text:
    Harry SCOGGINS v. STATE of Arkansas
    CR 75-113
    528 S.W. 2d 641
    Opinion delivered October 27, 1975

      Ralph W. Robinson, for appellant.

      Jim Guy Tucker, Atty. Gen., by: Terry Kirkpatrick, Asst. Atty. Gen., for appellee.
   J. Fred Jones, Justice.

Harry Scoggins was convicted of larceny by bailee at a jury trial in the Crawford County Circuit Court and was sentenced to the penitentiary for a period of one year in accordance with the jury verdict. On appeal to this court Scoggins has designated the following points on which he relies for reversal:

“1. The Trial Court erred in overruling defendant’s demurrer.
2. The Trial Court erred in permitting the Prosecuting Attorney to amend the information at the beginning of the trial to change the date of the alleged offense from January 17th to January 22, 1975.
3. The Trial Court erred in refusing to grant defendant a continuance after preparation of his defense was in conformity with the original charge.
4. The Trial Court erred in permitting appellant to be tried on a felony when there was no allegation in the information that an amount had been taken in excess of $35.00 which would have been necessary to charge a felony.
5. The Trial Court erred in violating defendant’s constitutional rights by admitting into evidence a statement taken from the appellant without his having been warned that he did not have to incriminate himself and which statement was turned over to the Prosecuting Attorney for prosecution immediately and on the same date with charges being filed the next day.
6. The Trial Court erred in permitting evidence of value of goods taken when there was no allegation of value in the information.
7. The Court erred in refusing to give appellant’s requested instruction No. 3.”

We find no merit in the appellant’s assignments 2, 3 and 5.

The trial court permitted a change in the information to allege the offense was committed on January 17 rather than January 22 as originally alleged in the information and refused to grant a continuance because of the change. Under Ark. Stat. Ann. § 43-1015 (Repl. 1964) a statement in the information or indictment as to the time the alleged offense was committed is not material, further than as a statement that it was committed before the time of finding the indictment, except where the time is a material ingredient in the offense. See Crabtree v. State, 238 Ark. 358, 381 S.W. 2d 729 (1964). The granting of the appellant’s motion for continuance was within the sound discretion of the trial court and we find no abuse of his discretion under the facts in this case. See Thacker v. State, 253 Ark. 864, 489 S.W. 2d 500 (1973) and cases there cited.

The appellant’s contention under his fifth point is likewise without merit. The statement made by appellant which was admitted into evidence was made to a private investigator who questioned the appellant concerning grain feed losses sustained by the appellant’s employer. Such statement when so made does not fall within the protection against self-incrimination under the Fifth and Fourteenth Amendments to the United States Constitution as set out in Miranda v. Arizona, 384 U.S. 436 (1966) and as argued by the appellant. The Miranda decision is cited more often than it is quoted, but in that case the court said:

“Our holding will be spelled out with some specificity in the pages which follow but briefly stated it is this: the prosecution may not use statements, whether exculpatory or inculpatory, stemming from custodial interrogation of the defendant unless it demonstrates the use of procedural safeguards effective to secure the privilege against self-incrimination. By custodial interrogation, we mean questioning initiated by law enforcement officers after a person has been taken into custody or otherwise deprived of his freedom of action in any significant way.”

In the case at bar the appellant was not in custody and he gave his statement to the agent employed by his employer in an effort to find out what was going, with the grain involved in this case. No questions were initiated by law enforcement officers in connection with the appellant’s statement and he was not deprived of his freedom of action in any significant way at the time his statement was made.

Returning now to appellant’s contentions under the other points he has raised, we conclude that the trial court erred in putting the appellant to trial for a felony (grand larceny) under the information as drafted. The information under which the appellant was charged is not abstracted but it simply charged him with “the crime of Larceny by Bailee committed as follows, to-wit:

The said Harry Scoggins in the County and State aforesaid on the 17th day of January, 1975, did unlawfully and willfully
obtain lawful possession of feed belonging to the O K Feed Mills, Inc. from the farm of Odell Shores and thereafter knowingly converted said feed to his own use contrary to the conditions under which the same shall have been obtained. Said act was in violation of Ark. Stat. Ann. 41-3929 ”

The proof was to the effect that Scoggins was a delivery truckdriver for O K Feed Mills, Inc. who furnished chicken feed in truck load lots to broiler producers and, when feed was left over at the broiler houses, upon feeding out or the sale of the broilers, it was part of Scoggins’ duties to pick up the surplus feed and deliver it back to his employer’s warehouse. The evidence is to the effect that Scoggins went into the hog raising business on a fifty-fifty profit sharing basis with another individual, and that he converted his employer’s feed to the hog production operation.

Ark. Stat. Ann. § 41-3929 (Repl. 1964) under which the appellant was charged in the information provides as follows:

“Any person who shall lawfully obtain possession as bailee of any money, goods, vehicle, aircraft, chose in action, or property of any character or description including farm produce and livestock, whether or not such possession was obtained gratuitously or for a consideration, who shall thereafter knowingly receive, dispose of, conceal, convert, keep, or use said property as above described contrary to the provisions of the agreement or conditions under which the same shall have been obtained, shall be deemed guilty of larceny to the degree depending upon the value of the property involved as fixed by law, and upon conviction thereof shall be punished as in cases of larceny.”

Ark. Stat. Ann. § 41-3901 (Repl. 1964) defines larceny as the felonious stealing, taking and carrying, leading, riding or driving away the personal property of another, and the penalty for larceny as set out in § 41-3907 is as follows:

“Whoever shall be guilty of larceny when the value of the property stolen exceeds the sum of Thirty-five ($35.00) Dollars, upon conviction thereof, shall be punished by imprisonment in the penitentiary not less than one [1] nor more than twenty-one [21] years. And when the value of the property stolen does not exceed the sum of Thirty-five ($35.00) "Dollars, by imprisonment in the county prison or municipal or city jail not more than one [1] year, and shall be fined in any sum not less than Ten ($10.00) Dollars nor more than Three Hundred ($300.00) Dollars.”

Thus, it is seen that the larceny of property in value of more than $35 constitutes grand larceny or a felony, and if the value is less than $35, the crime is petit larceny which is a misdemeanor.

In the case of Kightlinger v. State, 105 Ark. 172, 150 S.W. 690, the defendant was indicted, convicted and sentenced to imprisonment in the penitentiary for a term of six months for selling certain property upon which a mortgage lien existed. The appellant was indicted under a statutory provision which made it an offense for any person to sell or otherwise dispose of any property on which certain liens existed, among them a lien created by virtue of a mortgage, with intent to defeat the holder thereof in the collection of his debt secured thereby, it was further provided in the Act that a person convicted of such an offense should be deemed guilty of a felony where the debt secured by such lien exceeds the sum of $10, and the property so sold or otherwise disposed of exceeded in value the sum of $10. The Act provided that where the debt secured by the lien did not exceed the amount of $10, or where the property sold or otherwise disposed of did not exceed the sum of $10, then the person should be deemed guilty of a misdemeanor. The indictment in the Kightlinger case simply alleged, in apt and comprehensive language, that the defendant had sold certain property which was therein described, upon which a lien existed by virtue of a certain chattel mortgage executed by him, and that such sale was made without the consent of the mortgagee; but the indictment did not allege the value of the property which was sold nor the amount of the debt secured by the mortgage. The defendant interposed a demurrer to the indictment but the demurrer was overruled by the trial court. In reversing the judgment of the trial court, this court said:

“Under the provisions of the above statutes, the defendant could be guilty of a felony only where the property disposed of exceeded in value the sum of $10 and the debt secured by the mortgage exceeded in amount the sum of $10. The value of the property disposed of and the amount of the debt secured by the mortgage are therefore, of the very essence of the offense of which defendant was convicted. The offense is a graded crime, and the value of the property and the amount of the debt are elements in the punishment thereof.
When value is an element in the punishment of an offense, it must be alleged in the indictment, and it is immaterial what the crime is. Thus, in cases of larceny, the value of the article stolen must be alleged unless the statute makes the stealing of a particular thing itself a felony. Houston v. State, 13 Ark. 66; Ware v. State, 33 Ark. 567; Walker v. State, 50 Ark. 532; Shappard v. State, 42 Ala. 531; Davis v. State, 40 Ga. 229; Rapalje on Larceny and Kindred Offenses, § 109; 1 Bishop’s New Crim. Proc., §§ 541, 567; 12 Enc. Pl. & Prac. 996. Every indictment, for whatever offense, must set out all the facts which in law may influence the punishment for the commission thereof. The principle is thus stated in 2 Bishop’s New Crim. Proc., § 48: ‘If the punishment to be inflicted is greater or less, according to the value of the property, the value must be stated in the indictment, because every indictment for whatever offense must set out every fact which the law makes an element in the punishment thereof.’ 1 Wharton, Crim. Law, § 1003; Bishop on Stat. Crimes, § 427.
The punishment fixed for the crime of selling mortgaged property is influenced by and dependent upon the value of the property sold and the amount of the debt secured by the mortgage thereon, and these facts must necessarily be set out in the indictment in order to charge an offense under the above statutes.
It follows that the court erred in overruling the demurrer to the above indictment. For this error the judgment is reversed, and this cause is remanded with directions to sustain the demurrer to said indictment and for further proceedings.”

It is true, as stated by the state in its brief, that Ark. Stat. Ann. § 43-1006 (Repl. 1964) provides the language of an indictment must be certain as to the title of the prosecution, the name of the court in which the indictment is presented, and the name of the parties, and that it shall not be necessary to include statement of the acts constituting the offense unless the offense cannot be charged without doing so; that it also provides for a bill of particulars setting out the act or acts upon which it relies for conviction, when requested to do so. The state then cites Underwood v. State, 205 Ark. 864, 171 S.W. 2d 304 (1943) for the proposition that it was not necessary to state the value of the property stolen in an information charging the commission of grand larceny. The information in Underwood did charge grand larceny and we did point out in that case that grand larceny is not defined or distinguished from petit larceny by statutory definition, but that the statute merely provides different punishment; a felony penalty in cases where the value of the property stolen is more than $10 (Now more than $35), and a misdemeanor penalty where the value is less than $10 (now less than $35). We pointed out in Underwood that the theft of property of such value to incur the felony penalty has been designated by court opinion as grand larceny and the theft of property of the lesser value designated petit larceny. In other words, in Underwood we held, in effect, that since grand and petit larceny have been so well and so long defined and distinguished as felonies and misdemeanors. by judicial decision, the charge of grand larceny in an indictment or information charges theft of such value to constitute a felony and such charge without stating value is good on demurrer.

It is true that the appellant in the case at bar could have ascertained by bill of particulars whether he was being charged with a felony or a misdemeanor under the statute, but we are of the opinion that since the value of the property involved went to the essence of the charge in the case at bar, the duty was on the state to properly advise the appellant as to whether he was charged with a misdemeanor or a felony before requiring him to plead to the charge.

Ark. Stat. Ann. § 43-1009 (Repl. 1964) provides that:

“An indictment, except in cases mentioned in the next section, must charge but one offense, but, if it may have been committed in different modes, and by different means, the indictment may allege the modes and means in the alternative.”

Section 43-1010 provides for the joinder of offenses but grand larceny and petit larceny charged under the single charge of larceny is not among them. A very practical reason why the burden is on the state to either charge grand larceny, or petit larceny, or state the value of property taken, or otherwise couch the information in terms that would advise the accused of whether he was charged with grand or petit larceny before he is required to plead to the indictment or information, is that the accused might desire to plead guilty to a mere misdemeanor carrying a maximum penalty of $300 and one year in the county or city jail, whereas, he would desire to put the state on its proof where the maximum penalty is 21 years in the penitentiary.

It only follows from the statutorily graded offense of “larceny” that an information simply charging the accused with the crime of “larceny” would of necessity include the lesser of the two grades, petit larceny, but might or might not include the greater grade, grand larceny. Consequently, such information would be good on demurrer as to the lesser offense, petit larceny.

It is, of course, elementary law that a charge of grand larceny carries with it and includes the lesser offense of petit larceny, but a charge of petit larceny does not carry with it and include the offense of grand larceny. An accused may be convicted of the lesser offense under proper instructions when charged with the greater offense, but he cannot be convicted of the greater offense (a felony) when only charged with the lesser offense (a misdemeanor). An accused must be charged with a felony before he is convicted of having committed one.

We conclude, therefore, that the trial court erred in permitting the appellant to be put to trial on a felony when he was not charged with having committed one.

The judgment is reversed and the cause remanded.


source: Caselaw Access Project

author: Conley Byrd, Justice.

license: Public Domain

text:
    George C. KELL, Jr., et ux v. BELLA VISTA VILLAGE PROPERTY OWNERS ASSOCIATION
    75-143
    528 S.W. 2d 651
    Opinion delivered October 27, 1975

      Ralph C. Williams, for appellants.

      Little, Lawrence, McCollum & Mixon and Smith, Williams, Friday, Eldredge & Clark, for appellee.
   Conley Byrd, Justice.

This litigation arises out of the covenant assessments contained in the bill of assurance of a planned community development for the maintenance and operation of specified common properties developed for the use and benefit of all property owners in the platted area. The litigants are the appellants, George C. Kell, Jr. and Sharon A. Kell, his wife, property owners, and the appellee, Bella Vista Village Property Owners Association, a non profit corporation organized to act as trustee for the property owners. The matter was submitted to the trial court upon the pleadings and the testimony of John A. Cooper, Jr. and James A. Hatcher. The trial court held the assessments valid and secured by a continuing lien upon the land. Based upon that holding the trial court entered a judgment foreclosing the delinquent and unpaid assessments in favor of appellee. For reversal, the appellants raise the issues hereinafter discussed.

POINT 1. Appellants here contend that since the property constituted their homestead under Article 9, § 3 of the Constitution of Arkansas, their property is not subject to the lien of the assessments. The particular section of the declaration in the bill of assurance, which is challenged, provides:

“... The annual and special assessments, together with such interest thereon and costs of collection thereof as hereinafter provided, shall be a charge on the land and shall be a continuing lien upon the property against which each such assessment is made.”

The foregoing language is equally as strong and specific as a mortgage provision extending the lien thereof to future advances, and we can see no reason why the language employed should not be considered as creating a continuing lien on the property for future assessments.

POINT 2. The appellants here argue that they are not bound to pay the annual assessments because the covenant does not run with the land. We find no merit in this contention. See Neponsit Property Owners’ Ass’n v. Emigrant Industrial Sav. Bank, 278 N.Y. 248, 15 N.E. 2d 793, 118 ALR 973 (1938). Furthermore, the proof here shows that the common properties to be maintained add a value to each lot or living unit subject to the covenants.

POINT 3. Even though the record shows that the lien created by the bill of assurance was recorded, the appellants argue that they are not bound by the lien created thereby because they were not orally advised that such a lien existed. We find no merit to this contention. See Ark. Stat. Ann. § 16-114 (Repl. 1968), which makes the recording of such instruments constructive notice to all persons.

POINT 4. Appellants contend that the covenant constitutes a perpetuity contrary to Article 2, § 19 of the Constitution of Arkansas. The bill of assurance provides that the assessment covenant will remain outstanding for a term of 26 years and for successive ten year periods thereafter, until an instrument is signed and recorded by the then owners of two thirds of ¿he lots or living units. We find no merit to this contention. See Lowry v. Norris Lake Shores Development Corporation, 231 Ga. 549, 203 S.E. 2d 171 (1974). There is nothing here which keeps the property from vesting.

POINT 5. Under Article III, Section 2 of the declaration in the bill of assurance, the developer is classified as the only Class “B” member of the property owners association, and as such, it is entitled to ten votes for each lot or living unit of which it is the record owner. However, insofar as any action to increase the annual assessments is concerned, the Class “B” member only has a veto over such assessments, and its votes are not counted against the Class “A” members, such as appellants. Such class distinctions are ordinarily upheld among corporate shareholders, and in the absence of authority to the contrary, we can see no reason why such a veto power over increased assessments should be prohibited in matters involving private contract rights.

POINT 6. The allegation that the assessments amount to an unlawful delegation to tax in violation of Article 2, § 23 of the Constitution of Arkansas overlooks the fact that the assessments here arise out of contract and that they constitute a benefit to the property owner. Other courts recognize that such assessments are not an unlawful delegation of the State’s taxing power, Henlopen Acres v. Potter, 36 Del. Ch. 141, 127 A. 2d 476 (1956).

POINT 7. Appellants contend that the purposes for which the assessments are made are so vague and indefinite that they amount to a restraint on alienation. The “Covenant for Maintenance Assessments” insofaras here applicable provides:

“ARTICLE X
Covenant For Maintenance Assessments
Section 1. Creation of Lien. The Developer for each Lot and Living Unit owned by it within The Properties hereby covenants and each Owner of any Lot or Living Unit by acceptance of a deed therefor, or by entering into a contract of purchase with the Developer, whether or not it shall be so expressed in any such deed, contract of purchase, or other conveyance, shall be deemed to covenant and agree to pay to the Club: (1) annual assessments of charges; (2) special assessments for capital improvements, such assessments to be fixed, established and collected from time to time as hereinafter provided. The annual and special assessments, together with such interest thereon and costs of collection thereof as hereinafter provided, shall be a charge on the land and shall be a continuing lien upon the property against which each such assessment is made.
Section 2. Purpose of Assessments. The assessments levied hereunder by the Club shall be used exclusively for the purpose of promoting the recreation, health, safety, and welfare of the residents in The Properties and in particular for the improvement and maintenance of properties, services and facilities devoted to this purpose and related to the use and enjoyment of the Common Properties and the improvements situated upon The Properties, including, but not limited to, the payment of taxes and insurance thereon, and repair, replacement, and additions thereto, and for the cost of labor, equipment, materials, management and supervision thereof. The limitation aforesaid shall not preclude the use of assessments levied hereunder for maintenance of roads and streets within The Properties, even though same have been dedicated to the public.
Section 3. Basis and Maximum of Annual Assessments. Until the year beginning January, 1970, the annual assessment shall be $60.00 per Lot or Living Unit. From and after January 1, 1970, the annual assessment may be increased by vote of the members, as hereinafter provided, for the next succeeding three years and at the end of each such period of three years for each succeeding period of three years. Unless the annual assessment shall be increased as aforesaid, it shall remain at $60.00 per Lot of Living Unit.
The Board of Directors of the Club may, after consideration of current maintenance costs and future needs of the Club, fix the actual assessment for any year at a lesser amount. Likewise, the Board of Directors of the Club may, after consideration of the lack of improvements as to lots in a certain area, fix the actual assessment for any year as to these particular lots at a lesser amount.
Section 4. Special Assessments for Capital Improvements. In addition to the annual assessments authorized by Section 3 hereof the Club may levy in any assessment year a special assessment, applicable to that year only, for the purpose of defraying, in whole or in part, the cost of any construction or reconstruction, unexpected repair or replacement of the roads and streets within The Properties, even though same may have been dedicated to the public, and also a described capital improvement upon the Common Properties, including the necessary fixtures and personal property related thereto, provided that any such assessment shall have the assent of 51% of the votes of each class of members who are voting in person or by proxy at a meeting duly called for this purpose, written notice of which shall be sent to all Members at least 30 days in advance and shall set forth the purpose of the meeting. The Board of Directors of the Club may, after consideration of lack of improvements as to lots in a certain area, fix the assessment for any year as to these particular lots at a lesser amount.
Section 5. Change in Basis of Maximum of Annual Assessments. Subject to the limitations of Section 3 hereof, and, for the purpose therein specified, the Club may change the maximum and basis of the assessments fixed by Section 3 hereof prospectively for any such period provided that any such change shall have the assent of 51% of the votes of each Class of Members who are voting in person or by proxy, at a meeting duly called for this purpose, written notice of which shall be sent to all Members at least 30 days in advance and shall set forth the purpose of the meeting.”

As we read the foregoing provisions, the annual assessments are levied for the purposes of improvement and maintenance of the properties held for the joint use of the properties which include “the payment of taxes and insurance thereon, and repair, replacement, and additions thereto, and for the cost of labor, equipment, materials, management and supervision thereof.” Of course, for these purposes the appellee acts as a trustee for the use and benefit of ?he property owners. In such capacity it has some discretion as to expenditures, but under those circumstances, a property owner would have recourse in a court of equity to prevent any arbitrary or capricious action on the part of appellee. By virtue of this recourse in equity for relief, the covenants contain a formula from which assessments can be determined, and for these purposes, the assessments are not vague and indefinite and do not constitute a restraint on alienation.

The courts that have considered such assessments have upheld them where the purpose of the assessments has been stated so that a formula for the calculation of the amount thereof can be determined. See Rodruck v. Sand Point Maintenance Commission, 48 Wash. 2d 565, 295 P. 2d 714 (1956). Likewise, such assessments have been struck down as a restraint upon alienation where the covenants do not contain a formula for the calculation of the amount of the assessment. See Peterson v. Beekmere, Incorporated, 117 N.J. Super. 155, 283 A. 2d 911 (1971), and the cases from other jurisdictions cited therein. The courts that have considered the matter of assessment covenants have also refused to enforce such covenants when they do not apply alike to all units in the same subdivision enjoying the benefits to the common properties, Peterson v. Beekmere, Incorporated, supra. The reason is that the property bound by such covenants would be forced to tender larger proportionate amounts through assessments although such non-contributing neighbors would enjoy the same benefits.

When we consider the foregoing authorities, the term “a described capital improvement” in Article X, § 4 requires some discussion. If it is construed to mean the erection of any future improvement that the majority desire (such as an astrodome), then it clearly would amount to a restraint on alienation and would be void. However, the term “a described capital improvement” can be construed to mean those improvements described by the covenants and necessarily contemplated in the use or enjoyment thereof, such as an additional water tower to supply sufficient water pressure for domestic use and fire protection for some or all of the property owners. Applying the latter usage, the term “a described capital improvement” would furnish a sufficient formula for the calculation of the amount of the special assessment and would not constitute a restraint on alienation. Since, in the interpretation of contracts, we are to give a written contract, susceptible to more than one interpretation, a construction that will make it valid, it follows that when the term “a described capital improvement” is given the latter interpretation, we must uphold this Article X, § 4 provision as being valid and binding.

The provisions in Sections 3 and 4 of Article X, supra, providing that appellee may, after consideration of the lack of improvements as to lots in a certain area, fix the actual assessment for any year as to these particular lots at a lesser amount” appears to be invalid since the owners thereof have the same privilege of using the common facilities as do any of the residents of improved lots.

The foregoing invalid provisions can easily be separated from the valid provisions. Since the bill of assurance contains a severability clause and since the assessments here are not affected by the invalid provisions, we find that it does not impair or otherwise invalidate the annual assessments for maintenance and repair.

POINT 8. The contention of appellants that the property owners’ association has no standing to enforce the covenant to pay annual assessments is without merit. See Neponsit Property Owners' Ass’n v. Emigrant Industrial Sav. Bank, supra.

Affirmed as modified.

Roy, J., not participating.


author: John A. Fogleman, Justice. Conley Byrd, Justice, George Rose Smith, Justice, Elsijane T. Roy, Justice, PER CURIAM

text:
    Richard GAMBILL et al v. Dr. Paul T. STROUD
    75-80
    531 S.W. 2d 945
    Substituted Opinion On Rehearing Delivered January 26, 1975

      McMath, Leatherman & Woods, for appellants.

      Barrett, Wheatley, Smith & Deacon, for appellee.
   John A. Fogleman, Justice.

The appellants, the husband and the guardian of Yvonne Gambill, brought this action for damages assertedly resulting from medical malpractice. After an extended trial there was a verdict for the defendant, Dr. Stroud. The principal question on appeal is whether we should modify our prevailing “same or similar locality” rule in malpractice cases, by which a physician, surgeon, or dentist is held only to the standard of competence that obtains in his own locality or in a similar locality. The rule is fully stated in AMI 1501, which the trial judge gave over the plaintiffs’ objections. AMI Civil 2d, 1501 (1974).

In discussing the issues of law that are presented we need not describe in detail the serious injuries suffered by Mrs. Gambill. The appellee and another surgeon were prepared to operate upon the patient in a Jonesboro hospital, for the removal of a thyroid cyst. The operation was not performed because, after the patient had been put under anesthesia, she suffered a cardiac arrest (and later respiratory arrest) that resulted in serious and irreversible brain damage. The plaintiffs’ claim against the anesthesiologist was settled before trial. It is not argued that there was no substantial evidence to support the verdict.

The evidence disclosed that Dr. E. B. Sparks, the anesthesiologist who participated, told Dr. Stroud that the patient was ready for surgery, but the procedure was stopped immediately after Dr. Stroud made an incision and found that Mrs. Gambill’s blood was “very dark.” This blood coloration is indicative of an inadequate oxygen supply in the blood. On the evidence admitted, there was a jury question as to Dr. Stroud’s negligence.

Appellants offered the testimony of Dr. James Mayfield and Dr. George Mitchell, Jonesboro anesthesiologists, Dr. Sparks, also of Jonesboro, Dr. Charles W. Quimby, an anesthesiologist who practices and teaches at Vanderbilt University Hospital and Dr. Davis A. Miles, a Little Rock neurologist, who testified that he was familiar with the standards of practice in Jonesboro or similar communities. Dr. Quimby had taught and practiced anesthesiology for five years at the Medical Center in Little Rock, during which time he conducted statewide seminars relating to types and techniques of anesthesia for general practitioners, surgeons, obstetricians and anesthesiologists. He had obtained a law degree from the University of Pennsylvania in 1959. There is no indication that any witness offered by plaintiffs was not permitted to testify, or that any pertinent testimony of any medical witness for plaintiffs was excluded. Appellants state in their brief that it was uncontroverted that the standards of medical practice in Jonesboro, Little Rock and Memphis were comparable. Appellants did not offer any instruction in lieu of AMI 1501. All of the parties tried this case under the same or similar locality rule.

In spite of the failure of appellants to show how they were prejudiced in the introduction of evidence or to offer an instruction expressing their theory of the proper test of negligence in a medical malpractice case, they did make a specific objection to reference to locality. We might well conclude our discussion on the instruction on the failure to offer a modified or substitute instruction. See Wharton v. Bray, 250 Ark. 127, 464 S.W. 2d 554. We consider the objection to support the contention that the locality rule is obsolete. We think, however, that the same or similar locality rule articulately expressed in AMI 1501 is proper, adequate, viable and not unduly restrictive on the evidence a plaintiff may introduce. In spite of its abandonment in some jurisdictions and limitations in others, it may well be the majority rule. See 61 Am. Jur. 2d 239, Physicians & Surgeons, § 116; 70 CJS 950, Physicians & Surgeons, § 43; Restatement of the Law, Torts 2d (1965) 73, § 299A. It has been recently applied in many jurisdictions. See e.g., Goedecke v. Price, 19 Ariz. App. 320, 506 P. 2d 1105 (1973); Peters v. Gelb, 303 A. 2d 685 (Del. Super. 1973); Bailey v. Williams, 189 Neb. 484, 203 N.W. 2d 454 (1973); Karrigan v. Nazareth Convent & Academy Inc., 212 Kansas 44, 510 P. 2d 190 (1973); Burton v. Smith, 34 Mich. App. 270, 191 N.W. 2d 77 (1971); McBride v. U.S., 462 F. 2d 72 (9 Cir., 1972).

The thrust of appellants’ argument is that the rule set out in AMI 1501 is no longer applicable to modern medicine, because doctors practicing in small communities now have the same opportunities and resources as physicians in large cities to keep abreast of advances in the medical profession, due to availability of the Journal of the American Medical Association and other journals, drug company representatives and literature, closed circuit television, special radio networks, tape recorded digests of medical literature, medical seminars and opportunities for exchange of views between doctors from small towns and those from large cities where there are complexes of medical centers and modern facilities.

However desirable the attainment of this ideal may be, it remains an ideal. It was not shown in this case, and we are not convinced, that we have reached the time when the same postgraduate medical education, research and experience is equally available to all physicians, regardless of the community in which they practice. The opportunities for doctors in small towns, of which we have many, to leave a demanding practice to attend seminars, and regional medical meetings cannot be the same as those for doctors practicing in clinics in larger centers. It goes without saying that the physicians in these small towns do not and cannot have the clinical and hospital facilities available in the larger cities where there are large, modern hospitals, and medical centers or the same advantage of observing others who have been trained, or have developed expertise, in the use of new skills, facilities and procedures, of consulting and exchanging views with specialists, other practitioners and drug experts, of utilizing closed circuit television, special radio networks or of studying in extensive medical libraries found in larger centers.

The rule we have established is not a strict locality rule. It incorporates the similar community into the picture. The standard is not limited to that of a particular locality. Rather, it is that of persons engaged in a similar practice in similar localities, giving consideration to geographical location, size and character of the community. Restatement of the Law, Torts, 2d, 75 Comment g, § 299A. The similarity of communities should depend not on population or area in a medical malpractice case, but rather upon their similarity from the standpoint of medical facilities, practices and advantages. See Sinz v. Owens, 33 Cal. 2d 749, 205 P. 2d 3, 8 ALR 2d 757 (1949). For example, appellants state in their brief that it was uncontroverted that the medical standards of practice in Jonesboro, Little Rock, and Memphis are comparable. Thus, they could be considered similar localities. The extent of the locality and the similarity of localities are certainly matters subject to proof. Modern means of transportation and communication have extended boundaries but they have not eliminated them. See Sinz v. Owens, supra; Tvedt v. Haugen, 70 N.D. 338, 294 N.W. 183 (1940), 132 ALR 379. The opportunities available to practitioners in a community are certainly matters of fact and not law and may be shown by evidence under our own locality rule.

Our locality rule is well expressed in Restatement of the Law, Torts 2d (1965) 73, § 299A, viz:

Unless he represents that he has greater or less skill or knowledge, one who undertakes to render services in the practice of a profession or trade is required to exercise the skill and knowledge normally possessed by members of that profession or trade in good standing in similar communities.

It is fallacious to say that our locality rule permits a doctor in one place to be more negligent than one in another place. It is a matter of skill that he is expected to possess, i.e., the skill possessed and used by the members of his profession in good standing, engaged in the same type of practice in the locality in which he practices, or a similar locality. The similar locality rule prevents highly incompetent physicians in a particular town from setting a standard of utter inferiority for the practice of medicine there. Restatement of the Law, Torts 2d, 75, Comment e, § 299A. See also 3 Sherman & Red-field on Negligence 1532, § 617 (1941).

One of the ideas suggested in appellants’ argument is that a national standard of care should be observed. This is also unrealistic. We cannot accept that premise as a matter of law and we certainly do not take the theory that such a standard exists to Be so well established that it can be judicially noticed. If it does factually exist to any extent, or in any case, then certainly it can be shown by evidence. If the medical profession recognizes that there are standard treatments, which should be utilized nation-wide this fact should be readily susceptible of proof under the similar locality rule, because the skill and learning should be the same and all localities would be similar. See Annot, 37 ALR 3d 420, 425; Peters v. Gelb, 303 A. 2d 685 (Del. Super. 1973); Rucker v. High Point Memorial Hospital, Inc., 285 N.C. 519, 206 S.E. 2d 196 (1974); Hundley v. Martinez, 151 W. Va. 977, 158 S.E. 2d 159 (1967). The same may be said for any region exceeding the boundaries of a particular city or town. This is much more likely to be true in cases where a specialist, and not a general practitioner like Dr. Stroud, is involved. See Prosser, Law of Torts (4th Ed.) 164, 166, Ch. 5, § 32; Naccarato v. Grob, 384 Mich. 248, 180 N.W. 2d 788 (1970); McGulpin v. Bessmer, 241 Ia. 1119, 43 N.W. 2d 121 (1950). For this reason, cases cited by appellant which involved specialists are of little persuasive weight. After all, in all but the obvious cases of negligence, the question whether the defendant physician has applied that degree of skill and learning which the law requires him to possess is dependent upon medical testimony. Davis v. Kemp 252 Ark. 925, 481 S.W. 2d 712.

One of the difficulties with the strict locality rule was the tendency to apply it as a rigid, exclusionary rule of evidence, rather than a definition of a standard of care required of a physician. Of course the standard does necessarily have a relationship to the admissibility of evidence. See Couch v. Hutchison, 135 S. 2d 18 (Fla. App. 1961). But the similar locality rule is not necessarily so restrictive, and an expert witness need not be one who has practiced in the particular locality or who is intimately familiar with the practice in it in order to be competent to testify if the appropriate foundation has been laid to show that he is familiar with the standards of practice in a similar locality, either by his testimony or by other evidence showing the similarity of localities. For examples of such witnesses held competent and testimony held admissible under a similar locality rule, see Dunham v. Elder, 18 Md. App. 360, 306 A. 2d 568 (1973); Sinz v. Owens, supra; Iterman v. Baker, 214 Ind. 308, 15 N.E. 2d 365 (1938); Kirchner v. Dorsey, 226 Iowa 283, 284 N.W. 171 (1939); Turner v. Stoker, 289 S.W. 190 (Tex. Civ. App., 1926); Riley v. Layton, 329 F. 2d 53 (10 Cir., 1964); Sales v. Bacigalupi, 47 Cal. App. 2d 82, 117 P. 2d 399 (1941); Dickens v. Everhart, 284 N.C. 95, 199 S.E. 2d 440 (1973).

It is also suggested that modern transportation and communications have so extended the borders of the locality as to bring the physician in a smaller community within the boundaries of a larger community where appropriate treatment may be assured to a patient, even though the physician in the small town be unable to give it because of limited facilities or training. Here again, the appropriate community standard may require that these doctors send such patients as may be taken to such larger centers, but when this is not practicable, the small town doctor should not be penalized for not utilizing means or facilities not reasonably available to him. This, too, is a fact question which may be inquired into under our similar locality rule. Furthermore, there is nothing in the instruction that limits the locality to the limits of a city. Lewis v. Johnson, 12 Cal. 2d 558, 86 P. 2d 99 (1939). It may be comprised of a much larger district or area, depending upon the particular facts and circumstances. See Warnock v. Kraft, 30 Cal. App. 2d 1, 85 P. 2d 505 (1938); Kirchner v. Dorsey, supra. For e.g., it might be established by evidence that Jonesboro is a part of a locality that also includes Memphis, Tennessee.

It also seems that appellants have overlooked the impact of better medical education, modern technology, and improved means of travel and communication upon the law as it now exists. If the impact is as great as they theorize then no change in the law is necessary. See Peters v. Gelb, 303 A. 2d 685 (Del. Super. 1973). These factors have already elevated the degree of skill and learning ordinarily possessed and used by members of the medical profession in every locality, if that premise is correct.

It has also been suggested that we should adopt a standard of care and skill based upon that of the “average qualified practitioner” and permit consideration of the medical resources available to the practitioner as a circumstance in determining the skill and care required. Not only would this put a jury in a predicament as to how to arrive at an “average” but it seems to us that requiring the skill of the “average qualified practitioner” automatically makes approximately one-half of the doctors guilty of malpractice. The question is not one of the “average” or “medium” skill, but of the minimum common skill. Prosser, Law of Torts, 165, Ch. 5, § 32. See Restatement of the Law, Torts, 2d, 75, Comment e, § 299A. As pointed out heretofore, the availability of medical resources already has had a bearing upon the question of similarity of localities and, to some extent, upon the establishment of the boundaries of a locality.

As a subordinate contention the appellants argue that the court should not have allowed the jury to take the typewritten instructions into the jury room because these appellants objected to that procedure. The statute requires only that the court deliver a copy of the instructions to the jury when counsel for all parties so request. Ark. Stat. Ann. § 27-1732.1 (Repl. 1962). That does not mean that any party has an absolute veto power when all parties do not agree. The question is still one falling within the trial court’s discretion, as it was before the present statute was adopted. Rutledge v. State, 222 Ark. 504, 262 S.W. 2d 650 (1953). We find no abuse of discretion in this case.

The judgment is affirmed.

Byrd, J., concurs.

George Rose Smith, Jones and Roy, JJ., dissent.

Conley Byrd, Justice,

concurring. While I must agree that there is some merit to the minority’s criticism of the “same or similar locality” rule, I find that it has become firmly established as part of the law of this State. The rule did not come into our law as the result of an incorrect interpretation of the Constitution of this State or the United States as was the situation in Parish v. Pitts, 244 Ark. 1239, 429 S.W. 2d 45 (1968), and therefore it is subject to change by the General Assembly. In that situation under Article 2, § 12 of the Constitution of Arkansas this court is prohibited from suspending or setting aside the law with respect to the “same or similar locality” rule. Article 2, § 12 provides:

“No power of suspending or setting aside the law or laws of the State shall ever be exercised except by the General Assembly.”

For the reasons stated, I concur in the majority opinion.

George Rose Smith, Justice,

dissenting. This case illustrates the unjust situation that necessarily results from the “same or similar locality” rule: The plaintiff’s difficulty in obtaining expert medical testimony. Here Dr. Quimby, a qualified expert who had taught in medical schools in Arkansas and Tennessee, testified for the plaintiffs. On cross-examination Dr. Quimby admitted that he had not practiced in Jonesboro and was therefore not familiar with the standard of care adhered to by general practitioners in Jonesboro. Defense counsel then repeatedly asked Dr. Quimby, in various forms, what was essentially the same question: “If you do not know what the standard of care in Jonesboro, Arkansas, is, then what is your point of reference, how do you compare it to another locality?” The witness, understandably, could not give an altogether satisfactory answer to the question, despite his unquestioned qualifications as a medical expert. Since AMI 1501 compels the plaintiff to prove his charge of negligence by the same or'similar locality rule, defense counsel were obviously in a position to make a devastating jury argument with regard to Dr. Quimby’s testimony.

Such injustice is unavoidable under the rule adhered to by the majority. As a practical matter, a plaintiff simply has no real hope of finding a favorable medical witness whose testimony cannot be seriously weakened by the line of questioning adopted in this case. Thus the local physician obtains a demonstrably unfair advantage. As Prosser observes, the present tendency in the courts is to abandon the same or similar locality rule and, in its stead, to treat the size and character of the community as merely one factor to be taken into account by the jury in applying the general professional standard. Prosser, Torts, p. 167 (3d ed., 1964). I think we should have no hesitancy in taking this opportunity to adopt a rule that is becoming commonplace in other jurisdictions and that is unquestionably fair to both sides in the lawsuit.

Elsijane T. Roy, Justice,

dissenting. The writer is of the view that the narrow “same or similar locality” rule in malpractice cases has long outlived its usefulness. The tenor of the briefs filed by appellants and appellee both reflect the tremendous advances made in medical science during the last twenty years. The opinion of the majority in this case also recognizes the progress made in the field of medicine.

In Kolesar v. United States, D.C., 198 F. Supp. 517 (1961), the court pointed out that:

. . . [T]he locality rule of medical standards was originally formulated when communications were slow or virtually non-existent, and that it has lost much of its significance today with the increasing number and excellence of Medical Schools, the free interchange of scientific information, and the consequent tendency to harmonize medical standards, throughout the country. * * *

The North Carolina Supreme Court in Wiggins v. Piver, 276 N.C. 134, 171 S.E. 2d 393 (1970), stated:

The “locality rule” (never recognized in England) had its origin in the very old and faraway days when there were many little institutions which called themselves medical schools. Students were admitted who could show a high school diploma or furnish a certificate from a school piincipal that the bearer had completed the “equivalent” of a high school course of study. At the end of the course, he was given an M.D. degree. Passing the licensing board was in the nature of a formality. In many rural communities, ever thereafter the doctor was on his own. Frequent refresher courses, now generally attended, were unknown. * * *
Now medical schools admit only college graduates. They are equipped to the highest point of efficiency and turn out doctors who must continue their studies by internships and by actual experience under expert supervision. They continue to study, continue to attend refresher courses, and have access to journals which afford them opportunity to keep them current in the latest treatments and procedures.

It would serve no useful purpose to set out at length the many jurisdictions which have already recognized the need for change and have modified the rule to be applied in malpractice cases.

I agree completely with the comments in the dissenting opinion of Justice George Rose Smith concerning a plaintiff’s difficulty in obtaining expert medical testimony under the present rule. Medical science recognizes no geographical boundaries in its broad expanse in the field of progress, and neither should the law place such restrictive impositions upon the rule establishing the degree of skill and care required of medical practitioners.

In criticizing a standard of care and skill based upon that of the “average qualified practitioner”, the majority opinion states “[T]he question is not one of the ‘average’ or ‘medium’ skill but of the minimum common skill.” (emphasis added). In the writer’s opinion this was not the test and has never been the test applied in Arknasas. As far back as Dunman v. Raney, 118 Ark. 337, 176 S.W. 339 (1915), to our present AMI Civil 2d 1501 (1974), the standard established has been that in treating or operating upon a patient a physician or surgeon must possess, and using his best judgment, apply with reasonable care the degree of skill and learning ordinarily possessed and used by members of his profession in good standing engaged in the same type of practice or specialty in the same or a similar locality to that in which he practices.

In the writer’s opinion there is no need to change the standard established by AMI 1501 except to remove the restrictiveness of the “same or similar locality” rule and to give due regard to the medical resources available as one factor in determining the skill and care required of a physician or surgeon. For the foregoing reasons I respectfully dissent.

Justice Jones joins in this dissent.

Amendment of Rule 11, Rules of Supreme Court October 20, 1975

PER CURIAM

Paragraphs (f) and (g) of Supreme Court Rule 11 are amended to read as follows, effective November 1, 1975:

(f) Appellant’s Duty to File Abstract and Brief. — In all felony cases it is the duty of the appellant, whether he is represented by retained counsel, appointed counsel, or a public defender, or acts pro se, to abstract such parts of the record, but only such parts of the record, as are material to the points to be argued in his brief. (The former requirement that the Attorney General supply an abstract in felony cases no longer obtains.) The appellant’s brief in chief, before its printing, shall not exceed 40 doublespaced typewritten pages, with a similar 10-page limit upon the reply brief, except that if either limitation is shown to be too stringent in a particular case it may be waived by the Court on motion. See paragraph (g) of this Rule with respect to the printing of an indigent’s abstract and brief. The State’s brief shall be subject to the same page limit.

When the sentence is death or life imprisonment, the Court must review all errors prejudicial to the appellant. Act 333 of 1971; Ark. Stat. Ann. § 43-2725 (Supp. 1973). To make that review possible the appellant must abstract all objections that were decided adversely to him in the trial court, together with such parts of the record as are needed for an understanding of the objection. The Attorney General will make certain that all objections have been so abstracted and will brief all points argued by the appellant and any other points that appear to him to involve prejudicial error.

(g) Printing of Abstracts and Briefs for Indigent Appellants. — When an indigent is represented by appointed counsel or a public defender, his attorney may have the abstract and briefs printed by submitting the double-spaced typewritten manuscript to the Attorney General not later than the due date of the brief.

      In this very case, appellants’ expert witness, Dr. Quimby, was permitted to testify, over the vigorous objections of appellee, that the problems encountered in the Gambill case are specific and unique and that the treatment of such cases is well known and clear-cut and that there was a deviation from this “norm” which was basic whether in New York City or Jonesboro, Arkansas.

      See Tvedt v. Haugen, 70 N.D. 338, 294 N.W. 183 (1940).

       We certainly are not unaware of the difficulties experienced by small towns and rural communities in attracting qualified physicians. A complete abolition of the locality rule would certainly add to these difficulties.


author: George Rose Smith, Justice.

text:
    Elkana GLOVER v. NATIONAL BANK OF COMMERCE OF PINE BLUFF
    75-123
    529 S.W. 2d 333
    Opinion delivered November 3, 1975
    [Rehearing denied December 8, 1975.]

      Reinberger, Eilbott, Smith & Staten, for appellant.

      Bridges, Young, Matthews & Davis, for appellee.
   George Rose Smith, Justice.

On October 17, 1972, the appellant Glover and his partner Ferguson, who were in the meat-packing business, borrowed $20,000 from the appellee bank and gave a 90-day note for the debt. The partnership was not doing well. Two or three days before the note was due Glover informed an officer of the bank that Ferguson was buying Glover’s interest in the partnership (for $25,000 cash), that Ferguson was assuming all liabilities, and that Glover did not want the note extended and would not sign a renewal note. Some five months later Ferguson went bankrupt, his estate in bankruptcy eventually paying $758.92 upon the note.

The bank brought this action against Glover to collect the amount due on the note. At the close of the proof the trial judge directed a verdict for the bank. Glover argues that the jury should have been allowed to decide (a) whether the bank discharged Glover’s obligation by agreeing not to sue Ferguson and (b) whether the bank was estopped from pursuing its remedy against Glover by reason of its failure to collect the note by offsetting it against the meat-packing concern’s checking account in the bank.

Neither point has merit. Upon point (a) the appellant cites Ark. Stat. Ann. § 85-3-606 (Add. 1961), which provides that the holder of an instrument “discharges any party to the instrument to the extent that without such party’s consent the holder . . . agrees not to sue any person against whom the party has to the knowledge of the holder a right of recourse ...” Of course the statute means an enforceable contract. Clark, Suretyship in the Uniform Commercial Code, 46 Tex. L. Rev. 453, 457 (1968). Here there is simply no proof that the bank made any sort of binding agreement that it would not sue Ferguson. All the proof shows is that the bank twice accepted from Ferguson a payment of interest after the note was due. That evidence does not satisfy the appellant’s burden of proving that the bank made an enforceable promise not to sue Ferguson. The jury would have had no basis except speculation for finding that such an agreement existed; for no one so testified.

Upon point (b) the proof shows that on several days between the due date of the note and Ferguson’s bankruptcy the meat-packer’s checking account in the appellee bank briefly exceeded the amount of the note. The bank admittedly could have applied such funds in satisfaction of the note. Rush v. Citizens Nat. Bk., 114 Ark. 170, 169 S.W. 777 (1914). But there was no duty upon the bank to do so. Central Bank & Trust Co. v. Meltzer, 145 So. 2d 766 (Fla. App., 1962); cf. Peoples State Bank v. Caterpillar Tractor Co., 213 Ind. 235, 12 N.E. 2d 123 (1938). Moreover, there is no proof of an essential element of estoppel; that is, that Glover relied to his detriment upon the bank’s failure to offset the two claims. Indeed, there is no proof that the possibility of an offset was ever mentioned by Glover or the bank’s officers. The plain fact is that Glover was a principal obligor upon the note and sold his interest in the meat-packing partnership for $25,000. He never asked that the accounts be offset and certainly did not rely to his detriment upon the bank’s failure to do so.

It is also argued that the trial court should have admitted into evidence copies of the meat packer’s bank statements, showing that at times the amount in the checking account exceeded the amount of the note. Inasmuch as such proof would not have made a case for the jury, as we have seen, the admissibility of the bank statements becomes immaterial.

Affirmed.

Harris, C.J., and Holt, J., not participating.


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

text:
    Ferd HAND v. H & R BLOCK, INC.
    75-89
    528 S.W. 2d 916
    Opinion delivered November 3, 1975

      Wootton, Land & Matthews, for appellant.

      Rose, Nash, Williamson, Carroll & Clay, for appellee.
   J. Fred Jones, Justice.

This is an appeal by Ferd Hand from a declaratory judgment holding that Ark. Stat. Ann. § 70-802 (Supp. 1973) did not apply to a franchise existing between Hand and the appellee H & R Block, Inc. and, consequently, it was not necessary to pass on the constitutionality of § 70-802. The appellant urges three points on which he relies for reversal designated as follows:

“The lower court erred in holding section 70-802 inapplicable to the subject franchise agreement because the plain meaning of the language of the statute requires it to apply to the subject franchise agreement.
The lower court erred in holding section 70-802 inapplicable to the subject franchise agreement because a construction of the statute in light of the legislative intent requires it to apply to the subject franchise agreement.
The lower court erred in holding section 70-802 inapplicable to the subject franchise agreement because such construction circumvents the social benefit sought to be achieved by the statute.”

The facts in this case appear as follows: On August 13, 1969, H & R Block, Inc. entered into a franchise agreement with a Mr. Whitaker of Fort Smith, Arkansas, whereby H & R Block granted to Whitaker a franchise to use the service mark and trade name “H & R Block” in Paris, Arkansas, for a period of five years in connection with Whitaker’s business of preparing income tax returns for the general public. This franchise agreement was for a period of five years with option to renew. On August 13, 1970, with the consent of H & R Block, Whitaker assigned his rights under the franchise agreement to the appellant Ferd Hand and one Jim Randall. In 1971 the Arkansas General Assembly enacted Act 252 which made it unlawful for a franchisor to charge an Arkansas franchisee a royalty fee greater than the lowest royalty fee charged franchisees in other states. In 1973 the General Assembly amended § 2 of the 1971 Act with the pertinent provision of the Act, as amended, (Ark. Stat. Ann. § 70-802 [Supp. 1973]) reading as follows:

“After the effective date [January 30, 1973] of this Act, in granting a new franchise for use of a service mark, trade mark or trade name in Arkansas, it shall be unlawful for a franchisor to charge a franchisee a royalty fee which is greater than that which the franchisor customarily charges other franchisees in the United States for similar new franchises granted contemporaneously. ”

On September 21, 1973, H & R Block entered into a separate agreement designated “Major Franchise Agreement” with James W. Randall and the appellant Ferd Hand, whereby Hand and Randall were given the exclusive right in the same Paris, Arkansas, area formerly awarded to Whitaker, to use the name “H & R Block” and the service marks “The Income Tax People,” “America’s Largest Tax Service,” “Executive Tax Service,” “Nation’s Largest Tax Service” and any other name or service marks that may be adopted by Block or registered by Block.

On September 31, 1974, H & R Block filed its complaint praying a declaratory judgment under Ark. Stat. Ann. §§ 34-2501 — 34-2512 (Repl. 1962) to obtain a declaration of the rights and “other legal relations” including a declaratory judgment as to the constitutionality of § 2 of Act 252 of the 1971 General Assembly as amended by Act 21 of 1973, § 70-802, supra. The prayer of the complaint was as follows:

“[PJlaintiff respectfully prays for a judgment declaring that Section 2 of Act 252 of the 1971 Arkansas General Assembly, as amended, does not apply to the agreement dated September 21, 1973 (Exhibit 3), or in the alternative declaring Section 2 of Act 252 of the 1971 Arkansas General Assembly, as amended, to be unconstitutional. ...”

The judgment of the trial court recites in part as follows:

“6. the relationship existing between the plaintiff, as franchisor, and the defendant and James W. Randall, as franchisees, under the agreement dated August 13, 1969, and the assignment dated August 13, 1970, did not become a ‘new franchise’ by virtue of the agreement dated September 21, 1973 (Exhibit 3 to the Complaint), within the meaning of the term ‘new franchise’ in § 70-802;
7. the acts of the plaintiff in executing and entering into the agreement dated September 21, 1973 (Exhibit 3 to the Complaint), did not constitute ‘granting a new franchise’ within the meaning of the terms ‘granting a new franchise’ in § 70-802 of 1973;
9. this Court does not imply the assignments will always be treated as this assignment has been treated, however, restricted to the facts of this case, Section 70-802 does not apply to the franchise set forth and described in the agreement dated September 21, 1973 (Exhibit 3 to the Complaint), as the Court construes it as being an amendment or modification of an existing franchise involving substantially the same parties and the same territory, with no additional fee being charged.
10. Inasmuch as the Court has found and concluded that § 70-802 does not apply to the franchise existing between the parties, it is not necessary to determine the constitutionality of § 70-802.
In accordance with the foregoing findings of fact and conclusions of law IT IS THEREFORE ORDERED, ADJUDGED AND DECLARED that Act 21 of 1973 (Ark. Stats. Ann. § 70-802 [Supp. 1973]) does not apply to the franchise between the parties which is set forth and described in the agreement dated September 21, 1973, (Exhibit 3 to the Complaint).”

Block successfully argued before the trial court, and unsuccessfully argues here, that the so-called “Major Franchise Agreement” between Block and the appellant dated September 21, 1973, was only an extension of the franchise to Whitaker dated August 13, 1969, and subsequently transferred to the appellant Hand. It is agreed that the agreement entered into on September 21, 1973, was in violation of § 2 of Act 252 in that the franchise royalty fee charged was greater than the lowest royalty fee charged in other states; but, Block argues that since the “Major Franchise Agreement” of September 21, 1973, was only an extension of the August 13, 1969, franchise agreement, neither agreement was affected by the subsequent amendment to the Act which became effective January 30, 1973. The trial court agreed with the appellee Block on this point but we do not.

Ark. Stat. Ann. § 70-801 (a) (Supp. 1973) provides as follows:

“ ‘Franchise’ shall mean every aspect of the relationship created between a franchisor and franchisee by an ora! or written agreement or understanding or series of agreements, understandings, or transactions which involve or result in a continuing commercial relationship by which a franchisee is granted or permitted to offer, sell or distribute the goods or commodities manufactured, processed or distributed by the franchisor or to use a service mark, trade mark or trade name owned by the franchisor.”

In reaching its decision that the “Major Franchise Agreement” of September 21, 1973, did not constitute the “granting a new franchise” within the meaning of the term “granting a new franchise” in § 70-802, supra, the trial court pointed out that the “Major Franchise Agreement” of 1973 involved substantially the same parties and the same territory and that no additional fee was charged. We do not so construe the September, 1973, agreement. The August, 1969, franchise agreement was between Block as franchisor and J. O. Whitaker of Fort Smith, Arkansas, as franchisee. The September 21, 1973, agreement was between Block as franchisor and Ferd Hand and James Randall of 4310 Central Avenue, Hot Springs, Arkansas, as franchisees. The “Major Franchise Agreement” contains other pertinent differences including a “Cancellation of Prior Understandings” provision as follows:

“This Agreement expresses fully the understanding by and between the parties hereto and all prior understandings, or commitments of any kind, oral or written, as to this franchise and any matter covered by this Agreement are hereby superseded and cancelled, with no further liabilities or obligations of the parties with respect thereto except as to any monies due and unpaid between the parties to this Agreement at the time of the execution of this Agreement.”

The agreement also contains a “Release of Prior Claims” provision as follows:

“By executing this Agreement, Franchisee, individually and on behalf of Franchisee’s heirs, legal representatives, successors and assigns, and each assignee of this Agreement by accepting assignment of the same, hereby forever releases and discharges Block, its officers, directors, employees, agents and servants, including Block’s subsidiary and affiliated corporations, their respective officers, directors, employees, agents and servants, from any and all claims relating to or arising under any franchise agreement or agreements between the parties and executed prior to August 31, 1973, including but not limited to any and all claims, whether presently known or unknown, suspected or unsuspected, arising under the antitrust laws of the United States or of any State.”

The appellee attempts to classify a “franchise” as defined in § 70-802 as something more than a contract or agreement and argues in effect that a franchise which once comes into being remains the same franchise regardless of subsequent agreements. We are of the opinion and so hold that the “Major Franchise Agreement” entered into on September 21, 1973, constituted a “new franchise” within the meaning of the statute. This conclusion brings us to the alternative question presented on this appeal of whether § 2 of Act 252 is unconstitutional and we are of the opinion that it is.

In Stone v. State, 254 Ark. 1011, 498 S.W. 2d 634 (1973), we announced certain basic principles which must be kept in mind when determining the constitutionality of an Act of the Legislature and we set out those principles as follows:

“The first of these is that the legislature’s power is limited only by the state and federal constitutions. Rockefeller v. Hogue, 244 Ark. 1029, 429 S.W. 2d 85; Berry v. Gordon, 237 Ark. 547, 376 S.W. 2d 279; McArthur v. Smallwood, 225 Ark. 328, 281 S.W. 2d 428; Gipson v. Ingram, 215 Ark. 812, 223 S.W. 2d 595. The next is that a presumption of constitutionality attends every such act. Redding v. State, 254 Ark. 317, 493 S.W. 2d 116; Bush v. Martineau, 174 Ark. 214, 295 S.W. 9. All doubt must be resolved in favor of constitutionality. Redding v. State, supra; Busk v. Martineau, supra. Another principle is that if it is possible for the courts to so construe an act that it will meet the test of constitutionality, they not only may, but should and will, do so. Davis v. Schimmel, 252 Ark. 1201, 482 S.W. 2d 785; McLeod v. Santa Fe Transportation Co., 205 Ark. 225, 168 S.W. 2d 413. Another way of stating this elementary rule is that every reasonable construction must be resorted to in order to save the statute from unconstitutionality. Bush v. Martineau, supra. See also Redding v. State, supra.”

The basis for the challenge to the statute, § 70-802, supra, is that it effects a deprivation of property rights without due process of law, contrary to the Fourteenth Amendment of the Constitution of the United States. Block argues that the right of the owner to fix a price at which his property shall be sold or used is an inherent attribute of the property itself, and, as such, within the protection of the due process of law clauses of the Fifth and Fourteenth Amendments, and cites Tyson & Brother v. Banton, 273 U.S. 418 (1927), in support of this contention. The Tyson case involved a New York statute which attempted to limit the price ticket brokers could charge over and above the price printed on amusement tickets and the Supreme Court did hold in Tyson as Block now argues. Apparently, however, the public interest became more pronounced in the sale and distribution of amusement tickets in New York during the intervening years between the Tyson decision in 1927 and 1964, because in the 1964 case of Gold v. Dicarlo, 235 F. Supp. 817 (S.D.N.Y. 1964), Tyson was overruled and the court held that a New York statute which set the maximum price for which brokers could sell tickets to amusements was not a denial of property rights without due process, and that decision was affirmed by the United States Supreme Court, 380 U.S. 520 (1965). It was noted in Gold v. Dicarlo that abuse existed in the resale of tickets and that the public interest required state control.

As a general rule, it is well settled that the state may regulate private property rights or contract rights through a valid exercise of its police power, including the regulation of prices. Nebbia v. New York, 291 U.S. 502 (1934). In Goldblatt v. Hempstead, 369 U.S. 590 (1962), the United States Supreme Court upheld the validity of an ordinance which regulated a sand and gravel business. In that case, in connection with the police power, the court said:

“The term ‘police power’ connotes the time-tested conceptional limit of public encroachment upon private interests. Except for the substitution of the familiar standard ‘reasonableness,’ this Court has generally refrained from announcing any specific criteria. The classic statement of the rule in Lawton v. Steele, 152 U.S. 133, 137 (1894), is still valid today:
‘To justify the State in . . . interposing its authority in behalf of the public, it must appear, first, that the interests of the public . . . require such interference; and, second, that the means are reasonably necessary for the accomplishment of the purpose, and not unduly oppressive upon individuals.’ ”

The validity of Block’s property rights in its name here involved is not questioned. So the issue, as we see it in the case at bar, is whether § 70-802 is within the valid exercise of police power. Specifically, does the interest of the public require the interference with the franchisor’s and the franchisee’s right to contractually set their own price? In Willys Motors v. Northwest Kaiser-Willys, 142 F. Supp. 469 (D. Minn. 1956), in upholding a state law which prohibited the cancellation of a franchise agreement without just cause, the court said:

“That the economic interests of a state may justify the exercise of its protective power notwithstanding interference with contracts is a proposition now well established. See Lincoln Federal Labor Union v. Northwestern Iron & Metal Co., 335 U.S. at page 531, 69 S. Ct. 251.
There is one important proviso which must be met before legislation which impairs contractual obligations can be upheld; that is, the legislation in question must be enacted for a public, as contrasted with a private, purpose. See Home Building & Loan Ass’n v. Blaisdell, 290 U.S. 398, 438 S. Ct. 231, 78 L. Ed. 413; Worthen Co. v. Thomas, 292 U.S. 426, 431, 432, 54 S. Ct. 816, 78 L. Ed. 1344; Worthen Co. ex rel. Board of Com’rs, etc. v. Kavanaugh, 295 U.S. 56, 60, 55 S. Ct. 555, 79 L. Ed. 1298; Western States Utilities Co. v. City of Waseca, 242 Minn. 302, 65 N.W. 2d 255; compare Veix v. Sixth Ward Building & Loan Ass’n, supra, with Treigle v. Acme Homestead Ass’n, 297 U.S. 189, 56 S. Ct. 408, 80 L. Ed. 575.”

In State v. Hurlock, 185 Ark. 807, 49 S.W. 2d 611 (1932), in upholding the constitutionality of an act requiring the licensing of real estate brokers, this court said:

“It is true that the police power can only be exercised to suppress, restrain, or regulate the liberty of individual action, when such action is injurious to the public welfare.”

In Ark. State Hwy. Comm’n v. Ark. Power & Light Co., 231 Ark. 307, 330 S.W. 2d 77 (1959), in forbidding the Highway Commission from requiring the power company to move some of its poles for public use without just compensation, we said:

“The police power should not be indiscriminately or un* necessarily used. In Beaty v. Humphrey, 195 Ark. 1008, 115 S.W. 2d 559, this court said: ‘The police power of the State is one founded in public necessity, and this necessity must exist in order to justify its exercise.’

No case has been cited to us, and our own research has revealed none, wherein the police power of a state has been used to regulate the price to be agreed upon by contracting parties solely for the benefit of one of the parties. In every instance of such regulation under the police powers, it appears justified only because some broad public interest required it. In the landmark case of Nebbia v. New York, supra, the Supreme Court of the United States for the first time held a state price “fixing” law not in violation of due process. The statute involved in that case established a maximum and minimum price for the retail sale of milk in New York. The court sustained the invocation of the police power because of the significance of the industry to the public health, welfare and interest involved, saying:

“The production and distribution of milk is a paramount industry of the state, and largely affects the health and prosperity of its people. Dairying yields fully one-half of the total income from all farm products. Dairy farm investment amounts to approximately $1,-000,000,000. Curtailment or destruction of the dairy industry would cause a serious economic loss to the people of the state.”

There are many other federal court decisions and decisions from other states, both pro and con, as to the validity of statutes enacted under the police power but they all turn on the particular statute as related to the facts of the particular case, and the extent to which the public interest, peace, health or welfare were involved, was the final deciding factor in all of them.

The valid exercise of police power in price regulation and control has been upheld and approved by this court when a broad public interest is protected. In Concrete, Inc. v. Arkhola Sand & Gravel Co., 230 Ark. 315, 322 S.W. 2d 452 (1959), the Arkansas Unfair Practices Act, which made it unlawful for one engaged in the distribution of a commodity of general use or consumption to discriminate between different sections, communities or cities or portions thereof, with intent to destroy competition, by selling at a lower rate in one such section than in another, was upheld, and in that case we said:

“The appellee’s assumption that this is a price fixing statute is erroneous. Dunnell v. Shelley, 38 Cal. App. 2d 118, 100 P. 2d 830. The purpose of the Act, as stated in Ark. Stat. § 70-313, is to safeguard against the creation or perpetuation of monopolies and to foster and encourage competition by prohibiting unfair and discriminatory practices by which fair and honest competition is destroyed or prevented. We think the means adopted are reasonable and appropriate to promote the purposes mentioned.”

Although in Concrete, Inc, supra, we cited the purpose of the Act as stated therein, scienter was mentioned in the Act, and the public interest was to prevent monopolies by stifling and eradicating competition by prolonged and ruinous price wars. In the case of Gipson v. Morley, Comm’r of Revenues, 217 Ark. 560, 233 S.W. 2d 79 (1950), a statute controlling the minimum prices of intoxicating liquors was upheld. In that case Justice Lefiar, speaking for the majority, said:

“[T]he courts of Arkansas, like those of all American states, have sustained these monopolistic grants of special privilege on the ground that it is within the competency of the legislature to determine under the police power what regulatory rules are needful in controlling a type of business fraught with perils to public peace, health and safety as is the liquor business.”

The purpose of the statute challenged in the case at bar is set out in the emergency clause, Section 8 of the original Act 252 of 1971 as follows:

“It is found by the General Assembly that franchisors as described in the Act for adequate fees, have licensed Arkansas corporations and citizens to use their trade names and formulae; that in some instances the licensing agreements contain provisions requiring such franchisees to pay a greater royalty for the use of a trade name than is charged to franchisees doing business under the same trade name in other states, and that in some instances, franchisors collect advertising fees from franchisees which are not expended for advertising purposes; and that only by the immediate passage of this Act can this situation be remedied. Therefore, an emergency is hereby declared to exist and this Act, being necessary for the preservation of the public peace, health and safety, shall be in full force and effect from and after its passage and approval.”

We consider the case at bar more in point with Noble v. Davis, 204 Ark. 156, 161 S.W. 2d 189, and Union Carbide and Carbon Corp. v. White River Distributors, Inc., 224 Ark. 558, 275 S.W. 2d 455. In Union Carbide the manufacturer of Prestone antifreeze attempted to control the price for which it was to be sold in Arkansas under a provision of Act 92 of 1937, the so-called “Arkansas Fair Trade Act.” We held the provision unconstitutional as outside the police powers of the state and followed our reasoning in Noble v. Davis, supra. Consequently, we shall not review the Union Carbide decision further since our reasoning in Noble v. Davis so nearly coincides with our reasoning in the case at bar. In Noble the constitutionality of Act 432 of 1941 authorizing the state board of barber examiners to fix a minimum price for barber services was involved. In that case we refused to follow Nebbia v. New York, supra, and its progeny since the price regulation under Act 432 was outside the police power of the state. We quote at length from Noble since it sets out our reasoning in that case and also in the case at bar. In Noble we said:

“That portion of § 1 of said Act 432, above quoted, where the Legislature declared that the purpose of the act is the protection of the public health, safety, etc., is the declaration of a non-existent fact. The fact that the Legislature so declared the purpose of the act does not make it so, if, in fact, the declared purpose has no substantial connection with the real purpose of the act. The real and only purposes of the act were to confer power on appellants to establish (1) minimum price schedules for barbers; (2) minimum commissions to be paid to barbers for their services; and (3) opening and closing hours for barber shops. Now just what connection these three purposes have with the ‘protection of the public safety, health, welfare and general prosperity,’ or with either of them is difficult to perceive. How can the price a barber charges for a haircut or shave, or the commission the owner pays the barbers, or the hour the shop opens or closes affect the public safety, health, welfare or prosperity? Such connection is visionary and not real. In line with what we have just said, Am. Jur., vol. 11, p. 1077, it is said: ‘The mere assertion by the Legislature that a statute relates to the public health, safety, or welfare does not in itself bring that statute, within the police power of a state, for there must always be an obvious and real connection between the actual provisions of the police regulations and its avowed purpose and the regulation adopted must be reasonably adapted to accomplish the end sought to be attained. A statute or ordinance which has no real, substantial, or rational relation to the public safety, health, moral or general welfare is a palpable invasion of rights secured by fundamental law and cannot be sustained as a legitimate exercise of the police power. One application of the familiar rule that the validity of an act is to be determined by its practical operation and effect and not by its title or declared purpose, is that a constitutional right cannot be abridged by legislation under the guise of police regulations. The exercise of the power must have a substantial basis and cannot be made a mere pretext for legislation that does not fall within it. The Legislature has no power, under the guise of police regulations, arbitrarily to invade the personal rights and liberty of the individual citizen, to interfere with private business or impose unusual and unnecessary restrictions upon lawful occupations, or to invade property rights.’ ”

The above language in Noble is applicable to § 2 of Act 252 of 1971 as amended, Ark. Stat. Ann. § 70-802, in the case at bar. It must be remembered that § 70-802 is not confined to the franchises sold by the appellee Block but the statute applies to all new franchises for use of a service mark, trade mark or trade name in Arkansas. The statute applies to motel and quick food business as well as the income tax and other businesses. We can only construe the statute as an attempt to insure to Arkansas franchisees a minimum price for a franchise. As we interpret § 70-802, it simply attempts to insure to Arkansas businessmen who purchase a franchise for the use of a service mark, trade mark or trade name, that they shall receive such franchise at the lowest price in the nation without relation to the public safety, health, moral or general welfare. Consequently, we hold that Section 2 of Act 252 of 1971 as amended, Ark. Stat. Ann. § 70-802 (Supp. 1973), is unconstitutional.

The judgment of the trial court is, therefore, affirmed.

Fogleman, J., concurs.

John A. Fogleman, Justice,

concurring. I concur because I do not think Ark. Stat. Ann. § 70-802 (Supp. 1973) applied to this transaction. In this respect I agree with the circuit judge and disagree with the majority. This franchise was not a new one, in my opinion. I do not understand how the majority concluded that it is, except by saying so. At the very most, there was a question of fact, resolved against appellees by the circuit judge “sitting as a jury.” The result of the court’s holding is that only a change in terms of an existing franchise made by rewriting the agreement would make it a new one. This intention certainly does not appear from the statute.

I would not consider the constitutional question, because, in my view, the judgment should be affirmed on the basis of the circuit judge’s holding. This would render consideration of the constitutional question improper.

       Section 3 of the Act had to do with money collected for advertising and not used for that purpose. The Act contains a severability clause and Section 3 is not challenged or before us on this appeal.. We are only concerned with Section 2 as amended.