found by this court”. On June 1, 1971, appellant petitioned the court for a change of custody, asserting changed conditions, and it was further alleged that she had reason to believe that appellee was planning to remove the minor children from the state, and she asked that he be enjoined from doing so. Apparently, no hearing was held on this motion, and on June 18, 1971, Mrs. Taliaferro filed a motion asking that Mr. Taliaferro be cited for contempt for removing the children from Pulaski County without the prior approval of the court. On the same day, the chancery court, acting through a special chancellor, entered its order as follows:

“William Taliaferro is hereby directed and ordered to appear in this court on the 24 day of June, 1971, at 9:00 A.M. o’clock, for the purpose of showing cause, if any there be, why he should not be held in contempt of Court for failure to comply with the orders of the Court dated April 2, 1971.”

On June 24, the chancery court (acting through another special chancellor) heard the motion for contempt, Taliaferro not being present but represented by counsel, and found as follows:

“1. That plaintiff was served with notice of the hearing by the U.S. Mail and a copy of the receipt is filed herewith.
2. That the plaintiff is in Contempt of this Court for removal of the parties minor children from the bounds of Pulaski County in violation of the Court Order dated April 2, 1971 and is hereby fined the sum of $250.00; that said fine may be expunged by returning the minor children to Pulaski County within 10 days from the date this Order is entered.”

Appellee was then ordered to immediately return the children to Pulaski County, and appellant’s attorneys were awarded a fee. On July 1, 1971, appellee, through counsel, petitioned the court to set aside the order of June 24, and on September 2, the matter was heard by the court, the regular chancellor presiding. At that time, Mr. Taliaferro did not appear, nor was there any testimony offered on his behalf, but testimony was given by Mrs. Taliaferro, and a witness on her behalf. At the conclusion of the hearing, the court set aside the order of June 24, 1971, and denied the change of custody. From the order setting aside the June 24 order, and the order refusing a change of custody, appellant brings this appeal.

It is asserted that the court erred in not issuing a restraining order when the petition was filed by appellant on June 1 seeking to restrain the appellee from removing the children from the state. As earlier stated, this petition was apparently never heard by the court, and the record does not reflect the reason therefor. It is not suggested just what relief this court could grant under those circumstances.

In its order of September 2, the court held that the June 24 order was “null and void as it is shown that the plaintiff was not properly served with the petition seeking to hold him in contempt.” The meaning of this finding is not entirely clear, but it is established that appellee had notice of the hearing, for a return receipt is exhibited which he apparently signed himself. However, the order directing him to appear, heretofore quoted, does not comply with the holdings of this court. In Ex Parte Coulter, 160 Ark. 550, 255 S.W. 15, mentioned by the trial court, the question at issue was the support of Coulter’s minor children. This court, quoting from an earlier case, said:

“Under our system of procedure, the accused is entitled to be informed with reasonable certainty of the facts instituting the offense with which he is charged and an opportunity to make defense thereto — his day in court. The different kinds of procedure have been outlined for the punishment of other offenses, but the statute, as to this one, says only that he shall be notified of the accusation and have a reasonable opportunity to make his defense. There must be an accusation before the accused can be notified of it, and there is no reason why the court in session cannot recite that the matter offending has come to its knowledge, setting it out in an order, and direct a citation thereon to show cause.”

The court then cited section 1486, Crawford and Moses Digest, which is identical to the present statute, Ark. Stat. Ann. § 34-905 (Repl. 1962), providing:

“Contempts committed in the immediate view and presence of the court, may be punished summarily; in other cases, the party charged shall be notified of the accusation, and have a reasonable time to make his defense.”

The original decree now before us contains several provisions which could have been violated, viz, appellee could have failed to pay the $10.00 per week which was to be paid when appellant had physical custody of the children; he could have violated the provision whereby he was restrained from threatening, molesting, or harrassing appellant; he could have attempted to change the status quo as to property rights; and finally, he could have violated the provision prohibiting him from removing the children from the state without permission of the court. This last, of course, was the reason for the show cause order being entered but it will be noted that the order does not state that Taliaferro should show cause why he should not be held in contempt of court for violating that provision; rather, he is only directed to show cause why he should not be held in contempt “for failure to comply with the orders of the court dated April 2,1971”. Since Taliaferro was not informed with reasonable certainty of the facts constituting the offense, it follows that the order was deficient, and the court did not err in setting it aside.

As to the change of custody, we are unable, from the record before us, to say that the court erred. Of course, to justify a change of custody, the petitioner was required to show a change of circumstances which had occurred subsequent to the divorce. Stone v. Stone, 244 Ark. 850, 427 S.W. 2d 538. The testimony offered on behalf of appellant is not at all detailed, and there is nothing in the record to reveal the original circumstances that existed when the court granted custody to appellee. In other words, the record is insufficient for a determination of whether there has been a change in circumstances. It follows that we cannot say that the court’s order, here in question, was erroneous.

Of course, if appellant so desires, there is nothing to prevent the issues from being properly presented to the court.

Affirmed.

      This action by the court in granting each party a divorce is not at issue on this appeal, and we express no opinion as to the propriety of such action.

      No brief has been filed by appellee.

        Carl-Lee v. State, 102 Ark. 122, 143 S.W. 909.


text:
    SARKCO, Inc. v. C. Ray EDWARDS, d/b/a EDWARDS PLAN SERVICE
    5-6001
    482 S.W. 2d 623
    Opinion delivered July 17, 1972

      Tackett, Moore, Dowd ir Harrelson, for appellant.

      Young ér Patton, for appellee.
   Carleton Harris, Chief Justice.

C. Ray Edwards operates Edwards Plan Service in Texarkana, Texas which, inter alia engages in planning residential apartments, preparing plans, specifications, and supervision. Edwards instituted suit in the Miller County Circuit Court in July, 1970, alleging that he had entered into a contract with Sarkco, Inc., in July of 1968 to furnish services in connection with the plans, specifications and supervision, and engineering of the Orleans apartments in Texarkana, Arkansas; that after crediting Sarkco with amounts paid, he was still due the sum of $14,500, and judgment was sought in that amount. Sarkco, Inc., appellant herein, filed a general denial and further pleaded the statute of frauds, asserting that the alleged contract was not in writing and that the services sued for could not have been completed within a year. It was further alleged that Edwards had been paid for all services which had been rendered. Subsequently, Sarkco amended its answer and, in addition to the defenses already pleaded, further alleged that the actions alleged by Edwards were contrary to Ark. Stat. Ann. §§ 71-301 through 71-308, in that said statutes prohibited the activities for which Edwards was suing unless Edwards was a registered architect or engineer; that appellee was not a registered architect or engineer, and his cause of action was thus void. Motions for directed verdict at the conclusion of appellee’s testimony and at the conclusion of all the testimony were made by appellant but such motions were denied and the jury returned a verdict for Edwards in the amount of $11,667. A motion for judgment non obstante veredicto and a motion for a new trial were both denied by the court. From the judgment entered in accordance with the jury verdict, appellant brings this appeal. The contention that the contract was unenforceable because of the statute of frauds is not argued by appellant, and that point accordingly is waived and goes out of the case. Elton Gordon et al v. Street Improvement District No. 1 of Gillett et al, 242 Ark. 599, 414 S.W. 2d 628.

We agree however with appellant that this case must be reversed. Ark. Stat. Ann. § 71-308 (Repl. 1957) provides as follows:

“Any person who shall practice or offer to practice the profession of architecture in this state without being registered or exempted therefrom in accordance with the provisions of this act [§§ 71-301 — 71-313], or any person who shall give any false or forged evidence of any kind to the examining body or to any member thereof for the purpose of obtaining a certificate of registration, or any person who shall falsely impersonate any other registrant of like or different name, or any person who shall attempt to use an expired or revoked certificate of registration, or who shall violate, or aid or abet any violation of, any of the provisions of this act, shall be guilty of a misdemeanor and shall, upon conviction, be sentenced to pay a fine of not less than fifty dollars [$50.00] nor more than five hundred dollars [$500.00] or suffer imprisonment for a period not exceeding 3 months or both so fined and imprisoned, each day of such unlawful practice to constitute a distinct and separate offense.

In Arkansas State Board of Architects v. Bank Building & Equipment Corp. of America, 225 Ark. 889, 286 S.W. 2d 323, this court, in defining an architect, stated:

“An architect is one whose occupation it is to form and devise plans and designs and draw up specifications for buildings or structures and to superintend their construction. In the case of McGill v. Carlos, Ohio Com. Pl. 81 N.E. 2d 726, one of the Ohio courts, in discussing the practice of architecture, used this pertinent language:
‘Primarily, an architect is a person who plans, sketches and presents the complete details for the erection, enlargement, or alteration of a building or other structure for the use of the contractor or builder when expert knowledge and skill are required in such preparation. The practice of architecture may also include the supervision of construction under such plans and specifications. See Webster’s New International Dictionary; the New Century Dictionary; 3 Ohio Jur., Sec. 1, page 115; Kansas City Southern R. Co. v. Wallace, 38 Okl. 233, 132 P. 908, 46 L.R.A.N.S., 112; 3 Amer. Jur. Sec. 2, page 998.”

There is no dispute but that Edwards was rendering architectural services. From the record during cross-examination of Edwards:

“Q. Now, let me ask you if this is an Arkansas definition of an architect. An architect is one whose occupation is to form and devise plans and specifications and draw up specifications for buildings or structures and superintend their construction. Is that an architect?
A. Yes, sir.
Q. Are you an architect?
A. No, sir.
Q. Why were you charging architect fees in violation of the law?
A. I charged less than an architect.
Q. Let’s see what you have said. It doesn’t make any difference what you charged. An architect is one whose occupation is to form and devise plans and specifications. You said you did that. And to draw up specifications. You said you did that. For buildings or structures and to superintend their construction. Now, you did that.
A. Yes, sir.
Q. Therefore, you were an architect, weren’t you?
A. No, sir.
Q. Well, what in the world did you do that wasn’t an architect?
A. I do not claim to be a registered architect.
Q. Oh, I know. But you’re drawing fees for it contrary to the law, aren’t you? You just got through testifying that you did everything an architect is supposed to do and you said that an architect is just what I read to you, isn’t that right?
A That’s right.”

As long ago as 1878, this court, in the case of Lindsey v. Rottaken, 52 Ark. 619, in an opinion by Chief justice English, held:

“Any act which is forbidden, either by the common or the statutory law — whether it is malum in se, or merely malum prohibitum-, indictable, or only subject to a penalty or forfeiture; or however otherwise prohibited by a statute or the common law, cannot be the foundation of a valid contract; nor can anything auxiliary to, or promotive of such act.”

In Compagionette v. McArmick, 91 Ark. 69, 120 S.W. 400, this holding was reiterated, the court stating:

“A sale is illegal where the statute expressly declares it to be so, or where it prohibits its execution; and a sale is equally invalid where the statute only imposes a penalty upon the party for making it. It is not necessary that the statute should expressly declare the contract of sale to be void; but the infliction of a penalty upon what is declared as an offense implies a prohibition of such act, and thereby renders void any contract founded on such act. [our emphasis] In this State it is the well-settled doctrine that: ‘Every contract made for or about any matter or thing which is prohibited and made unlawful by statute is a void contract, [citing cases]”

These holdings among several other cases, were reiterated in Eager v. Jonesboro, Lake City & Eastern Express Company, 103 Ark. 288, 147 S.W. 60; Florence Cotton Oil Co. v. Anglin, 105 Ark. 672, 152 S.W. 295.

It is apparent, that under the cases cited, the contract entered into between Edwards and Sarkco was void, and recovery cannot be had. It is argued that it is “unjust and inequitable to allow a fully knowledgeable party to a contract to accept the services of the other party and to allow the other party to expend substantial sums of money in the performance of the contract and then to turn and contend that the contract is unenforceable because the contract was illegal”.

We certainly can appreciate this viewpoint but that does not change the law. In addition, Edwards can hardly be classed as “innocent”, since he admitted that he was familiar with the Arkansas statute.

The only case cited by appellee is American Accident and Life Ins. Co. et al v. American Pioneer Life Ins. Co. et al, 247 Ark. 355, 445 S.W. 2d 896, but, without looking further, one pertinent fact quickly marks that case as distinguishable from the case at hand. In American Accident, supra, one prayer of the complaint sought relief on a quantum meruit basis, and the opinion points out that there was substantial evidence to support the trial court’s finding that the amount allowed was due upon a quantum meruit basis. Here, no relief on that basis was sought, nor any instruction given the jury on that theory. Rather, the jury verdict could only have been based on the provisions of the contract, a contract which appellee was prohibited from entering into by statute.

Reversed and dismissed.

      No argument is presented relative to the place of the contract, or whether Texas or Arkansas law applies. It is interesting to note that Texas has a statute substantially similar to the Arkansas statute; Vernon’s Texas Civ. Stat. Ann. Art. 249a S 10 (a) 6.

      Appellee does not come within the exemptions.


author: George Rose Smith, Justice.

text:
    Marjorie WOODMAN v. Oscar Leonard WOODMAN
    5-5994
    482 S.W. 2d 629
    Opinion delivered July 17, 1972

      Jackson County Legal Services Inc., by: Monroe L. Bethea, for appellant.

      Pickens, Boyce ir McLarty, by: Tim F. Watson, for appellee.
   George Rose Smith, Justice.

In 1970 the appellant obtained a divorce from the appellee, who was ordered to pay $25 a week as alimony and $25 a week for the support of the couple’s eight-year-old son. Woodman faithfully made the payments for child support, but he made no payments of alimony.

After about a year the appellant filed the present petition to have the alimony delinquencies reduced to judgment and to have Woodman punished for contempt of court for having failed to pay alimony. The trial court entered judgment for the past-due installments of alimony, but he found that Woodman had been unable to make the payments. The court accordingly refused to hold Woodman in contempt and modified the original decree by relieving Woodman of the duty of making further payments of alimony.

We do not find the decree to be clearly against the preponderance of the evidence. According to Woodman’s testimony, before the divorce decree was entered the federal Government took his home and all his other assets to satisfy a tax assessment of about $30,000. About $4,200 of the assessment is still unpaid. Woodman has been working as a car salesman, earning from $85 to $105 a week. He has remarried. He states that he has been and is now unable to pay the alimony specified in the decree. His testimony is uncontradicted; in fact, Mrs. Woodman did not see fit to testify at the hearing.

We have held that remarriage is a change of circumstances that may be considered as a basis for a reduction in alimony. Barnes v. Barnes, 246 Ark. 624, 439 S.W. 2d 37 (1969); McCutcheon v. McCutcheon, 226 Ark. 276, 289 S. W. 2d 521 (1956). Here there is also Woodman’s testimony that when the divorce decree was entered he hoped to salvage some equity from the property taken by the government, but that expectation has not been realized. The chancellor was justified in concluding that if the decree were left unchanged the delinquencies would simply continue to accumulate, subjecting Woodman to a burden that, as a practical matter, might eventually impair his ability to continue to make even the payments for the support of the child. Upon the record as a whole we are not convinced that the chancellor’s decree is contrary to the weight of the evidence. Our affirmance, however, is without prejudice to the appellant’s right to seek a reinstatement of alimony if conditions should change.

Affirmed.

Byrd, J., concurs.


author: Lyle Brown, Justice.

text:
    MISSOURI PACIFIC RAILROAD CO. v. E. V. NEISSL
    5-5958
    483 S.W. 2d 188
    Opinion delivered July 17, 1972
    [Rehearing denied August 28, 1972]

      Smith, Williams, Friday, Eldridge ir Clark, for appellant.

      Bill Walters, for appellee.
   Lyle Brown, Justice.

A steer owned by appellee was struck and killed by a train operated by appellant’s employees. The jury returned a verdict for actual and double damages and the court fixed an attorney’s fee for appellee. On appeal it is contended that appellant should have been given an instructed verdict. We agree.

The case was submitted to the jury on the sole question of lookout. The only witness testifying regarding lookout was the engineer. That testimony may be briefly and sufficiently abstracted as follows:

At the time of the accident we were going east from Van Burén and had crossed over Bates Mill Crossing and over the hill. I was traveling thirty miles per hour. The headlight was shining straight ahead and I was watching down the track. I noticed a cow in the edge of the bushes about four car lengths ahead of the train. Four cars are approximately 200 feet. The cow was moving along parallel with the train. Then a car length before I got to it the animal turned angling across the track. When I first saw the cow I gave my whistle several short blasts. With the cow 200 feet down the track when I first saw it, considering the train which I was operating, considering the number of cars which I had on the train, if I had applied the emergency brake as well as the service brake it would have taken 1000 or 1200 feet to have stopped the train safely. If I had hit the brakes the moment I saw the cow I would have still gone eight hundred feet past it.

Where an injury is caused by the operation of a railroad train a prima facie case of negligence is made against the railroad. Of that well known principle we had this to say in St. Louis-San Francisco Ry. Co. v. Cole, 181 Ark. 780, 27 S.W. 2d 992 (1930) where we quoted from the Supreme Court of the United States as set out in Western & A.R.R. Co. v. Henderson, 279 U.S. 639 (1929): “The only legal effect of this inference is to cast upon the railway company the duty of producing some evidence to the contrary. When this is done, the inference is at an end, and the question of negligence is one for the jury upon all the evidence.”

The testimony that the engineer was keeping a lookout, that he was driving at a reasonable rate of speed, and that he could not stop the train in order to avoid killing the animal was not disputed, even by circumstantial evidence.

Reversed and dismissed.


author: John A.Fogleman, Justice.

text:
    FARMERS EQUIPMENT COMPANY, A Corporation v. John MILLER Jr. and Malcolm MILLER
    5-5835
    482 S.W. 2d 805
    Opinion delivered July 17, 1972

      Hout, Thaxton ér Hout, by: Dean A. Garrett, for appellant.
    No brief for appellees.
   John A.Fogleman, Justice.

The plaintiff-appellant, Farmers Equipment Company, sold a crawler tractor with dozer blade to the defendant-appellees, John Miller, Jr’, and Malcolm Miller, his father, for the sum of $11,000 to be paid in installments, and Farmers retained a security interest in the equipment. Upon default by the Millers, Farmers repossessed the equipment and sold it for $1,800 at public sale. Farmers applied the $1,800 less expenses on the $6,582.77 balance still owed by the Millers and brought suit against the Millers in the Izard County Circuit Court for the deficiency in the amount of $4,782.77.

Appellees defended upon the ground that the disposition of the collateral was not commercially reasonable as required by the Uniform Commercial Code and that appellant did not proceed in good faith.

A jury trial resulted in a judgment in favor of the Millers and on appeal to this court appellant relies on the following points:

The trial court erred in allowing the testimony of Travis Grissom, witness for appellees, as to the market value of appellees’ dozer.
The trial court erred in allowing Harliss Reeves, witness for appellees, to testify as to an alleged conversation with a person in authority at appellant’s place of business.
The trial court erred in failing to direct a verdict in favor of appellant at the close of the evidence and in overruling appellant’s motion for judgment notwithstanding the verdict.
The verdict is not sustained by sufficient evidence, and/or is contrary to law and appellant’s motion for a new trial should have been granted.

We find no reversible error.

Appellees sought to show the value of the bulldozer through the testimony of Travis Grissom. Appellant objected to Grissom’s opinion of the market value of the machine on the basis that the proper foundation was not laid by a showing that Grissom had an adequate knowledge of values. Grissom started working with heavy equipment during his service with the army engineers during the years 1953 to 1955 and had operated this kind of equipment ever since. He was employed by John Miller, Jr., as a bulldozer operator about February 1966. He actually operated the machine involved here until the day it was repossessed, so he was very familiar with it. He stated that it was then in good condition, except for the tracks and sprockets and left side armor. He claimed to have knowledge of the market value of a bulldozer of the type involved on the date of repossession, based upon what was said when he went with others shopping for this kind of machinery and from his own knowledge of what others had to pay for equipment on various jobs. The determination whether a nonexpert witness has sufficient knowledge of the matter in question or has had sufficient opportunity for observation to be qualified to state an opinion lies largely within the sound judicial discretion of the trial judge and is not reviewable on appeal unless so clearly erroneous as to manifest an abuse of discretion, even though we might have decided differently if the question had been presented to us in the first instance. Lee v. Crittenden County, 216 Ark. 480, 226 S.W. 2d 79. Firemen’s Ins. Co. v. Little, 189 Ark. 640, 74 S.W. 2d 777. The same principles apply to market value witnesses. Lazenby v. Arkansas State Highway Commission, 231 Ark. 601, 331 S.W. 2d 705; Housing Authority of City of Little Rock v. Winston, 226 Ark. 1037, 295 S.W. 2d 621; Ft. Smith & Van Buren Bridge Dist. v. Scott, 103 Ark. 405, 147 S.W. 440.

Even though the evidence of qualifications of the witness may now seem meager, we are unable to say that the circuit judge abused his discretion in admitting this testimony. We do not consider Little Rock & Ft. Smith Ry. Co. v. Alister, 62 Ark. 1, 34 S.W. 82, relied upon by appellant to indicate a different result. There it was clearly deminstrated that there was no basis for the opinion of a witness of the estimated cost of certain excavation work. He testified, on cross-examination, that he had never done any such work, either as a laborer or contractor and that what he stated as the price was only guesswork. We cannot say that it was unreasonable for the trial court to accept the statement of one, who had operated equipment of the type involved for over 15 years, that he had been sufficiently exposed to information about the selling price of equipment of that type to possess knowledge of its market value.

We cannot say that there was error in the admission of the testimony of Reeves. Appellant’s objection was that the testimony of Reeves, as to statements made by a person he could not specifically identify, was hearsay, and the appellant was deprived of the opportunity to cross-examine the person making the statements.

Reeves was foreman on the job from which the bulldozer was repossessed and had driven it on occasion. At the time of the trial, he was operating a similar type tract- or he had purchased. He stated that he had shopped around a great deal before making the purchase, and had attempted to buy the Miller "dozer” from appellant at Newport about a week or 10 days after the repossession. Miller had informed him that the unpaid balance Owed was something over $6,000. According to Reeves, he went to appellant’s place of business where he was told by someone whose name he could not remember, but who he thought "was the main guy in the company” at the time, that it would take $8,750 to buy the bulldozer. Reeves said that when he protested that this was too much, this same person said "We will sell it to somebody,” and Reeves then offered to leave his name, address and telephone number so that he could be called whenever the company got ready to sell the equipment, but did not offer a specific sum for the tractor. Reeves testified that this person said, "I don’t give a damn if we don’t get $2,000 on it, we’ll get our money” and that he had “two guys” on the note.

After appellant’s initial objection, Reeves responded in the affirmative to a question whether the person making these statements was in charge of Farmers Equipment Company and was negotiating with Reeves when he was trying to purchase the equipment. Reeves further identified the speaker as "top guy there that day,” "a medium sized guy” with "sort of brown” hair. Reeves claimed that the conversation lasted about five minutes, and that it took place in this man’s office. When asked if the person showed him any papers, he responded "I think he thumbed through some papers and came up with a price, but I am not sure about that.”

We find no real similarity between this testimony and that held inadmissible in Taylor v. Samuel, 238 Ark. 70, 378 S.W. 2d 200, relied upon by appellant. There, an attempt was made to prove the agency of two unidentified individuals making delivery of lumber by the statements of these individuals to the witness at the time of the delivery that they were making delivery for the alleged principal. That testimony was clearly hearsay and inadmissible as evidence of the agency.

The real question involved here is whether the witness sufficiently identified the person with whom he talked about buying the bulldozer to give rise to an inference that that person was an agent of the company with authority to speak upon the subject. Although the details of the actions of this person might have been more thoroughly developed, we do not think it would be unreasonable to draw an inference from Reeves’ testimony that he spoke to a person who occupied an office at appellant’s place of business and who acted as though he were in charge there, that the conversation took place in that person’s office, where there were papers through which this person thumbed while talking about the price for the piece of equipment, and that this person had sufficient knowledge of the transaction to know that there were two signers of the purchase money note who were liable for any deficiency. We feel that this identification is sufficiently definite to permit consideration of the testimony by a jury, which would determine the weight and credit to be given to it. We are strengthened in our belief by reason of the fact that Buddy Black, appellant’s current manager, called in rebuttal, when asked if he could identify the person Reeves was referring to by the description given, answered "average, brown headed fellow — I am sure he just have been talking about Burton Ford.” Black had previously identified Ford as the company’s manager at the time of the alleged conversation and himself as Ford’s assistant. Black also testified that the officers and stockholders took no part in the management of this company until several months after the transaction giving rise to this litigation. It was only necessary that the information as to the identity of the speaker be sufficiently definite that the evidence as to his authority and as to the making of the statements might be rebutted. See Dudding v. Thorpe, 47 F.R.D. 565 (D. C. Pa. 1969). Before Reeves testified, Black stated that he would not doubt Reeves’ testimony if Reeves said that he had offered $6,000 for this piece of equipment. It is true that after Black made the above-quoted statement on rebuttal, he described Ford as a “pretty good sized fellow, blond headed and wears glasses.” As we have said, weight and credibility were in the jury’s province. It is significant that appellees did not seek to prove the truth of the statements allegedly made. They only sought to prove that they were made.

The remaining points argued by appellant really raise the question whether there was any substantial evidence that the sale of the repossessed bulldozer was not made in a commercially reasonable manner as required by Ark. Stat. Ann. § 85-9-504 (3) (Add. 1961) or that appellant did not proceed in good faith as required by § 85-1-203 (Add. 1961). It relies upon our holding in Goodin v. Farmers Tractor & Equipment Co., 249 Ark. 30, 458 S.W. 2d 419, and the provisions of Ark. Stat. Ann. § 85-9-507 (Add. 1961). Particular emphasis is put upon the statement in the statute that the fact that a better price could have been obtained by a sale at a different time or in a different method is not of itself sufficient to establish that the sale was not made in a commercially reasonable manner. It is significant, however, that there is evidence on this issue relating to other facts.

The bulldozer was repossessed on October 1, 1969, at a time when the bank to which the contract of sale was assigned by appellant was pressing appellant for money. Although Black testified that the equipment was badly in need of repair at the time of repossession, this testimony was controverted by Reeves, Grissom and Miller. Miller said that the necessary work to put the tractor in excellent condition would have cost only $300. Black testified that appellant attempted to dispose of the machine by private sale for the balance due ($6,582.76) at first and later for three or four thousand dollars and had numerous people look at it but received no offers or bids before an auction sale held on April 4. Black said appellant “waited and waited and waited” until the bank forced it to hold the public auction. He testified that the original asking price scared everyone off to begin with. Although Black testified that a lot of those who viewed the tractor would have liked to have it, none wanted to buy under the circumstances and preferred to await a public auction. He could offer no explanation of appellant’s inability to sell the bulldozer at private sale. The decision to proceed by public auction was made only 10 days before the sale. While Black said that he called local implement dealers and farmers in the area to advise them of the public sale, he only called those he thought would be interested who had not already been by the place while efforts were being made to sell by private sale.

The successful bidder at the auction offered $1,800. Although Black testified that he was familiar with the normal commercial practices of dealers in this type of equipment in the area and practices in selling this type of equipment he did not state what they were. The notice of sale was headed “Sold at Public Auction!” and Black admitted that some who called were confused or misunderstood this heading and questioned him about it.

Black was of the opinion that the bulldozer was worth only $1,800 at the time of the sale, but admitted that his opinion was based on the amount realized at the public sale. He placed the costs of repairs at the time of the sale at $800. While Black stated the opinion that the bulldozer was worth $3,000 to $4,000 at the time of repossession, he estimated that repairs costing $1,200 or $1,300 would have been needed to put the equipment in condition to have this market value. John Miller, Jr., said that the bulldozer was worth from $8,000 to $8,500 when repossessed.

This case may be distinguished from Goodin in several respects. The alleged offeror in that case could not even approximate the date of his offer to a company salesman. The adequacy and propriety of the notice of sale there were not questioned. The published notice in this case may have been quite misleading in that it might have been taken by a casual observer to report a sale that had already been held. In Goodin, testimony that the condition of the equipment was “very poor — close to scrap” was not controverted.

Furthermore, if the jury believed that appellant’s manager made the statements attributed to him by Reeves, it could well have decided that appellant did not act either in good faith or in a commercially reasonable manner in disposing of the security. Appellant had the burden of showing the amount of tbe deficiency it was entitled to recover. Universal C.I.T. v. Rone, 248 Ark. 665, 455 S.W. 2d 37. Since appellees defended upon the ground that appellant did not proceed in accordance with the provisions of the code, appellant had the burden of proving that it proceed in a commercially reasonable manner. Investors Acceptance Co. v. James Talcott, Inc., 454 S.W. 2d 130 (Tenn. Civ. App. 1969, cert. denied 1970.) In view of the question about the notice, the total absence of evidence about normal commercial practices in disposition of this type of collateral, the length of the period of time elapsing between repossession and sale, the possibility that the bulldozer may have abnormally deteriorated during that period, as indicated by the discrepancy in descriptions of its condition and estimated cost of repairs, the failure of appellant to notify Grissom or others who had expressed an interest in purchasing the equipment and the evidence pertaining to remarks made to Grissom by one who may have been taken to be appellant’s manager, we cannot, say that there was not a jury question as to appellant’s good faith and the commercial reasonableness of every aspect of the disposition of this collateral.

Appellant argues that the circuit judge erred in not granting its motion for new trial because the verdict was against the preponderance of the evidence. Since we find substantial evidence to support the verdict, we cannot reverse the denial of this motion. Brady v. City of Springdale, 246 Ark. 1105, 441 S.W. 2d 81.

The judgment is affirmed.


author: John A. Fogleman, Justice. Conley Byrd, Justice,

text:
    Pauline AMOS, Administratrix of the estate of George L. AMOS, Deceased v. Raymond STROUD and Pat SALMON
    5-5886
    482 S.W. 2d 592
    Opinion delivered July 17, 1972

      Pearce, Robinson if McCord and /. Marvin Holman, for appellant.

      Wright, Lindsey if Jennings, for appellees.
   John A. Fogleman, Justice.

Pauline Amos, widow of George L. Amos, as administratrix of his estate, brought an action against Raymond Stroud and Pat Salmon, seeking to recover damages for medical bills, loss of earnings and conscious pain and suffering for the estate and for her loss of consortium and her mental anguish and that of other survivors of her husband. She alleged that her husband suffered injuries in an automobile collision caused by negligence of appellees, which ultimately caused his death. Commercial Union Insurance Company of America intervened, claiming subrogation rights as the workmen’s compensation carrier for the employer of George Amos. When the tort action came on for trial, appellees conceded their liability, and the only issues were whether the injuries received by Amos caused or contributed to his death and the amount of the damages. The trial resulted in a judgment for $5,000 in favor of the estate for damages sustained by appellant’s decedent prior to his death, but the jury found for appellees as to all other liability.

Appellant relies upon the following points for reversal:

I. The Trial Court erred in overruling the Plaintiff’s modon in limine to prevent the subrogation claim of Commercial Union Insurance Company of America being presented to the jury.
II. The Trial Court erred in overruling the objections and modon to strike of the plaintiff in regard to the opinion of Dr. Ben O. Price stated in response to a hypothetical quesdon.

Commercial Union Insurance Company, by permission of the court, filed its complaint in intervention, seeking a first lien to the extent of $697.50 on any recovery by appellant by right of subrogation under Ark. Stat. Ann. § 81-1340 (Repl. 1960). No allegations of liability were asserted against appellees. No answer to this pleading was filed by any party. Prior to the selection of a jury, appellant offered to stipulate that the compensation carrier would be entitled to receive $697.50 out of any judgment against appellees. This was done at a pretrial hearing during which appellees refused to admit the correctness of the amount claimed by the carrier, even though their attorney stated that they would offer no contradictory evidence. Appellant then made a motion to prohibit mention to the jury of the payment of workmen’s compensation. The ground for the motion was that these payments were from a collateral source and had no bearing on the amount appellant was entitled to recover from appellees. The circuit judge denied this motion.

The record does not reflect any evidence offered by the intervenor in support of its claim and the forms of verdict submitted to the jury do not mention its claim in any way. Still, the judgment makes this claim a first lien on appellant’s recovery for the amount alleged in the intervention and stipulated by appellant. It is admitted that the carrier’s counsel made an opening statement to the jury, but it does not appear that he participated in the trial in any other manner or that any other mention was made of the compensation payments. However, on direct examination of a physician called as a witness by appellant, the doctor stated that a summary of his opinion as to the disability of Amos was contained in a letter to Amos’ employer. On cross-examination appellees showed that this witness submitted reports to Commercial Union relating to Amos’ injuries.

Appellant argues that the compensation carrier, having joined in her action against the third-party tortfeasors, was only entitled to a lien on the net proceeds of her recovery, and not to a separate claim against the tortfeasors. Appellees, on the other hand, contend that permitting interven- or’s attorney to appear in the courtroom and make an opening statement was proper because they had declined to admit the amount of Commercial Union’s claim. They also contend that our decision in St. Paul Fire and Marine Insurance Co. v. Wood, 242 Ark. 879, 416 S.W. 2d 322, clearly establishes that the causes of action of the compensation carrier and the injured employee are separate and distinct. This position is clearly contrary to that implied by intervenor’s complaint.

First, we should say that appellees misconstrue our holding in Wood. There we did not hold that there were two separate and distinct causes of action. We expressly stated that there was but one. We held that the single cause of action could be split with the consent of the defendant in the tort action, the sole beneficiary of the prevailing rule against splitting causes of action. We should also note that no objection was made to the carrier’s intervention here. The objection was directed to mention of the compensation payment before the jury. We think appellant’s objection was well taken. The question has not heretofore been presented to us. The matter is treated by Professor Larson, who says:

The right of the carrier to intervene in the employee’s suit does not necessarily carry with it the right to participate in the conduct of the suit without the consent of the employee. This issue may be related to the bugaboo of prejudicing the employee’s case by revealing to the jury that an insurance company is going to profit by any damage award the jury might make. 2 Larson, Workmen’s Compensation Law 226.135, § 74.41 (1970).

In other jurisdictions where the question has been presented it has usually been held that an intervening employer or carrier which has paid workmen’s compensation benefits should not be permitted to participate in the trial of a suit against a third-party tortfeasor, without the consent of the injured employee. In Sjoberg v. Ryerson & Son, 8 Ill. App. 2d 414, 132 N.E. 2d 56 (1956), in commenting on an employee’s objection to the carrier’s participation in the conduct and trial of his suit against an alleged tortfeasor, the court appropriately said:

We think there is merit in plaintiff’s position. Conceivably, there could be such conflict which might seriously jeopardize a recovery in the action. The primary object of the statute is to afford the employer the protection of his lien for the amount the employer is obligated to pay the employee under the Workmen’s Compensation Act and no more. He would have no interest in any recovery beyond that amount, whereas the employee’s objective is more substantial, since he would be seeking to recover full damages for his injury, which could be much more than that allowed by the Workmen’s Compensation Act. No lien of the employer could attach to the amount in excess of that paid or to be paid by the employer. No case has been cited to us which defines the right of the employer to participate in the trial of the suit. It may well be that no one has seriously considered that an employer has a right to participate in the trial of the suit, and therefore the question seems never to have been raised or decided. Our search has not revealed any decision upon that particular question.
We believe the proper and just rule to apply in this type of situation is to allow the employer to join the action by intervention for the purpose allowed by the statute, and provide in the order that such intervention shall not extend to the intervening petitioner the right to participate in the conduct or trial of the suit, without the consent of plaintiff.

In Gorrell v. Kansas Power & Light Co., 189 Kan. 374, 369 P. 2d 342 (1962), the court held that it was error for the trial court to permit the active participation of an intervening workmen’s compensation carrier, saying:

The applicable statute, G.S. 1959 Supp. 44-504, provides that when the injury for which compensation is payable was caused under circumstances creating a legal liability against some person other than the employer to pay damages, the injured workman shall have the right to take compensation under the act and pursue his remedy by proper action in a court of competent jurisdiction against such third party, and that in the event of recovery from such third party by judgment, settlement or otherwise, the employer shall be subrogated to the extent of the compensation and medical aid provided by him to date of such recovery and shall have a lien therefor against such recovery, and the employer may intervene in any action to protect and enforce such lien.
# # #
We believe that portion of the statute providing that the employer shall be subrogated to the extent of the compensation and medical aid provided by him to the date of recovery, and that he shall have a lien therefor against such recovery and may intervene in the action to protect and enforce such lien, means that the employer or the insurance carrier is given the right to file with the court a notice of its lien so as to protect its subrogation rights in the event of recovery by judgment, settlement, or otherwise, but that it does not mean that the employer or insurance carrier may actively participate in the injured workman’s action.
Notwithstanding the fact that it was to the insurance carrier’s interest that a large verdict — at least to the extent of $22,500 — be recovered, and thus the “interests” of plaintiff and the insurance carrier may be deemed to have been the “same,” we believe that it was error for the court to permit the insurance carrier actively to participate in the trial. As previously stated, this was plaintiff’s lawsuit and the insurance coverage under the compensation act had no place in the pleadings or the evidence.

It was also said in Jarbet Co. v. Hengst, 260 S.W. 2d 88 (Tex. Civ. App. 1953), that it would have been improper and prejudicial for the intervening employer to have offered any evidence to the jury on compensation payments made by it and error for the court to permit the fact that the employee-plaintiff was protected by insurance to be brought directly to the jury’s attention. That court said that the intervenor’s pleading is addressed to the court.

We recognize that recoveries from collateral sources do not redound to the benefit of a tortfeasor, even though double recovery for the same danage by the injured party may result. Freeman v. Reeves, 241 Ark. 867, 410 S.W. 2d 740. In states following the “collateral source rule” evidence showing that the injured person received payments from such a source is inadmissible, unless relevant for some purpose other than mitigation or reduction of damages. 25A C.J.S. 69, Damages § 160. We have also held that an employee is entitled to recover the full extent of his damages even though he was compensated to some extent through workmen’s compensation. Swindle v. Thornton, 229 Ark. 437, 316 S.W. 2d 202 It is commonly held that evidence of the receipt or the amount of workmen’s compensation benefits is not admissible in evidence before the jury, but to the trial judge only, unless controverted or some other basis for its admission develops in the trial. Blue Ridge Rural Electric Cooperative v. Byrd, 264 F. 2d 689 (4th Cir. 1959), rev’d on other grounds, 356 U.S. 525, 78 S. Ct. 893, 2 L. Ed. 2d 953 (1958); Blatt v. C. C. Davis Construction Co., 184 Pa. Super. 30, 133 A. 2d 576 (1957); Sweeney v. Max A. R. Matthews & Co., 46 Ill. 2d 64, 264 N. E. 2d 170 (1970). If recoveries from other sources are not to be deducted from the injured party’s recovery, there is usually no reason why they should be disclosed to the jury and their disclosure could certainly result in prejudice. We think that the reasoning of the courts in the cases cited from foreign jurisdictions is consistent with our “collateral source rule” and properly applicable here. No valid reason for informing the jury of the payment or amount of workmen’s compensation benefits received by the deceased existed after the court was informed that appellant conceded the right of the carrier to a lien for the exact amount sought by the carrier. We do not perceive any legitimate interest appellees had in the determination of this amount. Although the opening statement made by the intervenor’s attorney is not reported, we do not see how he could have made any statement without mentioning compensation payments, the very thing to which appellant had objected. We conclude that the court’s action was erroneous. We must assume that the error was prejudicial because we cannot say with assurance that the record discloses that it was harmless (see Rickett v. Hayes, 251 Ark. 395 (1971), 473 S.W. 2d 446), particularly in view of the fact that the carrier’s participation was not insisted upon by it, but by appellees. The situation would be different if there were any indication that the carrier’s rights were not being protected.

Appellant also argues that the circuit court erred in overruling her objections to the testimony of Dr. Ben O. Price in response to a hypothetical question and in denying her motion to strike the testimony. Dr. Price was a medical expert who testified by pretrial deposition as ’to the probable cause of appellant’s decedent’s death, even though he had not examined or treated appellant’s decedent. His testimony was based on information gleaned from such sources as medical reports of other physicians. Appellant objected to any testimony of Dr. Price based upon a death certificate which recited the cause of death as coronary occlusion. Her argument is that the statement in the death certificate (which was not admitted in evidence) was the conclusion of an expert and an improper basis for Price’s expert opinion, and that the evidentiary value of the death certificate was destroyed because its maker had admitted that his statement as to cause of death was based upon the medical history of the patient, but that there were actually three possible causes of Amos’ death, i.e., coronary occlusion, cardiac arrhythmia, or a stroke. The judge admonished the jury not to consider anything with reference to the death certificate because it had not been introduced in evidence.

We find no prejudice to appellant, even if the court’s admonition was not sufficient preventative. Dr. Price considered the medical data recorded and testimony before the Workmen’s Compensation Commission, by Dr. Shrigley (the treating physician), among the most significant factors forming the basis for his opinion. The thrust of Dr. Price’s testimony was that the injuries suffered by Amos did not cause a coronary occlusion, and that a fatal arrythmia was unlikely due to the time lapsing between the automobile collision and the death. He also testified that he would not have suspected that Amos died of arrythmia, even without the death certificate. Whatever significance the death certificate may have been given by Dr. Price, the foundation of the opinion could well be said to be no less firm in view of the fact Dr. Shrigley attributed the hastening of the death to aggravation of a cardiac condition, a posterior myocardial infarction, and Dr. Manley, appellant’s expert, said that coronary occlusion was the cause of death. This testimony as to cause of death is no different from that stated in the death certificate.

For the error indicated, the judgment is reversed and the cause remanded for a new trial.

Byrd, J., dissents.

Conley Byrd, Justice,

dissenting. This is a wrongful death action allegedly resulting from a rear-end automobile collision. The collision occurred in August of 1967, and death occurred on April 25, 1968, from a heart condition. The big hurdle that appellant’s counsel had was to show that the collision either caused or aggravated the existing heart condition. On this issue appellant’s doctor on cross examination testified that he submitted to the Workmen’s Compensation Carrier regular reports from August 25, 1967, through January 10, 1968, without mentioning any cardio vascular problem. This cross-examination was entirely proper and I doubt that the case could have been tried without reference to the Workmen’s Compensation reports.

Appellant’s only objection to the intervention of the Workmen’s Compensation Carrier was as follows:

“I would further move in limine that the defense be prohibited from mentioning to the jury the fact of the compensation payment. It is a collateral source and certainly has nothing to do with how much we are entitled to recover in this lawsuit. We want them prohibited from mentioning the fact of the compensation.”

We have more than a score of cases holding that an appellant is not entitled to complain of error that is not prejudicial. Since this could not have been tried nor the issues developed without mention of the Workmen’s Compensation claim, I am unable to understand why appellant is entitled to complain of prejudice by the ruling made on his motion.

The majority opinion refers to an opening statement by the carrier’s attorney, but since the statement is not in the record, I am unable to see how this court can assume what was said.

For the reasons stated, I respectfully dissent.

      The statement in Winfrey & Carlisle v. Nickles, Admr., 223 Ark. 894, 270 S.W. 2d 923, that Ark. Stat. Ann. § 81-1340 recognizes separate causes of action in the compensation beneficiary and in the compensation carrier should not be taken to mean that the single cause of action against the tortfeasor may be split. That statement relates to the separate rights of the beneficiary and the carrier to institute the action against the tortfeasor. This meaning is clearly indicated by the subsequent statement in the opinion that the beneficiary may institute the action with notice to the carrier, or that the carrier may institute the action, joining the beneficiary. If there were actually separate causes of action which could be brought by the carrier and the beneficiary, each acting independently, we could not have held, as we did in Superior Forwarding Company v. Sikes, 233 Ark. 932, 349 S.W. 2d 818, that the tortfeasor was not prejudiced by the trial court’s refusal to require the carrier to intervene in a tort action instituted by the employee against it.

      See also, Varney v. Taylor, 71 N.M. 444, 379 P. 2d 84 (1963), where it was held that intervention by a compensation carrier should be allowed under such conditions as would protect all parties to the litigation.

      For a discussion of this rule and its general acceptance see 22 Am. Jur. 2d 286, Damages § 206.

      The application of the collateral source rule to workmen’s compensation benefits seems to be generally accepted. See 22 Am. Jur. 2d 292, Damages § 209; 25 C.J.S. 1017, Damages § 99 (3).


author: John A. Fogleman, Justice.

text:
    Coy SANDERS et ux v. Sam JACKSON
    5-5986
    482 S.W. 2d 621
    Opinion delivered July 17, 1972

      W. G. Wiley, for appellants.

      Poynter if Huckaba, for appellee.
   John A. Fogleman, Justice.

Appellants bring this appeal from an adverse decree of the trial court finding them indebted to appellee for his services in drilling a well on their property. Both parties admit that there was an oral contract for such purpose, but differ as to its terms and meaning. Five points are urged for reversal, most of which either challenge discretionary rulings made by the chancellor or allege that the findings and decree are against the preponderance of the evidence. Appellants also contend that the governing law at the time this cause of action arose is contrary to public policy and the best interest of society. We are unable to say that there was any error.

Coy Sanders and his wife, Wanda, defendants below and appellants here, contracted with appellee Sam Jackson for the digging of a well on their property. This much is clear froin the testimony on both sides. The evidence concerning the question of the promised performance, i.e., whether a specified quantity of water would be produced, is, to say the least, sharply contradictory. Because of this, we give great weight to the chancellor’s finding of facts. Guaranty Financial Corp. v. Harden, 244 Ark. 846, 427 S.W. 2d 548. No useful purpose would be served by detailing the testimony, for, at best, the evidence appears to be evenly poised and in such case we defer to the judgment of the chancellor who was in a superior position to determine the credibility of the witnesses. Alley v. Martin, 250 Ark. 74, 464 S.W. 2d 591; Cochran v. People’s Exchange Bank, 176 Ark. 830, 4 S.W. 2d 515; Walt v. Phillips, 166 Ark. 163, 266 S.W. 71. The chancellor who heard this matter was in a better position than this court to observe the demeanor, appearance, mannerisms, candor or lack of candor of the witnesses, and we are unable to say that his findings are clearly against the preponderance of the evidence. See May v. Alsobrook, 221 Ark. 293, 253 S.W. 2d 29.

Appellants argue that the chancellor erred when, after the case had been taken under advisement, he refused to reopen it in order for appellants to offer expert testimony that the well was, for all practical purposes, dry. Appellants admit, and we have held, that the reopening of a cause for admission of additional testimony is within the sound judicial discretion of the chancellor. See Halk v. Soncini, 208 Ark. 736, 187 S.W. 2d 960; Harrison v. Mobley, 214 Ark. 472, 217 S.W. 2d 242; Fromholz v. McGahey, 120 Ark. 216, 179 S.W. 360. Reversal is required only where there has been a manifest abuse of this discretion. Rinke v. Shackleford, 248 Ark. 941, 455 S.W. 2d 83; Harrison v. Mobley, supra. The chancellor in refusing to reopen this trial gave the following reasons:

There was no claim of surprise made at the trial; appellants made no showing that, if they were surprised, they had made diligent efforts to ascertain the nature of appellee’s evidence prior to the trial; that the cause was filed on August 18, 1969; that the record reflected two pretrial conferences; that the case was tried on March 16, 1971; that the motion to reopen was made March 25, 1971, after the case was taken under advisement; that while appellee had propounded interrogatories to appellants, served requests for admissions and obtained a court order authorizing discovery and inspection of the well, appellants took no pretrial discovery steps; that no evidence of the materiality of appellants’ test, made on March 18, to the question of productivity of the completed well on May 23, 1969, was offered or alleged.

We find no abuse of the chancellor’s discretion in not permitting appellants to reopen the case, nor are we impressed by their argument that it was the duty of appellee to introduce expert testimony on this matter, or their belated claim of surprise because appellee did not do so.

Before trial appellants offered to prove by the testimony of one Dale Townsend that appellee had a bad reputation as a well digger among the community and that he had performed unsatisfactorily for Townsend, and had experienced similar difficulties with others in the county. The proffered testimony involved transactions with parties other than appellants. Ordinarily this type of testimony is not admissible. We are unable to say that appellants were prejudiced by the chancellor’s determination that any prior breach of contract by appellee was not relevant to the issue before the court or that appellee would not have been prejudiced by its admission. See Davison v. Harris, 165 Ark. 518, 265 S.W. 67. In a related situation we have noted that this question is largely one of relevancy. It would have been an entirely different matter had appellants sought to introduce this testimony as evidence bearing on intent. Fulwider v. Woods, 249 Ark. 776, 461 S.W. 2d 581. We agree with appellants that a litigant may impeach a witness by testimony that his reputation for truth and morality is bad, but appellants’ offer of proof as to the testimony of Townsend did not indicate that the witness would testify on that point.

Appellants urge that the law prior to the passage of the Arkansas Water Well Construction Act [Ark. Stat. Ann. §§ 21-2001 — 21-2020 (Supp. 1971)] is against public policy and contrary to the best interest of the people. It appears that appellants are contending that appellee should have been a licensed water well contractor as now required under § 21-2011. While we do not say that it would not have been better had appellee been a licensed contractor, we cannot say that his lack of a license was contrary to the interest of the people nor violative of public policy.

Since we find no error, the decree is affirmed.