author: P. A. Hollingsworth, Justice. Steele Hays, Justice, Darrell Hickman, John Purtle, Justice,

text:
    Judith Lynn MEINHOLZ v. Ludwig Hugo MEINHOLZ
    84-52
    678 S.W.2d 348
    Supreme Court of Arkansas
    Opinion delivered October 29, 1984

      E. Winston Mclnnis, for appellant.

      Carl J. Madsen, P.A., for appellee.
   P. A. Hollingsworth, Justice.

This is a divorce case. Once again the Court must interpret our statute governing the division of property in divorce cases. Ark. Stat. Ann. § 34-1214 (Supp. 1983). The basic question here is whether we recognize the appellee’s “enhanced business career” as marital property under our present statute.

When the parties married in 1964 appellant, Judith Lynn Meinholz, had a bachelor of science degree and appellee, Ludwig Hugo Meinholz, had recently immigrated to the United States from Germany. While the appellee was not completely fluent in English, he was competent enough with the language to acquire several jobs. He is presently employed by Riceland Foods in an executive capacity and earns approximately $47,000 a year. From the time of the marriage until the divorce in 1982, the appellant generally took care of homemaking and the appellee took care of moneymaking. The sole exception was a period in 1965 when the appellant taught school for a year when the couple lived in New Jersey. They lived together for eighteen years, during which they had two sons, ages now 16 and 13.

In April 1982, Ludwig Meinholz sued for divorce; his wife filed a counterclaim also seeking a divorce. The decree granted a divorce to Mrs. Meinholz; ordered that the family home be sold when the children reach majority and the proceeds, divided; directed Mr. Meinholz to pay alimony until January 1, 1990, and child support for the minor children; divided the personal property, including two IRA accounts, and a profit sharing pension plan for Mr. Meinholz at Riceland Foods; and did not find Mr. Meinholz’s “enhanced business career” marital property subject to distribution under our present statute. We agree with the chancellor on failing to recognize the “enhanced business career” as marital property. However, we reverse and remand on the other points discussed by us and order the chancellor to fashion a decree not inconsistent with this opinion. The appeal comes to us under Ark. Sup. Ct. R. 29(l)(c).

The appellant’s first argument is that the chancellor erred in failing to recognize the appellee’s “enhanced business career” as marital property subject to distribution. Her testimony on this point indicates she gave up her ambition to be a counselor and instead became a homemaker because she and Mr. Meinholz agreed they were a partnership working toward the common goal of establishing his career. There was also testimony that she has a degenerative disc disease which prevents her from doing certain jobs that require extensive manual labor.

The appellant analogizes her situation to the “professional license” cases where one spouse works while the other obtains a professional degree and few assets are acquired so that when the couple divorces an inequity has arisen since the professional spouse’s increased earning potential no longer inures to the benefit of the other spouse. She maintains that the increased earning capacity is the same whether such capacity was enhanced by increased education or increased skills and asks this Court to recognize such capacity as marital property.

The appellee argues that he never prevented his wife from seeking her separate educational goals or from working after they were married. Furthermore, he maintains that his wife is a bright, articulate woman with a college degree and is physically and mentally equipped to work.

The appellant cites several professional license cases in support of her argument. In Inman v. Inman, 578 S.W.2d 266 (Ky. App. 1979) the court said, “[T]he husband’s increased earning power, represented by his degree, should indeed be counted as marital property where there is no accumulated marital property and the spouse who subsidized the degree is ineligible for maintenance.” Here, the appellant is eligible for maintenance and there is accumulated marital property. Furthermore, the Inman court said that one important factor to consider in determining whether a marital property classification is proper is to consider the extent to which the nonlicense-holder has already or otherwise benefited financially from his or her spouse’s earning capacity, or is eligible for maintenance. Both of these factors are important in this case in that here, the appellant has been married to the appellee for eighteen years and has already reaped benefits from her husband’s increased earnings. This is unlike the typical professional license case where the divorce occurs at the point where the increased earnings begin. Also, as already mentioned the appellant here is eligible for maintenance and in fact has been ordered to receive it in the form of alimony by the trial court. On the extent of Mrs. Meinholz’s disability, there was conflicting testimony. Where there are conflicts in testimony, we defer to the judgment of the trial judge as to the credibility of the witnesses because of the superiority of his position in making that determination. Weber v. Weber, 256 Ark. 549, 508 S.W.2d 725 (1974).

Appellee does not contest the appellant’s third and fourth points on appeal. He concedes that when the house and the remaining marital property are sold, the television set in his possession should also be sold at that time. Similarly on point four, the appellee agrees that a Singer sewing machine, six kitchen chairs, a microwave oven, and a used recliner chair were gifts or property owned by the appellant prior to the marriage and are therefore within the exception to marital property. On remand, the chancellor will include these agreements in his decree.

This appeal involves another distribution problem on which we have issued an opinion recently. The appellant is arguing that the chancellor erred by awarding Mr. Meinholz his Riceland Foods pension plan. In Day v. Day, 281 Ark. 261, 663 S.W.2d 719 (1984), this Court stated:

We now realize that we have inadvertently failed to recognize the new concept “of marital property,” created by Act 705 of 1979, as amended. That statute defines marital property as all property acquired by either spouse subsequent to the marriage with exceptions not important here. Section 34-1214 (Supp. 1983). That law directs that all marital property be distributed equally unless the court finds that division inequitable . . .
Under the recent holdings of the Supreme Court, spouses must be treated equally in the absence of a valid reason for making a distinction. Our 1979 law was enacted pursuant to that mandate and must be construed in harmony with that intent. It is easy to demonstrate that the legislative purpose will be frustrated if controlling differences are drawn between pensions vested and currently payable and those that are vested but payable in the future.

Our record in the present case is sparse on this point and the Riceland Foods pension plan is not an exhibit. However, it is clear that Mr. Meinholz’s pension rights are vested in that he will be entitled to enjoy the financial benefits in or about 2003 when he reaches sixty years of age, whether or not he continues in his present employment. At the time of trial, there was $7,959 in this fund.

We agree with the view affirmed by the New Jersey Court in Kikkert v. Kikkert, 438 A.2d 317 (1981):

It [the pension] is the result of direct or indirect efforts expended by one or both parties to the marriage — it is additional compensation for services rendered for the employer and a right acquired during the marriage. Hence, equitable considerations mandate its inclusion for distribution where, as here, the employee has already qualified for benefits and the other spouse, during the marriage, has foregone enjoyment of that additional compensation represented by the cost of the plan whether or not it requires employee contributions. Each spouse had the same expectation of future enjoyment with the knowledge that the pensioner need only survive to receive it.

Similarly with the IRA accounts, the amounts are known or easily attainable and those benefits have vested. There should be no distinction between appellee’s and appellant’s accounts. They are both marital property and should be included for distribution.

The appellant’s next contention is that the trial court erred by not requiring the parties to share equally in all repairs and maintenance to the home. The chancellor’s decree is ambiguous as to this point. In Paragraph 1, he states that Mrs. Meinholz shall be responsible for all utilities, routine maintenance and repairs and shall keep the house in a condition at least as good as it now exists. In the next section under that paragraph, he states that the parties shall jointly share the expense of taxes, insurance, and other routine maintenance. We held in Strang v. Strang, 258 Ark. 139, 523 S.W.2d 887 (1975), that the husband was ordered to pay half of any major repairs necessary in the upkeep of the homeplace because “[t]he mortgage payments and major repairs on the property would increase and protect Mr. Strang’s undivided one-half interest in the property as well as that of Mrs. Strang.” On remand, the chancellor will modify the decree to provide that the parties share equally in the costs of all repairs and maintenance to the home.

The other issue raised by the appellant that we will discuss is the matter of attorney’s fees. Ark. Stat. Ann. § 34-1214 (Supp. 1983) provides that all marital property shall be distributed one half to each party unless the court finds such a division to be inequitable in which case the court must state its basis and reasons for not dividing the marital property equally. We view the purpose of this statute as making the parties equal. We find no compelling reason to pay the wife’s attorney’s fees automatically unless the chancellor finds it to be Suitable. We will not disturb the trial court’s finding absent clear abuse. We find no such abuse here.

The chancellor and the parties did not have the benefit of our holding in Day when this case was heard. Equity and fair play require a remand to the trial court. Gentry v. Gentry, 282 Ark. 413, 668 S.W.2d 947 (1984). The chancellor can correct other errors alleged by the appellant on remand. We reverse and remand for further proceedings by the chancellor and for the decree to be modified consistent with this opinion.

Affirmed in part; reversed in part and remanded.

Hickman, J., concurs in part, dissents in part.

Purtle, J., dissents in part.

Hays, J., concurs.

Steele Hays, Justice,

concurring. I concur in the majority opinion but express the view that the Chancellor’s prospective reduction of alimony ought to be conditioned on later developments and not on a predetermined order. If the appellant is successful in finding employment, that should largely resolve the matter, but the proof raised genuine doubts about both her employ-ability and employment prospects. I believe those issues should be left open.

Darrell Hickman,

Justice, concurring in part, dissenting in part. I essentially concur in the result but write to point out several problems with the majority opinion. First, I adhere to my views expressed in Day v. Day, 281 Ark. 261, 663 S.W.2d 719 (1984), on the matter of retirement plans.

Second, I do not believe an “enhanced business career” can be “property” under Arkansas law; a contrary impression is left by the majority.

Third, the majority miscites Strang v. Strang, 258 Ark. 139, 523 S.W.2d 887 (1975), to hold as a matter of law that the chancellor must order the parties to equally share in the costs of all repairs and maintenance to the house. That is a discretionary matter even under the new law and on remand, I would allow the chancellor to clear up the apparent inconsistencies in the decree.

Fourth, I would point out that while the chancellor wrote a detailed letter carefully setting forth his findings, anytime there is less than an equal division of property the chancellor must give his reasons. Ark. Stat. Ann. § 34-1214 (Supp. 1983). In this case the chanellor undoubtedly used his discretion, as he should have, to fairly divide the property, but when these matters are appealed, we are confronted with the problem of finding reasons. If there are none, we must follow the statute and order an equal division on remand.

Except for the order to the chancellor to enter a finding that the parties shall equally share in the repairs, I concur.

John Purtle, Justice,

dissenting in part. I agree that Ark. Stat. Ann. § 34-1214 (Supp. 1983) does not require that the wife be awarded attorney’s fees when the property is divided equally. However, when the wife ends up with no money from which to pay the attorney’s fees and the husband has money available, I think it proper to award her a reasonable amount to pay her attorney’s fees. I think the wife in this case should be awarded such fees from the husband.


source: Caselaw Access Project

author: James H. Mckenzie, Special Justice. John I. Purtle, Justice, Darrell Hickman, Justice,

license: Public Domain

text:
    Jim MURPHY v. Wooten EPES, Executive Director of Arkansas Housing Development Agency, Mort HARDWICKE, Charles M. STOUT, James BRANYAN, Troy BURRIS, Fred DACUS, Margaret DAVENPORT, Tommy EDWARDS, Mahlon A. MARTIN, Bill MATHIS, Betty WALKER, George H. WRIGHT, Jr., Members of Board of Directors of Arkansas Housing Development Agency, and PEOPLES BANK AND TRUST COMPANY
    84-196
    678 S.W.2d 352
    Supreme Court of Arkansas
    Opinion delivered October 29, 1984

      Luther Hardin, for appellant.

      Steve Clark, Att’y Gen., by: George E. Campbell, Asst. Att’y Gen.; and Nose Law Firm, A Professional Association, by; David L. Williams, for appellees.
   James H. Mckenzie, Special Justice.

This is an illegal exaction suit filed pursuant to Article 16, Section 13 of the Arkansas Constitution and the Declaratory Judgment Act, Ark. Stat. Ann. § 34-2501 et. seq. (Repl. 1962). Jim Murphy, the plaintiff and appellant, is a citizen and taxpayer of Pope County, Arkansas. In this action, he represents all taxpayers within the state who might be potentially affected by the alleged illegal exactions. By his complaint in Pope County Chancery Court, the plaintiff alleged that the Arkansas Housing Development Agency should be enjoined from issuing Single Family Mortgage Bonds and Multi-Family Mortgage Bonds pursuant to Arkansas Acts 1977, No. 427 (“Act 427”). The Chancellor, in a well-considered memorandum opinion, held that the Single Family Bonds and the Multi-Family Bonds did not violate the Arkansas Constitution and were for a valid public purpose. He ordered the plaintiff’s complaint dismissed. It is from this order of dismissal that the appellant appeals.

The Arkansas Housing Development Agency (“AHDA”) was created by the Arkansas General Assembly by Act 427. The portions of the Act material to this litigation are as follows: Sections 2.00 through 2.02 are recitations as to the need for the AHDA and the public purposes it is to serve, i.e., basically the need for housing for the people with low and moderate incomes. Sections 4.00 through 4.08 establish a public body corporate and politic with corporation succession to be known as the AHDA with a board of directors consisting of the Director of the Department of Finance and Administration and six members appointed by the Governor. Sections 5.00 through 5.23 state the powers of the Agency to include the power to borrow money and to issue bonds. Sections 7.00 through 7.15 authorize the Agency to make loans to mortgage lenders under rules adopted by the Agency, and Sections 8.00 through 8.13 authorize the Agency to purchase and participate in mortgages made to eligible persons or families within the State of Arkansas. Sections 9.00 through 9.03 empower the Agency to issue revenue bonds from time to time and in amounts to be determined by the Agency. The bonds shall be authorized by resolution of the Agency to be made in such denominations, to mature at such time and to bear interest at such rate as the Agency shall determine not to exceed 10 percent per annum. The bonds shall be executed by the signature of the Chairman of the Agency and the Director of the Agency. The Agency shall adopt a seal, and each bond shall be impressed with the seal of the Agency. Section 10.00 requires it be plainly stated on the face of each bond that it is issued under the provisions of Act 427 and that the bonds shall be obligations only of the Agency and that in no event shall they constitute an indebtedness for which the faith and credit of the State of Arkansas or any of its revenues are pledged. Section 10.01 provides that the principal of, interest on and the trustee’s paying agent’s fees in connection with the bond shall be secured by a lien and pledge of the loans made or mortgages purchased from the bond proceeds and the collateral security received by the Agency. Section 12.00 says that the bonds shall be exempt from all state, county and municipal taxes, except property taxes. Section 16.00 states that all revenues received by the Agency, except revenues derived from appropriation, are specifically declared to be cash funds restricted to be used solely as provided in Act 427. These revenues shall not be deposited into the State Treasury but deposited in an account for the Agency.

The Board of Directors of the AHDA on June 14, 1984, adopted a series of resolutions which authorized the issuance by the Agency of $150,000,000 of single family residential mortgage revenue bonds (hereinafter referred to as “Single Family Bonds”) and $30,078,090 of multi-family housing revenue bonds (hereinafter referred to as “Multi-Family Bonds”). The proceeds from the sale of the Single Family Bonds will be used by the AHDA to purchase mortgages secured by single family dwellings of families with low and moderate income as those terms are defined by the Agency. The proceeds from the sale of the Multi-Family Bonds will be used to provide funding for the rehabilitation and construction for multi-family housing projects in the State of Arkansas. These are revenue bonds to be repaid from the mortgage payments made by the owners of the single family and multi-family residences. The interest on the bonds will be exempt from federal income taxation if certain criteria are met and the bonds are issued prior to January 1, 1985. The appellant contends that the bond issues are illegal in that they violate Article 16, Section 1 and Amendment 20 of the Arkansas Constitution and that they are not for a valid public purpose.

It is the opinion of this court that for the proposed revenue bonds to be valid, they must pass two tests: 1) Not to be in violation of the Arkansas Constitution; and 2) Be for a public purpose. We have concluded that these particular bonds meet both of these tests for the reasons explained below.

1. Constitutional.

First, we point out that this case is factually distinguishable from Purvis v. City of Little Rock, 282 Ark. 102, 667 S.W.2d 936 (1984), where the court was considering bonds issued by the City of Little Rock to be paid by revenues generated under a lease to La Quinta of a motel on property owned by the City. The Purvis v. City of Little Rock, supra, bonds were issued pursuant to Arkansas Constitution Amendment 49, Act 9 of 1960 and Act 380 of 1971. In the case at bar, the bonds are authorized and issued by the AHDA pursuant to Act 427 and are not issued by the State of Arkansas or even in the name of the State of Arkansas. The AHDA is, by Section 4.00 of Act 427, a public body corporate and politic with corporation succession. The bonds here in question are obligations only of the AHDA and so state on their face. They do not constitute an indebtedness of the State of Arkansas under Section 10.00 of Act 427. Each bond bears the seal of the AHDA and not the State of Arkansas.

The Arkansas Constitution is not a grant of enumerated powers to the legislature but rather the legislature may rightfully excercise the power of the people subject only to the restrictions of the state or federal constitutions. Wells v. Purcell, 267 Ark. 456, 592 S.W.2d 100 (1979). In the context of this case, the Arkansas Legislature could rightfully enact Act 427 to allow AHDA to issue the proposed revenue bonds without an election by the people of this state unless prohibited by the Constitution of the United States and/or Arkansas. It is not contended by either party that any provision of the United States Constitution is applicable, but appellant does argue that Article 16, Section 1 and Amendment 20 of the Arkansas Constitution prohibit the proposed bond issues. We do not agree. The concurring opinion of Justice Dudley in Purvis v. City of Little Rock, supra, is a recent statement of the reason why:

“Our cases constitute a well developed body of precedent, now stretching over half a century, by which this court has consistently interpreted the constitution to authorize governments to incur long term debt, without elective approval, in order to make authorized improvement for public purposes when the debt is to be paid out of revenues.”

282 Ark. at 126, 667 S.W.2d at 948. See also Miles v. Gordon, 234 Ark. 525, 353 S.W.2d 157, Davis v. Phipps, 191 Ark. 298, 85 S.W.2d 1020 (1935), Jacobs v. Sharp, 211 Ark. 865, 202 S.W.2d 964 (1947) and McArthur v. Smallwood, 225 Ark. 328 281 S.W.2d 428 (1955).

In Miles v. Gordon, supra, suit was brought seeking an injunction to prohibit the issuance of certificates of indebtedness to finance construction of buildings at the state-supported university and colleges under Act 65 of 1961. The certificates were to be repaid with interest received from the investment income received by the State Board of Finance on state funds. This interest went into a special fund and was pledged to the payment of the certificates of indebtedness. This was the sole source from which payment could be made. This court held that Act 65 and the certificates of indebtedness were not in violation of Article 16, Section 1 of the Constitution and said:

“Article 16, Section 1, of the Arkansas Constitution provides, inter alia, that the state shall not lend its credit for any purpose whatever. The answer to that argument is simply that Act 65 does not call for the State to lend its credit. The obligation arising under Act 65 is solely that of the Reserve Fund Commission. In Brown v. Arkansas Centennial Commission, 194 Ark. 479, 107 S.W.2d 537, the same contention was made in an attack upon Act 180 of 1935. This Court, after citing language of the Act to the effect that no bond, note, or other evidence of indebtedness issued under the Act or created by the Commission should be held or construed as an obligation of the State of Arkansas, stated:
‘It is plainly manifest from this language that the bonds to be issued are not obligations of the state, but “shall be solely and exclusively the obligations of the Commission in its corporate and representative capacity.” ’
This language is too plain to be misunderstood and is not open to construction. So the state is not lending its credit and it is not issuing any interest bearing treasury warrants or scrip, and the provisions of said section of the Constitution are not invaded.”

The Miles v. Gordon decision also concluded that Act 65 of 1961 did not violate Amendment 20.

In the case at bar, the AHDA is issuing bonds solely and exclusively as the Agency’s obligations and Act 427 specifically provides that the bonds shall be obligations only of the Agency. Those bonds are secured by a lien and pledge of the loans made or mortgages purchased from the proceeds and the collateral security received by the Agency. Section 10.01. The purchaser has no legal recourse against the State of Arkansas in the event of default of the bonds. Therefore, we conclude that on this set of facts, the state has not lent its credit. Consequently, Act 427 and the proposed bonds to be issued thereunder are not in violation of Article 16, Section 1.

Amendment 20 of the Constitution, as pertinent to this case, provides:

. . the State of Arkansas shall issue no bonds or other evidence of indebtedness pledging the faith and credit of the State or any of its revenues for any purpose whatsoever, except by and with the consent of the majority of the qualified electors of the State voting on the question at a general election or at a special election called for that purpose.”

Section 10.00 of Act 427 specifically says:

“It shall be plainly stated on the face of each bond that it has been issued under the provisions of this Act, that the bonds shall be obligations only of the Agency, and that in no event shall they constitute an indebtedness for which the faith and credit of the State of Arkansas or any of its revenues are pledged.”

In Purvis v. Hubbell, 273 Ark. 330, 620 S.W.2d 282 (1981), this court reviewed the holdings of McArthur v. Smallwood, supra, Miles v. Gordon, supra, and Holmes v. Cheney, 234 Ark. 503, 352 S.W.2d 943 (1962). It was concluded that bonds which are clearly not general obligation bonds of the city or state but are revenue bonds payable as authorized by the legislature from special funds not available for general purposes are not prohibited by the Arkansas Constitution, and such revenue bonds do not have to be approved by an election.

The bonds issued under Act 427 do not pledge the full faith and credit of the state nor the state’s revenues at all. The only revenues that are to be used to repay the bonds are the collection of the principal and interest from the loans made or mortgages, purchased with the bond proceeds. These revenues received by the Agency are not to be deposited into the State Treasury but rather are restricted in their use to be used by the Agency solely for the purposes of carrying out the provisions of Act 427. Section 16.00. There is no public money, either in the form of appropriations, rentals, license fees or the like, being pledged to support the repayment of these bonds. This is even a clearer case of there being no state revenues involved than were the facts of Purvis v. Hubbell, supra, Mr Arthur v. Smallwood, supra, Holmes v. Cheney, supra, and Miles v. Gordon, supra.

Act 427 is not in violation of Article 16, Section 1 or Amendment 20 of the Arkansas Constitution, and the revenue bonds to be issued by the AHDA are not subject to the requirement of an election. The remaining question is whether these bonds are for a public purpose.

2. Public Purpose.

In reviewing whether this legislation serves a public purpose, we do so in accordance with Kerr v. East Central Arkansas Housing Authority, 208 Ark. 625, 187 S.W.2d 189 (1945):

“Public policy is declared by the General Assembly; not by courts. Unless there is something in the Constitution restraining the Legislature from saying that a designated course of conduct or a policy is for the public welfare, or unless the thing authorized is so demonstrably wrong that reasonable people would not believe that such was the legislative intent; the Act must prevail.”

The concurring opinion of Justice Dudley in Purvis v. City of Little Rock, supra, can be applied in determining whether or not Act 427 is for a public purpose. That opinion, when applied to Act 427, says that the determination of whether legislation fulfills a public purpose is a legislative decision and a court will reverse that decision only if the legislature acted arbitrarily, unreasonably or capriciously. The court should not substitute its own j udgment for that of the legislature. As the Chancellor stated in his memorandum opinion, the legislature studied the need for the creation of the Arkansas Housing Development Agency and included in Act 427 particular findings of fact as to why it felt there was a public purpose. It is to be noted that Act 427 is the enabling legislation for the issuance of the Single Family Bonds and the Multi-Family Bonds. However, both series of bonds are issued under the AHDA’s bond authorization resolutions which set forth the terms of the bonds and how the bond proceeds will be used within the confines of Act 427. So, when this court examines the public policy of the bonds, we are not only reviewing the legislation but also the administration of this Act by the AHDA.

The evidence in the trial court concerning public purpose was either stipulated or uncontradicted.

As to the bond issue for single family dwellings, the proof shows that, at least in 1974, 70 percent of the state’s population was unable to afford a home through conventional private financing. The loan supported by the Single Family Bonds will be available only to families with annual incomes of $40,000 or less plus an additional $2,000 for each dependent. The interest rate for loans made under the bond issue is anticipated to be 11.5 percent, and the conventional loan interest rate is between 14 percent and 14.25 percent. Consequently, 20,000 potential home buyers would be eliminated from the housing market if the proposed bond issue is not implemented. The minimum qualifying income for a conventional loan of $37,000 is $21,469.68 per year. The qualifying annual income under the AHDA Single Family Bonds is $18,070.32. The median income in Arkansas is $19,737.00. Therefore, the proposed bond issue will allow families with less than the median income to purchase a home and save approximately $28,500 in interest over the life of a 30-year mortgage on a $37,000 loan. The testimony is that the AHDA bonds bring low and moderate income buyers into the housing market making it possible for them to obtain home loans where otherwise not available. There is a public purpose served by aiding the low and middle income residents of Arkansas to secure adequate housing which would otherwise be beyond their reach.

As to the Multi-Family Bond issue, 51 percent or more of the occupants must be families whose incomes do not exceed 1.5 times the median income of the State of Arkansas or the county in which the project is located, whichever is greater. Twenty percent of the occupants must have incomes of less than 80 percent of the median income. This is necessary because Act 427 does say that the bonds issued by the AHDA are to be tax exempt. To qualify as tax exempt, the Multi-Family Bond proceeds must be used to provide projects for residential rental property where 20 percent or more (except in “target areas”, where it is 15 percent) are to be occupied by individuals of low or moderate income, meaning the percentage of median gross income shall be 80 percent. 26 USCA Section 108. These requirements are to assure an “economic mix” of tenants. The testimony is that this will result in greater overall stability of the multi-family project, because there will be a mixture of economic households rather than being solely low income persons. This is to avoid the adverse consequences of isolating low income households. Wooten Epes, Executive Director of AHDA, testified that the requirement of 20 percent of the units in the project be reserved for persons whose income is not more than 80 percent of the median income is a form of rent subsidy for the poor. The developer will have to charge higher rent for the remainder of the units to generate enough cash flow to repay the indebtedness secured by the mortgage on the project that is pledged to the AHDA under the bond issue.

The concept of an ‘ ‘economic mix” in housing has been recognized in other jurisdictions as being for a public purpose by both courts and legislatures. The dominant intention of Act 427 is to provide adequate housing to people of low and moderate income. The concentration of low income families even in standard structures has been recognized as not eradicating undesirable housing or social conditions for the poor. However, integrating the housing of persons with varied economic means in the same rental projects and neighborhoods is conducive to the permanent elimination of substandard living conditions. Massachusetts Acts 1966, Chapter 708, Section 2; Tedford v. Massachusetts Housing Finance Agency, 459 N.E.2d 780 (Mass. 1984). This concept encourages the investment of private capital and stimulates construction of residential housing for the low and moderate income people by stabilizing the longevity of the project with an economic mix of residents. Virginia Housing Development Authority Act, Code Section 56-55.25; Infants v. Virginia Housing Development Authority, 272 S.E.2d 649 (Va., 1980). Act 427 states in Section 2.00 the legislature’s concern over depreciated property values, impaired economic values of large areas and reduced capacity to pay taxes where there exists a shortage of safe, adequate and sanitary residential housing in the state. We are persuaded by the reasoning of Infants v. Virginia Housing Development Authority, supra, that promotion of economic and social integration in low and moderate income housing will serve to reduce unsatisfactory social conditions in the rural and urban areas of this state. This intermingling of households of different economic strata reflects a legitimate public purpose of avoiding ethnic, economic and racial isolation. California Housing Finance Agency v. Elliot, 551 P.2d 1195 (Cal., 1976).

It is not overlooked that persons with unrestricted incomes will have access to possibly 49 percent of the multifamily housing allowed to be financed with Multi-Family Bonds. It is our conclusion that this is incidental and subordinate to the primary purpose of providing satisfactory housing for the poor and moderate income citizens of this state. In Grubbs v. Iowa Housing Finance Authority, 255 N.W.2d 89 (Ia., 1977), the Supreme Court of Iowa held a housing finance plan that required 30 percent of all housing units be for the elderly, handicapped and very low income to be for a public purpose and said:

"This built-in flexibility is reasonably designed by the legislature to promote the goal of adequate housing for the designated beneficiaries of the enactment, and does not convert a public policy into an unconstitutional private purpose.”

255 N.W.2d at 94.

Hogue v. The Housing Authority of North Little Rock, 201 Ark. 263, 144 S.W.2d 49 (1940), held that housing for the low and moderate income is a valid public purpose. The Legislature has stated in Sections 2.00 through 2.02 of Act 427 that the statute is for a public purpose. The uncontradicted and stipulated proof in this case is that the statute and its administration by the AHDA with the proposed bond issue are for a public purpose. The Chancellor found the bonds to be for a public purpose. This court’s standard for reviewing a Chancellor’s finding of fact is that his decision will be affirmed unless clearly against the preponderance of the evidence. For the reasons set forth above, we are unable to say that the Chancellor erred in finding the issuance of the Single Family Bonds and the Multi-Family Bonds is for a valid public purpose.

We affirm the Chancellor’s dismissal of the appellant’s complaint.

Hubbell, C.J., and Hollingsworth, J., not participating.

Purtle, J., concurs. Hickman, J. dissents.

John I. Purtle, Justice,

concurring. I agree with the result of the majority opinion for the reasons and citations contained in the first point of the opinion. I disgree with some statements under the first point and with the second point of the opinion.

First, I disagree with the statement that the Arkansas Constitution is not a grant of enumerated powers because it obviously is such a grant. The preamble begins with the words, “We, the people of the State of Arkansas...” Section 1 of Article 2 reads as follows:

All political power is inherent in the people and government is instituted for their protection, security and benefit; and they have the right to alter, reform or abolish the same in such manner as they may think proper.

Section 2 of Article 2 states that the government derives its powers from the consent of the people. Article 4 establishes the three branches of government. Articles 5, 6 and 7 define the powers granted to each of the three departments. If the grant of powers were not limiting there would be no reason why the General Assembly could not enlarge or reduce the powers of the Executive or Judicial departments. Furthermore, there would be no need to define the duties of any branch of the government if the Constitution were not a grant of powers by the people. There are many reasons for considering the Constitution to be a grant of powers. For example, the General Assembly may not establish laws allowing interest rates above certain limits; the Governor must keep the General Assembly informed of the conditions and government of the state; and no Judge or Justice may preside in a cause in which he has a personal interest or is related to a party, by affinity or consanguinity, within such degree as is prescribed by law. Indeed the very question before us now is whether the General Assembly has been given authority to provide for the issuance of the bonds here in question.

I also disagree with that portion of the majority opinion which states that we have held that bonds which are not general obligation bonds and are not prohibited by the Constitution do not have to be approved by the electorate. Such bonds also must not lend the credit of the state or municipal entity to secure the obligation. In Purvis v. City of Little Rock, 282 Ark. 102, 667 S.W.2d 936 (1984) [Purvis II] we held that the city of Little Rock had in fact lent its credit to La Quinta. The bonds were boldly entitled “limited obligation bonds of the city of Little Rock.” The bonds in the case before us do not purport to be obligations of the State of Arkansas. The majority opinion clearly expresses the reasons why these bonds are not obligations of the state and why they do not pledge the faith and credit of the state in any manner. There is absolutely no recourse against the state in the event the revenues do not meet the obligations imposed by the bonds.

I do not agree with the majority where it quotes from a concurring opinion in Purvis II to the effect that this court has consistently held that it was unnecessary to hold an election on bond issues which authorized governments to incur long term debts to make authorized improvements for public purposes if the bonds were to be paid from revenue generated by the project. The statement leaves out essential ingredients. The public purposes for which revenue bonds are issued cannot be debts incurred by the municipalities and must be for a purely public purpose as defined by Article 16, Section 1, as amended. The reason the concurring opinion was written on this point was that a majority of the court did not agree that it accurately stated the law. What we stated in Purvis II was that “municipalities may issue pure revenue bonds for purely essential public purposes without holding an election.” [Emphasis added.] The last quoted statement is not the same as the part of the concurring opinion which states that the Constitution “authorize^] governments to incur long term debt, without elective approval, in order to make authorized improvements for pub lie purposes when the debt is to be paid out of revenues. ” [Emphasis added.]

It seems clear to me that what we intended in Purvis II was to prohibit municipalities from issuing bonds pursuant to Amendment 49 without an election and further to make it clear that municipalities could authorize revenue bonds, which are not obligations of the municipalities, for those public purposes enumerated in Article 16 as amended. (Amendment 20 holds the state to the same restrictions as Article 16, as amended, does the municipalities.)

Having decided that the State of Arkansas is not involved in this bond issue it becomes unnecessary to decide whether they were issued for a public purpose. If it were necessary to decide this issue I would hold that they were not issued for a public purpose as defined in Purvis II.

Darrell Hickman, Justice,

dissenting. I expressed my views in Purvis v. City of Little Rock, 282 Ark. 102 667 S.W.2d 936 (1984), and I will adhere to them. The constitution clearly sets out which bonds the state or any government entity should be involved in. The bonds in this case, issued by a state agency, are simply a way to directly aid a private developer who builds and sells houses. While the bonds declare that the state will not be bound, this state entity was created expressly to issue bonds. The state is involved because it must declare them to be bonds issued for a public purpose. Otherwise, they would not be legitimate tax free bonds, which is the primary purpose of their existence. The state is not supposed to lend its credit or.good name to such private ventures. Ark. Const. Amend. XVI (1874). See also Ark. Const. Art. XII, §§ 6 and 7. However, that is what is happening here: the state’s good name is being used to promote these bonds.

These bonds are not issued to help “poor” people, which is how they are being justified. The record bears out that moderate and high income people will be the greatest beneficiaries of the bonds. There will not be any destitute people living in these houses. Arkansas does not need to be in the business of aiding private developers in building houses that are no different than others on the market. This case is not actually different in principle from Purvis v. City of Little Rock, supra, where we struck down a scheme to aid a private motel. If anything, the public purpose argument is less forceful here. The only purpose here is to aid bond dealers, developers, and investors by way of tax free bonds.

I respectfully dissent.


author: Per curiam.

text:
    David BOSNICK v. A.L. LOCKHART, Director, Arkansas Department of Corrections, et al.
    84-97
    677 S.W.2d 292
    Supreme Court of Arkansas
    Opinion delivered October 29, 1984

      Robert A. Newcomb, for appellant.
    No Response by the State.
   Per curiam.

Appellant, David Bosnick, has filed a motion for costs pursuant to Rule 24 of the Supreme Court Rules. The Attorney General did not file a response to the motion. Rule 24 provides that where, as here, an appellant succeeds in having the trial court’s ruling reversed, he may recover brief costs at the amount allowed per page, not to exceed $300.00, filing fee and record fee.

The appellant alleged in his motion that he has incurred costs of $100.00 for the filing fee; $114.60 for the record fee; and $56.00 for brief reproduction. The costs related to the brief reproduction will be determined by the Supreme Court Clerk based on the amount allowed per page. That sum plus the other two amounts alleged are ordered paid by the appellee.

Hickman and Dudley, JJ., dissent.


author: Per Curiam.

text:
    Billy Joe WALKER v. STATE of Arkansas
    CR 84-171
    678 S.W.2d 360
    Supreme Court of Arkansas
    Opinion delivered October 29, 1984

      Clark ir Crabtree, by: Terry Crabtree, for petitioner.
    No position taken by the State.
   Per Curiam.

Petitioner Billy Joe Walker was convicted in circuit court of theft by receiving and sentenced as a habitual offender to 30 years imprisonment. A fine of $15,000 was also imposed. He appealed the conviction to the Court of Appeals. Before the Court of Appeals rendered a decision, petitioner asked that the appeal be dismissed so that he could proceed under A.R.Cr.P. Rule 37. The Court of Appeals granted the motion, noting that petitioner would have to proceed in the Supreme Court for postconviction relief.

Rule 37.2 (a) provides:

If the conviction in the original case was appealed to the Supreme Court or Court of Appeals, then no proceedings under this rule shall be entertained by the circuit court without permission of the Supreme Court.

The rule does not specify whether “appealed” denotes simply filing a notice of appeal or denotes only those cases affirmed on appeal, but we interpret it to mean that a case must be affirmed before it becomes necessary to have our permission to proceed in circuit court. If an appeal is dismissed before final disposition, jurisdiction returns to the trial court to consider petitions for postconviction relief.

Accordingly, since petitioner does not need our permission to file a Rule 37 petition in the circuit court, this petition is dismissed without prejudice.

Petition dismissed.


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

text:
    Nancy OLIVER, Individually, and as Executrix v. BLUEGRASS RESOURCES CORPORATION
    84-122
    678 S.W.2d 769
    Supreme Court of Arkansas
    Opinion delivered November 5, 1984
    [Supplemental Opinion on Denial of Rehearing December 17, 1984.]

      Howell, Price ir Trice, and Steven L. Festinger, by: Steven L. Festinger, for appellant.

      Ronald W. Metcalf, P.A., by: Ronald W. Metcalf, for appellee.
   George Rose Smith, Justice.

This action was brought by the appellant, Nancy Oliver, to recover damages for the wrongful death of Donald L. Phillips, who was then the appellant’s husband. The defendant Bluegrass is a financial holding company headquartered in New York and involved in acquiring leases on coal property and subleasing or further leasing the rights it has acquired. Phillips was accidently killed while working in a coal mine in Johnson County, a mine in which Bluegrass had an interest as assignee of the original coal mining lease. The trial court entered a summary judgment for Bluegrass, finding that there is no issue of fact to support the plaintiff’s asserted cause of action against Bluegrass. We agree with the trial court’s conclusion.

In 1978 the owner of the land executed a coal mining lease to Fidelity Coal Company, which was required by the lease to mine the coal and pay royalties to the owner. The lessee was also required to comply with federal and state laws providing for the safety of employees working in the mine. Fidelity assigned the lease to Bluegrass. Bluegrass subleased the property to a limited partnership, which in turn entered into a mining agreement with Hays Chapel Coal Corporation, a wholly owned subsidiary of Bluegrass. Under the mining agreement Hays Chapel was an independent contractor with complete authority and responsibility for operating the mine, in return for a half interest in the coal produced. The agreement required Hays Chapel to comply with applicable federal and state laws.

Hays Chapel carried workers’ compensation insurance on its employees and for that reason was of course immune from tort liability for any negligence on its part. We agree with the appellant’s contention that Bluegrass, even though it was Hays Chapel’s parent corporation, might nevertheless be liable for independent negligence on its own part that contributed to Phillips’s accidental death. A subsidiary s immunity does not necessarily extend to the parent company.

The question, then, is whether there is any substantial evidence to show independent negligence on Bluegrass’s part. It is undisputed that Bluegrass, a financial holding company in New York, took no active part in the operation of the coal mine. The argument, however, is that Bluegrass, as the assignee of the lessor’s interest, was responsible for initiating safety programs and for correcting equipment defects that allowed a coal car to break loose and roll down an incline, striking and killing Phillips.

The flaw in this argument is that no affirmative action by Bluegrass is shown. Whatever liability it may have arises from a contract, from its position as the assignee of the coal lease. Certainly tort liability may originate in a contractual duty, but it must come from affirmative action (misfeasance) rather than from passive inaction (nonfeasance). As we said in Findley v. Time Ins. Co., 264 Ark. 647, 573 S.W.2d 908 (1978):

Prosser has pointed out that án action in tort cannot ordinarily be based upon a breach of contract which amounts to mere nonfeasance, which means not doing the thing at all, as distinguished from misfeasance, which means doing it improperly. ‘‘Much scorn has been poured on the distinction, but it does draw a valid line between the complete non-performance of a promise, which in the ordinary case is a breach of contract only, and a defective performance, which may also be a matter of tort.” Torts, § 92(4thed., 1971). We recently applied that very distinction, citing Prosser, in Morrow v. First Nat. Bank of Hot Springs, 261 Ark. 568, 550 S.W. 2d 429 (1977).

There is no proof that any employee of Bluegrass was ever in Arkansas, much less that one participated in the operation of the coal mine in Johnson County. There was an assertion that Bluegrass supplied defective equipment, but the only evidence is that it owned none of the equipment in the mine. There is simply no proof of active negligence in Bluegrass.

The appellant’s remaining arguments may be quickly answered. We find no evidence that Bluegrass was engaged in a joint venture with its subsidiary, but even if that were so, Bluegrass would then have been a joint employer of Phillips and hence immune under the. workers’ compensation law. Nor is there any proof to support the novel suggestion that the reopening of a coal mine is such an ultrahazardous activity that Bluegrass should be subjected to liability without fault.

December 17, 1984

681 S.W.2d 350

Affirmed.

Supplemental Opinion on Denial of Rehearing

George Rose Smith, Justice,

on rehearing. In a rehearing petition appellant argues that the controlling distinction between misfeasance and nonfeasance was waived by the appellee because it was not specifically argued in Bluegrass’s appellate brief. The point, however, is that the distinction is not a matter of defense, subject to waiver. It goes to the existence of the plaintiff’s cause of action. Hence even if the case were tried and the plaintiff introduced all the evidence that was before the trial court on the motion for a summary judgment, the necessary outcome would be a directed verdict for the defendant.

An effort is also made now to show that Bluegrass’s officers actively delegated responsibility to Hays Chapel and its employees, but the proof is lacking. In fact, appellant argued to the contrary in her original brief, relying specifically upon a witness’s statement by deposition that “Bluegrass was totally distinct from Hays Chapel and had nothing to do with the operation of the mine.” Although one of its officers was in Arkansas to negotiate leases or contracts, there is no proof that Bluegrass had any part in the operation of the mine.

Rehearing denied.


author: Darrell Hickman, Justice.

text:
    John DUNLAP, et ux v. Joe K. McCARTY, et ux
    84-112
    678 S.W.2d 361
    Supreme Court of Arkansas
    Opinion delivered November 5, 1984

      Guy Jones, Jr., for appellant.

      House, Wallace & Jewell, P.A., by: David M. Hargis, for appellee.
   Darrell Hickman, Justice.

This appeal concerns a family dispute. Joe McCarty sued his former brother-in-law and his wife, John and Margaret Dunlap, alleging invasion of privacy. McCarty based his lawsuit on two phone calls which occurred in July, 1980. The calls were made by Margaret Dunlap to McCarty’s present wife, Bobbye. Bobbye was subsequently joined as a plaintiff. McCarty alleged that several things were said that invaded his privacy. The parties filed numerous pleadings which raised different causes of action and various defenses. Ultimately, it was tried to a Pulaski County jury. The jury returned a finding for the McCartys but assessed no damages. The McCartys did not object to that finding, and it is the Dunlaps who appeal.

The Dunlaps make three arguments: first, that the court was without jurisdiction; second, that there was no substantial evidence to support the jury’s verdict; and third, that the suit should have been barred by the statute of limitations. We only address the statute of limitations argument and hold that the action is barred.

In a motion to dismiss, the Dunlaps specifically raised the limitation set forth in Ark. Stat. Ann. § 37-201 (Supp. 1983) which provides:

The following actions shall be commenced within one (1) year after the cause of action shall accrue, and not after: first, all special actions on the case, actions for criminal conversation, alienation of affection, assault and battery and false imprisonment; second, all actions for words spoken slandering the character of another; third, all words spoken whereby special damages are sustained.

The trial court ruled that the cause of action was not barred by this statute undoubtedly because he considered the action to be one for the tort of invasion of privacy and covered by the three year limitation in Ark. Stat. Ann. § 37-206 (Repl. 1962), which provides for torts not enumerated by § 37-201.

Our rule is that in order to prevail on a motion to dismiss the complaint on the basis of limitations, it must be barred on its face. McKim v. McLiney, 250 Ark. 423, 465 S.W.2d 911 (1971). Furthermore, we strictly construe the statute, and if there is any reasonable doubt, we will resolve the question in favor of the complaint standing and against the challenge. See Jefferson v. Nero, 225 Ark. 302, 280 S. W.2d 884 (1955).

In Arkansas we do not recognize “notice pleadings” only “fact pleadings.” ARCP Rule 8. Simply because the complaint said that the action was one for “invasion of privacy” would not make it so; we must look to the alleged facts. See Bankston v. Pulaski County School Dist., 281 Ark. 476, 665 S.W.2d 859(1984).

To determine then whether the action is barred, we look to the complaint itself. The answer is not easy because of the state of the pleadings. The original complaint, filed in August of 1981, alleged only oral communications. The Dunlaps moved to dismiss, raising the defense of the statute of limitations in October of 1981. In February of 1982 the judge denied the motion. On July 28, 1982, the McCartys filed an amended complaint which added Bobbye McCarty as'a party and added an allegation of civil conspiracy. The conduct alleged was the two telephone calls and the failure of the Dunlaps to pick up Joe McCarty’s son after a visit with McCarty on January 9, 1982. The Dunlaps moved to strike the amended complaint. The judge’s ruling on that motion is unclear. In an order he stated:

In reference to the “Motion to Strike Amended Complaint: filed herein in behalf of the Defendants, and in reference to the “Motion for Leave to Add Party” filed herein in behalf of the Plaintiff, the Court, having offered the Plaintiff an election between proceeding to the currently scheduled trial (July 12, 1982) with existing parties or continuing and resetting trial of this matter following addition of a new party, understands that the Plaintiff will file herein an amended complaint which will contain an expressed incorporation of the allegations made in earlier complaints and, therefore, both the “Motion for Leave to Add Party” and the “Motion to Strike Amended Complaint” should be granted; ....

At trial the judge stated that he would allow evidence of the conspiracy but he only instructed the jury on invasion of privacy. Evidence regarding the visit of McCarty’s son was presented to the jury. We cannot discern from the record or the parties’ briefs whether the amended complaint as to the new allegations was allowed. No argument is made that the amendment relates back to the original complaint, thus tolling the statute of limitations. See ARCP Rule 15 (c).

The Dunlaps were entitled to a ruling on their motion to dismiss at the point where the statute of limitations was first raised. The pleadings then in existence must be the basis of that ruling. Since the original complaint alleged only oral communications, it should have been barred. In order to arrive at that decision, we have had to examine the nature of the causes of action for defamation and invasion of privacy.

The basis for the claim for invasion of privacy alleged in the original complaint is two telephone calls made in late July 1980 by the Dunlaps to Bobbye McCarty in which the following things were said: Joe McCarty was not given notice of divorce filed against him by his former wife because Joe McCarty was transferring assets out of his former wife’s name; the Dunlaps “had something” on Joe McCarty which they would tell Bobbye; and Joe McCarty’s retarded son would be delivered to Little Rock and left on his door step. The complaint further alleged that the statements were made maliciously, invaded the McCartys’ right to privacy, destroyed his personal life, humiliated him and exposed him to ridicule and contempt.

There are four kinds of invasion of privacy that are actionable: (1) appropriation, which consists of the use of the plaintiff’s name or likeness for the defendant’s benefit; (2) intrusion, which is the invasion by one defendant upon the plaintiff’s solitude or seclusion; (3) public disclosure of pritraterarct^'whicYi is the publicity of a highly objectionable kind, given to private information about the plaintiff, even though it is true and no action would lie for defamation; and (4) false light in the public eye, consisting of publicity which places the plaintiff in a false light before the public. See W. Prosser, The Law of Torts § 117 (4th Ed. 1971); Restatement (Second) of Torts § 652 et seq. (1977). In Olan Mills v. Dodd, 234 Ark. 495, 353 S.W.2d 22 (1962), an appropriation case, we recognized the tort of invasion of privacy. If this case does present a claim for invasion of privacy it is invasion of privacy by intrusion. The only case we have had involving that type of invasion of privacy is Collection Consultants, Inc. v. Bemel, 274 Ark. 223, 623 S.W.2d 518 (1981). It is a case of harrasment by a bill collector and a classic case of invasion of privacy. In ten months the plaintiff received about fifty collection letters and seventy phone calls from the defendant, some to the plaintiff’s place of employment and many made at irregular hours.

The Restatement (Second) of Torts § 652 B, Comment b, illustrations (1977), gives five examples of invasion of privacy by intrusion, which are briefly: a reporter takes plaintiff’s picture in a hospital room against plaintiff’s wishes; a detective looks into plaintiff’s windows; a detective wiretaps plaintiff’s phones; the defendant examines the plaintiff’s bank records for evidence in a civil action; and the defendant, a professional photographer, telephones the plaintiff repeatedly to have her picture made. We find no case where such a cause of action was based on one or two phone calls.

Many courts have dealt with the question of whether only oral communications can constitute invasion of privacy. See 19 A.L.R.3d 1318. Some courts have ruled against allowing invasion of privacy actions, based on purely oral statements. Grimes v. Carter, 241 Cal. App. 694, 50 Cal. Rptr. 808 (1966); Pongallo v. Murphy, 243 S.W.2d 496 (Ky. 1951). Other courts have allowed such an action. Norris v. Moskin Stores, Inc., 272 Ala. 174, 132 So.2d 321 (1961); Biederman’s of Springfield, Inc. v. Wright, 322 S.W.2d 892 (Mo. 1959). Still other cases deal with the issue but do not resolve it. For example, in Santiesteban v. Goodyear, 306 F.2d 9 (5th Cir. 1962), the court held that there can be an invasion of privacy by oral statements if accompanied by sufficient publicity. See also Brown v. Colonial Stores, Inc., 110 Ga. App. 154, 138 S.E.2d 62 (1964).

Although closely related, invasion of privacy is distinct from libel, slander or defamation. Each of these requires injury to reputation or livelihood. See Parkman v. Hastings, 259 Ark. 59, 531 S.W.2d 481 (1976); A. B. Hanson, Libel and Related Torts § 245 (1969. Since McCarty alleged injury to his marriage and his peaceful home, the action would be more one of invasion of privacy. The privacy tort covers behavior harmful to the plaintiff even though there is no injury to his reputation.

We do not answer the question of whether mere oral communications can be the basis of a claim for invasion of privacy because it is unnecessary to our decision. This is neither a classic case of invasion of privacy by intrusion or one of defamation. But regardless of how we characterize the action it is one for words spoken whereby special damages are sustained, as specifically provided for in § 37-201. Only torts not enumerated in § 37-201 have a three year limitation. The reason there must tie a short limitation period for actions based on spoken words is simple: there is no written proof of the claim and such an action ought to be quickly resolved. This effects the underlying purpose of statutes of limitations; that is, to settle claims within a reasonable period of time after they arise and while the evidence is fresh in the witnesses’ minds. See 51 Am. Jur. 2d Limitation of Actions § 18 (1970).

Since the McCartys’ complaint was filed more than one year after the telephone calls were made, it is barred.

Reversed.

ERRATA 284 ARKANSAS REPORTS at page 9 Detach at perforation, moisten the back, and paste over the sixth line of the first full paragraph on page 9 of Dunlap v. McCarty: ¿ft private facts, which is the publicity of a highly objectionable

      ERRATA 284 ARKANSAS REPORTS at page 9 Detach at perforation, moisten the back, and paste over the sixth line of the first full paragraph on page 9 of Dunlap v. McCarty: ¿ft private facts, which is the publicity of a highly objectionable


text:
    Thomas B. KAY, et ux v. ECONOMY FIRE AND CASUALTY CO.
    84-135
    678 S.W.2d 365
    Supreme Court of Arkansas
    Opinion delivered November 5, 1984

      Rose Law Firm, A Professional Association, by: Stanley E. Price, for appellant.

      Matthews ir Sanders, for appellee.
   Darrell Hickman, Justice.

This case involves interpretation of Rule 15 of the Arkansas Rules of Civil Procedure. The trial court refused to allow either party to amend their pleadings after a certain date and because of the peculiar facts of the case, we cannot say he abused his discretion. The judgment is affirmed.

The Kays’ house, insured by the appellee, Economy, burned on June 19, 1980, and was totally destroyed. A proper proof of loss was submitted and Economy rejected it because the claim was “excessive, inaccurate, non-supported and not properly detailed.” The Kays filed this suit on the policy claiming policy limits of $65,000 and penalties and attorneys’ fees pursuant to Ark. Stat. Ann. § 66-3238 (Repl. 1980). The Kays also asked for punitive damages in the sum of $500,000 for bad faith to pay the claim.

Economy filed an answer generally denying the claim and alleging the policy was obtained through “material misrepresentation” and accusing the Kays of either burning the house or causing it to be burned. The Kays filed interrogatories and requests for admissions which Economy did not answer. In December, 1980, the Kays moved for summary judgment on the claims on the policy and a jury trial on the issue of punitive damages. A hearing was held in January, 1981, on the motion for summary judgment. The hearing was not recorded but referred to later in two orders of the trial court. At the hearing Economy admitted to failing to ánswer the interrogatories and that the defenses set up in its answer were without proof. Economy agreed to confess judgment on the policy. The Kays’ attorney gave Economy additional time to answer the interrogatorries and requests for admission. Two days later Economy filed an amended answer, stating it had tendered the policy amount and interest, but denied that it owed penalties or attorney’s fees. In March, Economy moved to dismiss the claim for punitive damages, arguing that Ark. Stat. Ann. § 66-3238 was an exclusive remedy. In April, the Kays filed an amended complaint alleging, in addition to bad faith, acts of dishonest, malicious, and oppressive conduct. The Kays reduced their original claim from $65,000 to $64,500, which was the policy amount less the deductible. Economy immediately seized on this by confessing judgment to $64,500 and moving that the Keys were only entitled to the policy amounts and were no longer entitled to penalties and attorney’s fees, since they had reduced their claim.

This state of the pleadings and maneuvering resulted in the trial court entering an order on July 8, 1981, that Economy could not take advantage of the Kays’ amended complaint to avoid paying penalties and attorney’s fees, because the understanding of the lawyers at the unrecorded January conference was that there would be no further pleadings filed after that date. The trial court granted the Kays’ claim for the policy amount, penalties and attorneys’ fees, and ruled the case would proceed to jury trial on the issue of punitive damages.

At some point, the plaintiffs realized that they had not made any allegations for compensatory damages in their tort of bad faith claim. They attemped to amend their pleadings to make that claim. Economy resisted the attempt. The trial judge pointed out that he had not allowed Economy to file further pleadings after January, 1981, and, therefore) he would not allow the Kays to amend. He found, however, that the Kays’ original claims supported a claim for punitive damages. During this time, we decided Aetna Cas. & Sur. Co. v. Broadway Arms Corp., 281 Ark. 128, 664 S.W.2d 463 (1983), which clearly reiterated recognition of the tort of bad faith and that that tort was not pre-empted by § 66-3238. Economy sent a copy of Aetna to the trial court arguing that since bad faith is a tort, any claim for punitive damages must be supported by a claim for compensatory damages. The Kays’ attorney conceded that to be true and also essentially admitted that he had made no such claim.

The Kays again asked to amend. The trial court, in a letter opinion, stated that both parties agreed that no cause of action for bad faith was stated in the original complaint and that, since he had originally decided there would be no further pleadings by either party after January and had not allowed Economy to attempt to defeat the Kays’ claim for fees and penalties, it would be unfair to allow the Kays to do so to salvage their claim. He entered a judgment on the pleadings and dismissed the complaint.

On appeal we have the single issue of whether the trial court abused his discretion. ARCP Rule 15 (a) governs. It reads:

(a) Amendments. A party may amend his pleadings at any time without leave of the court. Where, however, upon motion of an opposing party, the court determines that prejudice would result or the disposition of the cause unduly delayed because of the filing of an amendment, the court may strike such amended pleading or grant a continuance of the proceeding. A party shall plead in response to an amended pleading within the time remaining for response to the original pleading or within 10 days after service of the amended pleading, whichever period may be longer, unless the court otherwise orders.

The reporter’s note of this rule states:

Section (a) of Rule 15 marks a substantial change from FRCP 15 (a) and is generally in accord with prior Arkansas law. The Committee believed that amendments to pleadings should be allowed in nearly all instances without special permission from the court. The court is, however, given discretion to strike any amendment which would cause prejudice or unduly prolong the disposition of a case. As an alternative to striking an amendment, a continuance could be granted by the trial court. Under prior Arkansas law, trial courts were given broad discretion to permit an amendment to stand. [Cites omitted.] Generally speaking, it is the intent of this rule that amendments to pleadings should be permitted without leave of the court in all instances unless it can be demonstrated that prejudice or delay would result. To this extent, Rule 15 is more liberal than superseded Ark. Stat. Ann. § 27-1160 (Repl. 1962) and is certainly more liberal than the Federal Rule. (Italics supplied.)

In W. Cox and D. Newbern, New Civil Procedure: The Court That Came in From the Code, 33 Ark. L. Rev. 1 (1979), Rule 15 (a) is discussed:

Rule 15 (a) continues the prior policy of Arkansas law permitting liberal amendment of pleadings. If anything, this rule further liberalizes the practice so that a party is free to amend his pleadings at any time, subject only to the requirement that an amendment must not prejudice the opposing party or cause a delay in the proceedings. The trial court is vested with broad discretion to determine whether an amendment should be allowed to stand. Obviously this discretion can be abused, but as noted previously, the intent of this rule is to encourage and permit amendment so the burden of proving an abuse of discretion will weigh the heaviest upon one who moves to strike an amended pleading.

So, we have a rule which encourages amendment of pleadings. However, the trial court is still vested with broad discretion in allowing or denying amendments, and we cannot say the trial court here abused its discretion.

The recited facts reflects the unusual nature of the state of the pleadings and that, with the understanding of the parties, the trial court sought to hold the parties to their existing claims as of January, 1981. The Kays argue that the trial court only meant to close the pleadings with regard to any claim for damages under the contract. However, the trial court clearly stated that the case would have to stand or fall on the claim for punitive damages “as is.” The trial court denied amendments by either party. Certainly, under these circumstances, we cannot say the trial court abused its discretion.

Affirmed.

Hubbell, C.J., not participating.


author: Robert H. Dudley, Justice. George Rose Smith, Justice, P. A. Hollingsworth, Justice,

text:
    James RATLIFF v. Jimmy MOSS
    84-82
    678 S.W.2d 369
    Supreme Court of Arkansas
    Opinion delivered November 5, 1984

      L. David Stubbs, for appellant.

      Bridges, Young, Matthews, Holmes ir Drake, by: Michael J. Dennis, for appellee.
   Robert H. Dudley, Justice.

The plaintiff contends that the trial court erred by dismissing his complaint and amended complaint. We affirm. Jurisdiction is in this court to construe the Arkansas Rules of the Supreme Court, Rule 29 (l)(c).

In the complaint, which sounded in tort, plaintiff alleged that he was employed by the defendant and was injured by a fellow employee. The complaint did not contain an allegation of negligence on the part of the defendant nor did it contain an averment of negligence by the fellow employee. It recited only that plaintiff was injured when an employee dropped a piece of equipment on his leg.

The defendant filed a Motion to Dismiss for failure to state facts upon which relief could be granted. AR.CP Rule 12 (b)(6). Concurrently, defendant filed an answer denying liability.

The defendant next filed a motion for summary judgment in which he pleaded that recovery was barred by the fellow servant rule. In response, the plaintiff acknowledged the fellow servant rule but pleaded that he would file an amended complaint in which he would allege negligence on the part of the defendant. The plaintiff then filed his amended complaint. The real issue on appeal is whether the amended complaint contains a statement of facts showing that the plaintiff is entitled to relief. The pertinent part is as follows:

2. That in addition to the allegations contained in the Complaint filed on January 19, 1983, the plaintiff alleges herein that the defendant, Jimmy Moss, was personally present at the time of the incident on November 5, 1981; that the employees of the defendant were acting under the specific supervision of the defendant; that the directions of the defendant, Jimmy Moss, in describing how he wanted each piece of equipment handled by his employees were erroneous in that he described an improper procedure for the repair of the equipment. The plaintiff herein alleges negligence of the defendant, Jimmy Moss, in demanding and directing the action of his employees in an erroneous and negligent manner, such actions being the proximate cause of the negligent injury to the plaintiff herein.

Later, defendant’s motions were set for hearing. At that hearing, the trial court announced that he was granting summary judgment on the original complaint and dismissing the amended complaint because it “contains conclusions, not particulars. . . ” The order reflects that summary judgment was granted.

On appeal, plaintiff contends that the fellow servant rule is an affirmative defense which must be pleaded by answer, or else it is deemed waived. ARCP Rule 8. Thus, the plaintiff concludes, the case must be reversed. He also contends there are facts in dispute.

We do not reach the issues raised by the plaintiff because, even if the trial court announced the wrong reason for its ruling, an appellate court will sustain the judgment if it is right. Armstrong v. Harrell, 279 Ark. 24, 648 S.W.2d 450 (1983). The trial judge in this case reached the right result since the original complaint did not aver negligence on the part of the fellow employee, only an incident and an injury, while the amended complaint merely concluded that the defendant erroneously described and directed a negligent procedure. It did not state any facts.

Rule 12 (b) (6) provides for the dismissal of a complaint for “failure to state facts upon which relief can be granted.” Since Rule 12 (b) (6) provides for testing the complaint, it must be read in conjunction with Rule 8, which sets out the requirements of the complaint. Rule 8 provides:

A pleading which sets forth a claim for relief, whether a complaint, counterclaim, cross-claim, or third-party claim, shall contain ... (2) a statement in ordinary and concise language of facts showing that the pleader is entitled to relief, . . . (Emphasis supplied)

Both the complaint and the amended complaint failed to make a “statement in ordinary and concise language of facts showing that the pleader is entitled to relief because neither contains a factual allegation of any act of negligence. Thus, they were correctly dismissed under Rule 12 (b) (6) for “failure to state facts upon which relief can be granted.” See Harvey v. Eastman Kodak Co., 271 Ark. 783, 610 S.W.2d 582 (1981).

The dismissal should have been for failure to state facts upon which relief was granted and should have been without prejudice. If that procedure had occurred, the plaintiff would have had an election on whether to plead further or appeal. However, the dismissal order recites that it is on summary judgment and so plaintiff never was afforded a chance to plead further. Accordingly, we modify the order of the lower court to the extent that the dismissal is without prejudice.

Affirmed as modified.

George Rose Smith, J., and Hollingsworth, J., concur.

George Rose Smith, Justice,

concurring. I join in the majority opinion, but I take this opportunity to express my personal view that we should prospectively abolish the fellow servant doctrine. It was created during the industrial revolution, by court decisions, and rested on the theory that a workman was free to leave his employment at any time and therefore could not recover for the negligence of a fellow servant with whom he chose to work. Prosser, Torts, § 80 (5th ed., 1984); Harper fe James Torts, §§ 21.3 and 21.4 (1956). It was actually, a form of assumed risk, the courts taking the position that a servant assumed the risk of his fellow servant’s negligence and of dangers that were open and obvious. And, inasmuch as any slight contributory negligence completely defeated recovery, the fellow servant doctrine was a bar to recovery as between employer and employee.

All those doctrines have been generally abolished by our legislature. Comparative fault has superseded contributory negligence and assumed risk. Ark. Stat. Ann. §§ 27-1763 and -1764 (Repl. 1979). The fellow servant doctrine has been superseded by the worker’s compensation law. Ark. Stat. Ann. § 81-1304 (Repl. 1976). The doctrine still exists, as an anachronism, in rare litigation between employers and employees not subject to the compensation law. It has no place in society today. It was judicially created and should be judicially interred.

P. A. Hollingsworth, Justice,

concurring. The last sentence of the Court’s opinion states that the dismissal is without prejudice. I am in agreement with the result that is finally reached; however, I am not in accord with the Court’s failure to address the issue raised by the appellant.

The Court concluded that neither complaint stated any facts. I disagree. We have held that pleadings are to be liberally construed and that they are sufficient if they advise a defendant of his obligations and allege a breach of them. Allied Chemical v. Van Buren Sch. Dist., 264 Ark. 810, 575 S.W.2d 445 (1979). We have also held that “a liberal construction requires that every reasonable intendment should be indulged in favor of the pleader and effect should be given to substance rather than form regardless of the name of the pleading.” Home Ins. Co. v. Williams, 252 Ark. 1012, 482 S.W.2d 626 (1972).

I believe that liberally construing the pleadings filed in this case, they are sufficient. The appellant informed the appellee of the date the incident occurred, the location, and the parties involved. Further he explained what act on the part of the appellee he considered negligent — the erroneous instructing of the appellee’s employees. Therefore, he notified the appellee of his obligations and of a breach of those obligations. I think the complaints meet the test and were sufficient.

Therefore, I would reach the issue raised by the appellant where he contended that the fellow servant rule is an affirmative defense which must be pleaded by answer, or else it is deemed waived. ARCP Rule 8. In his answer, the appellee issued a general denial and asserted that appellant’s injuries were caused by his own negligence. Because he did not affirmatively plead the fellow servant rule, the defense is waived. The case should be reversed and remanded with orders to let the case proceed to trial on the issues.


author: Robert H. Dudley, Justice.

text:
    Rodney LONG v. STATE of Arkansas
    CR 84-117
    680 S.W.2d 686
    Supreme Court of Arkansas
    Opinion delivered November 5, 1984

      Jeff Duty, for appellant.

      Steve Clark, Att’y Gen., by: Patricia G. Cherry, Asst. Att’y Gen., for appellee.
   Robert H. Dudley, Justice.

Appellant was found guilty of violating the Omnibus DWI Act of 1983 and, on appeal, contends that the act is unconstitutionally vague. We uphold the statute and affirm the conviction. Jurisdiction to decide the constitutionality of the act is in this court. Rule 29(l)(c).

The Omnibus DWI Act of 1983, Ark. Stat. Ann. §§ 75-2501 through 75-2514 (Supp. 1983), changes the definition of the illegal act. Under the earlier statutes, §§ 75-1027 through 75-1031.1 (Repl. 1979), it was unlawful to drive while under the influence of intoxicants and there was a presumption that a person was under the influence of intoxicants if he had a blood alcohol content of .10% or more. Under the 1983 act, two separate acts are declared illegal: (a) driving while intoxicated or (b) driving with a blood alcohol content of .10% or more. The 1983 act, Ark. Stat. Ann. § 75-2503 (Supp. 1983), provides:

(a) It is unlawful and punishable as provided in this Act [§§ 75-1031.1, 75-1045, 75-2501 — 75-2514] for any person who is intoxicated to operate or be in actual physical control of a motor vehicle.
(b) It is unlawful and punishable as provided in this Act for any person to operate or be in actual physical control of a motor vehicle if at that time there was 0.10% or more by weight of alcohol in the person’s blood as determined by a chemical test of the person’s blood, urine, breath, or other bodily substance. [Acts 1983, No. 549, § 3.]

Appellant contends that subsection (a), above, is vague. Both the Fourteenth Amendment to the United States Constitution and article 2, section 8 of the Arkansas Constitution declare that no person shall be deprived of life, liberty or property without due process of law. It has been recognized for over 80 years that due process requires some level of definiteness in criminal statutes. Note, Due Process Requirements of Definiteness in Statutes, 62 Harv. L. Rev. 77, fn. 2 (1948). Due process requires a statute to be definite enough to provide (1) a standard of conduct for those whose activities are proscribed and (2) a standard for police enforcement and for ascertainment of guilt. State v. Bryant, 219 Ark. 313, 241 S.W.2d 473 (1951); Note, The Void-for-Vagueness Doctrine in the Supreme Court, 109 U. Pa. L. Rev. 67, 68-69 (1960); Note, Due Process Requirements of Definiteness in Statutes, 62 Harv. L. Rev. 77-78 (1948).

Subsection (a) of § 75-2503 meets both requirements. First, it gives a fair warning of the prohibited conduct. Due process requires only fair warning, not actual notice. McBoyle v. United States, 283 U.S. 25, 27 (1931). The standard is the same in Arkansas. Trice v. City of Pine Bluff, 279 Ark. 125, 129, 649 S.W.2d 179 (1983).

The word “intoxicated” is described in another subsection, § 75-2502 (a) as:

(a) “Intoxicated” means influenced or affected by the ingestion of alcohol, a controlled substance, or a combination thereof, to such a degree that the driver’s reactions, motor skills, and judgment are substantially altered and the driver, therefore, constitutes a clear and substantial danger of physical injury or death to himself and other motorists or pedestrians.

The definition of “intoxicated” fairly warns a person of ordinary intelligence that he is in jeopardy of violating the law if he drives a motor vehicle after consuming a sufficient quantity of alcohol to alter his reactions, motor skills and judgment to the extent that his driving constitutes a substantial danger to himself or others. The warning is sufficient to pass constitutional muster. The Constitution does not require impossible standards of specificity and a statute, is sufficiently clear if its language conveys sufficient warning when measured by common understanding and practice. Jordan v. DeGeorge, 341 U.S. 223 (1951); Davis v. Smith, 266 Ark. 112, 583 S.W.2d 37 (1979).

Second, a law is held to be vague when it leaves the police or the factfinder free to decide, without a fixed standard, what is prohibited. Trice v. City of Pine Bluff, 279 Ark. 125, 649 S.W.2d 179 (1983). The definition of intoxicated, set out in § 75-2502(a), is a sufficient standard for police enforcement and for ascertainment of guilt. We hold that § 75-2503(a) of the act is not unconstitutionally vague.

Under the second subsection, § 75-2503(b), intoxication is not an element of the offense. Driving with a blood alcohol content of. 10% or more is the prohibited act. Stated differently, it is a violation per se to drive with a blood alcohol content of .10% or more. We have also held this subsection is not unconstitutionally vague. Lovell v. State, 283 Ark. 425, 678 S.W.2d 318 (1984).

Appellant next contends that the trial court committed error in allowing the police officer to testify that appellant was intoxicated because, he argues, that is the ultimate issue. There is no merit in the argument. Rule 704, Ark. Unif. Rules of Evid., 28-1001, et seq. provides:

Testimony in the form of an opinion or inference otherwise admissible is not objectionable because it embraces an ultimate issue to be decided by the trier of fact.

The unmistakable trend of authority is to not exclude opinion testimony because it amounts to an opinion on the ultimate issue. Mathis v. State, 267 Ark. 904, 907, 591 S. W.2d 679, 681 (1979). While the opinion testimony in this case embraced the ultimate issue, it did not mandate a legal conclusion and there was no error in its admission. See Gramling v. Jennings, 274 Ark. 346, 625 S.W.2d 463 (1981).

For the benefit of bench and bar we comment on a matter not raised on appeal, and therefore not affecting this case, which relates to filing charges in cases of this nature. Appellant was charged with driving while intoxicated and with having had three prior convictions. Therefore, he was charged with a felony. Sec§ 75-2504(b)(3) (Supp. 1983). Yet, the charge was made in municipal court by a traffic ticket. An information was not filed. The Constitution of Arkansas requires that felonies be charged by either information or indictment, art. 2, § 8, amendment 21; Lovell v. State, supra. In addition, city attorneys cannot file felony charges and municipal courts are without jurisdiction to try felony cases.

Affirmed.


author: Steele Hayes, Justice.

text:
    Clint SAWYER v. STATE of Arkansas
    CR 84-94
    678 S.W.2d 367
    Supreme Court of Arkansas
    Opinion delivered November 5, 1984

      Gannaway, Darrow ér' O’Bryan, by: Joe O’Bryan, for appellant.

      Steve Clark, Att’y Gen. by: Velda West Vanderbilt, Asst. Att’y Gen., for appellee.
   Steele Hayes, Justice.

Appellant was charged with three counts of rape against three different victims and three counts of burglary committed in connection with those rapes. At trial the jury returned guilty verdicts on all six counts and appellant was sentenced to three consecutive life terms for the rape charges and sixty years for the burglary charges, the sixty years to run concurrently with the life terms. On appeal the appellant raises three points, none of which merits reversal.

Appellant first contends there was insufficient evidence to convict him for one of the rapes as his confession on that count was not corroborated by independent evidence. Ark. Stat. Ann. § 43-2115 provides that:

A confession of a defendant, unless made in open court will not warrant a conviction unless accompanied with other proof that such an offense was committed.

We stated in Bivens v. State, 242 Ark. 362, 413 S.W.2d 653 (1967), [t]he test of the correctness of the verdict is not whether there was sufficient evidence to sustain a conviction, but whether there was evidence that such an offense was committed or, in other words, “proof of the corpus delicti.”

Appellant stated in his confession he went to the victim’s house and found her in the bedroom. When she resisted he struggled with her and then raped her. The evidence showed the victim went to a neighbor the morning after the attack. She had been beaten, had a cut over her eye and was taken to a doctor. There was clear evidence the victim’s trailer had been broken into. One of the investigating officers testified that the trailer door had a chain on it in the middle and the lower part of the door had been pulled out to allow someone to crawl through. The victim was a ninety-two year old woman who had severe hearing problems and had been disoriented since the attack. She testified to being beaten but was unable to state anything about the actual rape. One of those officers, however, testified that the victim had reported the rape to the police. No objection was raised to this testimony. But even so, we have said a rape victim’s report to a third person that a rape occurred is generally admissible. Urquhart v. State, 273 Ark. 486, 621 S.W.2d 218 (1981). It is not necessary that the evidence be sufficient to sustain a conviction. The statute only requires that the confession be accompanied by other proof such an offense was committed. Bivens v. State, supra. The evidence and circumstances in this case were sufficient for such corroboration.

Appellant raises two other points which he believes deprived him of an impartial tribunal. First, he objects to a question posed to the elderly victim of the rape discussed above. On direct she was asked, “Ms. Beulah, do you remember being raped back in December of 1982?” An objection was made but no grounds were stated. The court had already ruled that it would allow leading questions of the witness because of her age and severe hearing problems. Because the objection was not sufficiently specific to inform the trial court as to the particular error complained of, the right to review on appeal was not preserved. Tosh v. State, 278 Ark. 377, 646 S.W.2d 6 (1983).

Appellant also argues that had the trial court granted a directed verdict on this rape charge, the prejudice from the implied accusation in the leading question would have been removed from the minds of the jury in determining guilt or innocence on the other counts. The appellant waived any objection to the leading question by not stating specific grounds. In view of the substantial evidence that appellant had committed two other rapes, the argument that he was prejudiced by the mere implications of a third is not persuasive. Roleson v. State, 277 Ark. 148, 640 S.W.2d 113 (1982).

Affirmed.


author: P. A. Hollingsworth, Justice.

text:
    STIFFT’S JEWELERS v. Charles R. OLIVER, Mary Lou OLIVER, and Grace Louise OLIVER
    84-131
    678 S.W.2d 372
    Supreme Court of Arkansas
    Opinion delivered November 5, 1984

      Laser, Sharp ir Mayes, for appellant.

      Ketz & Clark, by: Wesley J. Ketz, Jr., for appellees.
   P. A. Hollingsworth, Justice.

Charles and Mary Oliver, a married couple, and their daughter Grace are the appellees. Mr. and Mrs. Oliver are residents of Batesville and the appellant, Stifft’s Jewelers, is a Little Rock company engaged in the business of selling and repairing jewelry. On June 26, 1982, Mrs. Oliver brought three rings to Stifft’s to be repaired. They were described in testimony at the trial as follows: a .70 carat marquise diamond which was Mrs. Oliver’s engagement ring; a one-third carat diamond which Mr. Oliver’s mother had willed to Grace Oliver; and a one-fourth carat garnet which had originally belonged to Mrs. Oliver’s grandmother. At the trial the value of the three rings was established at approximately $3800.

On the same day, Mr. Oliver purchased a one carat diamond ring as an anniversary gift for Mrs. Oliver. Stifft’s agreed to mail all four rings after the repairs and proper cleaning were completed. The Olivers received a package in the mail from Stifft’s which they testified only contained the anniversary ring. When contacted by the Olivers, the appellant business maintained that all four rings were placed in the same box. The parties could not agree on a resolution. This action was brought by the Olivers seeking the replacement cost of the rings plus $50,000 in sentimental value. Stifft’s filed a motion for partial summary judgment seeking to have the prayer for sentimental value stricken which was denied by the trial court. The jury returned a verdict in favor of the Olivers for $4000 replacement cost and $4000 for sentimental value. This appeal is from the judgment of $4000 in sentimental value in favor of the Olivers. Because this case presents a question in the law of torts, this appeal is before us pursuant to Rule 29(1 )(o). We affirm and modify the judgment.

In order to determine correctly the measure of damages, the nature of the action must first be determined. While appellants have provided us with a tort theory, they are bound to proceed on a contract theory. In their brief, they stated their theory of the case relying on Bond v. A.H. Belo Corp., 602 S.W.2d 105 (Tex. Civ. App. 1980). In Bond, the Texas court awarded the appellant the sentimental value of pictures, birth records, and newspaper clippings lost by a newspaper reporter which pertained to her efforts to find her natural parents. The Texas court relied on an earlier Texas decision, Brown v. Frontier Theatres, Inc., 369 S.W.2d 299 (Tex. 1963). The Brown case which was also relied upon by the trial court here, held that when personal property has its “primary value in sentiment” recovery for such sentimental value cannot be denied. We do not accept this approach.

The question here is the amount of damages that can be established with reasonable certainty under the facts of this case. Since there was a market value established for the rings, we must now determine whether a special or sentimental value is greater than the market value, and what the parties understood their obligations to be. We look to our holding in Morrow, et al v. First National Bank of Hot Springs, 261 Ark. 568, 550 S.W.2d 429 (1977) for guidance. There we reaffirmed the adoption of the “tacit agreement test” for the recovery of special damages for a breach of contract. We stated: “By that test the plaintiff must prove more than the defendant’s mere knowledge that a breach of contract will entail special damages to the plaintiff. It must also appear that the defendant at least tacitly agreed to assume responsibility.”.

Here the appellees have not pointed out where the appellant company was made aware of the sentimental value of the rings. Neither do they show any tacit agreement by appellant to assume responsibility.

There could be circumstances where the value of the property is primarily sentimental and the jury could determine that value, provided there was a tacit agreement by the parties. However, the circumstances do not exist here because no tacit agreement was made and the alleged sentimental value of the lost rings is so highly speculative in this case that it was not a proper element of damages for consideration by the jury. We strike that part of the judgment for sentimental value.

Affirmed as modified.


text:
    Dr. Helen S. SCHAEFER v. James Franklin McGHEE
    677 S.W.2d 302
    Supreme Court of Arkansas
    Opinion delivered November 5, 1984

      James E. Smedley, for petitioner.
    No Response by Respondent.
   Per Curiam.

Inasmuch as the judgment in this case is stamped by the clerk in the upper righthand corner as having been filed on May 21, 1984, but is also stamped by the clerk in the lower righthand corner as having been “Filed & recorded” on June 7, 1984, the trial court is reinvested with jurisdiction to determine when the judgment was in fact filed in the clerk’s office.


text:
    Eva Deanna SULLIVAN v. Joe A. WICKLIFFE
    678 S.W.2d 771
    Supreme Court of Arkansas
    Opinion delivered November 5, 1984

      Miller & Goldman, by: David Goldman, for appellant.
    No Response by Appellee.
   Per Curiam.

In this civil case, the appellant’s tender of the transcript was denied by our clerk because the order of extension beyond 90 days from the filing of the notice of appeal was not entered within the 90 day period. Ark. R. App. P. 5 (b).

The trial judge signed the order within the 90 day period, on the 89th day. However, it was not entered and filed with the circuit clerk’s office until the 91st day.

We explained in Finley v. State, 281 Ark. 38, 661 S.W.2d 358 (1983), that the critical factor in such cases is when the order is entered, not signed. A question has been raised about our decision in Finley; specifically whether ARCP Rule 5 (d) controls in this situation. ARCP Rule 5 (d) provides:

Filing with the Judge. The judge may permit papers or pleadings to be filed with him, in which event he shall note thereon the filing date and forthwith transmit them to the office of the clerk.

Rule 5 (d) obviously does not mean an order can be deemed “entered” simply because it is signed by a judge. Rule 5 (b) of the Rules of Appellate Procedure provides:

Extension of Time. In cases where there has been designated for inclusion any evidence or proceeding at the trial or hearing which was stenographically reported, the trial court, upon finding that a reporter’s transcript of such evidence or proceeding has been ordered by appellant, and upon a further finding that an extension is necessary for the inclusion in the record of evidence or proceedings stenographically reported, may extend the time for filing the record on appeal, but the order of extension must be entered before the expiration of the period for filing as originally prescribed or extended by a previous order. In no event shall the time be extended more than seven (7) months from the date of the entry of the judgment, decree or order. Counsel seeking an extension shall give to opposing counsel notice of the application for an extension of time (Italics supplied.)

Motion denied.

Hubbell, C.J., dissents.