author: J. Fred Jones, Justice. John A. Fogleman, Justice,

text:
    George D. MARR v. CITY of FORT SMITH, Arkansas
    73-210
    501 S.W. 2d 777

    Opinion delivered December 10, 1973

      Pearce, Robinson & McCord, for appellant.

      Daily, West, Core & Coffman, for appellee.
   J. Fred Jones, Justice.

George D. Marr, a member of the Fort Smith Fire Department, was suspended from duty for a period of fifteen days without pay for violation of chapter 10, §§ 16 and 30, paragraph J, of the fire department rules and regulations. On appeal to the Civil Service Commission the suspension was approved for violation of § 16 of the rules, and on appeal to the circuit court the decision of the Commission was affirmed. On this appeal from the circuit court judgment, Mr. Marr contends that he did not violate the rules and regulations of the fire department and also contends that the rule he is alleged to have violated is unconstitutional as applied to his actions in violation of his First Amendment rights. We shall not discuss the substantiality of the evidence pertaining to the alleged violation because we agree with Mr. Marr as to his second contention.

Sectión 16 of chapter 10 of the fire department rules and regulations reads as follows:

“Members that have any matter that pertains to the Fire Department and to be taken up with any City Official shall first submit the same to his superior officer and the matter shall be handled thereafter through the chain of responsibility.”

As background for Mr. Marr’s alleged rule violation, it appears that the board of directors of the City of Fort Smith had passed an ordinance pertaining to overtime pay and optional “equalization” pay in lieu of legal holidays, and it appears there was considerable difference of opinion among the firemen, as well as others, as to the method to be employed in calculating the equalization pay for firemen under the provision of the ordinance. It appears that Mr. Marr was dissatisfied with the results of the method being employed under the provisions of the ordinance and so advised two of the city directors by telephone, as well as his Congressman in Washington and the Governor of the state by letters, without first submitting the matter to his superior officer in the fire department, so that the matter could be handled thereafter through the chain of responsibility under the provisions of § 16 of chapter 10, supra.

None of the witnesses seemed to know what Mr. Marr said in his telephone conversations with the city directors or in his letters to the Governor and Congressman. Mr. Marr admitted that he expressed his dissatisfaction with the ordinance when interviewed on television, but there is no evidence that any city official, or anyone else except Mr. Marr, saw the interview when it was placed on the air. The only evidence as to what Mr. Marr did say is contained in a letter from Director Stocks to City Administrator Keheley, a portion of which was read into the record as follows:

” ’Dear Mr. Keheley: By telephone conversation at home, Mr. Marr advised me that he was a member of the Fort Smith Fire Department and inquired if I was familiar with the Memorandum sent to the Fire Department personnel concerning the recent action of the Board of Directors in authorizing equalization pay for firemen, pursuant to State Law and advice of counsel. He stated that he had written letters to his Congressman and to his Governor and that he is completely dissatisfied with the fact that the result is only one-half time for overtime pay and presumes that the matter will have to be presented to the voters in view of our recent action in increasing the firemen’s pay of 10% and authorizing an additional increase as a result of the written demand for the attorney representing seventy-six firemen. I now request the full self study of the Fire Department, including the basis and the need for the number of firemen employed, the Fire Underwriters requirements, and further request that I be advised of the number of Fort Smith firemen who are gainfully employed elsewhere. The study should also include the number of hours that each fireman averages working during the year, the number of days off, the number of fire calls and the number of fires actually covered, the result which are —.’ ”

It is obviously apparent that § 16 of chapter 10 of the rules, supra, is vague and indefinite as to what constitutes the “matter” it refers to, but we are of the opinion that it could have no application to personal complaints made to city directors concerning municipal legislation pertaining to firemen’s pay or vacation rights. It is evident from the testimony in the record that Mr. Marr’s superiors in the “chain of responsibility” would have been first, his Captain, Sherman Ross; then next the Assistant Fire Chief, Petway; and finally Superior Fire Chief Bevel. The record is not clear as to the nature of the matters, or as to method of handling them, through “the chain of responsibility” after the same has been submitted to a superior officer under the rule. It is not clear from the record whether Mr. Marr’s grievances, complaints or opinions were to have been conveyed to the intended city official through the chain of responsibility after being submitted to his captain, or whether the rule simply required him to first obtain permission from his superiors before discussing the matters he did discuss with Directors Stocks and Crompton. The phrase “shall be handled thereafter” would indicate that the entire “matter” would be heard, considered and determined, or disposed of, within or through, the “chain of responsibility.”

It would appear that § 16 of chapter 10, supra, might have been designed or intended for such matters as interdepartmental rules, orders and regulations promulgated by the officers of the fire department, but as § 16 is now written, we are of the opinion it is unconstitutional as applied to Mr. Marr’s actions as reflected by the record in this case.

Because of the vagueness of the term “matter” re-, ferred to in the rule, we have encountered difficulty in finding precedent one way or the other on the subject. In the Iowa case of Klein v. Civil Service Comm’n of Cedar Rapids, 152 N.W. 2d 195, the Supreme Court of Iowa had on appeal by certiorari, the action of the Civil Service Commission sustaining the suspension of a fireman for disobedience of orders and violation of the rules of his fire department. The specific rules, 23 and 24, in that case were set out in the opinion as follows:

“Rule 23 provides: ‘All matters pertaining to or affecting the Department proposed or contemplated by members must be submitted to the Chief for approval and action.’
Rule 34 provides: ‘No member of the Department shall give out any information relative to the Department, its operations, equipment and so forth unless permission by the Chief has been granted.’ ”

The violation in that case consisted of the fireman giving news releases without first clearing such releases with his chief. The Supreme Court of Iowa held that in the absence of proof that the releases impaired public service, the suspension was improper. The court in Klein then reviewed a number of decisions from other jurisdictions pertaining to the constitutionality of such rules and regulations and concluded as follows:

. . the news release of August 5, 1964, by plaintiffs represented nothing more than an exercise of their constitutionally protected right of free speech regarding a labor dispute for which, in the absence of a showing of impairment of public service, they should not have been punished.
To the extent rules 23 and 34 authorize such punishment they are too broad, rigid and unreasonable. Under the fact their enforcement was arbitrary and capricious and therefore illegal.”
See also In re Gioglio, 248 A. 2d 570.

We conclude, therefore, that § 16 of chapter 10, supra, as written, and as it now stands, is unconstitutional as applied to Mr. Marr’s conduct as set out in the record in this case, and that the judgment of the trial court should be reversed.

The judgment is reversed.

Fogleman, J., concurs.

John A. Fogleman, Justice,

concurring. I concur. I think the regulation as written was not ambiguous and that the action taken by Marr was clearly within its purview, but I concur in the result because I think that the restraint provided in the rule effectively abridged Marr’s ever personally presenting his views to anyone other than his immediate superior. For this reason, I think the regulation was an unconstitutional restraint.


source: Caselaw Access Project

author: Conley Byrd, Justice.

license: Public Domain

text:
    Sidney Howard GIPSON v. STATE of Arkansas
    CR 73-127
    501 S.W. 2d 786
    Opinion delivered December 10, 1973

      Robert A. Newcomb, for appellant.

      Jim Guy Tucker, Atty. Gen., by: Alston Jennings Jr., Asst. Atty. Gen., for appellee.
   Conley Byrd, Justice.

Appellant Sidney Howard Gipson was convicted by a jury of being an accessory to felony murder. At his trial he was represented by employed counsel, the Honorable Bon McCourtney. No appeal was taken from that conviction. Pursuant to Criminal Procedure Rule No. 1, appellant filed a petition for post-conviction relief citing eight different reasons why he should be granted relief — among those reasons were that his attorney was inadequate and that he wanted to appeal his case but his attorney would not take the appeal because appellant did not have $2,700.

Upon appellant’s allegation that he was a pauper, the trial court appointed the Honorable Sam Highsmith to represent him in the post conviction proceeding. Thereafter, the allegations of inadequacy of counsel and the failure of counsel to take an appeal were struck from the petition upon motion of appellant, and he was granted time to file an amended petition. The petition was then amended to allege only that the State suppressed evidence favorable to appellant. By stipulation and with the knowledge and approval of appellant that was the only issue before the court at the post-conviction hearing. To reverse the trial court’s denial of post-conviction relief, appellant, now appearing by different counsel, contends:

“I. Appellant was denied effective assistance of counsel in presenting his Motion to Vacate Sentence Under Criminal Procedure Rule No. I as provided by the Sixth and Fourteenth Amendments to the United States Constitution.
II. Appellant did not make an intelligent waiver of the points raised in his pro se petition for post-conviction relief.”

Since the contentions now made were not at issue in the trial court, the record obviously does not show any facts from which one could arrive at any conclusions. We have a long standing rule that we will not consider on appeal an issue not first raised in the trial court. For that reason we hold that the contentions now made are without merit.

Affirmed.


author: Frank Holt, Justice.

text:
    Ira Y. BICKNELL et ux v. Thomas C. BARNES et ux
    73-79
    501 S.W. 2d 761
    Opinion delivered December 10, 1973

      Daily, West, Core é* Coffman, for appellants.

      Joe H. Hardegree, for appellees.
   Frank Holt, Justice.

The appellees purchased a portion of a ranch from the appellants. Subsequent to a delivery of the deed with a vendor’s lien, pursuant to a written contract, the appellees successfully sought reformation as to the recited acreage and purchase price. For reversal of that decree, appellants first contend the chancellor “erred in permitting Barnes [appellee] to reopen the question of acreage eleven months after the transaction was closed” because “(A) Time was expressly made the essence of the contract” and “(B) After February 15, 1971 the contract was an executed (fully performed) contract and was not subject to rescission either wholly or partially.”

The appellees purchased a portion of appellants’ ranch which was estimated to consist of 156 acres for the agreed purchase price of $70,000 with $30,000 down payment and the balance to be secured by a vendor’s lien payable in one year. By mutual agreement the formal description of the property was waived with the understanding that “accurate legal descriptions” were in the process of being determined, the abstract brought down to date and a survey made if necessary. “A rough copy of the plat of the land” being conveyed was made a part of the contract. Following the foregoing provisions is paragraph 2 of the contract which reads:

If it be ascertained that the acreage is in excess of one hundred fifty-six (156) acres, the Purchasers agree to increase the purchase price by Two Hundred Fifty Dollars ($250.00) per acre; and if it be ascertained that the acreage is less than one hundred fifty-six (156) acres, the Sellers agree to reduce the price by Two Hundred Fifty Dollars ($250.00) per acre.

Subsequent paragraphs related to oil, gas and mineral rights; the appellants’ right to continue in possession rent free until April 1, 1971; the proration of taxes; the parties’ respective obligations as to insurance coverage; and the appellants would furnish an abstract of title reflecting a merchantable title. Thereafter follows the concluding paragraph 8 which recites:

The Thirty Thousand Dollar ($50,000.00) down payment is also considered as a forfeiture in the event the Purchasers fail or refuse to go ahead and complete the transaction and it is specifically stipulated that time is of the essence and the entire transaction is to be closed by a Vendor’s Lien transaction within ten (10) days.

The contract was dated February 2, 1971. However, by mutual agreement the transaction was closed on February 15, 1971. In doing so, the parties relied upon appellants’ surveyor, a Mr. Wood, who a few days previously had ascertained that the lands being conveyed consisted of 158.35 acres. The appellees paid the appellants $587.50, which was computed at $250 for the 2.35 acres in excess of the estimated acreage. The appellees, after taking the agreed delayed possession of the property, employed a Mr. Weaver to survey the property. When time permitted him, Weaver made a survey which revealed there was actually a shortage in the conveyance of 8.61 acres.

Appellants strenuously contend that time was made the essence of the contract by express stipulation and therefore any action which either party desired to take with reference to a survey and consequent acreage determination must have been done by the closing date, or otherwise any party so failing would be forever foreclosed from so doing. In other words, appellants assert that paragraph 8, which contains the provision that time is of the essence, is controlling as to paragraph 2. We cannot agree. It is true that according to the cases cited by appellants time can be made the essence of a contract. However, generally this provision relates to a forfeiture of the purchase price. In the case at bar, we are of the definite view that the essence of time expressed in paragraph 8 relates to and is confined solely to the forfeiture of a very substantial down payment ($30,000) on the purchase price. Appellants recognize that “[T]he contract does not specifically say when the acreage excess or deficiency will be ascertained. . . ” However, appellants forcefully argue that from a construction of the entire contract the parties intended the ascertainment of the correct acreage was foreclosed upon delivery of the deed. If the parties actually desired that the correct acreage had to be ascertained before closing the transaction, then that limitation should have been so expressed in paragraph 2, which relates specifically to the right of adjustment as to acreage and price.

Although agreements respecting the sale of lands are deemed to be merged into a deed subsequently issued, this principle of law does not prevent reformation upon a showing of mutual mistake of fact, a misrepresentation or perpetration of a fraud. Otherwise there could never be a reformation. Reynolds v. Davis, 245 Ark. 255, 431 S.W. 2d 841 (1968), Duncan v. McAdams, 222 Ark. 143, 257 S.W. 2d 568 (1952), Stack v. Commercial Towel & Uniform Service, Inc., 120 Ind. App. 783 91 N.E. 2d 790 (1950). In the case at bar, the contract was subject to reformation (the pleadings were amended to confrom to the proof) based upon a showing of mutual mistake. Furthermore, the cause of action cannot be characterized as one for rescission as suggested by appellants.

In the sale of land by acreage where the quantity of acres is essential to the contract, we have recognized the purchaser is entitled to an adjustment of the acreage and a corresponding adjustment as to the purchase price. Glover v. Bullard, 170 Ark. 58, 278 S.W. 645 (1926). In the case at bar, the parties expressly agreed in paragraph 2 as to the estimated acreage and for a reduction or increase in the purchase price upon ascertainment of the correct acreage. As stated previously, we cannot agree that by paragraph 2 the parties restricted themselves to the agreed adjustment upon the closing of the transaction.

Appellants next contend the court erred in decreeing reformation of the deed to conform to the Weaver survey (appellees). The law is well settled that reformation of a written instrument is permitted in equity to show the true intent of the parties where there is a mutual mistake. Welch v. Welch, 132 Ark. 227, 200 S.W. 139 (1918). The parties seeking reformation, however, must present evidence that clearly and convincingly warrants a finding that a mutual mistake occurred. Glover v. Bullard, supra, Dent, Adm’r. v. Industrial Oil & Gas Co., 197 Ark. 95, 122 S.W. 2d 162 (1938). However, the proof need not be undisputed in order to achieve reformation. Galyen v. Gillenwater, 247 Ark. 701, 447 S.W. 2d 137 (1969).

In the case at bar, 158.35 acres were conveyed by the deed which was based upon the survey made by Wood, appellants' surveyor. After the conveyance, as previously indicated, the appellees’ surveyor, Weaver, ascertained from his survey that the deed conveyed a shortage of 8.61 acres and so testified. It appears that Wood and Weaver were each county surveyors. Wood, as a witness, did not have the advantage of his original map since he had lost it. However, following the initial hearing, Wood was permitted to testify again after resurveying the acreage. This time he testified that the acreage actually conveyed consisted of 161.65 acres of 3.30 acres in excess of his original survey. We have held many times that when the evidence is conflicting on factual issues the chancellor is in a better position to evaluate the evidence since he observes the witnesses, hears their testimony and we, on appeal, have only the printed word and exhibits before us. Brown v. LeTourneau College, 251 Ark. 851, 475 S.W. 2d 521 (1972). The provisions of the written contract specifically give the parties the right to ascertain the correct acreage. Therefore, when we consider the initial conflicting evidence (8.61 acres disparity) between the two su-veyors coupled with the admission by appellants’ own surveyor at a subsequent hearing that his first survey was inaccurate by 3.30 acres (increasing the disparity to 11.91 acres), we are unable to say that the finding of the chancellor, in reconciling the factual issue, failed to adhere to the standard of clear and convincing proof.

Appellants next contend that the court erred in denying interest on the $40,000 note from June 1, 1971, to March 8, 1972. This figure represents the balance of the purchase price which was secured by a vendor’s lien. Paragraph 1 of the contract provided that this balance would be paid “just as soon as they [appellees] dispose of their place in Houston, Texas, but not later than one year thereafter.” The promissory note, which was given at the time of the closing of the transaction, provided that the appellees [makers] agreed that whenever they disposed or sold “certain of their real property in Houston, Texas, before the due date” they would thereupon pay the balance and “at any rate not later than one year from the date of this note [February 15, 1971].” The note further provided that interest would be computed at the prevailing interest in the local area. Appellee Barnes testified “certain property in Houston” meant his home place. It is undisputed that his home had not been sold. Appellant Bicknell took the position that the sale by Barnes of his business on June 21, 1971, activated the interest on the note from that date. However, Bick-nell himself testified on direct examination that in their discussion of pre-payment on the note, Barnes stated “just as soon as I sell the property in Houston we will pay the note.” Bicknell acknowledged that only the house was mentioned as being on the market and Barnes expressed the belief he would sell it in the near future. On this subject Bicknell then testified “[W]ell, I’ll take a chance and gamble, then, that you do sell it right away and won’t have to ride a full year.” Bicknell further testified that Barnes told him he had a very profitable business which he could sell; however, Barnes expressed no desire to sell it. In view of this testimony, we certainly cannot say the chancellor’s finding on this factual issue is against the preponderance of the evidence. We have considered and find without merit any subsidiary arguments raised under this contention, as previously stated, with reference to the note and interest.

Affirmed.


text:
    Willard K. ROBERTSON v. Dennis CEOLA
    73-167
    501 S.W. 2d 764
    Opinion delivered December 10, 1973

      Croxton ir Boyer, for appellant.

      Davis, Reed & Douglas, for appellee.
   Frank Holt, Justice.

Appellee sued appellant for breach of an oral contract for the purchase and installation of certain materials during the construction of appellant’s house. Appellee was awarded $5,000 by a jury. For reversal of the judgment appellant asserts the jury’s award of damages was based upon speculation and conjecture. We must agree that appellee did not sufficiently prove his damages or loss of potential profits with reasonable certainty.

The proof of lost profits must be shown by evidence which makes it “reasonably certain” what the plaintiff would have made. Farmers Cooperative Assn. v. Phillips, 241 Ark. 28, 405 S.W. 2d 939 (1966), Black v. Hogsett, 145 Ark. 178, 224 S.W. 439 (1920). The plaintiff must produce a “reasonably complete set of figures, and not leave the jury to speculate as to whether there would have been any profits.” Sumlin v. Woodson, 211 Ark. 214, 199 S.W. 2d 936 (1947). The proof must be sufficient to remove the question of profits from the realm of speculation and conjecture. Reed v. Williams, 247 Ark. 314, 445 S.W. 2d 90 (1969). The value of appellee’s own services in completing the contract is a necessary element in computing the cost of performance. Gibney v. Turner, 52 Ark. 117, 12 S.W. 201 (1889). See also Columbus Mining Co. v. Ross, 218 Ky. 58, 290 S.W. 1052 (1927, and Jowers v. Bysard Construction Co., 113 S.C. 84, 100 S.E. 892 (1919). In the case at bar, the defect in appellee’s proof is his failure to offer evidence as to the value of his own services in the performance of the construction contract.

Lost profits, which are the basis for the award of damages here, are determined by the formula: contract price minus cost of performance equals profit. The profit in this case, a cost plus contract, rests upon 15% of certain materials purchased and whatever profit ap-pellee would make on the $12 per hour labor for installation.

The actual labor cost consists of the cost of a tile setter and helper. The helper was to be paid at the rate of $2.75 per hour, leaving $9.25 per hour in labor cost. Appellee was to be the tile setter and there is no testimony as to what his hourly wage was worth. Without evidence as to the value of appellee’s individual time, we have no way of ascertaining how much profit was to be made on the remaining $9.25 an hour of labor cost. Without that figure, damages are speculative.

Appellant next contends that appellee failed to prove a contract. The uncontradicted testimony of appellee (appellant did not testify) is that when he asked appellant if $12 per hour for labor plus 15% of the cost of certain materials would be satisfactory, appellant said “yes.” Ap-pellee also testified that when they completed their negotiations appellant said “[V]ery good, this is the way we will do the job.” There was also an understanding as to the time and method of payment. A factual dispute as to the existence of a contract properly presents a question for the jury. Bush v. Wofford, 139 Ark. 330, 213 S.W. 751 (1919), Honey v. Caldwell, 35 Ark. 156 (1879). The evidence in the instant case was certainly sufficient to create a question of fact for the jury as to the existence of a contract.

Appellant next contends that the contract would be prohibited by the statute of frauds, Ark. Stat. Ann. § 38-101 (Repl. 1962), since it could not be performed within one year. However, there was evidence that by employing additional help, appellee could have completed the job in six months. Since the contract was capable of performance within one year, it was not prohibited by the statute of frauds. Frieder v. Schleuter, 105 Ark. 580, 151 S.W. 696 (1912).

Appellant next cites Ark. Stat. Ann. § 85-2-201 (Add. 1961) which renders unenforceable an agreement for sale of goods in excess of $500 absent some writing. The cost of the materials appellee was to furnish exceeded $15,000. § 85-2-201 deals with the “sale of goods” and is inapplicable to personal service contracts. Even though it be said that the material appellee was to purchase and furnished constitutes goods within the definition of § 85-2-105 and part of appellee’s profit is to be gained on cost plus 15% on the material, nevertheless, the essence of the agreement is a service contract for appellee to install tile in appellant’s home. Unless the principal object of the agreement is for sale of goods, then § 85-2-201 is inapplicable. See Huyler Paper Stock Co. v. Information Supplier Corp., 117 N.J. Super. 353, 284 A. 2d 568 (1971).

Appellant’s final contention for a directed verdict is that “the damages alleged by the appellee could not have been in contemplation of the parties at the time the contract was made, or that such damages were the proximate result of appellant’s wrongs.” This contention is meritless. In the case at bar, loss of profits is naturally the proximate result of a breach of contract. Appellee’s loss of profits is also the type of a foreseeable loss that would be within the reasonable contemplation of the parties at the making of the contract.

Reversed and remanded.


author: Carleton Harris, Chief Justice.

text:
    ST. PAUL FIRE AND MARINE INSURANCE COMPANY v. CRITTENDEN ABSTRACT & TITLE COMPANY, Inc.
    73-168
    502 S.W. 2d 100
    Opinion delivered December 17, 1973

      Rieves ér Rieves, by: Donald A. Forrest, for appellant.

      Spears ¿r Sloan, for appellee.
   Carleton Harris, Chief Justice.

On April 23, 1969, W. I. Forrester, an attorney of Memphis, Tennessee, ordered abstract from appellee, Crittenden Abstract & Title Company, Inc., for Lots 1, 1A, 2, 2A, and 3 in Block 4 of Haisch Subdivision. The abstract was completed and delivered on May 20, 1969 to the attorney for Ray-Don Bildors, who examined same and approved the title on the basis of the abstract as delivered; Ray-Don Bildors thereupon acquired the property. In the latter part of November, 1970, it developed that Carrie Arnold Crane claimed title to this property, Crittenden Abstract & Title Company, Inc. learning of this claim about December 28, 1970, and two days later, it was determined by the latter that an instrument had been omitted from the abstract. Prior thereto, appellant, St. Paul Fire and Marine Insurance Company, had issued its Errors and Omissions Policy to appellee, effective from October 23, 1968 to October 23, 1969, and this policy had been renewed for the year October 23, 1969 to October 23, 1970. At that time, appellee changed to Lloyds of London, and the latter company issued its policy effective from October 23, 1970 to October 23, 1971. Both companies denied liability, appellant’s denial being based on a provision of the policy reading as follows:

“IV. POLICY PERIOD, TERRITORY. This Policy applies to claims, suits or any other action arising during the Policy period within the United States of America, its territories or possession, resulting from negligent acts, errors or omissions of the Insured, their predecessors or any person now or heretofore employed by the Insured or any predecessor.”

Lloyds of London denied liability, basing its contention on the following clause:

“It is understood and agreed that, notwithstanding anything contained herein to the contrary, this Policy shall not indemnify the Assured in respect of any claim made against the Assured by reason of any negligent act, error or omission committed, or alleged to have been committed, prior to ....... . OCTOBER 23. 1970.”

Appellant company denied liability because the abstract company’s error was not discovered during the term of its policy, but rather was discovered during the period that the Lloyds of London policy was in effect; Lloyds denied liability because the error was not committed during the term of its policy, and accordingly neither company would accept any responsibility. The lands involved consisted of 1.4 acres, but by the time the controversy arose, the acreage had been sub-divided into lots and blocks, streets had been built, sewers, water, and lights installed, and houses built, and accordingly, the total value of the lands had been greatly enhanced. Mrs. Crane had employed counsel preparatory to instituting suit, and appellee settled the claim on behalf of Ray-Don Bildors for $6,275.00 and the latter was given a deed by Mrs. Crane. Thereafter, on December 31, 1971, Critten-den Abstract & Title Company filed suit in the Crittenden Chancery Court, later transferred to Circuit Court, against appellant company and Crump London Underwriters, Inc. Each company denied liability and on trial, the only witness testifying was Mrs. Margueritte Held, the owner of Crittenden Abstract & Title Company. The court found that the cause of action arose at the time of the delivery of the abstract, and that accordingly there was no liability against Lloyds and the complaint as to this defendant was dismissed. As to appellant, the court held as follows:

“The abstract was made and delivered May 19, 1969. It appears that that was the date the cause of the action arose. At that time that was all that they [St. Paul] claimed, for their reasons for not being liable. They did not let the matter go any further than that, just denied at the outset that it was not liable. ##*
“From the evidence, it appeared, too, that had she [Margueritte Held] waited and not obtained this best settlement as she could, and at one time that settlement could have been made for $4,000.00 and it had already gone up to $6,000.00, she felt that in view of the improvements, the streets, gutters, utilities, and the residences and other improvements on the property that the suit would be much larger when the title got tied up, and looked a little more than it would be if she could settle it then for the least amount of $6,275.00.
“That was not the ground upon which the company was denying liability; it was denying liability on the ground that it did not arise during the policy period. *** The judgment will go against the St. Paul.”

Twelve per cent penalty was allowed and an attorney’s fee of $2,000. From the judgment so entered, appellant brings this appeal.

For reversal, it is first asserted that the judgment is erroneous because the claim did not arise during the policy period and appellant cites a Louisiana decision and New Jersey decision in support of this contention. In the Louisiana case, J. M. Brown Construction Co. v. D & M Mechanical Contractors, Inc. (First Circuit Louisiana), 222 So. 2d 93, the effective dates of the policy were March 6, 1964 through March 6, 1965 and the alleged error occurred during that period; however, demand for indemnification was not made until May 30, 1967, over two years after the error was made, though this fact would not be controlling. The policy, however, provided that the company would indemnify the assured against any claim caused by error or omission made against them during the period of coverage, there being only one exception, viz., claims of which the assured became aware, would be honored after policy expiration provided written notice was given the insurer during the policy term. In Rotwein v. General Accident Group, 247 A. 2d 370, the New Jersey case, the policy period was April 15, 1961 through April 14, 1964. In July, 1966, when General Accident no longer was the insurer, the defect in the performance of architectural services was first called to the attention of that company. The policy posed three conditions which must be met before General Accident would be liable, the third of these requiring the reporting and commencement of a claim during the policy period. The opinion recites the fact that defects came to the attention of the parties directly involved as early as 1964 while the policy was still in effect, but General Accident did not receive notice until 1966. In the case presently before us, there was no knowledge of any error until after the St. Paul coverage had expired. Be that as it may, we think the wording of the policy, as well as sound logic, requires the construction reached by the trial court in this case. The American Heritage Dictionary of the English Language (1969) defines “arise” as “to come into being; originate.” Certainly the error came into being, i.e., originated, while the St. Paul policy was in effect. What appears to be the general rule is succinctly stated in 1 C.J.S., Abstracts of Title, § 13, p. 399, as follows:

“The right of action against an abstracter for damages resulting from errors, defects, or omissions in an abstract of title prepared by him accrues at the time the examination is made and the abstract prepared and furnished, and not when the wrong is discovered or actual damage results therefrom ###.”

Likewise, in 1 Am. Jur. 2d, Abstracts of Title, § 24, p. 245, we find:

“It is generally held that a cause of action against an abstracter for damages caused by furnishing a defective or incorrect abstract accrues when the examination of the title is reported or the abstract delivered, and the statute of limitations begins to run from the time of the occurrence of the breach of duty, and not from the time of the discovery of the actual damages as a result of the breach.

Strangely, enough, it does not appear that this court has passed directly upon the question and no Arkansas cases are cited by either side. However, in Adams v. Greer, 114 F. Supp. 770, the United States District Court for the Western District of Arkansas (Fayetteville Division), was called upon to answer the exact question of when a cause of action arose against an abstracter for incorrectly compiling an abstract because of a plea of the statute of limitations. Judge John E. Miller, in a well written opinion, thoroughly discussed this subject as follows:

“Russell (& Co.) v. Polk County Abstract Co., 87 Iowa 253, 54 N.W. 212, 43 Am. St. Rep. 381, was an action against an abstract company for negligence in making an abstract and damages arising on account of such negligence. It was held by the court in that case that the cause of action accrued when the abstract was delivered by the abstract company to the purchaser thereof, and that there was a breach of the contract immediately upon the delivery, and not when the injury occurred or the error was discovered. Provident Loan Trust Co. v. Wolcott, 5 Kan. App. 473, 47 P. 8, is an action against an abstractor for giving an incorrect certificate of title, and it was held that the cause of action arose at the date of the delivery of the abstract, and not at the time of the consequential damages. Lattin v. Gillette, 95 Cal. 317, 30 P. 545, 29 Am. St. Rep. 115, was an action against an abstractor for negligence in certifying that a party was the owner, when, in fact, he only had a half interest in the title to the property. It was held that the cause of action accrued at the time of the delivery of the abstract and that the statute of limitations began to run at that time, notwithstanding the fact that the purchaser of the abstract did not discover the defect or error until after the statute of limitations had run, at which time he had to surrender one-half interest in the property. The Missouri courts have reached the same conclusion in Rankin v. Schaeffer, 4 Mo. App. 108, and Schade v. Gehner, 133 Mo. 252, 34 S.W. 576. See, also, note to Equitable Bldg. & Loan Ass’n v. Bank of Commerce (118 Tenn. 678, 102 S.W. 901), 12 L.R.A., N.S., 454. ***
“Since the plaintiffs’ claim accrued when the amended abstract was delivered by defendant to plaintiffs and since this occurred more than three years prior to the filing of the suit herein, the claim of plaintiffs is barred by Section 37-206, Ark. Stats. 1947, Annotated, and the motion to dismiss should be sustained.”

We hold that the claim arises when the abstract is compiled and delivered and not when the error is discovered.

It is next contended that error was committed in the rendering of the judgment because appellee did not comply with a condition precedent in the policy sued on. This argument has reference to the fact that included in the policy is a provision stating:

“No action shall lie against the Company unless, as a condition precedent thereto, the Insured shall have fully complied with all the terms of this Policy, nor until the amount of the Insured’s obligation to pay shall have been finally determined either by judgment against the Insured after actual trial or by written agreement of the Insured, the claimant and the Company.”

Admittedly, no suit was ever filed against the abstract company nor judgment rendered against it, nor did St. Paul agree in writing to any settlement. Accordingly, appellant says that it is not liable. We do not agree. The record reflects that St. Paul Fire and Marine Insurance Company was first notified by letter from Mrs. Held on December 28 that Mrs. Crane was making claim to the aforementioned lands. The company was advised “that since it appears that claim will arise in this matter, I am giving you notice.” On January 4, a second letter was sent by Mrs. Held, attaching a letter from the attorney for Ray-Don Bildors, Inc. advising Mrs. Held to call the matter to her insurance company’s attention inasmuch as it appeared that a claim would be made by the Cranes. On February 11, 1971, inquiry was made of St. Paul by letter of Mrs. Held asking that the company please advise its intentions regarding the claim. On February 16, Mr. Elliott Slutsky, Claim Loss Representative for St. Paul, replied to Mrs. Field as follows:

“In relation to the above captioned claim, Lloyds of London would be your carrier since the discovery date is within their policy period.
Attached please find a portion of your Abstractors Liability policy with us in which I circle number IV Policy Period, Territory which best describes why Lloyds of Lond[on] would be the carrier in this claim.”

On February 18, 1971, William D. Perry, an attorney of Memphis, wrote the attorney for Ray-Don Bildors on behalf of Mrs. Crane, demanding that Ray-Don Bildors execute proper deeds to restore the title back to Mrs. Crane or pay her the reasonable value of the property. Copy of this letter was sent to. St. Paul on February 23. Thereafter, on March 11, 1971, Archie M. Clark, Claim Loss Manager for the insurance company, wrote Mrs. Held as follows:

“As our attitude has not changed in connection with the matter, we feel that the burden should be borne by the Lloyds of London; therefore, I would appreciate your advising the principal in this matter.”

On May 27, the law firm of Spears & Sloan advised both St. Paul and Lloyds that Mrs. Crane was preparing to file an ejectment suit against the owners of houses located on the lands and, “This will develop into a full blown law suit and would require a great deal of technical proof, surveys, and various other things that would be rather expensive.” The letter advised that Mrs. Crane was making claim for $8,000, but that it was believed the claim could be settled for somewhere between $4,500 and $5,000, and it was the opinion of the law firm that “it would be the better part of wisdom to settle it.” On June 7, Mr. Clark of St. Paul acknowledged the letter from the law firm and stated:

“I have reviewed the above captioned along with the investigating adjuster, and we do not see how we are involved in this matter in any way. This is due to the fact that our policy expired October 23, 1970, and the date of discovery of this loss was December 23, 1970. Therefore, we have no alternative other than to stay out of any negotiations that you may have with the Lloyd’s policy.”

On October 8, the company was advised that the claim had been settled through payment by Crittenden Abstract & Title Company in the amount of $6,275.00, and the matter was thus terminated. Apparently, an identical letter was sent to Lloyds, for the attorneys state:

“If either or both of you wish to reimburse Crittenden Abstract & Title Company, Inc. for the sum of $6,-275.00, you may do so and divide the payment in any manner you see fit but in default of any payment we expect to file a declaratory judgment suit against both of you.”

Both companies denied liability.

It is thus apparent that appellant was kept completely informed of developments, and that it not once, but repeatedly, denied liability on the basis of the fact that the error was not discovered during the time that its policy was in effect. The correspondence could not more clearly show that appellant had no intention of doing anything at all. Accordingly, appellee was placed in the position of either settling the claim itself or defending litigation that would bring into the picture numerous additional parties, which, as stated by counsel, would develop into extensive, involved, and expensive litigation; in fact, in studying the record, we agree that there was substantial evidence to the effect that the settlement was wise. To hold with appellant would be to say that ap-pellee, left alone, when appellant should have participated, is penalized for taking action, which in its best judgment, mitigated the damages — damages that under the contract were the responsibility of St. Paul. The general rule is found in 44 Am. Jur. 2d, § 1550, p. 432, as follows:

“An insurer cannot breach its contract by unjustifiably refusing to defend an action against the insured, upon grounds that the claim upon which the action was based was outside the coverage of the policy, and at the same time take advantage of a policy provision prohibiting the insured from settling any claim without the consent of the insurer except at his own cost. Consequently, an insurer’s unjustified refusal to defend relieves the insured from his contract obligation not to settle, and the insured is at liberty to make a reasonable settlement or compromise without losing his right to recover on the policy. This rule permitting settlements by the insured despite the presence of a ‘no settlement’ clause applies regardless of the type of liability policy involved. However, the courts have frequently stressed the fact that in order to bind the insurer the settlement must be reasonable and entered in good fáith.”

From what has been said, it is apparent that we agree that there is substantial evidence that the settlement was reasonable and entered into in good faith.

Finally, appellant contends that the policy sued on covers only obligations imposed by law upon the insured and appellee settled with a party to whom it had no legal liability. It is pointed out that Mrs. Crane did not contract with the plaintiff for the abstract and in no manner was in privity of contract with the abstract company, i.e., the abstract was not prepared for her use and benefit, and she was a complete stranger to the contract. The case of Talpey v. Wright, 61 Ark. 275, 32 S.W. 1072, is cited in support of the contention. The facts in Talpey are entirely dissimilar to those in the present case. Here, appellee prepared the abstract for Ray-Don Bildors, and it did have an obligation to prepare a correct abstract for that company. Likewise, it apparently being recognized by counsel for Ray-Don, Crane, and appellee, that Mrs. Crane’s claim to the land here in question was entirely valid, the abstract company recognized liability to Ray-Don. In settling the claim, Crittenden Abstract & Title Company paid Mrs. Crane — but Mrs. Crane delivered her deed to the property in question to Ray-Don. In other words, appellee simply settled the claim on behalf of Ray-Don, and there certainly seems to be substantial evidence, as already pointed out, that this settlement was prudent and advisable.

Appellee also advances an additional argument which it is contended is applicable to Points II and III, viz., that St. Paul has estopped itself to deny liability except under paragraph 4 of its policy. This argument relates to the fact that throughout the correspondence between appellant and appellee (heretofore set out), appellant consistently bottomed its denial of liability on the fact that coverage was not furnished under paragraph 4, and appellant never at any time until it amended its pleadings in the trial court, set up these defenses which we have listed under the second and third points. Appellee says that, in reliance upon the position taken by appellant in its letters, it paid the claim and filed its suit to recover payment. In other words, it is argued that appellant, having breached its agreement to defend against the claim, and appellee having taken steps to defend itself, was not thereafter in a position to rely on other provisions. It is true that appellant took a “hands-off” attitude when appellee was threatened with litigation, was well aware of the fact that settlement of the claim was being considered by Crittenden Abstract 8c Title Company, and subsequently aware that such settlement was made, and it may be that there is merit in this contention. Pertinent authorities are cited to that effect. However, inasmuch as we have found appellant’s arguments on these two points to be without merit, there is no need to discuss the question further.

In accordance with what has been said, the judgment is affirmed.

Appellee requests that this court assess an additional attorney’s fee against appellant, which we grant, and we are of the view that a reasonable fee for services rendered in this court is $1,500.00.

It is so ordered.

      From the record:
      “It is hereby stipulated by and between the attorneys for the plaintiff and Underwriters At Lloyd’s, defendant, that the title of this action shall be amended by substituting as defendant herein, Robert Charles Sells as Lead Underwriter subscribing to Certificate of Coverage No. 30780, in the place and stead of Underwriters At Lloyd’s.
      “It is further stipulated that a final determination or judgment by this Court, or any Court having appellate jurisdiction herein, the right to appeal being expressly reserved, against Robert Charles Sells, a defendant herein, being one of the underwriters at Lloyd’s subscribing to insurance described in Certificate of Coverage No. 30780, shall be binding upon all of the underwriters subscribing to said insurance in respect of their liability thereunder, each for his own proper proportionate part, and not jointly or one for another.”

      The word “not” is obviously a typographical error.


author: George Rose Smith, Justice.

text:
    ARKANSAS STATE HIGHWAY COMMISSION v. Tony CHRISTELLO et ux
    73-170
    502 S.W. 2d 494
    Opinion delivered December 17, 1973

      Thomas B. Keys and Billy Pease, for appellant.

      Ralph Robinson, Tom Harper, and Carl Creekmore, for appellees.
   George Rose Smith, Justice.

This is a condemnation case. The highway department, by a declaration of taking filed on January 26, 1965, took a strip of about 12 acres across a 52-acre tract owned by the appellees, Tony Christello and his wife. The jury fixed the landowners’ compensation at $20,000. In substance the appellant argues two points for reversal, both being based upon the trial court’s refusal to strike testimony offered by the landowners.

The tract in question lies near the city of Alma and, according to all the abstracted testimony, is best suited to be used as a residential subdivision. T. J. Van Zandt, one of the landowners’ expert witnesses, testified that the value of the tract before the taking was $125,000, “assuming all utilities except sewer were available to the property.” On cross-examination the witness admitted that he did not know what it would cost to make the utilities available to the property, since he was not an engineer. It is now insisted, in view of that admission, that the condemnor’s motion to strike Van Zandt’s testimony should have been sustained.

Upon the record we cannot sustain that contention. Van Zandt did not assume that utility lines had been installed throughout the interior of the 52-acre tract. He merely assumed that utility services had been run “to the acreage,” where they would be available to the tract. When Van Zandt so testified there was already in the record ample proof to indicate to the jury that the various utility services (except sewer lines, which the witness also excepted) were in fact available at the border of the tract on the date of the condemnation. In the light of that proof the trial court was right in refusing to strike Van Zandt’s value testimony.

The appellant’s second contention is that the court should have stricken the testimony of Christello and that of his two expert witnesses, because they all “used small lot sales to establish the value of a large tract of land containing raw acreage.”

This contention, too, must be rejected. To begin with, the land was not raw acreage in the sense that the witnesses arrived at their estimates of value by multiplying the worth of individual lots in a fictitious subdivision that existed only upon a paper plat. That method of evaluation was disapproved in Ark. State Highway Commn. v. Watkins, 229 Ark. 27, 313 S.W. 2d 86 (1958). Here the subdivision was not imaginary. From the testimony the jury was warranted in finding that Christello, at least five months before the highway department itself knew where the proposed interstate highway would be located, began in good faith to develop the tract in question as a subdivision. He spent $2,500 in having the area cleared, surveyed, and platted. He obtained estimates of cost with regard to gas and water pipe lines, ditching, and concrete streets. He sold two lots and options upon several others. Upon the proof it cannot be said that the proposed subdivision existed only on paper.

Moreover, the three challenged witnesses did not base their values solely upon the sale of small lots. We discuss only Christello’s testimony, since he was the least qualified witness of the three. Christello had lived in Alma for 30 years and had owned land within and without the city, including all the land for at least a mile along both sides of a state highway abutting the tract now in dispute. Christello had developed and sold, lot by lot, another residential subdivision that was, at its closest point, only 200 yards from the subdivision now in issue. He testified that those lots, comprising about half an acre each, sold for from $1,000 to $1,200 each. Both he and his engineer stated that the first subdivision was situated upon low land and was therefore less desirable than the second one, which Christello described without contradiction as ‘‘the best piece of land for development that there is anywhere near Alma.”

Christello’s plat of his second subdivision showed a total of 27 residential lots, but he did not attempt to arrive at a value of the tract as a whole on the basis of those lots. To the contrary, at no point in his testimony did he ever assign any value to the lots as such. Instead, he testified that the 52-acre tract as a whole had a value of $107,500, which he reduced to a valuation of $2,115 an acre. His testimony that for many years there had been no sales in the vicinity of comparable large tracts is not disputed. Although he and his two expert witnesses fixed his damages at from $45,750 to $59,500, the verdict was for only $20,000. We find in the record no error that would justify our setting the verdict aside.

Affirmed.


text:
    Roy HILL v. STATE of Arkansas
    CR 73-120
    502 S.W. 2d 649
    Opinion delivered December 17, 1973
    [Rehearing denied January 21, 1974.]

      Harold L. Hall, for appellant.

      Jim Guy Tucker, Atty. Gen., by: O. H. Hargraves, Deputy Atty. Gen., for appellee.
   George Rose Smith, Justice.

Charged with first degree murder, the appellant Hill was convicted of second degree murder and was sentenced, as a habitual offender, to imprisonment for 26 years. He argues two points for reversal.

It is first contended that the trial court erred in allowing the State to introduce hearsay evidence. Hill and the decedent, Coy Daniels, had been neighbors in Dallas, Texas. In September, 1972, Hill, with his own family and three of Daniels’ children, moved to North Little Rock, where Hill rented a house. A day or two later Daniels came to North Little Rock and drove to Hill’s house at about four o’clock in the morning. When Daniels was seen, someone turned off the lights inside the house; but Daniels walked in the front door and turned on a light in the living room. Within a few moments Hill shot and killed Daniels, with a shotgun. Hill’s theory of the case was that he acted in self-defense.

The State called as a witness Mrs. Joel Lester, who had known the Daniels family in Dallas before she moved to North Little Rock. The court permitted Mrs. Lester to testify that at about 7:30 or 8:00 o’clock on the evening before the homicide Daniels had telephoned Mrs. Lester (apparently from Dallas) and had said that he was going to come and get his children and put them back in school.

Mrs. Lester’s testimony was admissible, as tending to show that Daniels’ mental state was not one of hostility toward Hill when Daniels went to Hill’s house. We have admitted similar statements by the victim of a homicide as part of the res gestae. Sullivan v. State, 171 Ark. 768, 286 S.W. 939 (1926); Spivey v. State, 114 Ark. 267, 169 S.W. 949 (1914). It is really more accurate to say that such statements are admissible as an exception to the hearsay rule. Morgan, Statements Evidencing Mental Condition, 3 Ark. L. Rev. 182 (1949). By analogy, our rule is that when self-defense is in issue, the victim’s uncommunicated threats against the defendant are admissible to show who was the aggressor. Decker v. State, 234 Ark. 518, 353 S.W. 2d 168, 98 A.L.R. 2d 1 (1962); Wilson v. State, 184 Ark. 252, 42 S.W. 2d 378 (1931). Since the accused may prove such uncom-municated statements to show an attitude of hostility, the State may prove uncommunicated statements, such as that made to Mrs. Lester, to indicate a peaceful intention.

We pass to the appellant’s second contention. Hill, testifying in his own defense, admitted three earlier felony convictions. The State’s attorney, in responding to an objection made to his cross-examination of Hill, said to the court: “Your Honor, he has testified that he has been convicted of three felonies, and I intend to show quite a few more things.” The court sustained defense counsel’s objection to the State’s line of questioning.

Defense counsel then asked for a mistrial on the ground that the State’s attorney should not have referred to “quite a few more things.” In denying the motion for a mistrial the court said, apparently to the jury: “I don’t [know] what the statement is that, by the Prosecutor, that he intends to show quite a few more things. You’ll disregard that, because I don’t know what he had in mind. There’s some ambiguity there, but you’ll disregard that statement because it shouldn’t have been made but I don’t think it’s prejudicial because he doesn’t say anything.” When defense counsel pressed his motion for a mistrial the court again made substantially the same statement to the jury.

It is now insisted that the court should have granted a mistrial and that the error was compounded by the court’s statement that “I don’t think it’s prejudicial because he doesn’t say anything.” We find no reversible error. A mistrial should not be granted unless the error is so prejudicial that justice could not be served by a continuation of the trial. Back v. Duncan, 246 Ark. 494, 438 S.W. 2d 690 (1969). This case does not fall in that category. Since the prosecutor’s remark conveyed no information to the jury about the other things that counsel intended to show, we think the court’s admonition that the remark be disregarded was sufficient to correct the error. The court’s additional statement was of course not a comment on the evidence, since the incident involved only a statement by counsel. We consider the court’s remark, that the statement was not prejudicial because he doesn’t say anything, to have been an accurate summation and certainly not so detrimental to the accused as to call for a mistrial or a reversal here.

Affirmed.

Harris, C.J., not participating.


author: Lyle Brown, Justice.

text:
    Jack DAVES v. SEARS ROEBUCK & CO. & The COMMISSIONER of LABOR for the State of Arkansas
    73-169
    502 S.W. 2d 106
    Opinion delivered December 17, 1973

      William M. Stocks, for appellant.

      Herrn Northcutt, for appellees.
   Lyle Brown, Justice.

This is an appeal from the denial of unemployment compensation benefits. The local agency for unemployment compensation at Ft. Smith denied the claim; that action was appealed to the appeals tribunal, where after a hearing by the referee the claim was again denied; the matter then went to-the board of review and the referee was upheld; and the circuit court affirmed. The single finding upon which denial of compensation was based was that claimant-appellant did not make reasonable efforts to preserve his job rights. The one point for reversal is stated thusly: “The appellant relies upon the fact that had he applied for job preservation rights due to illness under the circumstances of this case, they would have been denied by the employer, that an effort to obtain employment in another department of the same store would not have relieved the circumstances resulting in the condition requiring the job change and that under these circumstances, to require an exercise in futility is unreasonable and not required by the language of the unemployment compensation act”. Succinctly stated, appellant contends that a secondary cause of his illness was the pressure of the sales work and that he was medically advised he should seek employment elsewhere.

Appellant testified that on November 3, 1971, he had an unpleasant verbal confrontation with the store manager and suffered severe chest pains; that he went to a doctor; that his condition was diagnosed as viral upper respiratory illness and hyperventilation syndrome; that he was permitted by the doctor to return to work on November 18, with the admonition that he was to return to the doctor if he had a recurrence. There was shortly a recurrence and claimant says he was advised by the doctor to change his employment because of the history of stress. On November 26, 1971, appellant went to Mrs. Shields, the personnel manager and resigned. Appellant concedes that he made no effort to preserve any job rights because he was not aware of them and also, that it would have been a vain thing to do because he would, as long as he worked in sales, be under the same pressure which contributed to his illness. He further asserted Mrs. Shields should have advised him of any benefits to which he was entitled.

On November 29, 1972, appellant filed a claim for benefits indicating the reason to be “extreme pressure”. The local office of employment security determined that appellant left his work “for reasons other than good cause in connection with the work” and was therefore not entitled to any benefits. Appellant timely filed a petition for appeal to the referee and for his reason stated: “I feel that I had good cause to leave since I was under extreme pressure and my doctor advised that I get away from that job”.

A hearing was conducted pursuant to the appeal on January 5, 1972. Appellant stated that he discussed his physical problems with Mrs. Shields on November 26, the day he resigned. “I did not ask for leave of absence and I did not request transfer to other work with Sears.” A letter from appellant’s doctor was introduced:

Mr. Daves was seen initially by myself in the early part of November because of upper respiratory illness and some chest pain and secondary hyperventilation syndrome. He was evaluated. No serious difficulty was found. His diagnosis was a viral upper respiratory illness and hyperventilation syndrome. Part of his difficulty is secondary to pressure from his work. He returned to work on the 18th of November and had recurrence of his hyperventilation syndrome which was felt to have been due to pressure of his job. It was felt that he should make a change in his employment because of his physical reaction to the stress of his job. It has been recommended that he seek other employment.

Appellant explained that he was a floor salesman, dealing in household appliances of varied types. He attributed the pressure from his supervisors to two principal sources. First, he got a red mark if he sold more than seven percent of “leader merchandise”. “If you sell over seven percent, they put you in the shoe department or move you out of the department. I mean just constantly threatening you all the time to move you to a lesser job.” The other source of pressure he described as pertaining to the sale of service contracts. Of the 100% of his sales of appliances he said he had to sell 60% service contracts on those items “or you’d be threatened to move you into the grease pit or something like that or move you out someplace else where less desirable work was accomplished, compatible to the type work that I do”. He related that the described pressures developed during the last year he worked. He also said the pressures were standard to all Sears’ salesmen.

Appellant testified he did not ask Mrs. Shields for transfer to another job because selling was the type of work in which he had years of experience. He said he did not ask for a leave of absence because the doctor had recommended he get out of the pressured job and get into some other type selling. He reiterated he was not offered a transfer or a leave of absence.

Mrs. Shields testified for Sears. She said there were seven other salesmen in appliances who work under the same conditions as appellant. The tenure of other salesmen ran 24, 15, and 12 years, down to less than a year. She explained that Sears tried to keep the sales up “and Jack (appellant) was the low man in sales and maintenance agreements, so I’m sure he did feel more pressure than some of the others”. She stated that the company granted leaves for illness, and tried to grant permission to transfer whenever requested. She said appellant did not ask for leave at the time he resigned and as to transfer, “he stated he would not be interested working in another department”. She related that appellant gave as his reason tor quitting, “that the job interfered with his health, according to his doctor”. She testified she subsequently went to appellant’s home to get written permission from him to authorize his doctor to give Sears a statement; that appellant refused to sign such a release; and that the doctor therefore refused to release any information.

Appellant called as his witness a former appliance salesman for Sears. Mr. West generally corroborated appellant with reference to the pressure put on salesmen.

The reteree made a finding that “the claimant voluntarily quit his last work with the above named employer without making reasonable efforts to preserve his job rights prior to quitting. It was not established that the claimant was under any more pressure in his work than other salesmen employed by this employer in the same department. The claimant did not make an effort to preserve his job rights with this employer by requesting transfer to other work, as he felt that the other jobs to which he might be transferred might not enable him to earn the commission he had customarily earned in the household appliance department”. Then the referee cited the only section of law that is applicable to a resolution of this case, being a portion of Ark. Stat. Ann., § 81-1106 (Supp. 1971):

For all claims filed on and after July 1, 1971, if so found by the Commissioner, an individual shall be disqualified for benefits:
(a) If he voluntarily and without good cause connected with the work, left his last work. Such disqualification shall continue until, subsequent to filing his claim, he has had at least 30 days of paid work.
Provided no individual shall be disqualified under this subsection if, after making reasonable efforts to preserve his job rights, he left his last work due to a personal emergency of such nature and compelling urgency that it would be contrary to good conscience to impose a disqualification; or, if after making reasonable efforts to preserve his job rights, he left his last work because of his illness, injury or disability.

The claimant perfected an appeal and a hearing was conducted for the board of review on February 18, 1972. At that hearing appellant appeared with his attorney and the latter examined Mrs. Shields. She was questioned at length about the policy of Sears with reference to leave of absence due to illness. In that respect she stated that Sears has a very liberal policy. It is not necessary that we discuss illness benefits because that is not a part of the unemployment compensation law. To draw unemployment compensation a worker must be able to work and be available for work. Ark. Stat. Ann. § 81-1105 (c) (Supp. 1971). Illness benefits are completely aside from the issue of unemployment benefits which are the subject of this litigation.

Another letter from appellant’s doctor, dated February 15, 1972, was read to Mrs. Shields. In essence it stated that the doctor recommended claimant change jobs within the firm; that his patient felt that would be undesirable because he would be under the same pressure from the same supervisors; that the doctor therefore recommended that appellant change jobs entirely, that is, to another company. Mrs. Shields testified that had Sears been presented with the letter, it would have granted sick leave, and had appellant requested it, he would probably have been granted a different job within the firm. In fact, she stated there was an opening in home improvement sales on November 26, 1971, concerned with selling air moving equipment, such as cooling, heating and plumbing, at which job appellant could have made more commission.

The board of review sustained the findings of facts and conclusions of law made by the referee. That finding was affirmed by the circuit court on appeal.

In deciding these cases we follow the substantial evidence rule. Terry Dairy Products Co. v. Cash, 224 Ark. 576, 275 S.W. 2d 12 (1955). It is undisputed that appellant made no effort to preserve any job rights, such as a request for transfer to another department. We reiterate: we are not here adjudicating any right to illness benefits because that benefit is a matter between employer and employee based on the policy of the company; it is not a right granted by the unemployment compensation act.

I

Affirmed.


author: J. Fred Jones, Justice.

text:
    Eloise P. DeWEESE et al v. Milton Nevil WILLIAMS et al
    73-164
    502 S.W. 2d 94
    Opinion delivered December 17, 1973

      Haley dr Claycomb, for appellants.

      Lawrence Blackwell, for appellees.
   J. Fred Jones, Justice.

This appeal is from a chancery court decree partitioning 157 acres of Jefferson County land among the descendants of Louisa J. Williams who died intestate in 1898. It is admitted by all concerned that Warren E. Williams was a surviving child and lawful heir of Louisa J. Williams. This case turns on the question of whether Ida V. Williams West was also a child and heir at law of Louisa J. Williams, or whether she was only a foster child reared in the Williams home. The chancellor found that Ida was also a child and lawful heir of Louisa J. Williams and shared equally with Warren in Louisa’s estate.

Warren E. Williams died intestate in September, 1942, and left five children, Birdie W. Parker, Milton Ne-vil Williams, Mabel W. Seamans, Idell W. Bussey and Warren Edgar Williams, Jr., as his sole surviving heirs. Ida Williams West died intestate in 1953 and left one daughter, Ñola W. Fetsch, as her sole surviving heir at law. Birdie W. Parker died intestate in September, 1969 and left surviving her husband, I. V. Parker, and four children, Eloise P. DeWeese, Virginia P. Calaway, Walter C. Parker and Dorothy M. Parker, as her sole surviving heirs at law. Dorothy died in 1971 leaving only her father, I. V. Parker, as her sole surviving heir.

Milton Nevil Williams has been in possssion of the property here involved for a number of years and on April 22, 1958, he was appointed guardian of the person and estate of his .brother, Warren E. Williams, Jr., who was mentally incompetent. On August 11, 1970, under a probate court order authorizing a private sale, he executed a guardian’s deed conveying an undivided one-tenth interest in the described real estate to his sisters, Mabel W. Seamans and Idell W. Bussey. On June 16, 1971, Mabel W. Seamans conveyed all her undivided interest in the land to Milton by warranty deed, and on February 3, 1970, Milton obtained a quitclaim deed from Nola Fetsch conveying to him all her interest in the land as the sole surviving heir of Ida Williams West and Milton now claims a three-fourths undivided interest in the property.

This action was commenced on August 4, 1971, when the above named heirs of Birdie Parker filed petition for a partition of the property naming the remaining Williams heirs as parties defendant. They alleged that the property descended from Louisa J. Williams to her only child, Warren E. Williams, and through him to the Williams heirs including their mother, Birdie Williams Parker, in undivided one-fifth interests. They alleged that when their mother, Birdie Parker, died intestate, they inherited her one-fifth undivided interest in the property; that they each own an undivided one-fourth interest in the undivided one-fifth interest in the property owned by their mother subject to the curtesy rights of their father, I. V. Parker. The petition alleged that the parties had never been able to agree on a division of the property since the death of Birdie W. Parker, and alleged that Milton had wrongfully used and occupied the premises for his own personal use and in partnership with others since August, 1956. They alleged that they were entitled to an accounting for fair rental value, the timber harvested and government payments received. They prayed for a partition in kind or in the alternative that the property be sold and the proceeds divided according to the interests of the parties.

Milton filed an answer admitting the relationship of the parties and the death and intestacy of Birdie W. Parker as alleged in the petition. He admitted the petitioners are each entitled to one-fourth of the interest owned by Birdie W. Parker. Milton alleged, however, that Louisa J. Williams died intestate on August 4, 1898, survived by two children, Warren E. Williams and Ida V. Williams West, as her sole surviving heirs at law. He alleged that Ida V. Williams West died intestate on June 3, 1953, leaving one child, Nola Fetsch, as her sole surviving heir at law. He alleged that by inheritance and purchases he became the owner of an undivided three-fourths interest in the property described in the petition and that he acquired such interest as follows:

“By inheritance from Warren E. Williams, an undivided 10%. By purchase from Nola West Fetsch, sole heir at law of Ida Williams West ... an undivided 50%. By purchase from Mabel W. Seamans ... an undivided 15%.”

Milton then alleged that no demand for rents had ever been made and denied that any timber had been harvested from the land except when damaged by fire or ice. He then alleged improvements to the land in the amount of $11,500, taxes paid in the amount of $903.10 and prayed that these expenditures be taken into consideration in the event of partition. He then alleged that he, together with Birdie Parker and Mabel Seamans, had previously conveyed their interest in other lands to Idell W. Bussey by quitclaim deed with a provision in the deed that the conveyance should be taken into consideration in determining Mrs. Bussey’s interest in the lands here involved at the time of division of the estate properties of Warren E. Williams, deceased, and he prayed that this be done. The petitioners filed a reply to the affirmative allegations of Milton in which they specifically denied that Louisa J: Williams was survived by "two” children. They denied that Ida was a child or heir of Louisa J. Williams by birth or adoption and they joined issues with Milton’s allegations of improvements.

As already stated, the chancellor found that Ida V. Williams West was the daughter of Louisa J. Williams and John J. Williams, and that upon the death of Louisa J. Williams the title to the property passed to Warren E. Williams and Ida V. Williams West as tenants in common, with each of them owning an undivided one-half interest in the property. The chancellor found the interests of the parties in the property to be as follows:

"Idell W. Bussey, an undivided 15%.
Milton N. Williams, an undivided 75%.
Walter C. Parker, an undivided 2.5%.
Eloise P. DeWeese, an undivided 2.5%.
Virginia P. Calaway, an undivided 2.5%.
I. V. Parker, an undivided 2.5%.”

The chancellor then ordered a partition of the property according tq the interests found, and appointed Commissioners with directions to determine whether the property is subject to division in kind or should be sold and the proceeds divided. He then reserved the other issues for determination pending the report of the Commissioners.

On their appeal to this court, the Parker heirs first contend that the chancellor committed five specific errors pertaining to the admission and exclusion of documentary evidence. They next contend the chancellor’s finding that Ida V. Williams West was a daughter and surviving heir of Louisa J. Williams was against the preponderance of the evidence. We agree with the appellants on this second contention, so we consider it unnecessary to discuss the admissions and exclusions of the evidence under the appellants’ first contention.

The oral testimony of all the parties and the witnesses pertaining to the relationship of Ida V. Williams West to Louisa J. Williams, was simply based on their understanding and belief favorable to their side of the issue and we consider it unnecessary to set out the testimony in detail. The Parker heirs and their witnesses testified that they had always considered, understood and believed Ida to be an unrelated foster child reared in the home of Louisa J. Williams as one of the family and that she was never an heir at law of Louisa J. Williams,, either by blood or adoption. Milton and the other Williams heirs and their witnesses testified that they had always considered, understood and believed that Ida was a child and heir of Louisa J. Williams; that she was a blood sister to Warren E. Williams and shared equally with him in the estate of Louisa J. Williams. Both sides introduced ancient letters and documentary evidence in support of their respective understandings and beliefs. The appellee Williams heirs offered numerous ancient family letters, census reports, funeral attendance records, autograph books, etc. in which Ida was addressed or referred to as daughter, sister or cousin. All of this evidence indicates that Ida was considered, loved and accepted as a member of the Williams family by all parties concerned, but it falls far short as proof of legal relationship by blood or adoption to Louisa J. Williams. The Parker heirs also offered considerable documentary evidence in support of their own contentions and tending to impeach the credibility of Milton’s testimony and that of his surviving sisters to the effect that they had always considered and believed Ida to be their blood aunt by birth as the daughter of Louisa J. Williams. The most cogent evidence as to Ida’s relationship, or lack of relationship, to Louisa J. Williams is contained in a letter written to Birdie Parker in Ida’s own handwriting on May 9, 1943. This letter was introduced into evidence without objection and its authenticity is not questioned. Its importance to our decision, however, justifies a few words of background for the context in which it was written.

It is clear from the record that in the mid 1930’s Warren E. Williams mortgaged the property here involved to Taylor 8c Company as security for a loan and the indebtedness had not been paid at the time of his death. The record indicates that Taylor 8c Company wrote several letters to Milton as well as to his sister, Birdie Parker, concerning the indebtedness. The letters brought no response from Milton but Mrs. Parker did respond and under veiled threats of foreclosure in 1943, she paid the balance due on the mortgage indebtedness. It is apparent from the record that Mrs. Parker was concerned about the possibility of losing the property through foreclosure but also questioned the wisdom of making payments for the benefit of all the heirs and she corresponded with Ida in connection with the matter. The letter from Ida to Mrs. Parker, above referred to, reads in part as follows:

“Well, honey, I just don’t know what to say or how to say it. Yes I think that you or someone will have to take hold of the problem, for things can’t wait always. Yes, Taylor 8c Company can foreclose or force a sale most any time. I think they have been mighty nice as it is. I sure hope things will work out o.k. You be sure you always get receipts for things you pay 8c keep them, or dates and copies of them, if U have to give others receipts. . . .
Be sure you keep in the law in it all. I think Christopher would be a good guide for U. Yes, I know that W.E. would say keep the old home at any cost. I say so too. I don’t know weather [sic] to say this or not. But if things get messed up too much U know, (it might be that I could come in for V2 of that. If the records show that I was adopted. It would■ be about 1877 or near that. I don’t want a thing. But if need be it might help.) C. don’t mention this to anyone.
Yes, I would pay the mortgage off, and hold it, and interest, till I got mine. I sure hope it don’t pass into other hands.
You know that is about' the best farm around there and a lot of the very best ground has been allowed to grow up in brush, along the road across the creek; it used to be in cultivation don’t look like it now. Watch it & don’t let anyone else get the mortgage. I hope I am not butting in . . . .” (Our emphasis in parenthesis added).

This letter from Ida contains the only direct evidence in the record as to the actual relatonship, or lack of it, between her and Louisa J. Williams.

Of course, if Ida had been born as one of the two children of Louisa J. Williams, she wuld have inherited an undivided one-half interest in the property without question, and it is reasonable to assume that the question of adoption for that purpose, would never have occurred to her. When this letter is considered in connection with the Taylor & Company demands for payment directed to Mrs. Parker over a seven year period from 1936 to 1943, it adds credence to the Parker heirs’ belief that Ida was a foster daughter of their great grandmother, Louisa J. Williams, and was not a sister by blood or adoption to their grandfather, Warren E. Williams.

Ida’s marrige license in evidence indicates it was issued in 1908 to G. B. West and Miss Ida Williams, then 31 years of age. But the death certificate dated July 1, 1953, recites that Mrs. Ida West died on June 30, 1953, at the age of 78 years, and recites that on information furnished by Mrs. Ñola Fetsch, the name of Mrs. West’s father was John Williams and the name of her mother was unknown.

In the light of the above letter from Mrs. Ida West, we are unable to overlook as careless errors some of the transactions between the parties. On March 23, 1959, Milton Nevil Williams and two of his sisters, executed a quitclaim deed to their sister Idell W. Bussey, containing the following recitation: “. . .[W]e, Milton Nevil Williams and Eloise Williams, his wife, Birdie W. Parker, and Mabel W. Seamans, Grantors, being all the heirs at law of one W. E. Williams, deceased, except for Warren Edgar Williams, an incompetent, and the Grantee .herein, ... do hereby grant, sell and quitclaim. . . .” (Emphasis added).

We note that in Milton’s verified petition for guardianship filed on April 18, 1958, he represented Warren’s interest in the land as an undivided one-fifth interest, whereas his petition to sell the interest filed on July 30, 1970, and the subsequent sale on Agust 11, 1970, represented that interest as an undivided one-tenth interest. We also note that in the meantime, on February 6, 1970, Milton had recorded a quitclaim deed executed in the state of Missouri on February 3, 1970, by “Nola West Fetsch sole heir of Ida Williams West” conveying to Milton all her right, title and interest in the lands here involved. Milton readily admitted that he paid Mrs. Fetsch nothing for her interest in the land, but he explains that she was simply interested in assisting him in caring for his incompetent brother, Warren.

This case was well tried by the chancellor as well as the attorneys involved, but we disagree with the chancellor as to where the preponderance of the evidence lies. As we view the chancery record in this case on trial de novo, we conclude that the chancellor’s finding that Ida Williams West was the daughter and heir at law of Louisa J. Williams is against the preponderance of the evidence and the chancellor’s decree must be reversed. It is clear that the chancellor left some issues to be determined following the report of the Commissioners he appointed as above set out, so the decree is reversed and this cause is remanded to the chancery court for further proceedings not inconsistent with this opinion.

Reversed and remanded.

Harris, C.J., dissents.

Carleton Harris, Chief Justice, dissenting. I recognize that this is a close case, with some rather convincing items of evidence on both sides, but I certainly cannot say that the findings of the chancellor were clearly against the preponderance of the evidence. We have said on divers occasions that we will not reverse a chancellor unless his findings are clearly against the preponderance of the evidence. See Hampton v. Hampton, 245 Ark. 579, 433 S.W. 2d 149. The reasoning behind these holdings is that the chancellor, who sees the parties and their witnesses, and observes their demeanor while testifying, is in a better position to evaluate the credibility of their testimony.

The majority opinion seems to be mainly predicated on the purported letter written by Ida V. Williams West, but, to me, the letter does not carry the weight, significance, or importance, that is attached to it by the majority.

Let it be remembered that everything that an individual knows about his ancestry is acquired from hearsay evidence; he knows what he has been told; he cannot say of his own knowledge where he was bom or to whom he was born. Whatever Mrs. West thought about her ancestry had to come from other persons. To me, what an older brother or sister, or other close relative, says, is much more persuasive. Here, as will later be discussed, Warren E. Williams, Sr., admittedly a son of Louisa, clearly demonstrated that certainly it was his belief that Ida was his blood sister.

In this case, Mrs: Mabel Seamans, one of the children of Warren E. Williams, Sr., testified that she knew her aunt, Mrs. West, all of her life and that this aunt lived in the Williams home in the early days part of the time. She testified positively that Mrs. West was her father’s blood sister. She stated that she had heard her aunt request many times to be buried at the foot of her mother’s grave, meaning Louisa Williams — and Mrs. West is actually buried there. She also testified that she observed her father’s funeral record, which reflected the relatives attending the funeral and that Mrs. West was listed as a sister. This exhibit was offered in evidence and the entries on the funeral record were placed there by Eloise DeWeese, one of the appellants herein. Milton Nevil Williams testified that he always understood that Mrs. West was his father’s blood sister, and he never had any indication of any other relationship from his father, mother, or aunt. He said the first time that he ever heard anything to the contrary was “drifting words” around 1953 when his aunt died. He also testified that during the football seasons of 1933 and 1934, he lived with this aunt. These two witnesses testified from direct knowledge of the relationship of Ida West to their father, and as Warren Williams, Sr.’s own children, they, it would appear, had a much greater opportunity to know the facts than the grandchildren. Also, to me, the testimony of Mrs. Seamans and Williams was much more convincing for the testimony from appellants was far less positive. For instance, Eloise DeWeese testified that according to her understanding, Warren Edgar Williams was the only child of Louisa J. Williams. Likewise, yirginia P. Calaway, also a granddaughter of Warren E. Williams, Sr., testified that it was her understanding that Ida West was raised by John J. and Louisa Williams, but was not legally adopted. Walter Parker, brother of Mrs. DeWeese and Virginia P. Cala-way, testified that it was his impression that Ida Williams West is a foster daughter.

Certainly there was one person who lived during the lifetimes of these witnesses who should have known his relationship to Ida West and that was Warren Williams, whose every action indicated that she was his sister. On two occasions, Warren and Ida joined in trust deeds dealing with the lands in question; a 1932 deed of trust recited that Warren and wife and Ida V. Williams West were the sole heirs at law of Louisa J. Williams, deceased. Why would Warren E. Williams have his sister join in the execution of these conveyances unless she did in fact bear the relationship of daughter to Louisa Williams and was actually his blood sister? In addition, there were other exhibits which, in my view, clearly establish what Warren E. Williams thought about the matter. A letter was offered, dated December 13, 1908 from Williams to Ida V. Williams (West), wherein he addressed her as “Dear Sis”, and concluded his letter with the expression, “From your Bud, W. E. Williams.” Another exhibit was a “correspondence box”, which was given to Ida by Warren Williams as a Christmas present in 1891. In the bottom of the section containing the ink well, Warren E. Williams inscribed, “To Ida, from her Brother, Warren E. Williams, Christmas, 1891.”

The evidence contains a written communication from Louisa J. Williams to Ida in the form of an entry in an album addressed to “Dear Ida”, and closing with the words “and take what God sends is the wish of your mother, Louisa J. Williams.” There was also an authenticated copy of a Federal Census Report of 1880, that I deem to be admissible, which reflected that Ida was the daughter of John and Louisa Williams and I consider this admissible hearsay relative to the pedigree of the children of the Williams family, since this information had to be given to the census taker by some member of that family.

Without mentioning other items of evidence, suffice it to say that I cannot agree, as originally stated, that the findings of the chancellor were clearly against the preponderance of the evidence. Accordingly, I would affirm the decree.

      Warren E. Williams was thirteen years older than Ida.

      See Ark. Stat. Ann. §§ 28-931 and 28-932 (Repl, 1962).

      Ida was five years of age at the time of the census.


text:
    WHOLESALE APPARELS, Inc., Douglas PARRISH and Floyd McCANN v. HUBBARD PANTS COMPANY
    73-174
    502 S.W. 2d 453
    Opinion delivered December 17, 1973

      House, Holmes ir Jewell, for appellants.

      W. J. Walker, for appellee.
   J. Fred Jones, Justice.

This is an appeal by Wholesale Apparels, Inc., Douglas Parrish and Floyd McCann from a joint and several circuit court judgment rendered in favor of Hubbard Pants Company on an account for merchandise sold to Wholesale Apparels, Inc. with payment personally guaranteed by Parrish and McCann.

The background facts appear as follows: Parrish and McCann organized a new corporation under the name of Wholesale Apparels, Inc. The new corporation having little, if any, net worth contemplated business operations which necessitated acquiring on credit a stock of goods for resale. The corporation, in order to acquire such merchandise for resale, sought credit from various suppliers, one of whom was the appellee, Hubbard Pants Company. The Hubbard Company, before extending credit to the corporation, required a personal guaranty agreement from Parrish and McCann. On July 27, 1970, Parrish and McCann arranged for the purchase of merchandise from Hubbard Pants Company and delivered to Hubbard an agreement which reads as follows:

“We agree to personally indemnify your Company on any balance owed your Company by Wholesale Apparels, Inc. located in Little Rock, Arkansas.”

In reliance upon this agreement, Hubbard advanced credit to Wholesale Apparels, whose unpaid balance on account finally amounted to $14,487.89. When Hubbard pressed for payment of this balance, Mr. Parrish, as president of Wholesale Apparels, wrote a letter to Hubbard Company on September 8, 1971, advising that Wholesale had not had sufficient sales to meet its obligations; admitting that it owed to Hubbard Company a balance of approximately $15,000, and inquiring if Hubbard Company would accept $4,500 as payment in full. Hubbard refused this offer and on November 19, 1971, it filed its suit praying a joint and several judgment against Wholesale Apparels, Inc. and Douglas Parrish and Floyd McCann as guarantors.

On appeal to this court the appellants contend that there is no substantial evidence to support the trial court’s finding that the guaranty agreement executed by Parrish and McCann was an unlimited and continuing agreement. They argue that their agreement was only intended to cover the balance due on the initial purchase and was not intended to apply to balances due on subsequent purchases. According to the testimony of the credit manager for Hubbard Company and a copy of invoice sent out on July 31, 1970, the credit balance on the initial purchase amounted to only $121.20, and this amount was subsequently paid. Sheets from the ledger maintained by Hubbard Company were introduced into evidence and show numerous entries of charges and credits between July 51, 1970, and June 30, 1971, and the balance on the account in the amount of $14,487.89 is not questioned.

The only question on this appeal is whether there is any substantial evidence to sustain the trial court’s finding that the guaranty agreement was entered into with the intention and for the purpose of guarantying the payment of the corporate account over the entire period involved in this case, or whether it was intended to cover only the initial transaction as contended by Parrish and McCann.

Following several entries on the ledger sheets above referred to, there is shown an account balance, as of November 10, 1970, in the amount of $4,338.50. On that date Mr. Parrish wrote a letter to Hubbard Company confirming a previous telephone conversation in relation to one of the stores owned and operated by Wholesale Apparels. The letter advised that 50% of the stock in Wholesale Apparels was owned by Mr. Parrish and 50% by Mr. Mc-Cann, and the letter then reads in part as follows:

“This being a new Corporation and starting with a small net worth, Douglas Parrish and Floyd McCann have personally endorsed any liabilities of this company to the Hubbard Company. This endorsement should be in your credit files. # # #
The stated balance of $5,025.25 in your letter of November 2 agrees with our records. ...”

We are of the opinion there is substantial evidence to support the trial court’s finding.

The judgment is affirmed.

Harris, C.J., not participating.