text:
    Reid v. Karoley.
    1557
    313 S. W. 2d 381
    Opinion delivered May 26, 1958.

      Bailey, Warren,& Bullion, Walls Trimble, and U. A. Gentry, for appellant.

      Richard W. Hobbs & B. W. Thomas, for appellee.
   Ed. F. McFaddin, Associate Justice.

The Trial Court sustained the plaintiff’s (appellee’s) motion for judgment on the pleadings; and defendant (appellant) brings this appeal. The ultimate question posed in the case is the effect of the appellant’s bankruptcy discharge on the monthly payments claimed by the appellee; but we cannot reach this ultimate question because we conclude that the Trial Court was in error in rendering a judgment for the plaintiff on the pleadings, and thereby refusing to hear the evidence.

In May 1956 Mary E. Karoley filed the present suit against John D. Reid in the. Chancery Court, alleging:

“That on or about the 13th day of November, 1951, plaintiff entered into a contract with the defendant, a copy of said contract appearing in the record of the case of Mary E. Karoley v. John D. Reid in the Pulaski County Chancery Court, Case No. 97073; said copy of contract referred to herein is made a part hereof as fully as though set out word for word herein . . .

“Plaintiff further states that the defendant has refused and failed to make any payments from March, 1955, up to and including May of 1956, and that there is now due and owing upon the said contract to the plaintiff the sum of $3,500.00.”

The complaint prayed for judgment in the sum of $3,-500.00 with interest and costs. Reid filed an answer, and three amendments to the answer. The effect of the original answer was to admit a contract and the original delinquencies, but to plead Reid’s bankruptcy as a release from all liability. In the amendments, Reid (1) denied that Karoley was entitled to any judgment; (2) pleaded Reid’s discharge from bankruptcy as a release; and (3) denied that Karoley was still single and unmarried. With the record in this condition, the Trial Court, over Reid’s objections, rendered judgment on the pleadings for Karoley for $6,250.00. On this appeal, we discuss three points.

I. The Rule As To Jiidgment On The Pleadings. The rule is well established that judgment on the pleadings can be rendered only when, after giving every reasonable intendment to the pleadings of the respondent, the pleadings still show on their face that the respondent has no defense. Story v. Cheatham, 217 Ark. 193, 229 S. W. 2d 121. In 41 Am. Jnr. 520, in discussing a motion for judgment on the pleadings, the holdings of various jurisdictions are summarized in this language:

“Being in the nature of a demurrer, a motion for judgment on the pleadings raises an issue of law only . . . But it is proper where there is an entire failure to state a cause of action or defense. In a strict motion for judgment on the pleadings, parol evidence is not admissible.

“In determining the right of a party to a judgment on the pleadings, the real question to be determined is the sufficiency of the admitted facts to warrant the judgment rendered, and the materiality of those upon ivhich issue is joined. A motion for judgment on the pleadings should be sustained when, under the admitted facts, the moving party would be entitled to judgment on the merits, without regard to what the findings might be on the facts on which issue is joined. The motion, however, is not favored by the courts; pleadings alleged to state no cause of action or defense will be liberally construed in favor of the pleader ... If there is joined an issue of fact upon which, if supported by the evidence, a valid judgment may be based, a judgment on the pleadings is improper. The court cannot anticipate what the proof will show.”

Measured by the foregoing, it is apparent that the pleadings in the case at bar did not show that Karoley was single or that the amount of Reid’s default was $6,250.00. It was admitted in oral argument before this Court that admissions outside of the record were made by the attorneys in the course of the hearing before the Trial Court and that it was these admissions which caused the Chancery Court to set the figure at $6,250.00 and to decide that Karoley was single. But these admissions were not in the pleádings; and we must test the correctness of a judgment on the pleadings by what appears in the pleadings and not by factual admissions outside the pleadings.

II. Incorporation By Reference. Furthermore, there is another defect in the judgment on the pleadings. The complaint attempted to incorporate by reference a contract, a copy of which is alleged to have been filed in another case in the Pulaski Chancery Court. We have heretofore copied all of the language in the complaint as to the contract. No copy of the contract was attached to the complaint in this case (which was No. 105107 in the Pulaski Chancery Court); and since the judgment was rendered on the pleadings, the only way the Trial Court could have known what the contract was would have been to examine the pleadings in another case.

In 71 C. J. S. 28 “Pleadings” Key § 9, cases are cited to sustain the following textual statement:

" The allegations of a pleading in another independent action ordinarily cannot be adopted, even by agreement of the parties, unless they are copied into the pleading. ’ ’

The language in Karoley’s complaint, as to adoption by reference, was sufficient to have allowed the contract to be introduced in evidence ; but the case never reached the stage for introducing evidence. Karoley moved for judgment on the pleadings; and in considering the pleadings no contract was shown except by reference to some other case. The reference might just as well have been to a contract filed in another State, or a contract in the attorneys’ office, or in some other place. The contract could have been introduced in evidence, but it was not sufficiently shown in the pleadings to support a judgment on the pleadings.

Counsel for appellee tell ns that the contract is set out in full in the case of Karoley v. Reid, 223 Ark. 737, 269 S. W. 2d 322; but that is a separately numbered case. When Karoley v. Reid, 223 Ark. 737, 269 S. W. 2d 322 was reversed and remanded, it came back before us in the case of Karoley v. Reid, 226 Ark. 959, 295 S. W. 2d 767, and was there affirmed. As aforesaid, the present case is not a continuation of either of those cases, but is a new case; and the adoption by reference was fatally defective in the case at bar insofar as judgment on the pleadings is concerned.

III. Designation Of Points In Notice Of Appeal. Appellee says that Reid has waived all of the matters discussed in Topics I and II because in the Trial Court Reid assigned only one error, which was: “Discharge of the defendant, John D. Reid, in the United States District Bankruptcy Court discharges defendant’s obligation under the contract in controversy.”

This contention of appellees requires a consideration of a portion of Act No. 555 of 1953: the portion of which, germane to the point now under discussion is in Section II, which reads: “No motion for new trial and no assignment of errors shall be necessary. If the appellant does not designate for inclusion the complete record and all the proceedings and evidence in the action, he shall serve with his designation a concise statement of the points on which he intends to rely on the appeal.”

It will be observed that “no assignment of errors shall be necessary”; and yet in the Trial Court the appellant assigned as error the point that we have previously copied. The question is, whether such assignment, made in the Trial Court though not required, precludes appellant from listing other assignments in his brief in this Court. The case of Twin City Lines v. Cook, 226 Ark. 657, 291 S. W. 2d 810, is apropos. There, the appellant filed in the lower Court a motion for new trial in which he failed to mention one of the points that he subsequently argued on appeal in this Court. It was urged that since he had not mentioned the point in the motion for new trial, he therefore was prevented from arguing the point in this Court. We held that since the Act No. 555 of 1953 said, “No motion for new trial and no assignment of errors shall he necessary,” the filing of the motion for new trial was a mere surplusage and conld not preclude the appellant from mailing his assignment of points in his brief in this Court. The same rule is applicable here. The law did not require the appellant to file any assignment of errors in the Trial Court in this case, so the assignment that he filed was a mere surplusage, and he is not precluded from raising here the point previously mentioned regarding the failure of the pleadings to support the motion for judgment on the pleadings.

We must emphasize that wThen only a partial record is brought up, there must be filed in the Trial Court a statement of points. The Statute (as quoted) says: “. . . a concise statement of the points on which he intends to rely for appeal . . .” But when — as here —the entire record is brought up by appellant, then any “concise statement of the points on which he intends to rely for appeal” is surplusage; and the appellant can designate his points in his brief filed in this Court, and is not foreclosed by the surplusage filed in the Trial Court.

The judgment rendered on the pleadings is reversed, and the cause is remanded for further proceedings not inconsistent with this opinion; but this being an equity case, we adjudge all costs of this appeal against the appellant.

       The briefs herein contain the statement that these sama parties have been before this Court in two previous appeals: being Karoley v. Reid, 223 Ark. 737, 269 S. W. 2d 322; and Karoley v. Reid, 226 Ark. 959, 295 S. W. 2d 767. But the present litigation is not a reappearance of either of the former cases: this is a new case.

       To the same effect as the quotation given, see 71 C. J. S. 861 et seq. “Pleadings” § 424.

       But oven under our Statute (§ 27-1143), it is necessary to attach a copy of the instrument.

         This is found in § 27-2127.5 of the Cumulative Pocket Supplement of Arkansas Statutes.


source: Caselaw Access Project

author: Minor W. Millwee, Associate Justice.

license: Public Domain

text:
    White v. Thornbrough, Comm'r of Labor.
    5-1572
    313 S. W. 2d 384
    Opinion delivered May 26, 1958.

      Sam Goodkin, for appellant.

      Luke Arnett, for appellee.
   Minor W. Millwee, Associate Justice.

The principal question for decision is whether homestead property is exempt from a judgment for unemployment contributions, interest and penalty assessed pursuant to the provisions of the Arkansas Employment Security Act (Ark. Stats. Secs. 81-1101 — 81-1108, 81-1111 — 81-1122).

Appellants, W. B. Rainwater and wife, have owned and occupied their rural homestead in Sebastian County since 1949. In 1951 and 1957 the appellee, Commissioner of Labor, obtained assessments of contributions, penalty and interest against Mr. Rainwater as a delinquent employer under Ark. Stats., Section 81-1117 which provides that said assessments ‘ ‘ shall have the force and effect of a judgment of the circuit court.” These judgments appear of record in Sebastian County.

The Rainwaters, while still residing on their homestead, conveyed three different parcels thereof to three other appellants and desire to convey another parcel to another appellant if they can do so free of said judgments. They and the other appellants brought this suit to remove any cloud on their titles by reason of said judgments, to quiet title in the grantees to the parts already conveyed; and for a declaration that said judgments are not liens either on the tracts conveyed or the remainder of the homestead still owned and occupied by the Rainwaters.

Appellee demurred to the complaint on the grounds that it did not state facts sufficient to constitute a cause of action either for a declaratory judgment or for the relief sought. This appeal is from a decree dismissing appellants’ complaint after they declined to plead further when the court sustained the demurrer filed by appellee. The court found that appellants had an adequate remedy at law and could not invoke the Declaratory Judgment Act. The court further found: “That the contributions levied under and pursuant to the provisions of the Arkansas Employment Security Act are taxes for which the State of Arkansas has a lien upon all of the property owned by the plaintiff W. B. Rainwater, and under § 3 of Article 9 of the Constitution of Arkansas the homestead of plaintiff W. B. Rainwater is not exempt from the judgment and lien for said taxes.”

We find it unnecessary to determine the applicability of the Declaratory Judgment Act (Ark. Stats., Secs. 34-2501, et seq.). Aside from that act, the chancery court had jurisdiction of the instant suit under its traditional equitable jurisdiction to remove clouds on title to real estate. Equity jurisdiction to quiet and remove clouds from title to real estate was recognized long before such proceedings were authorized by statute (Ark. Stats. Secs. 34-1001, et seq.). See Patterson v. McKay, 199 Ark. 140, 134 S. W. 2d 543, and cases there cited. If the homestead is exempt from the judgments and liens for the unemployment contributions involved here, then such judgments clearly constitute clouds on the title of appellants, and jurisdiction to remove such clouds is purely of equitable cognizance. Sanders v. Flenniken, 180 Ark. 303, 21 S. W. 2d 847. The fact that appellants might defend against an attempt by appellee to execute on said judgments in the circuit court does not preclude them from proceeding to remove the clouds from their respective titles. Moreover, the Employment Security Act (Ark. Stats., Sec. 81-1117 (e)) expressly authorizes a review of the assessment for contributions in the chancery court.

We proceed to the main issue as to whether the homestead is exempt from the judgment and lien for unemployment contributions under Art. 9 Sec. 3 of the Constitution of Arkansas, Avhich reads: ‘ ‘ The homestead of any resident of this State who is married or the head of a family shall not be subject to the lien of any judgment, or decree of any court, or to sale under execution or other process thereon, except such as may be rendered for the purchase money or for specific liens, laborers’ or mechanics’ liens for improving the same, or for taxes, or against executors, administrators, guardians, receivers, attorneys for moneys collected by them and other trustees of an express trust for moneys due from them in their fiduciary capacity.”

If the contributions in question are “taxes” within the meaning of this constitutional provision, then they come within the exception exempting said homestead. We are cited to only one decision bearing on this question. In Lafayette Building Ass’n v. Spofford, 221 La. 549, 59 So. 2d 880, the state obtained judgment against the homestead owner for public Avelfare taxes and chain store taxes authorized by statute and sought to subject the homestead to the payment of said judgment. The court held that the word “taxes” used in a constitutional provision very similar to Art. 9, Sec. 3, supra, referred to property taxes relating directly to the homestead and did not include such excise taxes as were there involved. After pointing out the issue involved and the general object of the exemption proviso, the court said: “In the light of the foregoing, it necessarily follows that in order for the homestead exemption to be set aside and not apply to a certain debt, the provision of the Constitution which disallows the exemption insofar as certain debts are concerned must be strictly construed and it must be clearly shown that the debt comes within the meaning of the aforesaid provision. It is clear that the word ‘taxes’ as used in the constitutional provision refers to property taxes and was intended to relate directly to the homestead property and did not embrace excise taxes. As evidenced by the judgments obtained by the State of Louisiana, its claims are for Public Welfare Revenue Taxes and for Chain Store Taxes assessed against a former bankrupt business operated by defendant do not relate to taxes pertaining to nor levied on, nor assessment levied against the homestead in question. We reiterate that the word ‘taxes’ as set out in the constitutional exception embrace no other type of taxes than that assessed directly against the homestead property.”

The reasoning used and result reached by the Louisiana court appear to be in harmony with our own decisions. This court has traditionally declined to recognize inroads upon the homestead exemption except such as are clearly in accord with the constitutional' mandate. We have repeatedly said that the protection of the family from dependence and want is the object of all homestead laws. In Hollis v. State, 59 Ark. 211, 27 S. W. 73, the court held the homestead exempt from the lien of the State for costs in a criminal prosecution, saying: “The lien of the State for costs in a criminal prosecution is not a specific lien, nor does it come within the meaning of either of the other exceptions named. Homestead laws are intended for the protection of the families of those who are poor or unfortunate, and, in cases of this kind, there are no reasons why the State should be exempt from their operation.” This holding is in line with the general rule that it is only in case the homestead statute expressly subjects the homestead to debts due the state or the United States that an exemption therefrom is denied. 40 C. J. S., Homesteads, Sec. 108. Also in Arnold v. Stephens, 173 Ark. 205, 296 S. W. 24, we held a tax collector’s homestead exempt from the lien of a judgment in favor of his sureties who were compelled to pay money which he had collected and failed to pay to the State.

Employment Security Acts were unknown at the time of the adoption of our constitution. Our act is primarily a public welfare measure, and not a taxing statute. It was not enacted under the general taxing powers requiring uniformity of assessments according to value, but under the general police power as provided in Ark. Stats., Sec. 81-1101. The contributions here involved do not constitute a property tax nor one that is assessed directly against the homestead property such as the “purchase money,” “laborers” and other specific liens mentioned in the constitutional provision immediately preceding the word “taxes.” Obviously a homestead is not subject to the lien of a judgment for the “purchase money” of a car or a “specific lien” on some other chattel. In our opinion a proper construction of the constitutional provision warrants the conclusion that the word “taxes,” as used therein, refers to taxes against the homestead and not to contributions assessed against an employer under the Employment Security Act. The decree is accordingly reversed and the cause remanded with directions to overrule the demurrer and for further proceedings consistent with this opinion.

       Italics supplied.


author: George Rose Smith, J. Sam Robinson,

text:
    DeLong v. Green.
    5-1538
    313 S. W. 2d 370
    Opinion delivered May 26, 1958.

      McMillan <& McMillan and Otis H. Turner, for appellant.

      H. B. Means, for appellee.
   George Rose Smith, J.

On November 15, 1956, Phillip Green, aged nineteen, was killed in a collision between the car he was driving and a car owned by the appellant Garrett and being driven by the appellant DeLong. This action for wrongful death and property damage was originally brought by the decedent’s parents, Forace and Elvie Green. Later on Forace Green was appointed administrator of his son’s estate and in that capacity intervened as a plaintiff in the action. Upon trial before a jury the plaintiffs recovered a judgment for $23,061.47, of which $20,000.00 was awarded by the jury for the mental anguish suffered by the parents.

The principal argument for reversal concerns certain references to an insurance company that were made during the selection of the jury. Mr. Means, representing the plaintiffs, had stated that he proposed to ask the veniremen if any of them owned stock in the Southern Farm Bureau Casualty Insurance Company. Mr/ McMillan, representing the defendants, informed the court that the company in question was in fact insuring the defendants in the case. He further stated that, “as far as our information is concerned, we have no knowledge of anybody in Plot Spring county, and particularly on this jury, that has any stock in this corporation.” He went on to say that there was a conflict in the county between the farmers supporting the Farm Bureau and those supporting the Farmers Union, both of which had insurance companies, that at least two members of the jury were decidedly biased against the Farm Bureau, and that to indicate that the Farm Bureau was a defendant would affect those men. Mr. McMillan requested that the questions be limited to a reference to insurance companies in general, and, if any juror answered in the affirmative, that he then be' asked to name the particular company. “In this way,” Mr. McMillan pointed out, “Mr. Means can obtain his information without disclosing the name of the insurance company.”

Mr. Means insisted, however, that he was entitled to ask the jurors about the particular company. The trial court sustained this contention, s,nd Mr. Means then asked the veniremen four separate questions about their ownership of stock in, or their agency for, the Southern Farm Bureau Casualty Insurance Company. No juror gave an affirmative answer to any of these questions.

On some fifteen occasions we have considered the matter of questioning prospective jurors about their connection with insurance companies. The difficulty, which has made the issue a recurring one, is that of laying down a rule that will operate with fairness to both sides in the litigation. On the one hand, the plaintiff’s attorney is undoubtedly entitled to elicit information that may assist him in the exercise of his peremptory challenges. As we said in Dedmon v. Thalheimer, 226 Ark. 402, 290 S. W. 2d 16: “If counsel, in good faith, thinks that liability insurance is involved, then he may ask questions calculated to bring to light any bias or prejudice a venireman may have for or against insurance companies ... A lawyer trying a case would be rather careless if he failed to ascertain as well as possible if any one on the venire was biased or prejudiced on a question involved in the litigation, even though such question would be only indirectly involved. ’ ’

On the other hand, the fact that the defendant is insured has no bearing on the issue of negligence, and since that knowledge, as we have repeatedly held, may prejudice the jury, it is improper for the questions on voir dire to be used as a means of unnecessarily calling the jury’s attention to the fact of insurance. Pekin Stave & Mfg. Co. v. Ramey, 104 Ark. 1, 147 S. W. 83. Judge Frank Smith, in writing the court’s opinion in Williams v. Cantwell, 114 Ark. 542, 170 S. W. 250, had this to say: “. . . appellee’s attorney appears to have known, not only that Mr. Wynne did represent an insurance company, but to have known the particular company which he represented, and his speech before the court, as well as his questions to the jurors, appears to us to have unnecessarily advised the jurors of the fact that appellant was insured against liability and that he would not be required to pay any verdict which they might render against him. Information as to any jur- or’s connection with any insurance company could have been obtained in a less dramatic manner by asking each of the jurors if he represented or was connected with any casualty company insuring employers against liability, or if he was connected with any insurance company, or any other proper question which might have tended to disclose whether any juror had any bias or prejudice likely to influence his verdict one way or the other; and had any juror answered that he was so connected with any such insurance company it would not have been improper to have permitted a more minute inquiry of such juror. But no such necessity appears to have existed in this case, and the purpose and effect of counsel’s remarks addressed to the court and his questions to the jurors appear to have been to advise the jury that appellant was insured against liability in. the Home Life and Accident Insurance Company and would not have to pay any judgment for damages which they might render against him. ’ ’

In the case at bar it cannot be said that counsel’s unquestioned right to information about the veniremen necessarily required that the Southern Farm Bureau Casualty Insurance Company be referred to by name. Opposing counsel, whose good faith in the matter is not questioned, had declared that the farmers in the county supported two rival organizations, that at least two members of the panel were decidedly biased against the Farm Bureau, and that to refer to that company would have a prejudicial effect. He went further and pointed out, much as Judge Smith did in the Williams case, how the desired information might have been obtained by general questions. Despite this warning plaintiff’s counsel insisted upon naming the company and did so in four questions to the jury. It can hardly be supposed that a group of intelligent jurors did not draw the inference that the Southern Farm Bureau Casualty Insurance Company had insured the defendants, since that company was singled out in counsel’s repeated inquiries on the subject. Had there been no alternative way of examining the venire no doubt the plaintiffs’ right to information would have overridden the defendants’ objection; but there was an alternative, which the plaintiffs refused to adopt.

"We are aware that in three instances we have affirmed judgments even though a specific insurance company was mentioned during the selection of the jury. Ellis & Lewis v. Warner, 182 Ark. 613, 32 S. W. 2d 167; Halbrook v. Williams, 185 Ark. 885, 50 S. W. 2d 243; Lewis v. Cox, 187 Ark. 1163 (mem.), 58 S. W. 2d 215. We emphasize, however, that those precedents do not justify the procedure which was permitted in this instance and that the present judgment would have to be reversed regardless of what rule might be established for the future. In none of the cases just cited was there a suggestion, as there is here, that to name the company would be peculiarly prejudicial; nor was it insisted in the earlier cases that the desired information be elicited by general questions. In order to affirm this judgment we should have to go far beyond any prior case, by saying flatly that counsel has an unqualified right to name the particular insurer even though the record shows that the reference will have an especially prejudicial effect upon the jury and even though the needed information can equally well be obtained in a way that involves no such unfair advantage for either side. That view is not supported either by our earlier decisions or by the simplest notions of fair play.

We could, of course, end our discussion at this point, leaving for future determination a host of minute and finely drawn distinctions that would undoubtedly be urged in later cases. The bench and bar, however, are entitled to an expression of our views, especially if that course may reduce an area of uncertainty and thereby avoid needless appellate litigation. We therefore think it best to announce our preference for the procedure that is at once the simplest to follow and the fairest to both sides in the lawsuit: Questions about the veniremen’s insurance connections should refer only to insurance companies in general; a particular company should not be named when the information wanted can just as well be obtained by the use of general questions.

In the present case it is also contended that the plaintiffs ’ references to the Southern Farm Bureau Casualty Insurance Company were offset by the fact that the defendants were allowed to ask the jurors about their possible connection with the Emmco Insurance Company. The latter inquiry was plainly permissible, however, as the Emmco Insurance Company was actually a party to the case, having intervened to assert a subrogation claim for the damage to the Green car.

Several other asserted errors are argued in the briefs, but for the most part they are of a kind not apt to arise upon a retrial and need not be discussed. One matter, however, should be mentioned. Over the defendants’ objection the court permitted the jury to return separate verdicts for the mental anguish suffered by the father and that suffered by the mother. The case was tried under Act 115 of 1949, which allows the personal representative to recover for mental anguish sustained by the parents of the decedent and which directs that the recovery be distributed in the proportion provided by law for the distribution of personal property left by persons dying intestate. It is insisted that the court should have required the jury to return a single verdict in favor of the administrator for the total mental anguish undergone by both parents.

Without deciding the merits of this contention we point out that Act 115 was repealed by Act 255 of 1957, which by its language is applicable to all actions for wrongful death, whether arising before or after the effective date of the 1957 statute. Ark. Stats. 1947, §§ 27-906 et seq. The new act provides that the apportionment of the damages shall be made by the jury at the request of any beneficiary or party. Ark. Stats. § 27-909. We regard this as essentially a procedural change, since the substantive right to collect damages for wrongful death is continued in force, with a change in the procedural method by which the distribution of these damages is to be determined. The 1957 act will therefore be controlling upon a new trial, under the rule that procedural changes apply to pending cases. Foster v. Graves, 168 Ark. 1033, 275 S. W. 653.

Reversed.

McFaddin, Mill wee, and Robinson, JJ., dissent.

Sam Robinson,

Associate Justice, dissenting. The majority holds that before a venireman.can be questioned concerning his interest in or connection with a particular liability insurance company, he must first be questioned with reference to whether he has any interest in or connection with any liability insurance company. As support for the rule only two cases are cited: Pekin Stave & Mfg. Co. v. Ramey, 104 Ark. 1, 147 S. W. 83, and Williams v. Cantrell, 114 Ark. 542, 170 S. W. 250. The majority quotes Judge Frank Smith extensively from Williams v. Cantrell.

Cooper v. Kelly, 131 Ark. 6, 198 S. W. 94, was decided by practically the same court that decided Williams v. Cantrell. Judge Frank Smith, who wrote the opinion in Williams v. Cantrell, helped make the opinion in Cooper v. Kelly, which was written by Judge Wood. In Cooper v. Kelly, the attorney representing the defendant refused to give the name of the insurance company carrying the indemnity insurance. The Court said: “. . . counsel for the appellee, over the objection of the appellants, asked one juror on his voir dire whether or not he represented any accident or casualty insurance company, to which question the juror answered, ‘No. ’ And appellee’s counsel asked another juror whether or not he was under any obligation to any accident insurance company or was the agent of any such company. The juror answered, ‘No.’ And other jurors were asked, ‘Do you know of any accident company or any agent of any such company that has any influence or control over you in the city of Hot Springs?’ to which they answered, ‘No.’ And another juror was asked whether he knew that parties in public business were insured against accidents that occurred, and the juror answered, ‘Yes.’ Then the juror was asked, ‘Do you know of any insurance company or casualty company or any agent of such company, in Hot Springs or anywhere else, to whom you are under obligations ? ’ And the juror answered ‘No.’ Still another juror was asked, ‘Do you know any of these accident casualty companies ? ’ and the answer was,.‘Know all of them, I suppose.’ Question, ‘They haven’t any hold on you? Answer, ‘None that I know of, nobody else.’ ”

In holding that it was not error for the trial court to permit questioning of the veniremen as above indicated, the Court said: “. . . In both of those cases [referring to Pekin Stave & Mfg. Co. v. Ramey and Williams v. Cantrell] it is expressly recognized that it is within the province of an attorney representing a plaintiff to question veniremen concerning their relation to any casualty company whom the attorney might know or might honestly believe to have insured the defendant against loss for the injury which the plaintiff had sustained at the hands of the defendant.

“Had nothing more occurred in the above cases, relied upon by the appellants, than the mere asking of the questions therein propounded, doubtless this court would not have condemned as erroneous and prejudicial the rulings of the trial court in permitting such questions. Doubtless counsel for appellees in the instant case were permitted a broad scope of inquiry concerning the venirer men’s connection with any casualty insurance company in Hot Springs or elsewhere by reason of the conduct of the appellant’s counsel in refusing to discover whether or not he represented any casualty company, and, if so, in refusing to divulge the name of such company. Had such information been given to appellee’s counsel, we may assume that the court would have restricted the inquiry accordingly.” [Emphasis supplied]

From the above language of the Court in Cooper v. Kelly, construing Pekin Stave & Mfg. Co. v. Ramey and Williams v. Cantrell, it appears that the proper way for an attorney to question a venireman in regard to any interest in or connection he may have with an insurance company that is the real party in interest in the lawsuit then being tried is to question such venireman with reference to his connection or interest in the particular insurance company involved, and not just any insurance company.

Later, when Judge Frank Smith was still on the Court, Judge McHaney wrote Ellis & Lewis v. Warner, 182 Ark. 613, 32 S. W. 2d 167, where it is pointed out that in Cooper v. Kelly that case was distinguished from Pekin Stave & Mfg. Co. v. Ramey and Williams v. Cantrell. Judge McHaney said, in Ellis & Lewis v. Warner, that according to the rule in Pekin Stave & Mfg. Co. v. Ramey and Williams v. Cantrell, the attorney for the plaintiff has the right to question a venireman concerning his relation with any casualty company whom he might have reason to believe was interested in the outcome of the litigation.

As I see it, Pekin Stave & Mfg. Co. v. Ramey and Williams v. Cantrell do not support a rule to the effect that counsel seeking to ascertain if a venireman has an interest in or connection with an insurance company which is one of the real parties in interest must first ask the venireman about his connection with any insurance company. In fact, according to the construction put on those cases in Cooper v. Kelly and Ellis & Lewis v. Warner, the rule appears to be just the opposite, that is, if counsel knows, or has good reason to believe, that a certain insurance company is one of the real parties in interest, and in good faith wants to know if a prospective juror has any connections that would make him an undesirable juror in the opinion of counsel, then the venireman should be asked about that particular insurance company, and not just any insurance company.

The majority states that “Mr. McMillan, representing the defendants, informed the court that the company in question was in fact insuring the defendants in the case. He went on to say that there was a conflict in the county between the farmers supporting the Farm Bureau and those supporting the Farmers Union, both of which had insurance companies, that at least two members of the jury were decidedly biased against the Farm Bureau, and that to indicate that the Farm Bureau was a defendant would affect those men.” In these circumstances it was of the utmost importance that counsel for plaintiff learn, if possible, whether any of the veniremen were biased in favor of the Southern Farm Bureau Insurance Company, since that company was the real party in interest on the defense side of the case. Counsel for defendant knew there were two veniremen who were prejudiced against that insurance company. Apparently counsel for plaintiff had no information on the subject, but if there were two veniremen prejudiced against the insurance company, by like token there could be two or more who were biased in favor of the insurance company. A careful trial lawyer representing the plaintiff in all probability would not want a person on the jury where liability insurance was involved if such person had a close relative who worked for any liability insurance company. In Halbrook v. Williams, 185 Ark. 885, 50 S. W. 2d 243, counsel for appellant asked all the members of the panel if they bad “any connection or relationship with the Standard Casualty & Surety Company of New York”; and, further, if they “had such relationship with any such company or any surety company that insures persons against liability”.

In affirming the trial court in permitting these questions to be asked on voir dire examination, this Court said: ‘ The jurors or some of them might have had some relationship or connection with the particular company mentioned or some other surety company so as to make them undesirable jurors, and still not have been connected with any agency or held any stock in the particular company. We have many times held that similar questions may properly be asked the veniremen for the purpose of intelligently exercising the right of challenge. Smith-Arkansas Traveler Co. v. Simmons, 181 Ark. 1024, 28 S. W. 2d 1052; Ellis & Lewis v. Warner, 182 Ark. 613, 32 S. W. 2d 167; Bourland v. Caraway, 183 Ark. 848, 39 S. W. 2d 316; Sutton v. Webb, 183 Ark. 865, 39 S. W. 2d 314. No error was committed, therefore, in this regard.”

The trial court has wide discretion regarding the scope of the voir dire examination and in my opinion there was no abuse of that discretion in the case at bar.

For the reasons set forth herein, I respectfully dissent.

I am authorized to say that Mr. Justice MoFaddin joins in this dissent.


author: Paul Ward, Associate Justice.

text:
    Stroud v. M. M. Barksdale Lumber Co.
    5-1576
    313 S. W. 2d 376
    Opinion delivered May 26, 1958.

      Donald Poe• and Shaver, Tachett d> Jones, for appellant.

      Loohadoo, Gooch <& Loohadoo, for appellee.
   Paul Ward, Associate Justice.

The question for decision is whether the complaint and amended complaint filed in the trial court stated a cause of action.

On June 6, 1957 appellee, M. M. Barksdale Lumber Company, filed a complaint against “Stroud Brothers Lumber Company, Inc.” in which it was alleged appellee sold to the said defendant a “lot of lumber for the price of” $1,382.43; that the amount was due, and; that demand for payment had been made and refused. The prayer was for payment in said amount. The complaint was verified. Also attached thereto, marked “Exhibit A,” was a verified and detailed statement of the account of the aforementioned sum. This statement was made out to “Stroud Mills.” On June 25, 1957 “Stroud Brothers Lumber Company, Inc. ’ ’ answered with a general denial.

On the 12th day of July, 1957 appellee filed a verified "Amended Complaint” in which it was stated:

"Plaintiff hereby amends his complaint by making S. Y. Stroud and Roy Stroud, dba Stroud Milling Company with place of business at Mena, Polk County, Arkansas, as defendants; by making Raymond Stroud and Roy Stroud, doing business as Stroud Lumber Company, Inc., defendants; and prays judgment against S. V. Stroud and Roy Stroud and Raymond Stroud, against the Stroud Brothers Lumber Company, Inc., against Stroud Milling Company, against Stroud Lumber Company, Inc., in the amount of Thirteen Hundred Eighty-Two Dollars and Forty-Three Cents.”

On the same day summons issued for the newly named defendants.

No answer or other pleading having been filed by the newly named defendants, appellee filed a verified Motion For Default Judgment on December 14, 1957. On December 27,1957, no pleading still .having been filed by any of said defendants, the trial court entered a default judgment in favor of appellee against "S. Y. Stroud and Roy Stroud as individuals and dba Stroud Mill Company, and against Raymond Stroud and Roy Stroud as individuals and dba Stroud Lumber Company, Inc.”

This appeal is prosecuted by those parties against whom the above judgment was rendered. The only question involved is, as stated by appellants, "whether the complaint and amended complaint state a cause of action upon which to base a default judgment against the defendants brought into litigation by the amended complaint. ’ ’

It is our conclusion that the complaint and amended complaint, taken together, do state a cause of action against appellants. While the second complaint is denominated an "Amended” complaint, yet we think it should be treated as an “Amendment” to the first complaint. The first portion of the second paragraph begins as follows: "Plaintiff hereby amends his complaint by making S. Y. Stroud and Roy Stroud . . . defendants . . .” This portion of the amended pleadings, taken together with the rest of it, indicates clearly, we think, that it was not meant to take the place of the first complaint hut to add to it. We have frequently stated, in effect, that a pleading will not be judged by what it is called but by what it contains. It was said in Randolph v. Nichol, 74 Ark. 93 (at page 101), 84 S. W. 1037: “But under our code of practice all forms of action are abolished, and relief is granted according to the facts alleged and proved, without regard to the form or denomination of the plea.” To the same effect, see: Clements v. Hamilton-Brown Shoe Company, 99 Ark. 335, 138 S. W. 971; Teal v. Thompson, 180 Ark. 63, 20 S. W. 2d 307, and; Railway Express Agency, Inc. v. H. Rouw Company, 197 Ark. 1142, 127 S. W. 2d 251.

Also, under our system, we must construe pleadings liberally and give them every reasonable intendment. Mason v. Gates, 90 Ark. 241, 119 S. W. 70; James v. Lloyd, 196 Ark. 568, 118 S. W. 2d 284; Central Supply Company v. Wren, 198 Ark. 1090, 133 S. W. 2d 632, and; Neal v. Parker, 200 Ark. 10, 139 S. W. 2d 41.

Therefore, when we take both of appellee’s pleadings, and considering them in accordance with principles above stated, we think all the appellants were aware of the fact that appellee was attempting to hold theúi liable for the lumber it had sold. It is of no avail to appellants that the statement was made out to “Stroud Mills” when it now appears that the correct name is “Stroud Mill Co. Inc.” This issue was decided against appellants in the Central Supply Company case, supra. See also § 27-1155 Ark. Stats. and Beavers v. Baucum, 33 Ark. 722.

Appellants make no contention that proper service was not had on any of them, and since, as we have indicated above, the pleadings stated a cause of action, the judgment of the trial court must be affirmed.

Affirmed.


author: Sam Robinson, Associate Justice.

text:
    Rhine v. Thompson, County Judge.
    5-1555
    313 S. W. 2d 369
    Opinion delivered May 26, 1958.

      James M. Gardner, Rhine & Rhine and John C. Watkins, for appellant.

      Kirsch, Cathey & Brown and Robert Branch, for appellee.
   Sam Robinson, Associate Justice.

Appellants, Olga Hooper and L. Y. Rhine, are in the abstract business at Paragould. One of their competitors is appellee Frances Walls. This action was filed by appellants to enjoin appellee J. Ed Thompson, County Judge of Greene County, from allowing Mrs. Walls to use space in the County Judge’s office in the courthouse to do her abstract work. Mr. Rhine and Miss Hooper have appealed from an order denying the injunction.

Mrs. Walls has been in the abstract business since 1932 and she has owned the business since 1941. During all of this time she has done her abstract work in the courthouse in the same manner in which she is now conducting it. Prior to the election of appellee, J. Ed Thompson as County Judge of Greene County, in 1952, Mrs. Walls did her work in the county clerk’s office. The circuit clerk’s office would have been more convenient for her, but since appellants and one other abstract concern had space in the circuit clerk’s office in which to do their abstract work, there was no room for Mrs. Walls, and she therefore did her work in the county clerk’s office. After Judge Thompson was elected, he reached the conclusion that due to the crowded condition in the county clerk’s office it would he better for Mrs. Walls to do her work in the judge’s private office. He suggested to Mrs. Walls that she move her facilities into his office, and she agreed to this arrangement. It appears that this is a very good arrangement for the county. Mrs. Walls had her own private telephone, and the county judge did not have one. Therefore, an extension was installed under an arrangement whereby the county pays one-half of the regular telephone bill and Mrs. Walls pays one-half. She also pays for her listing and for her long distance calls. It is necessary that the county judge be out over the county a considerable portion of the time, and Mrs. Walls takes messages for him and telephone calls; she also does stenographic work for the county judge — all of this at no cost whatever to the county. She is merely allowed to use small space in the county judge’s office in connection with her abstract work.

Appellants are given space in the circuit clerk’s office to do their abstract work, as required by statute. In fact, appellants sued the county judge in 1951 to compel the county to furnish them space to do their abstract work. As a result of that suit appellants were furnished space in the circuit clerk’s office. Ark. Stat. § 71-108 provides:

“Space for work designated in office of clerk or elsewhere in courthouse. — Upon full compliance with all the provisions of this act (§§ 71-101 — 71-109) by any person, firm or corporation, it shall be the duty of the clerk to designate a reasonable space in his office for such person, firm or corporation to work. Provided, that in any case where space in the circuit clerk’s office shall be insufficient to permit the circuit clerk to assign work space to all abstracters entitled thereto, the County Court or County Judge may assign other space in the Courthouse for such purposes, provided such space so assigned does not interfere with the duties of any public official. Nothing herein contained shall be construed to permit any public records to be taken from the clerk’s office when same shall be in use by the clerk, but when not so required, the public records may be used by the abstracter in the area assigned by the County Court or the County Judge.”

Here the statute was followed to the letter. Since there is not room in the circuit clerk’s office for Mrs. Walls, the county judge assigned her other space in the courthouse in which to work. The fact that Mrs. Walls was permitted to have a telephone in the courthouse in connection with her work as an abstracter was a matter within the discretion of the county judge. According to the undisputed evidence, the other abstracters may also install telephones if they so desire.

Affirmed.


author: Per Curiam.

text:
    Hardy v. Hardy.
    5-1415
    313 S. W. 2d 387
    Opinion delivered May 26, 1958.

      Rose, Meek, Rouse, Barron S Rash, for appellant.

      Frank J. Wills, Quinn Glover, Langston & Walker and Wayne Foster, for appellee.
   Per Curiam.

Subsequent to the opinion rendered in this case on April 7, 1958, appellant, Meriwether Wright Hardy, filed a petition, setting out that dividends and interest, which had accrued on the various stocks and bonds since the date of the trial court’s decree (December 28, 1956), had been paid to appellees. Under the opinion rendered by this Court on April 7, 1958, appellant was given, free from the lien claimed by appellee, Corinne Hardy, one-third of Robert L. Hardy’s stocks and bonds. Appellant contends that under the result reached by this Court, she is entitled to judgment for one-third of the dividends and interest which have been paid to appellees since December 28, 1956. In Item 5 of its opinion, this Court continued in effect the trial court’s order allowing appellant $262.50 per month for temporary alimony, and provided that such temporary alimony “shall remain in effect until such time as appellant’s award of dower, herein set out, shall be satisfied in full.”

It is conceded that the award of temporary alimony is greater than the amount of dividends and interest which appellant would have received from the stocks and bonds, if same had been divided in kind at the time of the entering of the decree. In her response to appellant’s petition, appellee, Corinne Hardy, states that she “has made arrangements with said bank for the release of that portion of said securities awarded appellant free of appellee’s pledge. ’ ’ In view of this statement by appellee, Corinne Hardy, and the facts herein enumerated, we make the following order:

The order allowing appellant $262.50 per month for temporary alimony shall remain in effect until such time as appellant’s award of dower in the stocks and bonds shall be satisfied, and the making of such payments shall operate in lieu of judgment for dividends and interest that may have been paid to appellees since December 28, 1956, and in lieu of amounts that may hereafter be paid until there is a division of the stocks and bonds in kind; PROVIDED, that appellant’s dower in the stocks and bonds, heretofore awarded shall be satisfied in full within 120 days from the rendition of this order; otherwise, such temporary alimony shall remain in effect and be cumulative to any dividends or interest that may accrue thereafter.

Costs in both courts against appellees.

Justice George Rose Smith not participating.


author: Carleton Harris, Chief Justice.

text:
    Wilhelm v. McLaughlin.
    5-1540
    313 S. W. 2d 821
    Opinion delivered June 2, 1958.
    [Rehearing denied July 1, 1958.]

      Rex W. Perkins, G. A. Fuller and E. J. Ball, for appellant.

      O. E. Williams, for appellee.
   Carleton Harris, Chief Justice.

The issue in this appeal is whether appellants were acting in a fiduciary relationship to appellee in certain real estate transactions. Appellant, Jeanne Luptak, is a resident of Eureka Springs, Arkansas, where she has operated a motel for several years. Milton Wilhelm is a real estate broker with an office in Eureka Springs. Appellee, Margaret O. McLaughlin, has been a resident of Eureka Springs since September, 1955. Prior to such date, she lived in a Chicago suburb. Mrs. Luptak and Mrs. McLaughlin are cousins. Mrs. McLaughlin, who was nearing the age of retirement, became interested in Eureka Springs. On an occasion when Mrs. Luptak went to Chicago to bring her husband back to Eureka Springs for a vacation, Mrs. McLaughlin returned with them, and purchased property known as the “Baker property.” Wilhelm, a friend of Mrs. Luptak, bought and sold several pieces of property for appellee. On January 31, 1957, Mrs. McLaughlin instituted suit against Wilhelm, alleging that he had represented her in the purchase of certain property, designated as the Vaughn Street or Jeske property, had purchased same with her money (though he received the deed), and had charged her $7,-000 while the actual consideration was only $3,300, and asking that he be made to account for the difference. She alleged other property sales and various loans to Wilhelm, stated she was unable to obtain an accounting, and prayed the court to require him to account for all sums due her from the transactions. On March 23rd, she amended her complaint by joining Mrs. Luptak, J. D. Carter, and Manufacturer’s Casualty Insurance Company as defendants. As to Mrs. Luptak, it was alleged that the latter purchased a piece of property for Mrs. McLaughlin from Mrs. Hazel Baker for the sum of $4,000, but that Mrs. Luptak had represented to Mrs. McLaughlin that the price was $5,500, and appellee asked that Mrs. Luptak be required to account for the difference. She alleged that Carter was a partner of Wilhelm, and had received $1,000 from the Vaughn Street transaction. The insurance company was surety on the bonds of Wilhelm and Carter for the years 1955 and 1956 in the amount of $2,000 each (under the provisions of Act 395 of 1951), conditioned on compliance with Arkansas Statutes 71-1301 through 71-1311. Appellants denied the allegations, as did Carter, who also filed a cross complaint against his co-defendant, Wilhelm, alleging that Wilhelm had sold various properties, including those heretofore mentioned, and had not paid him his proper share of the commission as per the agreement under which they operated. The cause proceeded to trial, and at the close of appellee’s evidence in chief, appellants and Carter filed their separate demurrers to the evidence. The court sustained the demurrer as to Carter, and overruled the demurrers of appellants. On concluding the trial, the court rendered judgment against Wilhelm for $3,700, against Mrs. Luptak for $1,300, and against Manufacturer’s Casualty Insurance Company, as surety on Wilhelm’s bond, in the sum of $2,000, when paid, to apply on the judgment against Wilhelm. From such decree, appellants bring this appeal. Appellee cross-appeals, such appeal being based upon the action of the court in denying recovery for sums she contended were due her from Wilhelm, arising from the purchase of property from one J. E. Pitts, and the purchase from one C. B. Stofregen of property located at 42 Prospect, where she iioav lives. Mrs. McLaughlin contends that she is due $1,175 on the Pitts transaction, and $1,000 on the Prospect Street transaction.

The litigation is purely a fact question, it being admitted by appellants that an agent occupies a fiduciary relationship to his principal, and as such fiduciary, cannot make a profit for himself while serving his principal in a particular transaction without the consent of the principal, and then only after a full and complete disclosure of all material facts. Appellants simply contend that the proof in this case was not sufficient to establish that they were acting under a fiduciary relationship. We see no need to detail the testimony, which was quite lengthy, and which would serve no good purpose since, as previously stated, the law governing such transactions is not in dispute, and the litigation was determined purely upon the trial court’s view as to the preponderance of the evidence.

We will first consider the transaction between Mrs. McLaughlin and Mrs. Luptak. Mrs. McLaughlin, in brief, testified as follows: She is 62 years of age . . . a registered nurse . . . her cousin, Mrs. Luptak, called her around the last of April, 1955, advising there was a good piece of property in Eureka Springs that could be bought . . . stated she would buy it herself, but could not afford to, but would make the down-payment for appellee, and witness could pay her back . . . “I said, ‘Well, very well, go ahead’.” . . . Mrs. Luptak first stated the property was selling for $4,250, but, while apparently talking to somebody at her end of the line, said she had made a mistake and it was $5,500. Mrs. McLaughlin was reaching retirement age, and had previously told Mrs. Luptak to look around for a place where she could live . . . She came to Eureka Springs on May 6th or 7th, 1955, with Mrs. Luptak and her husband, by automobile, shortly returned to Chicago to get money, and within a few days, returned to Eureka Springs. She saw Mrs. Baker on May 24th for the first time . . . went with Mrs. Luptak and Wilhelm to the home of Mrs. Baker . . . tried to talk to Mrs. Baker, but her cousin and Mr. Wilhelm would change the subject or have something else they wanted to show her. She gave her check in the amount of $5,500 to Mrs. Luptak on that date, and later learned that her cousin had only paid Mrs. Baker $4,000 for the property.

Mrs. Luptak testified that she was searching for a piece of property for her brother . . . Wilhelm mentioned the Baker property to her and she went out and looked at it . . . she told Mrs. Baker she was buying it for her brother . . . her brother was unable to buy it, and so she bought it herself as an investment. . . . she went to Chicago the next day and went out to visit Mrs. McLaughlin, telling her about the property . . . denied that she had called Mrs. MeLaughlin over long distance in April . . . appellee wanted to go back to Eureka Springs with her and take a look at the country . . . they went to see the Baker property, accompanied by Wilhelm, and later Mrs. McLaughlin wanted to purchase it . . . Wilhelm insisted she let Mrs. McLaughlin have the property, and she agreed, selling it to her for $5,500. Mrs. Luptak insists that she had no thought or intention of buying the property for appellee at the time she (Luptak) entered into the purchase agreement with Mrs. Baker in April; that Mrs. McLaughlin inspected the property on three different occasions between May 9th and May 24th and only decided to purchase same on the latter date, giving her a check for $5,500 at that time. This testimony was disputed by Mrs. Baker (now Doherty) who testified that Mrs. Luptak told her she was buying the property for her cousin. She stated that the transaction was completed before she ever met Mrs. McLaughlin, and further verified appellee’s testimony to the effect that appellants prevented her from having any conversation with appellee.

The most potent evidence in behalf of appellee, however, is the deed itself. This deed is from Hazel D. Baker to Margaret McLaughlin and Brian A. McLaughlin, dated May 9, 1955, and recorded on May 18, 1955. Mrs. Luptak’s explanation is that the deed was originally made to her on May 9th, but that on reconveying it to Mrs. McLaughlin, the name was rubbed out, and Mrs. McLaughlin’s inserted in order to save recording-fees on two deeds. She makes no explanation for the fact that the deed, as recorded on May 18th, showed the Mc-Laughlins to be the grantees. There are obvious erasures where the name of the grantee is inserted, but Mr. Jay Bussell, an attorney of Eureka Springs, gave a much more reasonable explanation. Mrs. Baker had come to his office on another matter, and while she was there, he also prepared this particular deed. From his testimony:

* * j had understood that the deed was to be made to Jeanne Luptak, and I drew the deed to Jeanne Luptak and handed it over for examination. And Wilhelm said, ‘No, I want it made to Margaret McLaughlin and Brian A. McLaughlin. ’ I then rubbed out Margaret McLaughlin and-

Q. You mean Jeanne Luptak’s name.

A. Jeanne Luptak’s name, and put in Margaret McLaughlin and Brian A. McLaughlin, and had Mrs. Baker sign it. I did that on the 9th of May * *

As stated by the Chancellor:

“* * * Now the Court is unable to * * * see how Mr. Wilhelm or anybody else would have the prescience to know, on May 9th, only one day after Mrs. McLaughlin got here, that on May 24 she would decide to buy the property and pay for it, and would know to instruct the scrivener to take the Luptak name out and put the McLaughlin name in’ * * We fully agree. These facts are irreconcilable with Mrs. Luptak’s contention that Mrs. McLaughlin was not interested in the property until after arriving in Eureka Springs sometime around May 8th or 9th, and that appellee did not decide to purchase it until May 24th.

We come now to a discussion of the purchase of the Yaughn Street or Jeske property. Mrs. McLaughlin testified that she returned to Chicago and sold her home, as she. planned to go back to Eureka Springs and stay, and wanted a place there to live. She accordingly wrote a letter to Wilhelm asking him to find a place for her to purchase as a home. According to her testimony, Wilhelm called her on July 31st and told her there was a place to be sold at auction, and he thought it would be a good place to live. At the time, Wilhelm was holding approximately $8,000 belonging to appellee, by virtue of sales of property he had made as her agent. Appellee testified that she asked if she had enough money to buy it, and he replied: “Well, if it costs more than I’ve got, I won’t bny it.” He called her back on August 2nd and reported that he had purchased the place. The record reflects that the property was purchased on August 2nd and deed executed to Wilhelm. Mrs. McLaughlin returned to Eureka Springs on August 14th, and it was not until a few months later that she learned she had been charged $7,000 for the property, while Wilhelm had only paid $3,300 for it.

Wilhelm testified that he and Carter saw the property advertised for sale, took a look at it, and he bid it in for $3,300, with the deed being made to him, though he and Carter were partners in the transaction. He denied any prior conversation with Mrs. McLaughlin . . . stated she had never contacted him about the Vaughn Street property . . . that he had no conversation with her about this property until after she arrived in Eureka Springs. He stated that she wanted to purchase it, and he sold it to her for $7,000 on August 8th . . . that the amount was taken from the money heretofore referred to which he was holding, and which belonged to her. According to Wilhelm, Mrs. McLaughlin signed an “Offer and Acceptance” agreement to purchase the property from him for $7,000, the transaction taking place at the home of Mrs. Luptak on August 8th, and he offered in evidence a copy of such agreement, supposedly signed by appellee. This testimony was corroborated by Mrs. Luptak. Mrs. McLaughlin denied signing such agreement, stated that the signature was a forgery, and testified that she was in Chicago serving on the Cook County Petit Jury on August 8th. She offered in evidence a photostatic certified copy of an “Attendance Master Jury Card.” Apparently, under the procedure in Cook County, the juror is required to sign this card each dajr he or she is present for jury service, and the card shows Mrs. McLaughlin’s signature for each day from August 1st through August 12th. The court rejected this evidence, apparently because it was not properly authenticated. Be that as it may, we think there is sufficient evidence to sustain the chancellor’s finding that Wilhelm was acting for Mrs. McLaugklin in purchasing the property. As stated by the trial court:

‘ ‘ The evidence is replete that Wilhelm was acting as something more than a mere real estate broker, as to plaintiff; that he actually did have her money, and was actively engaging himself as her agent * *

We are of the opinion, however, that the court erred in one respect. Other lots, which had not been purchased by Wilhelm at the sale, and which were not included in the $3,300 sale price, were conveyed to Mrs. McLaughlin, along with the Vaughn Street property, for the $7,000. The testimony reflects that $1,000 was paid to Carter by Wilhelm for these lots, though the fact that this amount was paid, does not necessarily establish the lots to be of that value. We hold that Wilhelm is entitled to a credit on the $3,700 judgment in the amount of the actual value of these lots at the time they were conveyed to Mrs. McLaughlin.

Turning to the cross appeal, we quote from the trial court’s opinion:

“As to the other properties, the Court finds that Mrs. McLaughlin has failed to meet the burden of proof imposed upon her; in respect of the Pitts property or the Prospect Street property or the Bohlman property, that in no material degree has the plaintiff shown by a preponderance of the evidence that she was misled or had her eyes closed to anything. And even though it might appear that the price received by the seller of the properties was less than that paid by Mrs. McLaughlin, there is nothing in the testimony to indicate that the difference was other than the normal and legal and proper difference. In any event, there is nothing about those transactions to show that Mrs. McLaughlin was misled or deceived or cozened.”

We are unable to say that the court erred in so finding.

As stated in Kelker v. Payton, 227 Ark. 369, 298 S. W. 2d 704:

“This case is almost entirely a question of fact, and if the lower court construed the facts correctly, there could be no contention that the law was erroneously applied. The Chancellor heard the case, had the opportunity to observe the demeanor of the witnesses, and evidently paid close attention to the evidence. * * * The rule, so many times reiterated, is to the effect that while this Court tries Chancery cases ele novo, still it will not reverse a Chancellor’s decree unless his findings are against the weight of the evidence.”

The court further found that the evidence did not reflect with certainty that a balance was owed by Wilhelm to Mrs. McLaughlin, or by Mrs. McLaughlin to Wilhelm, with which conclusion we concur.

Accordingly, the decree should be modified to the extent of giving Wilhelm credit for the value of the lots deeded with the Vaughn street property to Mrs. McLaughlin, and the case is remanded with directions to determine the value of said lots at the time of the conveyance on August 8, 1955, and to enter a decree consistent with this opinion.

       These sections relate to licensing of real estate brokers, causes for revocation of license, etc.

       The cross complaint was later dismissed by Carter, stating that “* * * his said co-defendant has in all things met and satisfied the demands of this defendant as set out in the cross complaint.”

       Mrs. Luptak was given credit for a $200 broker’s fee she had paid.

       Son of appellee.

       The Baker property was disposed of by Mrs. McLaughlin about two months after the purchase.

       The exact amount is in dispute, the testimony ranging from $7,-800 to $8,600.

         Upon this finding, the court dismissed a cross complaint (counterclaim) filed by Wilhelm, but which does not appear in the transcript. The counterclaim related to various expenditures which Wilhelm contended he had personally made on Mrs. McLaughlin’s properties. The court’s action in dismissing the counterclaim is not assigned as error, nor argued by appellant in his brief.


author: J. Seaborn Holt, Associate Justice.

text:
    Bostic v. Bostic.
    5-1582
    313 S. W. 2d 553
    Opinion delivered June 2, 1958.

      J. Harrod Berry, for appellant.

      Langston S Walker, for appellee.
   J. Seaborn Holt, Associate Justice.

Appellee, Bose Ellen Bostic, secured a divorce from appellant, John Elmo Bostic, August 13, 1954. She was also awarded the care and custody of their two minor children, John Scott Bostic 9 years of age and Danny Gene Bostic, 6. The decree also contained this recital: “The defendant shall pay through the office of the Master in Chancery the sum of $40.00 on the 15th day of August, 1954, and the sum of $40.00 on the 1st day of September, 1954, and a like amount on the first and fifteenth days of each and every month thereafter until such further order of this court, said sums to be for the support of the children herein and alimony for the plaintiff.”

Both parties have remarried since the divorce decree. On March 8, 1957, appellant sought to have the decree modified by reducing the alimony and child support allowance to $40 per month, alleging “changes in circumstances of both parties” such as would warrant modification. Trial resulted in the denial of appellant’s petition and the decree directed that “The defendant, John Elmo Bostic, shall henceforth pay to the plaintiff for the nse and benefit of the minor children the sum of $80.00 per month. Said sums shall be for the support of the minor children of these parties.” This $80 per month was to be paid $40 on the first and $40 on the fifteenth of each month. It appears that appellant has not failed to make these payments in accordance with the court’s order. From that decree is this appeal.

For reversal appellant contends that the trial court erred in refusing to reduce the child support payments because of: “ The remarriage of appellee and her improved financial circumstances; and the decreased earnings of appellant, his worsened financial circumstances, and his remarriage.”

We find no error in the decree of the trial court. Our rule is well settled that it is both the legal and moral duty of the father to support his minor children in accordance with his means and ability during their minority, and this obligation is required of him even without a court order. See Kuespert v. Roland, 222 Ark. 153, 257 S. W. 2d 562.

The evidence discloses that appellee lives with her new husband within the city limits of Arkadelphia. They own a small garden plot of 30 feet x 70 feet and 96 acres of pasture land and rent about 400 acres of farm land. They own no passenger car but do own a Chevrolet truck (1949 or ’50 model). The record appears to be silent as to the income of appellee or her husband. Generally the remarriage of both husband and wife (as here) to third persons is not within itself regarded as a sufficient change in circumstances as would require a modification of the allowance for child support and maintenance. “The fact that a divorced husband has remarried or was contemplating remarriage is not alone ground for reducing the amount of the allowance, although it is a circumstance that may be considered in weighing the equities of the situation, and the same rule applies to the remarriage of the wife, at least in the absence of an assumption by the second husband of any obligation to support the children of the first marriage; nor is the remarriage of both husband and wife to third persons, in itself, regarded as such a change of circumstances as requires a modification of the allowance,” 27 C. J. S. Divorce, Sec. 322, p. 1245. It appears undisputed that appellant was earning more money after his remarriage, and at the time of the decree in the present case, than he was at the time the divorce decree was granted. For a number of years appellant has been employed by the Rock Island Railroad, and is now so employed. His take home pay is approximately $260 per month. At the time Mrs. Bostic divorced him he was receiving approximately $240 per month, so that at the present time he is earning about $20 more per month, than at the time the divorce decree was granted. He and his present wife operate a rooming house, from which they net about $15 per month, after paying rent of $75 per month. Appellant, in August 1956 following his remarriage, purchased a new 1956 “Ford Fairlane” and obligated himself for installment payments of $72.68 per month on the Ford. Appellant has no children by his present wife. It, thus, appears that appellant’s financial condition is better now than it was at the time of the divorce decree. Of significance is the fact that appellant’s obligation in the purchase of a new car with payments of $72.68 per month is just $7.32 less than his obligation, under the court’s decree, of $80 per month for the support of his children. As indicated, his first obligation was to these children.

Upon consideration of all the evidence presented we hold that the chancellor’s findings, that there were no changed conditions such as would warrant a reduction in the child support payments, are in accordance with the preponderance of the testimony. See Wilson v. Wilson, 186 Ark. 415, 53 S. W. 2d 990. Affirmed.


author: Ed. F. McFaddin, Associate Justice.

text:
    Kansas City Fire & Marine Ins. Co. v. Baker.
    5-1558
    313 S. W. 2d 846
    Opinion delivered June 2, 1958.
    [Rehearing denied July 1, 1958.]

      Kirsch, Cathey & Brown, for appellant.

      Rhine & Rhine, for appellee.
   Ed. F. McFaddin, Associate Justice.

This is the second appearance of this litigation in this Court. The first appeal was Baker et al. v. Kansas City Fire & Marine Ins. Co., 227 Ark. 532, 300 S. W. 2d 264, wherein the facts were recited in considerable detail. Baker, Houston, and the First National Bank of Paragould (all hereinafter called “Baker”) had a fire loss of $2,-214.35 and sued the Kansas City Fire & Marine Insurance Company (hereinafter called “Kansas City Company”) for the amount of that loss since the Kansas City Company had issued a $4,000 policy to Baker. The Kansas City Company claimed that there was another policy on the same property issued by the Consolidated Underwriters of South Carolina Insurance Company (hereinafter called “Consolidated Underwriters”) for the sum of $6,000; that the total insurance was $10,000 and that the Kansas City Company was liable for only $885.74, which, was 40 per cent of the total loss of $2,-214.35.

On the first trial the Circuit Court agreed with the Kansas City Company and rendered judgment in favor of Balcer for only $885.74; and Baker appealed. The Consolidated Underwriters were not made parties defendant in the first trial. We said on the first appeal:

“The Kansas City Company defended on the basis that there was . . . ‘other valid and collectible insurance ’. The burden was on the Kansas City Company to prove that as regards the plaintiffs, there was outstanding a valid and collectible policy issued by the Consolidated Underwriters. . . . The Kansas City Company never showed that the plaintiffs could have recovered on the $6,000 policy issued by the Consolidated Underwriters. . . . The Kansas City Company alleged the affirmative defense that there was other valid and collectible insurance; and the burden was on the Kansas City Company to sustain the allegation. . . . Therefore, we conclude that the Trial Court was in error in holding that the Kansas City Company was liable for only a pro rata part of the loss. The judgment is reversed and the cause remanded for a new trial; and upon remand the Consolidated Underwriters may be brought in and the issues litigated with all parties before the Court. ’ ’

After the mandate containing our opinion was filed in the Trial Court Baker (the plaintiffs) made no effort to have Consolidated Underwriters made a party defendant. Instead, it was the Kansas City Company that had the Consolidated Underwriters made a third party defendant; and that Company (Consolidated Underwriters) admitted its liability for 60 per cent of the total loss of $2,214.35 and deposited with the Court the sum of $1,341.90 representing 60 per cent of the loss with interest until the date of the deposit, and asked that the Court direct payment to the person or persons entitled thereto.

The case was then tried by the Circuit Court on the testimony offered on the first trial, together with the subsequent pleadings, as hereinbefore mentioned; and the Circuit Court, in the trial from whence comes the present appeal, rendered judgment against the Kansas City Company for the full loss of $2,214.35, together with penalty and attorneys’ fees, but allowed the Kansas City Company, upon payment of the full judgment, to receive the amount deposited by the Consolidated Underwriters. From that judgment the Kansas City Company brings the present appeal.

We reach the conclusion that the judgment must be reversed. In the first trial the Kansas City Company pleaded the existence of other valid insurance (to-wit, the policy issued by the Consolidated Underwriters) as a defense to any liability by the Kansas City Company for more than 40 per cent of the total loss. The burden of proving this defense of “other insurance” was on the Kansas City Company; and on the first appeal we held that such burden had not been discharged: so we reversed and remanded. Then, on the second trial in the Circuit Court, the Kansas City Company sustained its burden of proving “other insurance” because the Consolidated Underwriters admitted liability and paid into the Court 60 per cent of the total loss. With the 60 per cent paid into Court, then the existence of ‘ ‘ other insurance” was established and the Kansas City Company became liable for only the remaining 40 per cent of the loss.

The real battle is over the matter of penalty and attorneys’ fees, which the Trial Court awarded Baker against the Kansas City Company. But what we have said, as to the Kansas City Company’s liability for only 40 per cent of the loss, points to the disposition that we make of the items of penalty and attorneys’ fees. Our applicable statute on these matters is § 66-514 Ark. Stats.; and onr cases hold that to he entitled to recover penalty and attorneys’ fees the plaintiff must recover from the defendant insurance company the amount for which the plaintiff sued. See Pacific Mut. Life Ins. Co. v. Carter, 92 Ark. 378, 123 S. W. 384, 124 S. W. 764; Fidelity Phenix Fire Ins. Co. v. Roth, 164 Ark. 608, 262 S. W. 643; Lincoln Reserve Life Ins. Co. v. Jones, 178 Ark. 466, 10 S. W. 2d 910; Mutual Life Ins. Co. of New York v. Marsh, 186 Ark. 861, S. W. 2d 433; Service Fire Ins. Co. v. Horn, 202 Ark. 300, 150 S. W. 2d 53; Liverpool & London & Globe Ins. Co. v. Jones, 207 Ark. 237, 180 S. W. 2d 519.

At all times in this case the Baker plaintiffs prayed that they recover from the Kansas City Company the sum of “$2,214.35 together with 12 per cent penalty and reasonable attorneys’ fees, as required by law . . .” After the remand of the case and after Consolidated Underwriters paid its money into the Court, the plaintiffs were not entitled to recover the full $2,214.35 from the Kansas City Company; and, therefore, the Kansas City Company was not liable for penalty and attorneys’ fees.

The judgment is reversed and the cause is remanded with directions to the Trial Court to enter judgment as follows: that the plaintiffs may have and receive the money paid into Court by the Consolidated Underwriters, and then have judgment against the Kansas City Company for the sum of $885.74 plus interest and all costs of the Trial Court, but not for penalty and attorneys’ fees. The costs of this appeal are taxed against the appellees.

       There is no controversy as to the fact that interest is to he charged. So we omit any further calculation or reference as to interest.

       That these amounts bear interest is not denied and interest was tendered by the Consolidated Underwriters and offered to be confessed by the Kansas City Company, so we omit any further calculation or reference as to interest.


text:
    Schwartz v. Hardwicke.
    5-1574
    313 S. W. 2d 832
    Opinion delivered June 2, 1958.

      Boy S. Dunn, Shaw, Jones & Shaw, for appellant.

      Chas. I. Evans, for appellee.
   Minor W. Millwee, Associate Justice.

This suit was brought by appellees, Mort Hardwicke and wife, against appellants, Herman Schwartz and wife, primarily to establish a deed as a lost instrument. In addition, appellees sought an accounting of certain monies allegedly withheld by appellants from a stone cutting business corporation owned by the parties in equal shares, and for an injunction to restrain Mr. Schwartz and his brother from operating a competitive business on adjacent lands. There is a direct appeal from a decree in which, the chancellor found that the appellants had executed and delivered the deed in question to the business corporation; and that it was duly established as a lost instrument. Appellees have cross-appealed from the court’s denial of their plea for an accounting by appellants of the affairs of the corporation.

As a basis for the decree, the trial court rendered a comprehensive memorandum opinion which we set forth and adopt as a clear and accurate appraisal and summation of the evidence adduced and the issues presented. The opinion reads:

“Ata time when Mort Hardwicke was County Judge of Logan County and engaged in maintaining its roads he chanced to discover a deposit of building stone on or near lands belonging to Mr. and Mrs. Herman Schwartz. That particular kind of building stone was in demand and Herman Schwartz and Mort Hardwicke formed a partnership to quarry and market the stone, Schwartz being the active manager and Judge Hardwicke advising and assisting.

“Their venture was profitable and brought to each a substantial return each year. Books and records were kept by Mr. Schwartz in a manner satisfactory to both parties for the type business they were conducting.

“At some time prior to May 9, 1951, Schwartz and Hardwicke consulted with Hon. L. J. Arnett, an attorney of long and favorable acquaintance to both and from their consultation evolved an agreement that a corporation be formed. The details of the formation of the corporation and even the terms of the agreement to form the corporation are in dispute, but the testimony of Mr. Ar-nett, who actually did the legal work is both explicit and also logical and when considered together with the ‘Articles of Incorporation,’ bearing the admitted signatures of Mr. and Mrs. Hardwicke and Mr. and Mrs. Schwartz, it is apparent that ‘Logan County Building Stone Co., Inc.,’ was validly created and is now and has been continuously in existence and operation since its incorporation in May of 1951. The name ‘Cherry Blend Stone” was registered in the U. S. Patent office by the corporation and business form statements were printed and used with the following heading:

Logan County Building Stone Co., Inc. producers of Cherry Blend Stone (Reg. U. S. Pat. office)

Phones: 101 or 396

Herman Schwartz, Pres., M. B. Hardwicke, Sec.

“Business was carried on in the corporate name. There is such a mass of circumstantial evidence in addition to the direct evidence in the record that the court cannot but find the creation and existence of the corporation in exactly the manner testified to by Mr. Ar-nett.

“Other than the change from a partnership to a corporation the business of operating the quarry and marketing stone was continued uninterrupted with Herman Schwartz continuing to serve as manager and with Judge Hardwicke assisting until January, 1953, when Judge Hardwicke went out of public office. At that time both men became active in the stone business carried on by the corporation, Mr. Schwartz continuing to sell, collect and look after the business side and Mr. Hardwicke attending more to the quarrying and preparing of stone for sale.

“Mr. Schwartz also engaged in other stone selling ventures. He and his brother opened a quarry in the vicinity of that operated by the corporation. The stone produced was very similar and in his selling sometimes Mr. Schwartz would sell ‘split’ loads, i. e., part of a load of stone being supplied from the quarry of the corporation and the other part from the quarry owned by Herman Schwartz and his brother.

“The activity of Mr. Schwartz was such that Mr. Hardwicke became dissatisfied and this dissatisfaction was enhanced by a general slackening up in the demand for this particular type building stone and the resulting appreciable decrease in the profits derived from the corporation. Mr. Hardwicke decided lie would try to help with the sales and actually did do some selling and collecting. Mistrust was multiplied when it was disclosed that Mr. Schwartz had deposited some corporation money in the Bank of Charleston in his son’s name and Mr. Hardwicke had deposited some money in the Bank at Dardanelle.

“With the assistance of Mr. Arnett, Mr. Hardwicke and Mr. Schwartz tried to get the affairs of the corporation hack on an amicable basis and a ‘get-together’ was held on June 18, 1955, and a balance and statement was struck and reduced to writing and endorsed as follows :

‘Approved as read witness by Mr. Luke Arnett, Attorney for company at time.’

“In spite of this apparent effort to get things back on a friendly and workable basis, matters went from had to worse and culminated in the filing of this action on November 1, 1955, the determination of which requires findings of facts and the declaration of law applicable thereto.

FINDINGS OF FACTS

‘ ‘ The Court finds that Logan County Building Stone Company, Inc., is a validly formed Arliansas Corporation and has been such since its incorporation in May of 1951. The stockholders and their shares are as follows :

H. Schwartz 19
M. Hardwicke 19
Pat Hardwicke 1
Theresa Schwartz 1

“Having found that it is a validly formed corporation it must follow that the corporation received something of value for its capital stock. Sec. 8, Art. 12 of the Arkansas Constitution of 1874 among other things provides that ‘. . . no corporation shall issue stocks or bonds except for money or property actually received or labor done . . .’ Mr. Arnett, the attorney handling the formalities of incorporation was well aware of the provisions of the law and testified positively that it was clearly understood that the 80 acres of land was to constitute the property received and to be valued at $1,000. He also testified positively that the deed was in proper form and was executed and delivered to the corporation by Mr. and Mrs. Schwartz and that in exchange therefor the stock was issued.

“The execution and delivery of the deed is a bitterly controverted matter, but a decision of this case requires a finding of fact on that issue and the court adopts the testimony of Mr. Arnett and finds that Mr. and Mrs. Schwartz executed and delivered the deed to the corporation.

‘ ‘ The Schwartzs offered no other explanation of what any of them paid or gave for their stock. Herman Schwartz has held himself out as the president of the corporation. The Corporation, under his management has done an extensive business, made substantial profits and has registered the ‘Cherry Blend’ name. Such conduct and circumstances, together with Mr. Arnett’s direct testimony that the deed and conveyance of the land constituted the consideration for the issuance of the stock in the corporation leaves no alternative but to find that such deed was executed and delivered and that title to said land should be vested in the Corporation and that Mr. and Mrs. Herman Schwartz should be divested of such title. Nor can the Schwartzs be heard to contend that no consideration has been paid them. The stock in the corporation is valuable. They have received very substantial profits from the corporation based on their stock ownership. In the pipe line settlement in December of 1953, a very substantial sum was paid to the Schwartzs ($3,000) while $1,000 was being paid to the corporation. On the other hand, the Hardwickes cannot be heard to complain about the $3,000 overpayment to the Schwartzs because they knew of the settlement and acquiesced in it by sharing in the corporation profits in 1953 subsequent to the settlement and the years subsequent thereto. In addition, Mr. Hardwicke, had full knowledge of the pipe line settlement when he and Mr. Schwartz made the settlement of account on June 18, 1955, and no reference or complaint was made concerning it at that time.

“The Court also finds that the corporation agreed to pay to the Schwartzs 25 cents per ton so long as it produces building stone from the tract. The 25 cents per ton provision was not written in the deed and there was never any official action taken by the corporation to be recorded in its minutes, but the proof is beyond cavil that the corporation was to pay the 25 cents per ton and the court finds that such provisions should be made a part of the order vesting title and be binding upon the corporation, its grantees, successors and assigns.

“The Court finds that Herman Schwartz at a time when he was president of the corporation and its active manager also was engaged in competitive stone selling ventures, but finds that there is no evidence in this case to warrant a finding that he was not entitled to be so engaged. At all times when Mr. Hardwicke was in charge of the business, certainly Mr. Schwartz was entitled to be in competitive business.

“However, since the registered name of ‘Cherry Blend’ is the registered trade name of the rock handled by the corporation, Schwartz should be restrained from marketing competitive stone as ‘Cherry Blend’ even though his competitive stone may be so similar to that marketed by the corporation as to be indistinguishable from it.

“Undoubtedly Mr. Schwartz has used the name ‘Cherry Blend’ in the past. But we must not lose sight of the fact that he was and now is the president of the corporation and that he and Ms wife own half the corporate stock. He was for many years the manager of the corporation’s business. Under the evidence in this ease the Court is unwilling to assess damages against Mr. Schwartz.

“Since this suit does not seek a dissolution of the corporation, the court makes no finding concerning that aspect of the case, at the same time recognizing the absurdity that results when half the corporate stock is owned by one faction and an exact equal half is owned by the other — an impasse which could possibly result in inability to elect directors or conduct corporate affairs. Therefore, based on the evidence and happenings since the commencement of this action, the court finds that until some change is made in a legal manner the directors of the corporation have empowered Mort Hardwicke to conduct the corporate business in its accustomed manner and to keep a full, true and complete set of books from which an accurate accounting can be made.”

CONCLUSIONS

“The Corporation is a validly existing Arkansas corporation.

“Title to the 80 acres in question shall be vested in the corporation and divested from the Schwartzs.

“The order vesting title shall contain a provision binding on the corporation, its grantees, assigns and successors requiring payment of 25 cents per ton on the rock quarried and marketed, which shall be payable to Herman Schwartz, his grantees, devisees, successors, heirs or assigns.

“Mort Hardwicke is hereby declared to be the presently acting manager of the corporation business of quarrying and marketing building stone and he is required to keep a full, true and complete set of books.

“Herman Schwartz is restrained from using the name ‘Cherry Blend’ in his competitive rock ventures.”

I. The Direct Appeal. It is well settled by our own cases, and the authorities generally, that the evidence required to prove and establish a lost deed must be clear, satisfactory and convincing, though it need not be undisputed. McCulloch v. McCulloch, 213 Ark. 1004, 214 S. W. 2d 209. In Dillard v. Harden, 197 Ark. 586, 124 S. W. 2d 10, we said it is sufficient if the testimony which the court credits and accepts as true shows clearly, concisely and satisfactorily that the deed sought to be restored had in fact been executed and delivered. We have also said that the burden is upon one who claims under an alleged lost instrument to establish its execution, contents and loss by the same quantum of proof. Slaughter v. Cornie Stave Company, 172 Ark. 952, 291 S. W. 69.

The first and most difficult question is whether the proof tending to establish the execution, delivery, contents and loss of the alleged deed from appellants to the Logan County Building Stone Company, Inc., meets this test. In testing the appellants’ earnest and able contention that it does not, due deference must be given to the findings and conclusions of the trial judge who heard and observed the witnesses as they gave their testimony.

As the chancellor indicated, the evidence was sharply conflicting and the testimony of some of the witnesses was indefinite and contradictory on some points. For instance, Judge Hardwicke first testified to the execution of the deed by appellants to the corporation but later stated that he did not actually see them sign the instrument. Also, the minutes of a meeting of stockholders dated May 5, 1951, which might have been the date of the alleged execution of the deed, made no mention of that fact. But the trial court credited and gave great weight to the testimony of Mr. Arnett. So do we. In a hotly contested case like this, it is refreshing to have the testimony of a witness who seems to enjoy the utmost respect and confidence of all parties to the litigation. Mr. Arnett has ably represented the corporation throughout its existence without favor or partiality to either group of stockholders. The appellants do not question his honesty or integrity but do insist that his memory was fallible because it was not in harmony with that of the appellants or Judge Hardwicke on some points and with the minutes which he kept. We find nothing vague, uncertain or indefinite in Mr. Arnett’s testimony concerning- the execution, delivery, contents or loss of the deed in question. We agree with the trial court that such testimony was positive, straightforward, explicit, logical and credible. If there were the slightest motive or inclination on his part to tell anything other than the absolute truth, it is not reflected in this record.

On the question of delivery Mr. Arnett testified that after the deed which he prepared was signed by appellants it was delivered to Schwartz by him with directions to take it and have it acknowledged, but not to record it for a while; and that he (Arnett) later found the deed in the files of the corporation but did not notice whether it had been acknowledged. Subsequently the deed was missing from the files. As president of the corporation and then in active charge of its affairs, Mr. Schwartz was the proper party to accept the deed and we think the evidence sufficiently shows a valid delivery.

On the whole case we conclude that the execution, delivery and contents of the deed from the appellants to the corporation were shown by that clear, satisfactory and convincing testimony required to establish it as a lost instrument.

II. The Cross-Appeal. Appellees say the trial court erred in holding that Schwartz was not liable to the corporation for $3,000 of the $4,000 easement payment made by the pipe line company. In our opinion a preponderance of the evidence sustains the trial court’s finding that appellees had full knowledge of the settlement and fully acquiesced therein by thereafter accepting statements of the accounts and sharing in the corporate profits without complaint concerning the settlement made by Schwartz with the pipe line company. There was evidence that Hardwicke knew about the settlement prior to and during the period that he admits receiving monthly statements of the corporate accounts without protesting the settlement in any way.

Practically the same situation is involved in appellees ’ further contention that the court erred in refusing to hold appellants liable for damages for selling stone from the Schwartz Brothers quarry as “Cherry Blend Stone.” It was shown that Hardwicke not only had knowledge of these sales of the “split” loads of Cherry Blend Stone bnt actually assisted in making them and shared in the profits without complaint. Moreover, appellees failed to establish the amount of any damages to which they might otherwise be entitled if they had not fully acquiesced in and agreed to said sales. There is a paucity of proof that appellants actually misappropriated any of the funds belonging to the corporation.

The decree is affirmed on both the direct appeal and the cross-appeal.