text:
    Ark. State Highway Comm. v. O. & B., Inc.
    5-1240
    301 S. W. 2d 5
    Opinion delivered April 22, 1957.

      W. R. Thrasher and Dowell Anders, for appellant.

      Catlett é Henderson, for appellee.
   Minor W. Millwee, Associate Justice.

This is an action by appellant, Arkansas State Highway Commission, condemning certain lands in Pulaski County for the relocation and reconstruction of TI. S. Highway 67 between North Little Bock and Jacksonville, Arkansas. The suit involved numerous tracts but the instant appeal concerns only two parcels containing 12.98 acres belonging to the appellees, O. & B., Inc., and H. & B., Inc.

Barney Elias, Baymond Bebsamen and Edward Elias were partners doing business as Statewide Homebuilding Company in April, 1954, when they purchased from Dr. Ewing Nixon, Buth Nixon and Buth Wilson about 30 acres known as Oakview Subdivision to the City of Jacksonville, Arkansas, and 66.03 acres known as Edgewood Subdivision to said city. Included in Oakview Subdivision was a 4.16-acre strip 200 feet wide known as “Plot A” and in Edgewood an 8.82-acre strip similarly designated as “Plot A”, which are the lands involved here.

The replat of Oakview Subdivision filed in the circuit clerk’s office by the Nixons and Buth Wilson on May 31, 1954, specifies that Plot A shown thereon is “Beserved by Owner for Sale to Arkansas Highway Department.” The plat of Edgewood Subdivision filed by the same owners on October 5, 1954, states that Plot A shown thereon is “Beserved for Highway Use.” The plats dedicate “all streets, alleys, walks, parks and other open spaces to public use as noted” thereon. Bills of assurance also filed by the owners provide for dedication to the public of the “streets and easements” as set out on the plats.

Shortly after appellant filed the instant suit on December 27, 1955, Statewide Homebuilding Company conveyed Plot A, Oakview Subdivision, to appellee, O. & B., Inc., and Plot A, Edgewood Subdivision, to appellee, H. & B., Inc. Appellees are Arkansas corporations owned in equal interests by the partners of Statewide Homebuilding Company. Appellant deposited $8,650 as estimated just compensation for the two tracts in a declaration of taking filed January 16, 1956. In its answer O. & B., Inc., asserted it had been damaged in the sum of $38,500 by the taking of the 4.16-acre tract while H. & B. Inc., sought damages of $63,000 for its 8.82 acres.

At the trial four expert witnesses for appellees fixed the market value of the 4.16-acre tract at the time of taking at amounts varying from $19,600 to $23,040 and the 8.82-acre tract at amounts from $39,200 to $66,714. Two witnesses for appellant placed a market value of $750 per acre on all the lands for a total value of $10,000. All the witnesses agreed that if the property had not been taken by appellant the highest and best use to which it could be put was for residential lot development and some witnesses stated that was the only use to which the property could logically he put. All the lots in Oakview Subdivision except Plot A had been sold at the time of trial but none of the lots in Edgewood had been sold at that time. The population of Jacksonville had more than doubled and property values in the vicinity had increased 200 per cent, or more, since 1953 on account of the construction there of the Little Rock Air Force Base. The number of residential subdivisions increased from seven to sixteen in the same period. The jury returned -a verdict in favor of O. & B., Inc., in the sum of $12,480 and in favor of H. & B., Inc., for $26,460. The instant appeal is from the judgment based on this verdict.

The principal contention for reversal is that the two parcels in question were dedicated to the public for highwáy purposes and appellees were, therefore, entitled to recover nothing on account of the taking. Appellant says this is clearly shown by the plats and bills of assurance filed by the owners and that the court erred in refusing its request for a peremptory instruction to the jury to that effect. Reliance is had on Mebane v. City of Wynne, 127 Ark. 364, 192 S. W. 221, and many similar cases holding that where owners of land lay out a town, or an addition to a city or town, platting it into lots and blocks, intersected by streets and alleys, and sell lots by reference to the plat, they thereby dedicate to the public use the streets, alleys and other public places marked on the plat, and such dedication is irrevocable.

Appellant also cites the following statement of the textwriter in 16 Am. Jur., Dedication, Sec. 24: “Even such an indefinite expression as ‘the place’ or the word ‘reserved’, may operate, in the light of the circumstances under which it is used to show a dedicatory intention, while open or vacant spaces may be held devoted to public use where from their position on, and relation to, the plat, or from symbols used, such appears to have been the intention of the owner, although they are not named. Where reservations for specified public purposes have been made with no apparent intention on the part of the dedicator of reserving title in himself, but with the sole object of benefiting the public, such a reservation has been given effect and, of course, has been held to constitute a dedication. It has been held, however, that where a designated space on a map or plat is marked ‘Reserve’ or ‘Reserved’ although there is an absence of statement of the purpose of the reservation, there is no intention to grant to the public and no dedication takes place.”

The question whether the terms “Reserved by Owner for Sale to Arkansas Highway Department” and “Reserved for Highway Use” used on the plats filed in the case at bar constituted a dedication to the public use was decided adversely to appellant’s contention in Ft. Smith & V. B. Bridge Dist. v. Scott, 111 Ark. 449, 163 S. W. 1137. In that case appellee’s predecessor in title platted land which became a part of the town of Yan Burén with Water Street running parallel with the Arkansas River on its North bank. An irregular strip lying between the south boundary of Water Street and the river was marked “Reserve” on the plat and map. A portion of this strip was condemned by the bridge district for construction of abutments and had been used by appellee and his predecessors as a ferry boat landing. In rejecting the district’s contention that the strip was dedicated to the public the court said: “The irregular strip of ground between it (Water Street) and the banks of the river, as above indicated, has well defined boundaries marked on the map, and, in addition thereto, it is marked ‘Reserve’, thereby indicating an intent on the part of the dedicator not to dedicate it to the public. When all these facts, as shown by the map itself, are considered, there can be no doubt that the owner intended that the strip of ground marked ‘Reserve’ should be excepted from the dedication, and that it was to be reserved or withheld from public purposes, and that it should be and remain the property of the dedicator.” Other cases to the same effect which also involve use of similar words on city or subdivision plats are: Morris v. Avondale Heights Co., 218 Ky. 356, 291 S. W. 752; Fortner v. Eldorado Springs Resort Co., 76 Colo. 106, 230 Pac. 386; Harris v. City of St. Helens, 72 Ore. 377, 143 Pac. 941.

We have also frequently said that the question whether an owner intended to dedicate his land for public use is one of fact to be determined by the jury where such intention is not expressed in writing without ambiguity. Ayers v. State, 59 Ark. 26, 26 S. W. 19; Davies v. Epstein, 77 Ark. 221, 92 S. W. 19. The question was submitted to the jury by the trial court here under an instruction requested by appellant. The terms used by the owners plus other facts and circumstances bearing on their intention are ample to sustain the jury’s finding that there was no intention to dedicate the property to the public. Dedication is ordinarily considered as just the opposite of reservation and it would appear somewhat anomalous for one desiring to donate his land to public use to reserve it “for sale” to the public agency involved.

Appellant also contends that, even if there was no dedication, the land was without market value because its use was restricted for highway purposes under the rule usually applied with respect to such properties as schools and churches that are used for service and not for profit. This point was also resolved against appellant’s contention in Ft. Smith & V. B. Bridge Dist. v. Scott, supra, where the court said: “Finally it is insisted by counsel for appellant that there is no testimony tending to support the finding of the circuit court as to the value of the land taken. They contend that the only value to the land, as shown by the testimony of appellees themselves, was its use as a ferry landing, and that this is not an element of value that can be considered by the court in awarding damages in a condemnation suit. It is true that the testimony on the part of appellees tended to show that the land in question was not dedicated to the public, but was reserved in the dedicator on account of its value as a ferry landing. The court, however, is not concerned with the purpose which caused the dedicator to reserve the land. He might reserve it for ferry purposes as well as for any other purpose. The question to be determined by the court in awarding damages in this case was the value of the land taken, and in determining this value, its availability for any use to which it is plainly adapted can be considered.” The lands here were “reserved for” and not “restricted to” highway usage by the owners and appellees could have used the plots for building sites or any other lawful purpose if appellant had not located the highway across the land.

Nor do we agree with the further contention that the court erred in admitting testimony relative to the division of the two plots into residential lots and its net value for such purposes after deduction of improvement costs. The established rule in this state in cases like this is that the owner may be allowed to show every advantage that his property possesses, present and prospective, in order that the jury may satisfactorily determine what price it could be sold for upon the market. Little Rock Junction R. Co. v. Woodruff, 49 Ark. 381, 5 S. W. 792, 4 Am. St. Rep. 51; Kansas City Southern R. Co. v. Boles, 88 Ark. 533, 115 S. W. 375.

Appellant concedes that potential nse of land for subdivision purposes may be considered in establishing market value but says it is error to show the number and value of lots into which a certain tract may be divided. Cases from other jurisdictions supporting this argument involve facts quite different from those in issue here. This is not a case where use for subdivision purposes is merely speculative and too remote to influence present market value. As previously indicated, it is undisputed that the land of appellees was adjacent to and surrounded by well developed residential sections of the fast growing City of Jacksonville and that its best and most logical use was for residential lot development. In these circumstances we have held the testimony objected to by appellant to be admissible to establish market value. ,

In St. Louis I. M. & S. Ry. Co. v. Theo Maxfield Co., 94 Ark. 135, 126 S. W. 83, the court said: ‘ ‘ The chief question involved in this ease is whether or not, in determining the value of the land, the fact can be taken into consideration that the land is suitable for division into lots and blocks and an addition to the adjacent city; and whether or not the witnesses can take into consideration the value of such lots and blocks in arriving at their opinion as to the market value of the land. It is contended by the appellant that the land, although thus laid, out on the plat in lots and blocks, was actually enclosed and cultivated as a farm; and while one or two streets had been opened up along the sides of the tract, the streets were not actually opened up through the tract, and the lots were not actually at the institution of the suit indicated on the land; and it urges that the value of the lots as laid out on the plat should not be considered in arriving at the value of the tract of land. But the measure of the damages which the owner is entitled to recover for property taken for public use or depreciated by such use is the market value of it. This market value is determined, not solely by the uses to which the property has been put or is put at the time of the condemnation proceeding, but by all the purposes to which it is adapted”. After noting that the land was situated similarly to that involved here, the court further said: “In the case at bar we are of opinion that the witnesses, in estimating the market value of the tract of land that was appropriated for the right-of-way, could take into consideration its value for the purposes of town lots, and that they and the jury could fix the value thereof upon that basis of the market value of such lots.” See also, 29 C. J. S., Eminent Domain, Sec. 160.

On the question of adaptability of the land for building lots the trial court told the jury: “Now from the testimony, you have heard that the maximum value of the other similarly situated lands for any reasonable use is for subdivision purposes. And in that connection let me caution you that it is the value of the entire tract that you must determine and not the lots into which it might be divided. You are not to determine how it could best be divided into building lots, nor conjecture how fast they could be sold nor at what price per lot. You should not inquire what a speculator might be able to realize out of resale in the future, but you should consider what a purchaser would have been willing to pay for it on January 16, 1956, in the condition it was then in. ’ ’ The jury evidently followed this admonition in fixing the market value and there is no contention that the verdict is excessive. Since the instruction was perhaps more favorable to the appellant than the facts warranted, it is hardly in position to now argue that same was inconsistent with the evidence, or that appellant was in any manner prejudiced by the giving of the instruction.

The testimony of appellees’ agent as to his intention in respect to the alleged dedication of the two plots in question was admissible under the general rule that such evidence may be considered in connection with all the other facts and circumstances for the purpose of throwing light on the acts of the dedicator, where such acts do not manifestly indicate the intent to dedicate. See 26 C. J. S., Dedication, Sec. 46 (c).

We find no prejudicial error, and the judgment is affirmed.


source: Caselaw Access Project

author: George Rose Smith, J.

license: Public Domain

text:
    King v. Hill.
    5-1252
    301 S. W. 2d 9
    Opinion delivered April 22, 1957.

      Wiley A. Brant on, for appellant.

      John Harris Jones, for appellee.
   George Rose Smith, J.

Two separate suits against the appellee, George W. Hill, were consolidated hy the court below for the purpose of passing upon the defendant’s plea of res judicata in each case. The chancellor sustained the plea in both cases and dismissed the complaints without a trial on the merits. The plaintiffs in each suit have appealed.

In one of the complaints Thomas W. Morgan and his wife assert that they own two lots in Jefferson county, that Hill owns the property lying north of the plaintiffs ’ lots, and that Hill is encroaching on the Morgans’ land by maintaining thereon a butane gas tank and a portion of a fence that extends across the boundary line between the two tracts. The plaintiffs ask that Hill be required to remove the encroachments and to respond in damages for his wrongful use of the plaintiffs’ land.

To this complaint Hill pleads as res judicata the decree that was affirmed by this court in Morgan v. Hill, 224 Ark. 39, 272 S. W. 2d 67. That was also a dispute between these two neighbors. There, however, Morgan asserted in his complaint that the two tracts were separated by a public road and that Hill was maintaining fences and other obstructions in the public thoroughfare. Hill denied the existence of the alleged public street and successfully contended that he had title by adverse possession to the land within his fences.

We agree with the chancellor’s conclusion that Morgan’s present complaint against Hill presents essentially the same issues that were involved in the earlier litigation between these parties. Although Morgan averred in the first case that a public street lay between the two properties, Hill denied this assertion and insisted that the parties were really adjoining landowners. According to the transcript in that case, which was considered at the hearing below, Hill testified in the former litigation that his land extended clear over to Morgan’s property, that a fence separated the two, and that the butane gas tank owned by Hill was located on his side of the line. Thus Hill defended and won the prior case upon the theory that only a private boundary line was involved and that he owned the land on his side of the fence that marked the boundary. By his present complaint Morgan concedes that the parties are adjoining-landowners, but he contends that the division fence is on his side of the true boundary line. It is evident that this question — the correct location of the boundary between the two tracts — was within the issues presented by the former case and is therefore not open to re-examination. Timmons v. Brannan, 225 Ark. 220, 280 S. W. 2d 393. On .this branch of the case the decree is affirmed.

The other complaint now before us was filed by Love King and others. These plaintiffs allege that they own property fronting on Thirty-second Street, that certain of Hill’s fences and a part of his residence encroach upon the street, and that the plaintiffs have suffered special damages as a result of the interference with public travel. The prayer is that Hill be required to remove the obstructions complained of. This is the same grievance that Morgan asserted in his first suit against Hill. Hill contends, and the chancellor held, that the earlier case was in effect a class suit on the part of Morgan and that the present plaintiffs, as members of the class, are therefore concluded by the prior decree.

This contention is not sound. We may concede, without having to decide, that Morgan, had he chosen to do so, might have brought a class suit on behalf of himself and everyone else whose rights were affected by Hill’s encroachments upon the public street. But Morgan did not frame his complaint on that theory. He did not purport to act for anyone except himself, which negatives the suggestion that his suit was a representative one. Rest., Judgments, § 86, Comment b. Morgan alleged that he had suffered special injury from Hill’s conduct ; without that allegation he would have had no standing in court. Ruffner v. Phelps, 65 Ark. 410, 46 S. W. 728. As far as the earlier complaint disclosed, Morgan was asserting only a cause of action personal to him. Had his neighbors examined that complaint they would not have been pointedly informed that the litigation was to afford them their only day in court.

Hill argues that since a decree in Morgan’s favor, requiring the removal of the obstructions in the street, would have afforded the plaintiffs the same relief they now seek, the earlier suit should be treated in substance as a class action. It is said that Hill should not be required to defend more than one suit involving the same fact situation. This argument was rejected, in similar circumstances, in Connor v. Thornton, 207 Ark. 1113, 184 S. W. 2d 589. There one inhabitant of a residential area had unsuccessfully brought suit to enjoin the operation of a sawmill, asserting it to be a nuisance. Later on other residents unsuccessfully brought an action for damages said to have been caused by the operation of the mill. In still a third suit the owners of the mill contended that the prior cases, though not representative in form, should be treated as class actions binding all inhabitants of the area. In denying this contention we said: ‘‘While it is unfortunate that a decree involving persons who have for the third time been required to defend must be set aside, we are not willing to say that plaintiffs in the Circuit Court action (which was not designated as a class suit) were acting for all property owners in the affected area. ’ ’ It follows that King and his coplaintiffs are not concluded by the earlier decree in favor of Hill. With respect to these appellants the decree is reversed and the cause remanded for further proceedings.

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


author: Paul Ward, Associate Justice.

text:
    Jones v. Cox.
    5-1217
    301 S. W. 2d 12
    Opinion delivered April 22, 1957.

      C. Van Fayes, for appellant.

      Ben M. McCray, for appellee.
   Paul Ward, Associate Justice.

On June 23, 1954 Wesley N. Jones, d/b/a, Jones Ready-Mix Concrete, appellant, purchased from appellees, a partnership composed of William A. Cox, Samuel M. Cox and William T. Cox, a Ford 3 ton truck together with a concrete mixer installed thereon. The purchase price for said equipment, including finance charges, amounted to $9,085.44. On the date first above mentioned the parties executed a Conditional Sales Contract in the usual form which provided for 24 monthly payments of $378.56 each and which provided for the title to remain in the sellers until the equipment was paid for. After appellant had reduced the principal indebtedness to the sum of $5,418.24 he failed or refused to make any further payments.

On September 29, 1955 appellees filed a complaint in the chancery court setting forth, in substance, the facts above mentioned, and also stating that said equipment was in the possession of appellant, that it was no longer covered with insurance, and that the court should order the sheriff to take said equipment and hold it subject to the orders of the court. The prayer was for a judgment against appellant in the sum of $5,418.24 together with interest, that the equipment be sold by the sheriff and the proceeds therefrom be applied on the judgment. .

To the above complaint appellant entered a general denial, and further stated that the said equipment “was to be entirely and absolutely paid for out of all the net profits, if any, realized from the operation of said equipment . . and that ‘ ‘ said truck and mixer did not secure any profit other than that which was jjaid . . It was further stated in the answer that upon failure of the profits to pay for the truck and concrete mixer all of the equipment was to be returned to appellees without any further obligation or responsibility on the part of appellant.

After a trial on the issues above set forth the chancellor, after finding that said equipment was in the possession of appellant, entered judgment in favor of appellees in the amount sued for and authorized the sheriff to attach and sell said equipment, after having advertised the same, with the proceeds therefrom to he applied to the judgment.

For a reversal of the decree of the trial court, appellant relies on three separate grounds, viz: I. The terms of the Conditional Sales Contract were later changed; II. Appellees waived their right to sue for the balance due, and; III. The decree is inequitable. We shall discuss these points in the order mentioned.

I.

Appellees purchased the concrete mixer which it sold to appellant from an equipment company in Little Rock. On the day the sale was closed, June 23, 1954, appellant and Sam M. Cox (one of appellees) were in Little Rock and talked with Mr. Leonard R. Clark, who was connected with said equipment company. It is appellant’s contention that on this occasion, and after the Conditional Sales Contract had been executed on the same day, he had an agreement with Mr. Sam M. Cox that the equipment would be paid for solely and absolutely out of the net profits derived by appellant from the use of such said equipment, and that if and when such profits were insufficient to make the payments, he, appellant, would have the right to return the equipment to appellees and thereby cancel all indebtedness.' The chancellor found against this contention of appellant, and we think such finding was not against the weight of the testimony.

After the matter was discussed it was reduced to writing and signed by Sam M. Cox and Wesley N. Jones, and was sworn to before a notary public, on June 23, 1954. This note or writing reads as follows: “Any and all net monies acquired from the truck and mixer applies to the purchase price agreed upon, which is the amount of the unpaid balance of the contract with the Universal CIT Credit Corporation, Little Rock, Arkansas.” It will of course be noted that this writing contains no provision that the equipment would be paid for entirely and absolutely out of the net profits and nothing else. It seems unlikely that Mr. Jones and Mr. Cox would have omitted from the writing anything as essential as that contended for by appellant if it had in fact been agreed upon. Appellant apparently relies entirely on the writing set forth above, for we find this statement in the record made by his attorney: ‘ ‘ The note will reflect that the money will be paid out of the profits of the mixer and that is what we stand on.” Mr. Clark’s testimony relative to the purported oral agreement does not entirely bear out appellant’s understanding of the same. In answer to a question Mr. Clark stated: “I put everything (in the note) I thought that would protect my customer.” Clark was also asked this leading question. Q. “You made a further statement that Mr. Cox said if something happened where profits wouldn’t pay for it, then Mr. Jones wouldn’t have any further responsibility1?” A. “As I said before, I don’t remember the exact words, however he said words to that effect. ’ ’ Moreover, since the parties put their agreement in writing, oral testimony would not be admissible to engraft other agreements or understandings made or had at the same time. The rule that permits testimony to show a subsequent oral agreement (as announced in Von Berg v. Goodman, 85 Ark. 605, 109 S. W. 1006) is not applicable here, because, if there were any such oral agreement as appellant contends for, it was contemporaneous with and not subsequent to the written agreement which Jones and Cox signed.

II.

Appellant says appellees waived their right to sue for the balance due by taking possession of the equipment before trial and by having the sheriff take it after suit was filed. Appellant’s position cannot be sustained on either count. Appellant is relying on the rule well established by many decisions of this court that the seller, upon breach of a Conditional Sales Contract has two remedies: One, he can take possession of the merchandise thereby cancelling the obligation of the buyer to pay, or; Two, he can treat the sale as consummated and sue for the balance of the purchase price, and; The exercise of one remedy excludes the right to exercise the other remedy.

The testimony shows that appellant remained in possession of the equipment at all times, and that he never at any time turned it over to appellees. On one occasion an employee of appellees inquired of a Mr. Baker if he would be willing to assume the payments on appellant’s contract in event appellees had to take the property back from appellant. This, of course, did not justify the court in finding that appellees had repossessed the property.

Appellees’ procedure, in asking the court to direct the sheriff to hold the equipment pending the outcome of the trial, was not a taking of possession in the sense referred to in the rule mentioned above, but was in accordance with Ark. Stats. § 34-2301 and § 34-2302, and the decision in the case of Olson v. Moody, Knight & Lewis, Inc., 156 Ark. 319, 246 S. W. 3.

III.

We see no merit in appellant’s argument that it would be inequitable to permit the judgment of the lower court to stand. The Conditional Sales Contract was transferred, by appellees, with recourse, to the Universal Credit Corporation. When it became apparent that appellant was not going to pay for the equipment, it became necessary for appellees to repay C.I.T. and repossess the contract and note, which at that time showed a balance of $5,418.24. In so doing appellees gave C.I.T. their check for $2,418.24 and at the same time they cancelled out $3,000 of a reserve which they had with the said credit company. We can see nothing irregular or inequitable about such a transaction. Appellees paid for the contract just as effectively as if they had given a check for the entire amount.

Affirmed.


author: Sam Robinson, Associate Justice.

text:
    Sewer Improvement Dist. No. 4 of Morrilton v. Davis.
    5-1246
    301 S. W. 2d 15
    Opinion delivered April 22, 1957.

      Townsend S Toionsend, for appellant.

      Phillip H. Loh, Pelver A. Rowell, Jr., Clay Brasil, Charles Ecldy and Clyde Brewer, for appellee.
   Sam Robinson, Associate Justice.

Sewer Improvement District No. 4 of Morrilton, Arkansas was created in 1924. Subsequently, owners of property not located in the district connected sewer lines from such property to the system owned by District No. 4 without paying anything for the privilege and without obtaining permission for such connections from the Commissioners of the District. Later, the district filed suit against such property owners to recover connection charges. This court held that the statute of limitations had run on the debt owed by some of the defendants, but the court specifically pointed out that the property owners had acquired no vested right in the use of the sewer system. The court said: “In holding that the recovery of these connection charges is barred by limitations we do not imply that the unauthorized use of the district’s lines has given rise to a vested right that would prevent the district from refusing to continue the service in the future.” Morrilton Homes Inc. v. Sewer Improvement District No. 4, 226 Ark. 22, 287 S. W. 2d 581.

The case at bar was filed by the district asking that the owners of property outside the boundaries of the district be required to pay a reasonable sum for the use they are making of the sewer system, or that they be enjoined from using it. The chancellor sustained demurrers to the complaint filed by some of the defendants and refused to enter default judgments against other defendants who failed to answer the complaint, and the district has appealed. The demurrers were sustained on the theory that the district was attempting to collect a service charge and that such a charge is not authorized by law.

Ark. Stats. § 20-332 provides: “All sewer districts shall have authority to permit lands outside the boundaries of the district to connect sewer lines serving such lands with the sewer lines and mains of the district and to make a charge for such privilege.” Ark. Stats. § 20-333 provides: “The Commissioners of the district shall have the right to consent to or refuse to allow such connections within their discretion, and such connections shall be made on such terms as the Commissioners may dictate, provided, however, that no lands outside of the district shall be permitted to connect with the sewer line of the district except upon payment to the district of a sum equal to the charge made against similarly benefitted lands within the district, and in case such connections have heretofore been made without the payment of a charge for such connection, the district may refuse to allow sewer service to such lands until permission for such connection is granted and the charge for such service is paid to the district.”

The Commissioners have authority to permit land outside the boundaries of the district to connect with the sewer system belonging to the district. But, the Commissioners have the right to exercise their discretion as to whether such connections will be allowed, and under the provisions of the statutes, the district has the right to refuse to allow service to lands outside the district; the owner of such lands can use the sewer, system only with, permission of the Commissioners of the district. The mere fact that the property owners have sewer lines from their property connected with the District No. 4 system for more than three years gives them no vested right to the nse of snch sewer system, as pointed ont in Morrilton Homes Inc. v. Sewer Improvement District No. 4, supra.

Reversed, with directions to proceed in a manner not inconsistent herewith.


text:
    Brown v. Stair.
    5-1259
    301 S. W. 2d 16
    Opinion delivered April 22, 1957.

      Dobbs, Pryor & Dobbs, for appellant.

      Warner, Warner & Rag on, for appellee.
   Sam Robinson, Associate Justice.

The appellee, John Stair, was damaged when his automobile, which he was driving East on Rogers Avenue in Fort Smith, was struck from the front by a car driven by Coleman Smith and struck from the rear by an automobile driven by appellant, Sanford Brown. There was a judgment in favor of Stair against both Smith and Brown. Brown has appealed.

The principal issues on appeal are whether Brown and Smith are joint tort-feasors, and whether there is any substantial evidence of negligence on the part of Brown. Appellant contends there were two collisions sufficiently separated in point of time as to make inapplicable the principles of joint tort-feasor; and that there was no negligence on his part. Brown was traveling about one hundred twenty feet behind Stair; they were both going in the same direction. Coleman Smith, traveling in the opposite direction, got over on the wrong side of the road and collided head-on with Stair. There is evidence to the effect that, practically simultaneously with the head-on collision, the Brown car struck Stair from the rear. Stair testified that, in an attempt to avoid the collision, he put on his brakes when he saw Smith get over on the wrong side of the road. Brown testified that he did not see the Smith car prior to the collision, and did not see Stair attempting to stop; there is a reasonable inference that if Brown did not see the Smith car he ivas not keeping a proper lookout and negligently failed to observe Stair stopping his car in an attempt to avoid a collision with Smith; and this theory would explain Brown’s action in striking the Stair car from the rear. Brown claims that the Stair automobile was knocked back into his car, but these were questions for the jury.

Brown argues that there were two separate accidents; first, that Smith and Stair collided head-on and at an appreciable time later, Brown collided with the Stair car and that, in these circumstances, the second wrongdoer is not a joint tort-feasor with the party who was negligent in the first instance. Assuming appellant’s theory of the law on this point is correct, according to the evidence it cannot be said as a matter of law that this principle is applicable in the case at bar. After testifying about being struck from the front by the Smith car, Stair said: “I felt the second impact almost instantaneously. ’ ’

By his requested Instruction No. 3, the appellant asked the court to tell the jury as a matter of law there were two separate accidents, but, in view of the evidence in the ease the court was justified in refusing the instruction. Instruction No. 4 requested by appellant, and refused by the court, assumes there were two separate accidents. In view of the evidence, the court could not adopt this assumption.

Affirmed.


author: Carleton Harris, Chief Justice.

text:
    Exchange Bank & Trust Co. v. Texarkana School Dist. No. 7.
    5-1267
    301 S. W. 2d 453
    Opinion delivered April 29, 1957.

      B. L. Allen, for appellant.

      Smith $ Sanderson, for appellee.
   Carleton Harris, Chief Justice.

On December 30, 1952, McDougald Construction Company, a partnership composed of G. W. McDougald and B. V. McDougald (hereinafter called McDougald) entered into a contract with Texarkana School District No. 7 of Miller County, Arkansas, for the construction of a senior high school building. Under the contract, McDougald was to furnish all material and perform all work, receiving as compensation therefor the sum of $377,111. McDougald furnished to the district two performance bonds, with United States Fidelity and Guaranty Company as surety, under the terms of which the principal and surety agreed to the faithful performance of the terms and conditions of the construction contract, and the surety agreed that in case of default of the contractor to perform, the surety would, to the extent of the bond, make good any snch default. It was agreed between the school district (sometimes called owxier) and McDougald that the owner would pay the contract price in monthly installments as the work progressed. The amount of each installment was to be based on estimates covering the preceding month’s progress, work done, and materials delivered on the job, with ten per cent retained until filial completion and acceptance of the entire job. McDougald was to furnish satisfactory evidence of payment of all laborers, materialmen, and subcontractors, and owner was authorized to withhold from McDougald’s unpaid compensation a sum of money sufficient to pay any and all such unpaid claims. The contract provided that in paying any unpaid bills of McDougald, the owner was deemed the contractor’s agent, and any payment so made was to be considered as a payment made under the contract by the owner to the contractor. In furnishing the bond, Mc-Dougald entered into an agreement with the United States Fidelity and Guaranty Company, (hereinafter called surety), under which McDougald agreed “* * * to indemnify the Company (surety) against all loss, damages, claims, suits, costs and expenses, whatever, including court costs and couxisel fees at law or ixx equity, or liability therefor, which the Company may sustain or incur by reason of: executing or procuring said bond, or making any investigation on account of same, or procux-ing its release or evidexxce thereof from same, or defending, prosecuting or settling axiy claim, suit or other proceeding. * * *” To secure the surety, McDougald did “* * * assign and coxxvey to the Company as collateral to secure the obligations herein and any other indebtedness or liabilities of the undersigned to the Company, whether heretofore or hereafter incurred, all the right, title and interest of the undersigned in and to: (a) said contract axid axxy change, addition, substitution or xxew contract (including all retained percexxtages, deferred payments, earned moneys and all moneys and properties that may be due or become due under said contract, change, addition, substitution or new contract) * * *; such assignment to be effective as of the date of the construction contract but only in event of (1) any breach of any of the agreements herein contained or of said contract or performance bond or of any other bond executed or procured by the Company on behalf of the applicant herein. * * * ” This agreement was executed on December 30, 1952.

On January 27, 1953, McDougald executed another assignment of its rights under the contract with the school district, to the Exchange Bank and Trust Company, appellant herein, to secure advances to be made to it. The stipulation does not reflect that all such advances were made in connection with McDougald’s performance of his contract with the district, and no advances were made after November 13, 1953. Appellant notified the district of its assignment. Based on eleven monthly estimates covering the construction period from the beginning of the contract through November, 1953, installments of the contract price were made to McDougald for its account amounting in the aggregate to $272,-556.41. Ten per cent of such monthly estimates, amounting in the aggregate to $27,055.23, was retained by the school district. The eleventh such estimate, covering work done and materials furnished in November, 1953, was filed by McDougald with the district after December 1,1953, and payment based thereon was remitted for Mc-Dougald’s account by owner on December 10, 1953. Around the middle of December, McDougald was in such financial straits that it was unable to meet its payroll, and on December 28, 1953, formally notified appellee owner that it was unable to continue in the performance of the contract in question. Two days later, the owner notified intervener of McDougald’s default, and intervener elected to complete the performance of the construction contract in its capacity as surety under the bond, and in accordance with its obligation. Shortly after January 1, 1954, McDougald filed its twelfth estimate covering work done during the month of December. At the time of default, the aggregate of the retained percentages under the construction contract, which was being held by the school district, was $27,055.23. This amount was subsequently paid to the surety, who completed Mc-Dougald ’s contract at a cost of $206,414.89. Appellant filed suit against the school district, alleging that the district owed it $14,469.39. This was based upon the assignment from McDougald to appellant, wherein appellant was to receive all monies due McDougald under the contract. (The amount sought was the total sum of indebtedness due the hank from McDougald.) The school district filed its answer, setting up that the United States Fidelity and Guaranty Company, as surety, “# * * under equitable subrogation, became entitled to receive all of the contract price stipulated for in said construction contract which remained at the time of contractor’s said default unpaid, upon the completion by surety of the performance of the construction and improvements in accordance with the terms of the construction contract after contractor’s default thereunder * * The United States Fidelity and Guaranty Company filed its intervention, adopting the answer of the school district. At the conclusion of the hearing, the court entered its decree dismissing appellant’s complaint. From such decree comes this appeal.

There is really only one question to he determined in this litigation, i.e.: “Was the right of appellant to funds in the hands of appellee, Texarkana School District No. 7, superior to the right of appellee, United States Fidelity and Guaranty Company?” At the time of McDougald’s default, it owed its materialmen, subcontractors, and employees for work done and materials furnished during the month of December, the sum of $28,-147.54. For work done and materials furnished on the job prior to December 1, 1953, it owed the additional sum of $71,418.58. This amount was past due and remained unpaid until paid by the surety. Appellant contends that it had a valid assignment from McDougald, which was accepted by the school district, and that no subsequent assignee of McDougald, and no creditor, could acquire any rights superior to the rights of the bank, the first assignee, and any monies due McDougald for work done in December should properly have been paid to appellant. It is also contended that appellant is entitled to a sufficient amount of the retained percentages as will liquidate McDougald’s indebtedness to it. We do not agree. There was nothing due (to .McDougald or appellant) because of McDougald’s failure to pay for work done and materials furnished. This constituted an amount far greater than any sum due under estimate twelve. Each estimate did not constitute a separate or completed contract. The contract was indivisible, and these estimates were made under its provisions. It is conceded by appellant that under prior decisions of this Court, the United States Fidelity and Guaranty Company would be entitled to equitable subrogation as to the funds in the hands of the school at the time of Mc-Dougald’s default. American Bank & Trust Co. v. Langston, 180 Ark. 643, 22 S. W. 2d 381; City of Texarkana v. F. W. Offenhauser & Co., 182 Ark. 201, 31 S. W. 2d 140. It is contended, however, that Act 118, of 1945 (Ark. Stats. (1947) 68-805) contravenes the earlier holdings of the Court and is controlling in this matter. Said statute reads as follows:

“Every written assignment made in good faith, whether in the nature of a sale, pledge or other transfer, of an account receivable or any moneys due or to become due on an open account or on a contract, except for wages and salaries (all of which shall hereinafter be referred to as ‘account’), with or without the giving of notice of such assignment to the debtor, shall be valid and complete at the time of the making of such assignment, and shall be deemed to have been fully perfected at that time. Thereafter, no bona fide purchaser from the assignor, no creditor of the assignor, and no other assignee or transferee of the assignor, in any event shall have or be deemed to have acquired any right or interest in the account so assigned or transferred or in the proceeds thereof or in any obligation substituted therefor, superior to the rights and interest therein of the assignee. In any case where, acting without knowledge of such assignment or transfer, the debtor in good faith pays all or part of such account to the assignor, or to such creditor, subsequent purchaser or other assignee and transferee, all payments so made shall be acquittance to the debtor to the extent thereof, and such assignor, creditor, subsequent purchaser or other assignee and transferee, shall be a trustee of any sums so paid and shall be accountable and liable to the prior assignee thereof.

“Provided further, however, that any defense of the debtor against any account so assigned or transferred shall be good as against any subsequent purchaser or other assignee and transferee.”

We cannot agree with appellant’s contention. This statute does not enlarge the rights of assignee as compared to the rights of the assignor (against a debtor), nor does it take away any defense available against the assignor. The title of this Act is “AN ACT to Benefit Small Business by Facilitating the Obtaining of Loans and Financial Assistance by Merchants and Other Businessmen Through the Assignment of Accounts Beceivable and Amounts Due or to Become Due on Open Accounts or Contracts Whether or Not the Debtors Thereon Are Notified of Such Assignments and Providing That Non-Notification of Such Debtors of Such Assignments Shall Not Affect or Impair the Validity Thereof.” It is not necessary to consider this act in detail in the instant litigation. It is sufficient to state that we consider appellant’s construction to be erroneous.

Let it be remembered that appellant’s action here is derivative through McDougald, and appellant may not maintain any action against the appellee school district that McDougald could not assert. That McDougald was in default is not disputed; that it was indebted for labor and materials on the job in an amount in excess of funds held by the district is not disputed. Accordingly, it would not be contended that the district should have paid the monies over to McDougald. The same reasoning applies to the rights of the surety. There was a clear duty and obligation upon the United States Fidelity and Guaranty Company to pay the outstanding indebtedness of its principal, and to complete the contract. This it did at a cost stipulated to be reasonable. The doctrine of equitable subrogation clearly applies.

Affirmed.

       Referring to construction contract between McDougald and school.

       Cheeks were made payable to McDougald, but from March, were transmitted by mail to McDougald’s assignee, appellant.

       Appellant is presently seeking only $11,384.54.


author: J. Seaborn Holt, Associate Justice.

text:
    Wynn v. Hale.
    5-1275
    301 S. W. 2d 466
    Opinion delivered April 29, 1957.

      Tom Kidd, for appellant.

      O. W. Loolcadoo, for appellee.
   J. Seaborn Holt, Associate Justice.

Appellee, J. W. Hale, brought this suit to require appellants to remove certain cattle guards and gates erected on a public road, and which he alleged were obstructions. The facts appear to be undisputed and the appellee says: ‘ ‘ The only questions involved in this law suit are whether or not the appellants had a legal right to place the cattle guards and gates across the road, and whether or not the cattle guards and gates are obstructions.”

The trial court found the issues in favor of appellee and ordered the cattle guards and gates removed. This appeal followed. The chancellor’s findings contained this recital: “That plaintiff and defendants own adjoining real estate in Pike County, Arkansas; that a road is on the land line between the adjoining owners; that this road or highway has been in use by the public for a period of more than fifty years, openly, continuously and adversely, and that the public has acquired an easement by prescription of which it cannot be dispossessed by the owners of the land in fee:

That plaintiff and his wife have used this road for more than fifty years and now are using it in going from their home that is located on said highway to their mail box and to church and to Nashville, Dierks, Murfreesboro and other places; that this is their only means of ingress and egress to their home; that the road is a public highway and is now used by the plaintiff and the public generally;

That defendants bought their real estate during the year 1943 and, at the time that they purchased this land, it was enclosed and there was a fence built on each side of the public road involved in this controversy; that defendants, in 1952, built two cattle guards and swinging gates, one at the east end and one at the west end of the road herein between defendants’ land;

That plaintiff does not own a car but that he does own a wagon and team, and in traveling over this road he is required to stop and open and close the gates;

We have concluded that the court erred in holding that the gates and cattle guards were obstructions and should be removed. It is conceded that appellee and the public generally have acquired from long usage a prescriptive right to use this road. We hold that the obstructions do not prevent its free use to appellee in going to and from his farm. His complaint is that he had no motor vehicle and cannot drive over the cattle guards with a team of horses or mules and must, therefore, stop when he reaches the cattle guard, open, drive through, and close the gate, which is an inconvenience to him. We think - this slight personal inconvenience, which is no different from that suffered by the public generally, does not warrant removal of the cattle guards and gates.

The applicable rule in such a situation as is presented here is announced by the text writer in 40 C. J. S. § 226(b), p. 225, in this language: “. . . a property owner has no right of action where the obstruction does not prevent access to his land but merely causes him personal inconvenience in being compelled to take a more circuitous route in going from his property to necessary points. A mere traveler on the highway cannot bring an action to abate an obstruction unless he shows some injury greater than personal inconvenience suffered by the necessity of taking a more circuitous route in reaching his destination.”

Accordingly, the decree is reversed and the cause remanded with directions to enter a decree consistent with this opinion.

Mr. Justice McFaddin dissents.


author: Ed. F. McFaddin, Associate Justice.

text:
    Lynch v. Garnes.
    5-1191
    301 S. W. 2d 739
    Opinion delivered April 29, 1957.
    [Rehearing denied June 3, 1957]

      Luke Arnett and John F. Park, for appellant.

      Linwood L. Brickhouse, Langston & Walker and Wayne Foster, for appellee.
   Ed. F. McFaddin, Associate Justice.

This litigation involves the dealings and transactions between the appellant, S. J. Lynch and Mrs. Annie Engelberger, a lady now 91 years of age. Por a period of approximately twenty years, Mr. Lynch was the agent, business adviser, and property manager, of Mrs. Engelberger; and he also borrowed considerable sums of money from her at various times. In June, 1955 Mrs. Engelberger filed her complaint against Lynch, praying, inter alia: (a) that she have judgment against him and his wife for the amounts due on certain notes and mortgages, together with foreclosure thereof; (b) that she have a complete accounting of Lynch’s dealings as her fiduciary; and (c)that she have judgment against Lynch for all that he owed her as disclosed by the accounting. To the complaint there was filed an answer and a cross-complaint.

In October, 1955 Mrs. Annie Engelberger — on petition of her three daughters and three grandchildren— was declared mentally incompetent; and her daughter, Mrs. Tillie Engelberger Garnes, was appointed as guardian of Mrs. Engelberger and was substituted as plaintiff in the said suit that Mrs. Engelberger had filed. Various interlocutory orders were made; and by agreement an accountant was appointed to audit the books.

Trial in the Chancery Court resulted in a decree of April 10, 1956, finding inter alia: (a) that Mrs. Annie Engelberger had been “since 1946 mentally incompetent and incapable of transacting business matters”; (b) that Lynch and wife had borrowed money from Mrs. Engelberger, evidenced by notes, at intervals from 1942 to 1950, and still owed Mrs. Engelberger a total balance on three notes of $13,975.27 and interest at 10% from February 2, 1956 until paid; (c) that certain mortgages executed by Lynch and wife to Mrs. Engelberger should be foreclosed; (d) that certain contracts and powers of attorney executed by Mrs. Engelberger to Lynch should be cancelled; (e) that Lynch was entitled to a deed to one property upon payment of a certain amount; and (f) that Lynch was liable for $752.35 damages he had inflicted on a building.

From this decree, Lynch and wife have appealed; and Mrs. Garnes, as Guardian, has cross appealed. The appellants bave listed seven points on tbeir direct appeal; and the appellee has listed five points on her cross-appeal. We gronp and discuss the points in suitable topic headings.

I. The Amount Due By Lynch On The Notes To Mrs. Ehgelberger. The record shows there were four notes executed by Lynch to Mrs. Engelberger:

Note No. 1 was dated April 24, 1942 for $3,800. The mortgage securing this note was duly released of record in November, 1942: so the Trial Court correctly held this note to have been fully satisfied and no judgment was rendered against Mr. Lynch on this note.

Note No. 2 was dated October 2, 1942 for $3,800. Lynch’s pleadings admitted that this was a valid note, but he claimed many credits on it. The Chancery Court allowed credits totalling $1,348.69 and found that the balance of principal and interest due on February 2, 1956 was $5,940.65.

Note No. 3 was dated June 21, 1950 for $3,450. Lynch’s pleadings admitted that this was a valid note, but he claimed many credits on it. The Court allowed credits totalling $1,450 and found that the balance of principal and interest due on February 2,1956 was $3,080.

Note No. 4 was dated July 13, 1950 for $3,200. Lynch’s pleadings admitted that this was a valid note, but he claimed many credits on it. The Court found that there were no credits on this note and that the balance of principal and interest due on February 2, 1956 was $4,954.62.

Thus, the Court found that the total on notes Nos. 2, 3, and 4, due February 2, 1956, was $13,975.27; and Lynch says that he is entitled to many credits that the Chancery Court failed to allow him. When Lynch admitted that notes 2, 3 and 4 were valid, the burden devolved on him of proving payment. Caldwell v. Hall, 49 Ark. 508, 1 S. W. 62; Barnett v. Bank of Pangburn, 147 Ark. 500, 228 S. W. 369; Toulmin & Toulmin v. Underwood, 172 Ark. 813, 290 S. W. 377; and Daugherty v. Merrifield, 190 Ark. 537, 80 S. W. 2d 72. Mr. Lynch failed to discharge this burden beyond the amounts allowed by the Chancery Court. Early in the course of the litigation it became evident that there would have to be an audit of Mr. Lynch’s books in order to learn of his dealings as Mrs. Engelberger’s agent. Accordingly, by agreement of both sides, an order was made on November 25, 1955 appointing Mr. O. B. Courtney to make the audit. Mr. Courtney undertook to audit Mr. Lynch’s books, in keeping with the Court order; and on December 16,1955 Mr. Courtney filed his 14-page report. He also testified in the case.

It is apparent that Mr. Lynch kept very inadequate records. There were no entries prior to November 16, 1948, and no entries after July, 1955. Furthermore, it was impossible to determine whether certain expense items were paid on account of Mrs. Engelberger’s property or for personal expense of Mr. Lynch on his own property. Not only was the burden on Mr. Lynch to prove any payments he claimed on his notes to Mrs. Engelberger, but also it was his duty as agent to keep an accurate record of his dealings for her. As stated in 2 Am. Jur. 226 (“Agency” § 286) on the duty of an agent to keep and render accounts:

“The duty of an agent to account for moneys of his principal coming into his hands is well recognized. As stated by the American Law Institute, unless otherwise agreed, an agent is subject to a duty to keep, and render to his principal an account of, money or other things which he has received or paid out on behalf of the principal.”

In view of the duties of Mr. Lynch and the poor records that he kept, and the uncorroborated nature of his testimony, we cannot say that the Chancery Court was in error in its holding in regard to credits claimed by Mr. Lynch. So we affirm the decree as to amounts due on the notes.

II. The Decree Ordering The Guardian To Execute A Deed. The decree reads in part as follows:

“The prayer of the defendant S. J. Lynch for an order of this Court to require the incompetent to execute a deed to him to Lot 1, Block 16, Holt’s Industrial Addition to North Little Rock is hereby granted. Tillie Engelberger Carnes, guardian of the estate of Annie Engelberger, shall forthwith execute said deed and convey said Lot to S. J. Lynch upon payment to said guardian of $1,450 together with interest on said sum . . .”

The appellee has cross appealed from this portion of the decree; but we affirm the said quoted portion of the decree on the cross appeal. The evidence did not show that Mrs. Engelberger was incompetent at the time of the contract. The evidence shows that the price for this property was fair at the time of the contract, and that Lynch had spent considerable money on the property in reliance on the contract. We conclude that substantial equity was accomplished by the decree concerning this property.

III. The Judgment Against Lynch For Damages. The evidence showed that Lynch had ordered that the front of a business building in North Little Rock be torn down preparatory to having the front rebuilt. The Court found that by reason of Mr. Lynch’s orders the building had been damaged a total of $1,205; and that Lynch had spent $452.65 on repairs on the property for which amount he was entitled to credit. After allowing the credit, the Court rendered judgment against Lynch of $752.35 as damages to the building.

We hold that the damage judgment was erroneous. Lynch had caused the front of the building to be torn down in order to abate a dangerous situation. Mr. J. P. Caldwell, Chief of the Fire Department of North Little Rock, testified that, to his personal knowledge, the building in question had been in existence fifty years or more; that in 1953 he first notified Mr. Lynch that the building was unsafe and would be condemned unless it was repaired; and that certain repairs were made, but that the dangerous condition of the front wall existed until Mr. Lynch tore it down in 1955. It was not shown that Mr. Lynch had acted negligently or wrongfully in any way in this building matter; so the damage judgment of $752.35 against him is reversed and set aside.

IV. The Cancellation Of The Other Contracts Lynch Mad Obtained From Mrs. Engelberger. Lynch obtained several contracts from Mrs. Engelberger:

(a) On October 30, 1945 he persuaded her to sign a contract which gave him 16 years in which to sell the property owned by her at 508 Main Street in North Little Bock and also certain property she owned in Levy.

(b) On September 9, 1952 Mr. Lynch persuaded Mrs. Engelberger to execute to him an unlimited power of attorney to do as he wished with any and all of her property.

(c) On September 11, 1952 Lynch persuaded Mrs. Engelberger to give him a contract allowing him fifteen years to sub-divide and sell a 20-acre tract in Levy.

The Chancery Court cancelled all three of these contracts, as above referred to, and Lynch claims error. As regards the contracts of 1952, they are subject to cancellation because of Mrs. Engelberger’s mental condition at the time of execution, all of which will be discussed in Topic V, infra. As regards the contract of October 30, 1945, we hold that it should have been cancelled as an imposition on Mrs. Engelberger. In 1945 Lynch had acted as Mrs. Engelberger’s fiduciary for ten years and in such a position of trust and confidence he persuaded a lady then past 80 years of age to give him an exclusive listing for a period of 16 years on her valuable property. In short, Lynch was getting all the benefit of whatever might happen to property values from 1945 to 1961, without being required to do anything during that time. It was unconscionable for him to take such a contract from Mrs. Engelberger in view of the relationship then existing. The Trial Court was correct in cancelling the 1945 contract; and the Trial Court was also correct in cancelling the 1952 contracts, in view of the matter now to be discussed.

V. Mrs. Engelberger’s Mental Condition. In 1955 the Probate Court made an adjudication that Mrs. Engelberger was then mentally incompetent, and appointed her daughter, Mrs. Tillie Engelberger Carnes, as her guardian; and the guardian was substituted as the plaintiff in the pending litigation, which is now before us. Of course, the Probate adjudication is not conclusively binding on the Chancery Court in a case like the one at bar. (Feild v. Koonce, 178 Ark. 862, 12 S. W. 2d 772, 68 A. L. R. 1303 and annotation; Schuman v. Westbrook, 207 Ark. 495, 181 S. W. 2d 470; and Dew v. Requa, 218 Ark. 911, 239 S. W. 2d 603). So the Chancery Court heard a vast array of witnesses as to Mrs. Engelberger’s mental condition in order to determine when she actually became mentally incompetent.

The Chancery Court found and decreed: ‘ ‘ The Court finds that the said Annie Engelberger is now, and has been since 1946, mentally incompetent and incapable of transacting business matters”. Appellant says that the date of 1946 is in error; and we agree that the preponderance of the evidence shows the date to have been later than 1946. Dr. E. J. Ritchie, Mrs. Engelberger’s personal physician, was called as a witness by appellee. He testified that he had known Mrs. Engelberger for twenty years; that she suffered with hypertension, generalized arteriosclerosis, and arteriosclerotic heart disease; that he began to notice the failing of her faculties in about 1947; that her condition in 1950, as compared with 1956, would be a “thing of degree”; that she had progressively grown worse since 1947; and that she was senile. There was testimony by many lay witnesses, some interested and some disinterested; but we find that Dr. Ritchie’s testimony is the.most enlightening evidence in the record on this matter of geriatrics. When a person has reached the age that Mrs. Bngelberger had in 1952 and has her afflictions, then at times such a person might be normal and at other times abnormal. Such cases as Puryear v. Puryear, 192 Ark. 692, 94 S. W. 2d 695; and Pernot v. King, 194 Ark. 896, 110 S. W. 2d 539, shed light on such situations.

At all events, we cannot say that every act of Mrs. Bngelberger after 1946 was the act of an incompetent: rather we hold that each act is to be tested as of its own date and surrounding circumstances. But beginning with 1952 the evidence shows Mrs. Engelberger to be totally mentally incompetent. Certainly the contracts of September 9,1952 and September 11, 1952 must fail because of her mental condition.

VI. Refused Testimony. In connection with the mental condition of Mrs. Engelberger, the appellant complains of the refusal of the Court to allow Hon. John L. Sullivan to testify when called as a witness by appellant. Mr. Sullivan, as her attorney, had prepared a will for Mrs. Engelberger; and appellant called Mr. Sullivan to testify as to Mrs. Engelberger’s mental condition at the time the will was executed. Mr. Sullivan did not desire to violate the confidence of his client and asked the Trial Court to protect him against being required to answer. Also the appellee objected to the appellant interrogating Mr. Sullivan because of the relationship of attorney and client; and the Court ruled that Mr. Sullivan would not be required to testify.

Appellant complains of the Court’s ruling; but the point is without foundation because the appellant made no offer to prove what the testimony of Mr. Sullivan would have been if he had been required to testify. Boland v. Stanley, 88 Ark. 562, 115 S. W. 163; Ward v. Ft. Smith Light & Traction Co., 123 Ark. 548, 185 S. W. 1085. So, even if Mr. Sullivan’s testimony had been competent against the claim of confidential relationship between attorney and client — a point we need not decide- — -still appellant made no offer to show what Mr. Sullivan’s testimony would have been.

CONCLUSION

We affirm the Chancery Court on both direct appeal and cross appeal on every point except the damage judgment, as discussed in Topic III. The damage judgment is reversed and set aside; but, because the damage judgment is a very small portion of the case, we adjudge the costs of this Court against the appellant, S. J. Lynch. The costs in the Trial Court have already been adjudged against him by the decree of the Chancery Court.

       Mrs. Lynch was a party defendant because she had joined her husband in signing notes and mortgages to Mrs. Engelberger. Judgment was rendered against Mrs. Lynch for several such items; and she is an appellant here; but since Mr. Lynch is the principal party, we will refer to him as “the appellant.”

       Lynch filed a cross complaint against Marion Gisler (daughter of Mrs. Engelberger) who responded with a cross complaint against Lynch. In the final decree the Chancery Court dismissed both cross complaints without prejudice, so this appeal does not involve the LynchGisler controversy.

       These points are: I. Evidence Insufficient upon Which to Base Finding of Incompetency. II. Court Erred in Excluding Testimony of John L. Sullivan. III. Conduct and Actions of Appellees Refute the Charge of Incompetency. IV. Entire Absence of Proof of Unfair Dealings or Overreaching on Part of Appellant. V. So-called Audit is Worthless to Strike a Balance Between the Parties or to Arrive at Anjr Amount upon Which Judgment Could be Returned. VI. The rourt Erred in Rendering a Judgment for Demolishing the Front of Building at 508-510 Main Street, North Little Rock, Arkansas. VII. Material Inconsistencies in Court’s Findings and Final Decree.

         These points are: I. The ruling of the court that the purchase of the lot from the incompetent is a valid contract and not subject to cancellation is inconsistent and erroneous. II. Contracts with incompetents, except for necessities, are void ab initio. III. Appellee is entitled to have her title quieted as against the appellant without respect to improvements, especially since appellant has sought recovery of his improvements against a third party, which matter is not before this Court. IV. It is clear by a preponderance of the evidence that the appellant is guilty of violations of the fiduciary trust reposed in him, and that the court overlooked the fact that the contract of purchase carries fraud on the face of it. V. Appellant is, in effect, a trustee ex maleficio', and, as such, cannot recover for any improvements made by him upon this property.

       The order recited in part: “On this day, by agreement of all parties hereto, it is ORDERED: O. B. Courtney, an accountant of the City of Little Rock, be and he is hereby authorized and directed by the Court to make an audit of the books and records of the plaintiff, Anna Engelberger, (sic) the defendants, S. J. Lynch and Theresa Lynch Raines, and the cross-defendant, Mary Gisler, with reference only to the dealings and transactions between the parties to this cause as set forth in the pleadings in said action. . . . Said O. B. Courtney is authorized and empowered to have access to and inspect all and only such records, books, receipts, cancelled checks, documents, bank accounts and all correspondence of all of the parties hereto that have reference to the dealings and transactions between them, that may in any way aid the court in arriving at a final determination of the controversy between the parties.”

       Here is a portion of Mr. Caldwell’s testimony: “Q. Now do you remember the instance of Mr. Lynch having the brick torn out from the top there, Chief? A. Yes. Q. Have you had occasion to inspect those beams? A. Yes, sir. Q. Now will you tell the Court, Chief, what condition those beams are in and were in when he tore the brick out? A. Well, the front wall was leaning out there three or four inches and the roof had been bad and rain water had soaked in there and deteriorated the beams and he asked — he did make a statement that he was going to have it fixed. . . . Q. Were those beams in good condition or bad condition? A. Well, to a certain extent I would say they were in bad condition. Q. Do you think in repairing or rebuilding, those old beams should have been used? A. Well, some of them could, yes. Q. Did you notice the brick above them that were resting on those front beams? A. That’s right, I did. Q. What condition were those brick in? A. Those brick were old bricks and they were deteriorated. Q. Were they tight or loose? A. They were loose. Q. Was there any danger of people passing there from those brick or the front leaning like it was? A. Well, they had two or three signs there and I advised them to take the signs down for, of course, I am no engineer or anything like that but I didn’t think that the front wall was perfectly safe.”

       This contract reads: “For and in consideration of the services rendered and to be rendered by S. J. Lynch in selling or assisting me to sell or exchange the property described on the reverse side of this contract, of which I am the sole owner, I agree that S. J. Lynch shall have the sole and exclusive agency of sale for said property for a period of 16 years from date hereof, and thereafter until notified by me orally or in writing of its withdrawal from sale; and I hereby authorize them to sell or contract with purchaser for the sale and conveyance by warranty deed of said premises according to the price and terms herein given, title to be shown by abstract of title which I agree to furnish. If said property be sold or otherwise disposed of by Annie Engelberger during the above period, I agree to pay to their order the sum of $ being the customary commission of 5 per cent on the gross amount of said sale, or the value at which it may, with my consent, be exchanged for other property. I further agree to pay said commission to S. J. Lynch if said property be sold or otherwise disposed of by any other person, firm or corporation including the undersigned, during the above period, or after the above period, on information given, received, or obtained through this agency. (Signed) Mrs. Annie Engelberger.”

       This contract was on the same form as the previously numbered exhibit.

       Mr. Sullivan stated in this regard: “If the Court please. May I get my position clear in this matter. During the period of time that I knew Mrs. Engelberger and transacted business with her, I acted as her attorney. I am willing to give any information pertaining to any transaction where the Court will hold that I am not bound by my professional interest in the matter.”


author: Minor W. Millwee, Associate Justice.

text:
    Karr v. State.
    4868
    301 S. W. 2d 442
    Opinion delivered April 29, 1957.

      Claude F; Cooper, for appellant.

      Bruce Bennett, Atty. Gen.; Ben J. Harrison, Asst. Atty. Gen., for appellee.
   Minor W. Millwee, Associate Justice.

Appellant was convicted of tbe crime of false pretense under Ark. Stats. Sec. 41-1901 by falsely and fraudulently obtaining the signatures of two cosigners on his promissory note for $3,000. His punishment was fixed at three years in the penitentiary.

The principal contention for reversal is that the evidence is insufficient to support the verdict. Appellant resided in Blytheville, Arkansas, in 1952 when he procured a franchise as a.salesman or distributor of farm machinery and equipment for the Winpower Manufacturing Company of Newton, Iowa, upon a commission basis. He maintained his office in his residence and solicited orders from retail dealers in parts of Arkansas, Mississippi, Tennessee and Louisiana. The company sold forage boxes or beds which were supplied by another manufacturer under Winpower’s brand name. In January or February, 1954, the company notified appellant and its other distributors that it had discontinued the sale of forage boxes.

W. L. Walker operates an insurance agency in Blytheville and J. F. Scrape is a farmer living near there. Walker had known appellant about five years, in the ■early part o£< 1955 when the three men became friends in connection with a Dale Carnegie course which they took. Walker and Scrape testified that in July, 1955, appellant solicited their assistance in a business deal upon which he stood to make a generous profit; that he represented to them that he had orders for eight forage boxes from retail dealers in Mississippi and Louisiana which had already been placed with the Winpower Manufacturing Company; and that the sum of $2,891.28 was necessary to effect the release of the equipment and the balance of a $3,000 loan was needed for traveling expenses to insure proper delivery. Acting on these representations, Walker and Scrape became cosigners on appellant’s note to the First National Bank of Blythe-ville for $3,000 on July 23, 1955, payable in 90 days. When appellant defaulted Walker and Scrape paid the note and secured a judgment against him which remains unsatisfied. When Scrape and Walker talked to appellant after the note became due he declined to identify the dealers from whom he claimed to have orders for eight forage boxes.

F. K. Bauer, Secretary of Winpower Manufacturing Co., testified of notices to appellant in 1951 that the company had discontinued the sale of forage boxes; that the company had no orders for such equipment from appellant in July 1955; and that the last shipment of any kind to appellant’s account was made on May 10, 1955.

In his testimony appellant admitted representing to Walker and Scrape that he had orders for eight forage boxes from dealers in Mississippi and Louisiana and that $2,891.28 was required to complete said orders but denied representing that the orders had been placed with the Winpower Company. Instead he stated he had orders from four dealers for eight boxes which were placed with another company and so informed Walker and Scrape; and that three of the dealers cancelled their orders for two boxes each before delivery. Shortly after procuring the loan appellant transferred the proceeds to a Memphis bank. He introduced an invoice and check for $723.32 to another company in support of his statement that he sold and delivered two forage boxes to a dealer in Mississippi shortly after July 23, 1955. He spent the balance of the $3,000 on personal bills. Although he stated that he had documentary proof of the other three orders and cancellations, none was produced.

The false pretense which constitutes an offense under Sec. 41-1901, supra, is a false representation of an existing fact or past event by one who knows that it is not true and of such nature as to induce the party to whom it is made to part with something of value. Fisher v. State, 161 Ark. 586, 256 S. W. 858. The burden is on the State to prove the falsity of the representations as an essential ingredient of the offense. Fox v. State, 102 Ark. 451, 145 S. W. 228. While it was disputed by appellant, the testimony offered by the State warranted a jury finding that appellant fraudulently obtained the signatures of Walker and Scrape to the $3,000 note which they were forced to pay by falsely pretending he had orders for eight forage boxes which had already been placed with the Winpower Manufacturing Company and that the sum of $2,891.28 was necessary to effect the release of the boxes; and that such representations were false and known to be so by appellant and were relied on by Walker and Scrape in signing the note. The credibility of the witnesses was a matter for the jury and the evidence was sufficient to satisfy the requirements of the statute and sustain the verdict of guilty.

The record reflects that immediately before the first witness was called the trial court stated: “In the opening-statement of Mr. Harrison for the State he stated to the jury that, he thought that the witnesses would testify in a cerain manner, to which an objection was made by Mr. Cooper for the Defendant, on the ground that this was an expression of opinion on the part of the Prosecuting Attorney, which objection was overruled and exceptions noted. Later in his opening statement Mr. Harrison, for the State, stated to the jury that he thought that the testimony of the witnesses would justify a finding of guilty by the jury. This statement was objected to by Mr. Cooper, for the Defendant, and said objection is being overruled by the Court and exceptions noted thereto.” There is nothing else in the record to indicate the nature and contents of the remarks of the prosecuting attorney in his opening statement. The principal object of the opening statement is to give the jury an outline of the evidence to be introduced by both sides and the nature of the issues to be tried. (Ark. Stats., Secs. 43-2110 and 2111). Good faith is generally the test in passing upon the conduct of the prosecuting attorney in his preliminary presentation of the case and much discretion in what may be stated is given to the trial court. Stanley v. State, 174 Ark. 743, 297 S. W. 826. We will not presume that the undisclosed remarks of the prosecuting attorney were improper and we find nothing in the court’s narrative to sustain appellant’s argument that counsel’s statements were prejudicial or made in bad faith.

There are several assignments of error in connection with the admission or exclusion of evidence, some of which are too indefinite to ascertain what appellant was objecting to. We have carefully examined other assignments relating to certain questions asked by the prosecuting attorney which were unanswered and we find no error in the court’s action in overruling appellant’s objections thereto. Appellant also argues error in the court’s refusal to strike the testimony of Walker and Scrape to the effect that they had a conversation with appellant after the note became due in which they asked him to identify the dealers who ordered the eight forage boxes and he failed to do so. We cannot agree that such testimony was wholly irrelevant, incompetent and immaterial to the issues in the case. The jury had a right to consider it as well as its denial by the appellant along with all the other facts and circumstances in determining guilt or innocence.

We find no prejudicial error in the record, and the judgment is affirmed.


text:
    Walden v. Metzler.
    5-1262
    301 S. W. 2d 439
    Opinion delivered April 29, 1957.

      Chas. F. Cole, for appellant.

      Wayne Boyce, for appellee.
   George Rose Smith, J.

The appellee sued the appellant upon a $700 account for labor and materials furnished in the construction of a dwelling. The summons was served on January 16, 1956, but as a result of Walden’s failure to bring the matter promptly to his attorney’s attention the defendant’s answer was not filed until February 22. On motion of the plaintiff a default judgment was entered on October 15, the court being of the opinion that Acts 49 and 351 of 1955 mandatorily require the entry of such a judgment when the defendant fails either to plead or to obtain an extension of time for pleading within twenty days after the service of summons. Ark. Stats. 1947, §§ 27-1135, 29-401, and 29-410. During the same term of court Walden’s motion to set aside the default judgment was overruled, and he has appealed.

Upon the facts now before us, which involve no suggestion of unavoidable casualty, the trial court was correct in his interpretation of the 1955 statutes. The legislative intention that led to the enactment of Acts 49 and 351 must evidently be determined by comparing these statutes with the law as it existed before their passage.

A defendant was formerly required to file his defense by noon of the first day of a regular or adjourned session of court held twenty days or more after the service of summons. Ark. Stats., § 27-1135, as it read before the 1955 amendment. Despite this requirement, the court had broad discretionary authority to allow the filing of an answer after the expiration of the time limited. Ark. Stats., § 27-1160; Blauvelt v. Blauvelt, 199 Ark. 710, 136 S. W. 2d 201. And before rendering judgment by default the court might for good cause allow further time for the filing of a defense. Ark. Stats., § 29-401, as it read before the 1955 amendment.

As every practicing lawyer knows, the statutes just mentioned allowed much unnecessary delay in the conduct of litigation. It was not unusual for a defendant to file a demurrer or a dilatory plea on the last day allowed. After this pleading had been disposed of additional time had to be given for the filing of an answer —all of which often prevented a trial on the merits until at least another term of court. If the terms were held at six-month intervals the trial might easily be delayed for a year or more.

It cannot be doubted that Acts 49 and 351 were adopted as a means of reducing needless delay in the trial of cases. Section 2 of Act 49 requires the defense to be filed within twenty days after the service of summons, without reference to any' term of court. Ark. Stats., § 27-1135, as amended. Section 3 provides for judgment by default and requires that a defendant’s application for further time be made before the expiration of the period within which the defense should have been filed. Ark. Stats., § 29-401, as amended. Act 351 permits the courts to dispose quickly of defenses that do not go to the merits of the case. Ark. Stats., §§ 27-1162, 27-1163, and 29-410, as amended.

In view of the unmistakable language of the acts in question we cannot sustain the appellant’s contention that the courts still have unlimited discretion to grant further time to a defendant already in default. If that were true the 1955 acts would, as far as we can see, have made no change whatever in the law as it already existed.

In holding the two acts to be mandatory we do not mean to foreclose the possibility of relief to a defendant who has been prevented by unavoidable casualty from making his defense. For nearly a hundred years such a misfortune has been a basis for vacating a judgment after the expiration of the term. Ark. Stats., § 29-506. The 1955 acts do not purport to change the law in this respect. Since there might be no good reason for requiring a defendant to wait until after the term before asking relief on the ground of unavoidable casualty, it may well be true that the statute can also be invoked before the lapse of the term. In the case at bar, however, there is no indication of unavoidable casualty or misfortune; so we need not explore this question in detail.

There is no merit in the further contention that the court below erred in entering judgment by default without requiring the plaintiff to present proof. There was filed with the complaint a verified statement of the account, which is sufficient to support the judgment. Ark. Stats., § 28-202; Clarke v. John Wanamaker, 184 Ark. 73, 40 S. W. 2d 784.

Affirmed.


text:
    Pyle v. Amsler, Judge.
    5-1256
    301 S. W. 2d 441
    Opinion delivered April 29, 1957.

      Talley & Owen and William L. Blair, for petitioner.

      Cockrill, Limerick S Laser, Abner McGehee, Jacob Sharp, Jr., for respondent.
   Paul Ward, Associate Justice.

The petitioner by this writ seeks an interpretation of the language used in Section 2 of Act 49 of the Acts of 1955, which section is also § 27-1135 of Arkansas Stats. Supp. For the purpose of this opinion the material part of the aforementioned section reads as follows: ‘ ‘ The defense to any complaint or cross complaint must be filed the first day after the expiration of the periods of time set forth below, as the case may be: First. Where the summons has been served 20 days in any county in the State;”

On September 11, 1956, Lakeside School District No. 1 filed a complaint in the Pulaski Circuit Court, Second Division, against the petitioner, J. E. Pyle, seeking damages in the amount of $1,500 for, allegedly, defective workmanship on a certain building. The return on the summons issued against Pyle shows that it was served on September 13, 1956 in Pulaski County.

On October 11, 1956 (no answer or other pleading having been filed by Pyle) the said School District was granted a default judgment against the petitioner by the trial judge, sitting as a jury, in the amount of $1,385.

On October 24, 1956 Pyle filed a motion to set aside the default judgment against him on the ground that he had not been notified by registered mail of the said School District’s intention to ask for such judgment. On November 2, 1956 tbe trial court entered an order granting tbe above mentioned motion and setting aside the default judgment theretofore entered. Said order states it was made “during term time.” On the same day, November 2, 1956, Pyle tendered an answer, and the court refused to allow it to be filed “for the reason that said answer has not been filed according to the provisions of Section 2 of Act 49 of 1955.”

Upon the trial court’s refusal to permit him to file an answer Pyle presented his petition to this court for a Writ of Mandamus, asking us to command the respondent, the Hon. Guy Amsler, Judge, to permit him to file an answer to the complaint above mentioned. We are not here concerned with the trial judge’s reason for setting aside the default judgment, and need hot be since he did so during term time.

The question herein raised has been decided against the petitioner’s contention by the decision in the case of Owen Walden v. Charles Metzler, Jr., handed down by this court today. Therefore the petition for a Writ of Mandamus is denied.


text:
    Womack v. Maner.
    5-1266
    301 S. W. 2d 438
    Opinion delivered April 29, 1957.

      Kenneth Coffelt, for appellant.

      James C. Cole,, and O. Wendell Hall, Jr., for appellee.
   Sam Robinson, Associate Justice.

The complaint in this case alleges: “From time to time, and at various intervals, . . . the plaintiff has paid to the defendant the sum of $1,675 . . . for the consideration of the defendant, as the Judge of the Circuit Court of Saline County giving to the plaintiff whatever protection was necessary to prevent the plaintiff from being prosecuted or suffering punishment in said' court for engaging in the unlawful business of gambling in Saline County which the plaintiff was engaged in with the full knowledge, consent and approval of the said defendant as the Judge of said Court. Plaintiff alleged, that the consideration for his paying to the defendant the said sum of money as herein above set forth is void and unlawful and was void and unlawful when said money was paid by him to defendant, . . . Wherefore, plaintiff prays, that he have judgment against the defendant for his cause of action herein stated, in the sum of Sixteen Hundred and Seventy Five Dollars; for his costs herein expended, and for all proper relief.”

The defendant demurred to the complaint on the ground that a cause of action is not stated. The demurrer was sustained by the trial court, presided over by a judge on exchange. The plaintiff, Womack, has appealed.

The appellant relies on Lane v. Alexander, 168 Ark. 700, 271 S. W. 710, as authority for his alleged right to recover. In that ease, Alexander filed suit to replevy bonds valued at $20,100. As a defense, Lane alleged that he had won the bonds from Alexander at the gaming table. Chief Justice McCulloch said: “The answer tendered no valid defense, for the statutes of this State expressly authorize the maintenance of an action for the recovery of money or property lost at any game or gaming device or on any bet or wager.” Crawford & Moses’ Digest, § 4899 (Ark. Stats. § 34-1601).

But, we have no statute authorizing the recovery of money alleged to have been paid as a bribe. It is firmly established that in a situation such as is set out in the complaint the law will hot aid either party to the alleged illegal and void contract. According, to the-allegations in the complaint the parties are pari delicto, hence, plaintiff cannot recover.

In Edwards v. Randle, 63 Ark. 318, 38 S. W. 343, this court said: “The transaction, taken altogether, plainly shows that the sale and purchase of the office of postmaster was the main thing, . . . This court cannot lend its aid to either party in respect to any claim or thing involved in such a contract.”

“The general rule is, that where an illegal contract has been made, neither courts of law nor of equity will interpose to grant any relief to the parties, but will leave them where it finds them, if they have been equally cognizant of the illegality.” Shattuck v. Watson, 53 Ark. 147, 13 S. W. 516.

“Where the ground of a promise on one part, or the thing promised to be done on the other part, is unlawful, the courts will not enforce the contract for either party.” Neece v. Joseph, 95 Ark. 552, 129 S. W. 797.

“Any contract, therefore, the consideration of which is to conceal or withhold evidence of a crime or to abstain from the prosecution therefor, is void, . . .” Goodrum v. Merchants & Planters Bank, 102 Ark. 326, 144 S. W. 198.

In Patterson et al v. Hamilton, 19 Ky. L. Rp. 825, 42 S. W. 88, it was held that there can be no recovery of money paid as a bribe.

The United States Supreme Court said, in Clark v. United States, 102 U. S. 322, 26 L. Ed. 181: “Clearly this was bribery, and placed the claimants and the man they corrupted in pari delicto. They could not recover back from him the money they paid, . . .”

And, in United States v. Galbreath, 8 Fed. 2d 360, it was said: “Petitioner therefore was guilty at least of an attempt to commit bribery, if not of that crime itself. It is of course unthinkable that a court of justice will assist in the recovery of property voluntarily surrendered under such circumstances.”

Affirmed.