author: Carleton Harris, Chief Justice.

text:
    Wilkins v. Enterprise TV, Inc.
    5-2021
    333 S. W. 2d 718
    Opinion delivered April 4, 1960.

      Jeff Duty, Charles Gocio, for appellant.

      Charles Bass Trumbo, E. J. Ball, for appellee.
   Carleton Harris, Chief Justice.

This is an appeal from a $10,000 judgment awarded to Enterprise TY, Inc., appellee, against Gilbert M. Wilkins and Gilbert and Company, appellants, in the Benton Circuit Court.

The facts are as follows: On March 21, 1955, Wilkins sold his coin machine business, called Ace Novelty, to appellee. The sales agreement contained this proviso:

“The Seller promises and agrees that he will not operate in competition with the Buyers or their assigns at any time any coin machine route in Crawford, Washington, Benton and Madison Counties, Arkansas, or within a radius of fifty miles of Fayetteville, Arkansas, either directly or indirectly as an individual, partnership, corporation, employee, or through any other type of business organization, it being understood that the Seller will refrain from competing in any way or manner with the business enterprises which are now owned directly or indirectly by the Buyers or either of them or which may be hereafter acquired by said Buyers or either of them.”

On June 8, 1955, appellee instituted suit in the Chancery Court of Benton County against Major Industries, Inc., Eugene Meese, Gilbert M. Wilkins, and J. Marcus Hedrick, alleging that the defendants had breached the sales contract with appellee, said breach consisting of competing routes and locations in violation of the agreement. On January 30, 1957, the Benton Chancery Court entered its decree, pertinent portions hereto providing as follows:

“. . . after hearing the evidence introduced by the parties and at the conclusion of the testimony, the plaintiff moved the court to dismiss the complaint against the defendants Major Industries, Inc., and Eugene Meese and said defendants moved the court to dismiss the cross complaint against plaintiff.
Whereupon the court dismissed the plaintiff’s complaint against the defendants Major Industries, Inc., and Eugene Meese, with prejudice, and dismissed the cross complaint of the defendants, Major Industries, Inc., and Eugene Meese as against the plaintiff, with prejudice, and on motion of the plaintiff, non-suit was taken by plaintiff as to the defendants, Gilbert M. Wilkins, all at the cost of the plaintiff.
IT IS, THEREFORE, considered, ordered and adjudged by the court that the plaintiff’s complaint as against the defendants, Major Industries, Inc., and Eugene Meese, be and is dismissed, with prejudice, and that the cross-complaint of the said defendants as against the plaintiff be and is dismissed with prejudice, and that the plaintiff’s complaint as against the defendant, Gilbert M. Wilkins, is dismissed, without prejudice, all at the cost of the plaintiff.”

Thereafter, on January 9, 1958, Enterprise TV, Inc., filed the instant suit in the Benton Circuit Court against Wilkins, alleging the breach of the sales agreement, and further alleging the fraudulent conveyance of real estate owned by Wilkins to Gilbert and Company as a means of defrauding appellee. Evidence of appellee was directed to the fact that Wilkins was actually the sole owner of Major Industries, and was in competition with appellee contrary to the terms of the agreement. Appellant’s proof was to the effect that he held no interest in the corporation, and had violated no agreement.

For reversal, appellant urges two points, as follows:

“I.

The Findings and Decree of the Chancery Court on January 3rd, 1957, Constituted an Adjudication of the Controversy Between the Parties and is Res Adjudieata in the Instant Suit.

II.

The Court was in Error in the Admission of Hearsay Testimony by the Witness Effie Meese on Behalf of the Plaintiff, Prejudicial to the Defendants.”

We proceed to a discussion of these contentions in the order listed.

I.

Appellants argue that the Chancery Court, in dismissing the complaint with prejudice against Major Industries and Meese, necessarily found that they were guilty of no wrong doing toward appellee, and that this finding inures to the benefit of Wilkins, since the complaint alleged that Major Industries, Inc., was an alter ego of Wilkins. We do not agree. This action was based upon breach of contract, and only Wilkins was a party to the agreement. Accordingly, there was no privity of contract between any of the other defendants in the original suit and Wilkins relative to this agreement. The relevant portion of § 27-1405, Ark. Stats. Anno. (1947), provides:

“An Action may be dismissed without prejudice to a future action:
First. By the plaintiff before the final submission of the case to the jury, or the court, where the trial is by the court.”

Appellee had every right to take the non-suit, and there being no privity between Wilkins and the other defendants in the sales agreement, the Chancery decree could not be a bar to the present action.

II.

Effie Meese is the widow of Eugene Meese, who died March 7, 1957. According to her testimony, for the period that Major Industries, Inc., was engaged in business, her husband was president, she was vice-president, and their oldest daughter, secretary. She stated that at the outset, her husband was working in Bentonville ; that he came home from work one afternoon and told her about the organization that was planned, “He said they were going to start up a route down here to be known as the Major Industries or Gene’s Amusements, and he explained that they had to have three officers and that he was one, and I was one and Beba, that’s my daughter, was the other one, and he made it out that way and brought the papers home. He didn’t ask me about it, he just did it. I didn’t know it, I went ahead and signed it and let it go at that. * * * He said he was going to get $70.00 a week, and he said Mr. Wilkins told Mm he would give Mm 5% of the profit, or the income, however he stated it, that’s what he meant, of what the route made -in a year. Q. Do you know, Mrs. Meese, who paid your husband for services that were rendered in getting this route' started for Major Industries, Incorporated? A. Well, at the time— between the time, the route was sold once and started again, he was paid a weekly salary by Mr. Wilkins. Q. Did you see the checks that were given Mm? A. I always took them to the grocery store and got groceries every week. Q. Do you know what they were for? A. They were for $60.00 and at the time the route started, they were raised to $70.00 a week. Q. Did you notice who signed the checks, who they were drawn on, if you remember? A. Well, all the time, up until the time Major Industries started, it was Ace Novelty.” This testimony was objected to by appellants as hearsay evidence and inadmissible. Mrs. Meese further testified that she heard several telephone conversations between Wilkins and her husband relating to the business; that following the death of her husband, she took all papers (stock certificates) to Wilkins’ office in Joplin, Missouri, and “signed” them, and also signed over the title to a truck, wMch had been purchased by Mr. Meese as an officer of Major Industries. Further,

“Q. Do you recall any other incidents or time or places your husband told you anything concerning the agreement of Gilbert Wilkins not to compete with this Enterprise TV! A. Yes, many a time he talked about that, that he wasn’t supposed to, and when they started Major Industries, he told me how it ivas, he was going to do the work but it belonged to Gilbert, and of course he kept that from the customers, kept them from knowing it, none of them knew it.”

According to her evidence, she received no compensation when the properties were turned over at the office.

Appellants argue that in admitting the evidence of what Meese was supposed to have told his wife, the court admitted evidence that was entirely incompetent, and highly prejudicial to Mr. Wilkins.

Of course, the evidence was hearsay, and the only question is whether it comes within one of the exceptions to the hearsay rule. A rather thorough discussion is found in an article by Dr. Robert A. Leflar, “Theory of Evidential Admissibility — Statements Made Out of Court”, found in 2 Ark. L. R., 26, 41 (1947-48). Under the sub-heading, “Declarations Against Interest”, Dr. Leflar states:

“Another exception dating from the early days of the Hearsay Rule is that which admits declarations made against the interest of the declarant. It is well settled that to be admissible under this exception the statement must have been against the declarant’s interest when he made it. That fact being present, a high degree of reliability in the statement made is obviously assured. People do not deliberately make statements contrary to their own interests unless truth impels them to do so. The guaranty of trustworthiness for such extrajudicial statements is about the same as if the declarant were present in court for cross-examination. The degree of reliability being as high as it is, it would seem that such declarations should be admitted in evidence whenever necessity is established by the declarant being for any reason unavailable. Actually, the cases have not gone that far; death or absence from the jurisdiction is usually required.”

Again, in “Wigmore on Evidence”, Yol. 5, 3rd Edition, paragraph 1465, page 271, it is stated:

“Since the principle is that the statement is made under circumstances fairly indicating the declarant’s sincerity and accuracy it is obvious that the situation indicates the correctness of whatever he may say while under that influence. In other words, the statement may be accepted, not merely as to the specific fact against interest, but also as to every fact contained in the same statement.”

In C. J. S., Yol. 31, § 217, page 959, we find the requirements that render a declaration against interest admissible:

“(1) Declarant must be unavailable as a witness. (2) The declaration must have related a fact against the apparent pecuniary or proprietary interest of declarant when his statement was made. (3) The declaration'must have concerned a fact personally cognizable by declarant. (4) The circumstances must render it improbable that a motive to falsify existed.”

The testimony in the instant case meets the requirements of admissibility. Without passing on the matter of what constitutes “unavailability”, it is certainly apparent in this case that the declarant was unavailable, for he was dead. The declaration admitted, related to a fact against the apparent pecuniary or proprietary interest of Mr. Meese when the statement was made, for, ostensibly, and on the record, he was the president and principal stockholder of the corporation, while, under his declaration, he was only a salaried employee, without any control of the business. The declaration certainly concerned facts personally cognizable to declarant, and no motive for Mr. Meese to make a false statement to his wife appears in the record.

Finding no merit in appellants’ contentions for reversal, the judgment is affirmed.

McFaddin, J., dissents.

       Entered nunc pro tunc as of January 3,1957.

       Meese had worked for Wilkins for four or five years prior to the establishment of Major Industries, Inc.

       Mrs. Meese admitted that her husband had testified in the Chancery action that Wilkins had no interest in the business, but she stated that the testimony was false, and that her husband had told her of his testimony before the court . . . “he was for Gilbert, he was working for Gilbert and expecting to get the pay, the 5% profit. * * * He was going on with him through the- deal he started with, I guess you’d say. He started in the beginning to make wages to support us, like any other man.” The testimony of Meese in the Chancery case was introduced into evidence.


source: Caselaw Access Project

author: J. Seaborn Holt, Associate Justice.

license: Public Domain

text:
    North Ark. Milling Co., Inc. v. Lipari.
    5-2064
    333 S. W. 2d 713
    Opinion delivered April 4, 1960.

      Thomas B. Tinnon, for appellant.

      Danuser and Pierce, for appellee.
   J. Seaborn Holt, Associate Justice.

Leon and Pearl Lipari, husband and wife, appellees (and cross appellants), filed their complaint against appellant, North Arkansas Milling Company, Inc., and Archer-Daniels-Midland Company, alleging: “That the appellee, Leon Lipari, ‘was employed by an officer of the defendant, North Arkansas Milling Company, Inc., which is the .agent for Archer-Daniels-Midland Company, defendant, on or about March 10, 1957, to brood turkeys and said defendant agreed to pay said plaintiffs the sum of twenty cents (20£) per turkey brooded. Pursuant to :said contract of employment, the plaintiffs brooded 4,713 turkeys over a period of eight weeks . . . for which said defendant is indebted to said plaintiffs in the sum of $942.60. After said turkeys were brooded, the said officer, employee, or agent of North Arkansas Milling Company, Inc., employed said plaintiff, Leon Lipari, to care for said turkeys, including feeding and raising same, it being agreed and understood by the said parties that the plaintiffs would be paid a reasonable sum for said services rendered’ . . .” and: “The said defendant, Archer-Daniels-Midland Company, by fraudulent misrepresentations and willful misconduct induced the plaintiffs to execute a chattel mortgage dated March 13, 1957, and other documents the nature of which is not known by the plaintiffs for the fraudulent purpose of attempting to create an indebtedness and obligation to said defendant against said plaintiffs by reason of said instruments; the said defendant, Archer - Daniels - Midland Company, by reason of said fraudulent instruments has made a demand against these plaintiffs to pay an alleged indebtedness claimed in the sum of approximately $1,600.00. The plaintiffs deny that they are indebted to said defendant in any sum and pray that said fraudulent mortgage and any other fraudulently secured instruments be canceled, set aside and forever held for naught.” They prayed for judgment against both Archer-Daniels-Midland Company and North Arkansas Milling Company, Inc., in the total amount of $2,356.60, and that said chattel mortgage be canceled. Appellant, North Arkansas Milling Company, Inc., answered with a general denial and specifically denied that the Liparis were ever employed by it for any purpose. Archer-Daniels-Midland Company also answered with a general denial and in addition, filed a cross complaint against Leo and Perarl Lipari, praying for a decree based on some 53 notes and for a foreclosure of a chattel mortgage given by the Liparis to it in the amount of $1,680.91 plus attorney’s fee. The Liparis answered with a general denial. A trial resulted in a decree which contained these recitals: “As between plaintiffs and the defendant, North Arkansas Milling Company, Inc., upon plaintiffs’ claim for the brooding of the turkeys by plaintiffs, Leon Lipari and Pearl Lipari (they should have a decree), and against the defendant, North Arkansas Milling Company, Inc., in the amount of $942.60. The court further finds in favor of the plaintiffs against the defendant, North Arkansas Milling Company, Inc., for the reasonable value of services rendered by plaintiffs in caring for the turkeys for a period of approximately 80 days beyond the brooding period in the amount of $250.00, making the aggregate amount of the judgment to be entered in favor of the plaintiffs against the North Arkansas Milling Company, Inc., in the sum of $1,192.60.

‘ ‘ On the issue as between the plaintiffs involving the notes and chattel mortgage executed by the Liparis in favor of the defendant, Archer-Daniels-Midland Company, the Court finds that the evidence does not warrant the cancellation of said instruments. The Court further finds that after a sale of the turkeys by the mutual consent of both the mortgagor and mortgagee, and the application of the proceeds of the sale upon the indebtedness evidenced by the notes and mortgage, there remained an unpaid balance due Archer-Daniels-Midland Company in the amount of $1,331.73, and there is further due said company the sum of $105.00 representing interest upon the $3,500.00 note dated May 6, 1957, until November 4, 1957, on which date the Court finds that the principal of this note was paid in full, when the credit of $7,944.89 was made. The Court finds that on the unpaid balance of $1,331.73, evidenced by the delivery receipt notes, interest is due only from December 31, 1957, to the present date, in the amount of $126.40, making the aggregate judgment for principal and interest to be entered in favor of Archer-Daniels-Midland Company against Liparis, in the amount of $1,563.13, plus the further sum of $150.00 for attorney fees which the court allows for the plaintiffs attorney, as authorized by the notes. The decree shall assess one-half of the court cost herein against North Arkansas Milling Company, Inc., and one-half against the plaintiffs, Leon Lipari and Pearl Lipari.” This appeal followed.

For reversal, appellant relies on two points: “I. That the trial court’s findings as between the plaintiffs, Leon Lipari and Pearl Lipari, and the defendant, North Arkansas Milling Company, (appellant) upon plaintiffs’ claim for the brooding of the turkeys and against the defendant, North Arkansas Milling Company, Inc., (appellant) in the amount of $942.60 is contrary to the evidence and law. II. That the trial court’s findings in favor of the plaintiffs, (appellees), Leon Lipari and Pearl Lipari, as against the defendant, North Arkansas Milling Company, Inc., (appellant) for the reasonable value of services rendered in caring for the turkeys in the amount of $250.00 is contrary to the evidence and law.”

We do not agree to either contention. The great preponderance of the evidence, we think, supports the chancellor’s findings and decree.

Mr. Lipari testified that he and his wife made an agreement with appellant, North Arkansas Milling Company, Inc., to the effect that the company would furnish him with day-old turkey poults to care for and raise until they were eight weeks old; that all Lipari was to do was to furnish his labor and care for the turkeys until they were eight weeks old; that the company agreed to furnish and deliver all the necessary feed and to pay 200 per head for Lipari’s labor in caring for them. He admitted that he (Lipari) and his wife signed a chattel mortgage which, he testified, appellant company represented was just to guarantee “that the turkeys would be here when we want them and the mortgage is really on the turkejrs. ’ ’ Lipari further testified that appellant company had not paid him anything for brooding the turkeys and that they brooded 4,713 head until eight weeks old, for which appellant owed him twenty cents (200) per head. He further testified: “Q. How many days after these turkeys were 8 weeks old did you care for them? A. We took care of them up until October 28, or sometime along there, when they took them out to market. * * * THE COURT: It is in evidence that the turkeys came in on May the 6th, and any contract would begin at that time, and continue until the turkeys were disposed of on October 28. * * * Q. What would you say is the reasonable value of your services for taking care of these turkeys until they were taken away, including the use of your tractor and fuel: A. I just figured that it was worth $10.00 a day for the use of the tractor and labor and fuel. I told him that. I am not a guy who likes to override the other man, but that I felt like I ought to have $10.00 per day for the use of myself and my tractor.” Mr. Menard Beard assisted Lipari in caring for these turkeys.

Mr. Jack Stewart, president of appellant company, testified: “Question: Did you go out to their (the Lipari’s) place and pick up the waterers and feeders? Answer: I did not. Question: Did you have one of the men from the North Arkansas Milling Company do that? Answer: Well, he was working for the company. Question: Did he pick up these items? Answer: Yes. * * * Question: Did you talk to him [Mr. Beard] about taking care of the turkeys on the Lipari property? Answer: Yes. Question: Did you discuss what the salary arrangements would be? Answer: Vaguely. Question: What was said about that? Answer: I was the ‘go-between’ Lipari and Mr. Beard, because they were wanting somebody to help them grow the birds and feed them, but as far as the money involved, I don’t remember. Question: Where were you when you talked with him ? Answer: In my office. ’ ’

Mr. Beard testified: “Question: Did you ever hear Mr. Stewart make any statement about whose turkeys they were? Answer: He said they were his turkeys. Question: Did he tell you that? Answer: Yes. We were out by the brooder house. Question: Why did he tell you that? Answer: He was talking to Mr. Lipari, and he was telling them about it.”

While the testimony is somewhat conflicting, however, as indicated, we have concluded that the findings and decree are not against the preponderance thereof. The chancellor evidently believed appellees’ testimony. In the recent case of Brown v. Bridges, 227 Ark. 1006, 304 S. W. 2d 939, we said: “The chancellor saw and heard appellee testify, had ample opportunity to observe his appearance on the witness stand, and was in a position to best determine whether the witness was telling the truth. This was a finding of fact and we have held that we will not reverse a chancellor’s decree unless his findings are against the weight of the evidence. Lupton v. Lupton, 1946, 210 Ark. 140, 194 S. W. 2d 686.”

On appellees’ cross-appeal they say: “If an agent or employee is compelled to pay a debt which should be paid by his principal, the agent is subrogated to rights of the creditor. The prayer for ‘all other relief to which they are entitled’ would require the Equity Court to recognize the cross appellants’ right to subrogation as against their principal where the principal is a party to the suit.” Before appellees can claim subrogation to the rights of their principal, appellant, they must first show that they have paid a debt or obligation of their principal which they did not do. “Before the surety can claim the right to the benefit of any of the securities, he must first pay the entire debt of the principal for the payment of which the securities were given. As is said in the case of Bank of Fayetteville v. Lorwein, 76 Ark. 245: ‘The right of subrogation can not be enforced until the whole debt is paid, and until the creditor be wholly satisfied, there ought to and can be no interference with his rights or his securities which might, even by bare possibility, prejudice or embarrass him in any way in the collection of the residue of his claim,’ ” Barton v. Matthews, 141 Ark. 262.

Affirmed, both on direct and cross-appeal.


author: Ed. F. MoFaddin, Associate Justice.

text:
    Price v. Mabrey.
    5-2088
    333 S. W. 2d 724
    Opinion delivered April 4, 1960.

      Phil Loh, Charles H. Eddy, for appellant.

      N. J. Henley, for appellee.
   Ed. F. MoFaddin, Associate Justice.

This is a suit for damages because of alleged misrepresentations. Appellant Price was the plaintiff, and appellee Mabrey was the defendant; and from a decree in his favor for only $700.00, Price has appealed, claiming the damages to be inadequate. There is no cross appeal.

Price ivas a school teacher in Florida and desired to purchase Arkansas lands for an investment. The Mabrey tract was located; and when Price inspected it he found Keeling was cutting timber and operating a mill on the land, because of a timber deed from Mabrey. The timber deed was not of record, and Price inquired of Mabrey as to the terms and provisions of the timber deed. Based on Mabrey’s definite representations as to the timber deed, Price agreed to purchase the land; and the sales contract, dated August 15, 1955, contained this-language, which gives rise to the present litigation:

“It is agreed and understood by all parties that-there is a timber deed on said lands that will terminate within four years and in case saw mill is removed from said lands at any time, timber deed will become void. It is also understood that no timber is to be sold unless-it is taken through saw mill on said property.”

Price returned to Arkansas in the summer of 1956- and found that the Keeling mill, that had been on the land in August 1955, had ceased operations; that after Keeling had cut all the timber he wanted to process at his mill, he had sold the remaining oak and gum timber-on the land to Crow for $700.00, and had sold the remaining pine timber on the land to "Whilloek for $1,000.00. These parties (Crow and Whilloek) were still in the process of cutting their purchased timber from, the land in the summer of 1956. They claimed that they had purchased from Keeling; and he claimed that he had a right — under the terms of his timber deed from Mabrey — to make such sales, regardless of his mill having been removed from the land. He had such right under the timber deed.

Price then filed the present suit against Mabrey for damages, claiming that Mabrey had misrepresented to him the provisions in the unrecorded timber deed from Mabrey to Keeling. In the trial, the said timber deed was introduced in evidence. It was dated October 16,, 1954; and by its terms Mabrey sold to Keeling, “all the merchantable sawmill timber from the land”. It also stated that Keeling, “shall cut and remove said timber within a period of four years from date hereof, and shall be entitled to all of that time within which to cut and remove said timber”; and the deed further provided, “At time mill is removed from said land and work has ceased, the timber deed will be returned” to Mabrey. (Emphasis supplied.)

Thus it is apparent that the timber deed covered all merchantable timber, with four years to cut and remove the same; and it was not until the mill had been removed from the land and all “work has ceased” that the timber deed could be terminated short of the four year period. The contract that Mabrey executed to Price stated definitely, as previously copied, that, “in case saw mill is removed from said land at any time, timber deed will become void”; and also, it said that “no timber is to be sold unless it is taken through saw mill on said property”. Price testified as to the materiality of this last quoted representation:

“I was told that the timber there had been sold to an operator who was to have his mill set up on the property, and that when he moved the mill off the property and discontinued operation on that land, all remaining timber on the property would belong to whomsoever owned the property at the time the mill was moved. This was an important point to me, because I inquired whether or not he would be able to turn around after he had satisfied his wishes with the timber and sawed all he wanted, and sub-contract it, to someone else, because this might go on for several years until the expiration of the Timber Deed. I was told that this was not possible under the Timber Deed, and when and if he decided to quit cutting, anything left on the land would be mine if I bought the property.”

The very eventuality, that Price tried to guard against in his sales contract, came about, and clearly emphasizes the difference of language between the timber deed and the sales contract. It is clear that Mabrey misrepresented to Price the provisions of the unrecorded timber deed, and that such material misrepresentation resulted in damage to Price. In short, Price made a case entitling him to damages. See Yeates v. Pryor, 11 Ark. 58; Matlock v. Reppy, 47 Ark. 148, 14 S. W. 546; and Sullenberger v. O’Lee, 209 Ark. 798, 192 S. W. 2d 543. As aforesaid, trial in the Chancery Court resulted in a decree for Price for $700.00; and Price brings this appeal, claiming that the amount awarded him by the Chancery Court is too small. There is no cross appeal by Mabrey.

It was established that Keeling ceased operating his mill on the land and sold the remaining uncut timber to Crow and Whillock; that Crow cut and removed the oak and gum timber; and that Whillock put his own mill on the land and cut and processed the pine timber. The learned Chancellor thought the placing of the Whillock mill on the land fulfilled the provision in the sales contract which recited, “no timber is to be sold unless it is taken through saw mill on said property”; and, so, the learned Chancellor rendered judgment for Price for $700.00, being the amount that Keeling received from Crow, but refused to award Price any damages for the pine timber that Whillock cut. Viewing all the testimony, and the language used, and the situation existing between the parties, we think the evidence clearly shows that the language in the Mabrey-Price contract referred to the Keeling mill then on the land, and that Mabrey represented to Price that when Keeling ceased cutting timber from the land and processing it at his mill on the land, then the timber deed would be ended. Viewing it in this light, we are clearly of the opinion that Price is entitled to recover damages for the timber that Whillock cut from the land.

We come, then, to the more difficult question, and that is, the amount of the damages. The burden was on Price to prove his damages. In Burbridge v. Bradley Lbr. Co., 218 Ark. 897, 239 S. W. 2d 285, we reviewed at length many of the cases of this Court on determining the value of timber cut and removed from the land; and we cannot say that Price established his damages in accordance with the Burbridge case. Crow testified that he cut 80,000 feet of oak timber and 14,000 feet of gum timber, and possibly some additional timber. But Crow stated that he received for the timber that he cut 1‡ per foot delivered in Pierce City, Missouri. Prom Crow’s testimony there is no way of telling what this timber was worth at the stump. Whillock testified that he cut 150,000 feet of pine timber and that the price varied from $15.00 to $20.00 per thousand; but he did not say whether such value was at the stump or after it was processed. These were the only two witnesses on the value of the timber, except Keeling’s testimony, which , we will subsequently mention.

The case of Matlock v. Reppy, 47 Ark. 148, 14 S. W. 546, was a case of damages for false representations in a land purchase contract; and, in discussing the measure of damages that the purchaser of the land might recover for the misrepresentation, this Court quoted from the earlier case of Goodwin v. Robinson, 30 Ark. 540, as to the damages:

“ . . or he may elect to retain the property and sue for the damages he has sustained by reason of the false and fraudulent representations, and in this event the measure of the damages would be the difference between the real value of the property, in its true condition, and the price at which he purchased it; or, to avoid a circuity bf action and a multiplicity of suits, he may plead such damages in an action for the purchase money, and is entitled to have the same recouped from the price he agreed to pay.’ ”

Under the above quotation, Price’s measure of damage was the difference between the “real value of the property” if the timber had not been sold by Keeling, and the value of the property with the timber, sold by Keeling, cut and removed. Keeling testified that he sold the oak and gum timber to Crow for $700.00, and the pine timber to Whillock for $1,000.00; and as near as we can see from this record, that is the only testimony that might go to satisfy the rule stated in Matlock v. Reppy, supra.

The learned Chancellor had this to say about the difficulty of determining the damages from the evidence: “The evidence as to the value of this particular timber in the stump which was cut and removed by Crow is not very well established by the record; however, as the sale price to Crow was $700.00, the Court’ finds this to be the amount of damages suffered by plaintiffs for breach of the contract. . . .” Following the same line of reasoning, we conclude that the damages for the Whillock pine timber should be fixed at $1,000.00; and this, along with the $700.00 allowed for the Crow timber, makes a total of $1,700.00 that Price should recover, instead of the $700.00 allowed by the Chancery Court. The decree, therefore, is reversed, and the cause remanded, with directions to enter a decree for the appellants for the additional amount of $1,000.00 involving the pine timber sold to Whillock.

       Mrs. Price was a co-purchaser with her husband, and also a party-plaintiff and party appellant; but we refer to Price in the singular, since he acted for his wife. Equity jurisdiction — -not questioned by defendant — was invoked because Price desired the amount of his damages to be credited on his future payments due on his sales contract.

       In 1 Ark. Law Review 310, there is a case note entitled: “Measure of damages for defrauded vendor in actions of deceit”, which suggests the uncertainty in awarding damages in such cases.


author: George Rose Smith, J. J. Seaborn Holt, Associate Justice,

text:
    Brown v. Lewis.
    5-2077
    334 S. W. 2d 225
    Opinion delivered April 4, 1960.
    [Rehearing denied May 9, 1960]

      John F. Gibson, for appellant.

      William H. Drew, for appellee.
   George Rose Smith, J.

This is a proceeding under the statute to vacate a default decree after the term, for unavoidable casualty. Ark. Stats. 1947, § 29-506. The defendants, who had filed an answer in the case, assert unavoidable casualty in that their attorney, Mr. Gibson, did not know that the case was set for trial on the day that the default decree was rendered. The chancellor concluded that no unavoidable casualty had been shown and therefore refused to vacate the decree.

In the original case the plaintiff, represented by Mr. Drew, filed suit to quiet her title to sixty acres of land. The regular chancellor, Judge Merritt, announced his disqualification, and Mr. W. K. Grubbs, Sr., was elected special chancellor. As of April 5, 1959, the special chancellor overruled Mr. Gibson’s demurrer to the complaint and granted the defendants ten days for further pleading.

The special chancellor and the two attorneys met in the courtroom on April 23. Mr. Drew asked for a default judgment, as the defendants had not filed a pleading within the time allowed. This request was denied for the reason that Mr. Gibson had not received a copy of the order overruling his demurrer, and he was granted until April 25 to file his answer, which was to be a general denial. The answer was later filed within this additional time.

After the special chancellor denied Mr. Drew’s request for a default judgment the three men discussed the selection of a date for trial. Both Mr. Grubbs and Mr. Drew understood that May 18 was definitely agreed upon as the trial date. Later that day, April 23, Mr. Grubbs prepared an order reflecting the court’s action and reciting that the case was to be tried on May 18, but Mr. Gibson did not receive a copy of that order. On May 18 Mr. Drew appeared in court with his client and some twenty witnesses, but Mr. Gibson and his clients did not appear. The decree recites that after waiting four hours for the defendants to appear the special chancellor heard the case upon the plaintiff’s evidence and found the issues in her favor.

At the hearing upon the' complaint to vacate the decree Mr. Grubbs and Mr. Drew testified as we have indicated, that on April 23 they aiid Mr. Gibson selected May 18 as the day for trial,. and the presiding chancellor, Judge Launius,' so found'. Mr. Gibson does not question the good faith of. Mr. Grubbs and Mr. Drew in the matter; he'simply states that he did not understand that any date for trial was definitely selected on April'23. Upon this basis it is argued that there was actually a misunderstanding between counsel, which constitutes an unavoidable casualty. Baskin v. Aetna Life Ins. Co., 190 Ark. 448, 79 S. W. 2d 724.

If the record contained no thing, except the testimony that we have mentioned we might well be in a position to reconcile the statements of these three honorable members of the bar by concluding that a misunderstanding occurred. Unfortunately there is an insurmountable obstacle in the way of such a disposition of the case.

After the filing of the motion to vacate the decree the plaintiff served a request that the following facts, among others, be admitted by the defendants: “That at the hearing of April 23, 1959, the Special Chancellor, the Hon. W. K. Grubbs, Sr.; solicitor for the defendants, W. G. Brown and Vivian Brown, the Hon. John F. Gibson; and solicitor for plaintiff, Elza Lewis, William H. Drew, all checked their calendars and found that this 'cause would be tried May 18, 1959.” To this request the defendants filed an unverified response stating that they were not present on April 23 and “cannot truthfully admit or deny” the requested admission of fact.

The statute, so far as it is relevant here, is explicit in providing that a request for an admission is deemed admitted unless the party to whom the request is directed files a sworn statement either denying the matter or setting forth in detail the reasons why he cannot truthfully admit, or. deny the matter. Ark. Stats., § 28-358. In White River Limestone Products Co. v. Mo.-Pac. R. Co., 228 Ark. 697, 310 S. W. 2d 3, we considered a situation identical to the present one and held that- an unverified response does not comply with the statute and hence amounts to an admission of the request. It follows that in the case at bar the appellee is entitled to insist, as she does, that the agreed setting of the case stands as an admitted fact. Thus it is beyond our authority to make a contrary finding.

The appellants’ remaining arguments do not establish a valid ground for reversal. It is contended that the chancery court was not legally in session on May 18, because Judge Merritt had entered- an order recessing court until May 25. But this order did not really conflict with the special chancellor’s order setting the trial for May 18, and in any event the statute now provides that the chancery court is always in session, that two or more chancery courts of the same circuit may be concurrently in session, and that an order fixing the time and place when the court will be in session does not preclude the court from transacting business at other times and places. Ark. Stats., §.22-408.1.

It is also contended that the special chancellor was without power to set the case for trial until after the issues had been joined by the filing of the defendants’ answer. Act 70 of 1957, Ark. Stats., § 27-1719; and Act 244 of 1957, regulating the practice in this particular chancery circuit. We do not find in either act any language suggesting that the parties and the court cannot agree upon a trial date before the filing of the answer or that a trial held pursuant .to such an agreement is a nullity.

Affirmed.

Holt, Robinson, and Johnson, JJ., dissent.

J. Seaborn Holt, Associate Justice,

dissenting. As I read the evidence in this case, I am convinced that, on trial de novo here, the preponderance of the testimony supports appellants ’ contention and I would reverse the decree with directions to set aside the default decree for what was,' I' think, in effect, an unavoidable casualty. A more complete synopsis of the testimony is to the following effect: Mr. Brown, one of the appellants, on the day the decree for default was rendered against him and his wife, was ready, willing and able to defend had he known that court was to be held on that day. His wife, Mrs. Brown, co-appellant and appellant here, testified in corroboration of her husband, that on the day the default decree was rendered against her, she was ready, willing and able to defend had she known that court was to be held on that day. The attorney for the Browns, Mr. Gibson, testified that he did not appear and defend because it was his impression and understanding that the case would not be heard until the court reconvened in regular session on May 25, 1959, and further that he was under the definite impression that no agreement had been reached between himself, the special chancellor, Mr. Grubbs, who rendered the default decree, and opposing counsel, Mr. Drew, as to a date for trial of the case. The special chancellor, Mr. Grubbs, who presided at the hearing at which the default decree was rendered, testified that on April 23,1959, there was a discussion of fixing the date; for the trial of the issues in this case: ‘ ‘ That date was fixed at May 18,1959. This date Avas first fixed between Mr. Drew and Mr. Gibson. I asked them to agree on a date for trial. That date Avas agreeable to me. This date was fixed the morning of the 23rd (April 1959). I am sure that Mr. Gibson and yourself (Mr. Drew) and myself agreed on the date May 18,1959 ... I did not specifically instruct that a copy of the decree be sent to you. I have no knowledge whether you received a copy or not. I did not ask the sheriff to call you on that day. I did not have any knowledge that you had known of the actual entry of the Order on April 23, 1959 . . . Mr. Gibson mentioned several dates when he had various things scheduled. But I remember the 18th day ivas the only day proposed unless it was the Monday and for some reason that Monday was turned down. I don’t remember why. The 18th was on Tuesday. After looking at my calendar May 18th is on Monday. It was my recollection that there was some reason or another that we couldn’t hear it on Monday. That is my memory. It didn’t take very long to agree npon a date. I remember it was jnst a Monday that we conldn’t agree upon. There is no doubt in my mind as to the agreement of May 18, 1959.” [Emphasis ours].

Mr. Drew, attorney for appellee, Elza Lewis, testified that: ‘ ‘ On April 23,1959, Mr. Gibson and Mr. Grubbs and myself met here with reference to a motion that I had filed for a default judgment ... We discussed various dates. We finally agreed upon the 18th of May. Mr. Grubbs checked his calendar and found that there were no conflicts for the 18th of May and the case was ordered to be tried on that date by him ... We tried one phase of the Marques case and immediately after Mr. Gibson, myself and Mr. Grubbs heard the motion for default judgment. It seems to me that we heard the Marques case until about lunch time and I believe Mr. Gibson left around noon.”

The record further reflects that counsel for both sides had just finished part of a long and involved contested divorce case when the purported agreement was reached. It was shortly before noon and both parties were anxious to get away when the impromptu meeting was called. It further appears that the regular chancellor (Merritt) had adjourned court until May 25,1959. All of which, it seems to me, would clearly show that a misunderstanding as to the trial date occurred between the parties. It further appears that the only positive testimony as to the date agreed upon as Monday, May 18,1959, was that of opposing counsel who took the default judgment.

The majority, in their opinion, candidly admit that the evidence is sufficient to show a misunderstanding between the parties but go further and say that this court is bound by an ‘ ‘ insurmountable obstacle in the way of such a disposition of the case.” This “insurmountable obstacle” being the unsworn answer to a request for admissions and in support, they rely on 228 Ark. 697, 310 S. W. 2d 3, the case of White River Limestone Products Co. v. Mo.-Pac. Rd. Co., which held that response unsworn to amounts to an admission of the request. A reading of the decision in the above case shows that the court quoted from and relied upon several federal court cases which stated the federal procedure, and that our procedure is substantially the same as that of the federal courts. In Ark.-Tenn. Distributing Corp. v. Breidt et al., 110 Fed. Supp. 644, we find this language: “It must be taken into account that Harry Breidt denied having been served the request for admission. The answers to the requests were signed by Charles Handler and sworn to by Jacob Breidt only. It is true that failure to deny is tantamount to an admission, but it is equally true under this rule as under the others, that technical considerations will not be allowed to prevail to the detriment of substantial justice. Barron and Holtzoff, Federal Practice and Procedure, Vol. 2, Section 837.”

It seems to me that simple and substantial justice requires that these appellants be not denied the right to a trial of their lawsuit because of a clear mix up and misunderstanding as to the trial date when even the trial judge, Mr. Grrubbs, was himself so confused that he didn’t know if the 18th was on a Monday or Tuesday, and that the 18th was the only day proposed; that he remembered there was some reason that the case couldn’t be tried on a Monday which was, in fact, the 18th. Nor do I agree that appellants should be bound by the highly technical requirement of their failure to verify the response set out in the majority opinion. As pointed out by the federal court above: “Technical considerations will not be allowed to prevail to the detriment of substantial justice.”

I would reverse.


author: Paul Ward, Associate Justice.

text:
    Park v. McClemens, Excr.
    5-2055
    334 S. W. 2d 709
    Opinion delivered April 4, 1960.
    [Rehearing denied May 23, 1960]

      Robert M. Lowe, Paul Jones, for appellant.

      Smith & Sanderson, for appellee.
   Paul Ward, Associate Justice.

Tbis litigation is concerned witli the ownership of several bank accounts. Appellant, as the survivor, claimed title to four bank accounts upon the death of her aunt on the ground that they were joint accounts. The trial court held against her contention, hence this appeal. The facts which are somewhat involved but not materially in dispute are substantially as hereinafter set forth.

Mrs. Janie Witten who owned and managed a modest business in Texarkana for many years died testate July 31, 1958, and the appellee, John William McClemens, was appointed the executor of her estate. Prior to her death, on April 24, 1957, Mrs. Witten executed a will in which she left part of her estate to another niece, Ida Jo McClemens who is at this time a student in school. During several years Mrs. Witten had deposited funds from time to time in two separate banks in Texarkana, which funds are the subject of this litigation. At the time of her death there were these accounts: In the State National Bank there was Savings Account No. 4619 in the amount of $2,259.63 and a checking account in the amount of $2,639.15. In the Texarkana National Bank there was Savings Account No. 4931 in the amount of $2,159.59 and a checking account in the amount of $1,533.90. All the above mentioned funds were placed in the banks by Mrs. Witten and were there held in her name until about the 8th day of August of 1957 when she and appellant signed signature cards which were delivered to the banks. Thereafter the banks placed appellant’s name on each account record along with the name of Mrs. Witten which had been there all along. It is, of course, the contention of appellant in this litigation that the effect of placing her name on the above accounts constituted her a joint owner with the right of survivorship.

The record shows that appellant had been living with Mrs. Witten for several months at the time of her death and, apparently believing that the subject funds belonged to her, she withdrew all of them on or about August 2, 1958. The record further reflects, however, that when it became apparent that a dispute over the funds was in the offing she and her attorney, with a commendable spirit of fairness and cooperation, replaced the funds in a bank pending legal determination of the rightful ownership.

This litigation was begun by appellee in Probate Court by agreement with and the cooperation of appellant in order to have the ownership of the funds established. On appeal no questions were raised regarding jurisdiction of the Probate Court. In view of the fact that both parties agreed to submit their differences to the Probate Court we think that Court could take and retain jurisdiction under Ark. Stats. § 62-2409 and Hartman v. Hartman, Admr., 228 Ark. 692, 309 S. W. 2d 737.

Only two issues are raised by appellant: Tbe competency of certain evidence and tbe effect of tbe signature cards.

Dead Man’s Statute. As will more fully appear later it was recognized early in tbe trial that tbe question of Mrs. Witten’s intentions regarding the disposition of her bank deposits might be material, so for that and other reasons appellant was called to testify in her own behalf. At the outset appellee objected to any testimony relative to conversations or transactions which appellant had with the deceased. The pertinency of the objection, based on the Arkansas Constitution, Schedule, Section 2, was conceded by appellant. However, appellant contended and now contends that appellee waived all objections by taking the deposition of appellant. In support of this appellant relies on our opinion in Smith, Administratrix v. Clark, 219 Ark. 751, 244 S. W. 2d 776. That opinion was rendered January 7, 1952 and was based on Ark. Stats. § 28-401. The following year the Legislature passed Act 335, commonly known as the “Discovery Statute”. Section 1 of that Act now appears as Ark. Stats. § 28-348. Subdivision (f) of the said section in part states: “A party shall not be deemed to make a person his own witness for any purpose by taking his deposition”. It is contended by appellee that, since appellant’s deposition was never introduced into evidence and never used by appellee, appellee did not waive his right to object to appellant’s testimony regarding conversations and transactions with the deceased. We do not, however, at this time, pass upon this particular question since it is not necessary to do so. The record shows that when the trial court sustained appellee’s objection to the proffered testimony appellee did not place in the record a statement of what appellant would -say if allowed to testify. Not having done so appellant is in no position now to ask for a reversal. See Lincoln Reserve Life Insurance Company v. Morgan, 126 Ark. 615, 191 S. W. 236; Ward v. Fort Smith Light & Traction Company, 123 Ark. 548, 185 S. W. 1085; Wallace v. Riales, 218 Ark. 70, 234 S. W. 2d 199; and Lynch v. Games, 227 Ark. 767, 301 S. W. 2d 739.

Joint Accounts. Appellant ably and strenuously contends that the joint signature cards signed by her and the deceased (and delivered to the bank) operated to create joint accounts and that the proceeds of the accounts go to her as the survivor. To support that contention appellant points particularly to the decision of this Court in Pye v. Higgason, 210 Ark. 347, 195 S. W. 2d 632. The opinion in that case deals with a joint bank account and construes the meaning of Pope’s Digest, Section 727a, (the same as Ark. Stats. § 67-521). This section, in all portions material here, reads:

“When a deposit shall have been made by a person 'in the name of such depositor and another person and in form to be paid to either,'or the survivor of them, such deposit thereupon' and any additions thereto made by either of such persons, upon the making thereof, shall become the property of such persons as joint tenants, and the same, together with all interest thereon, shall be held for-the exclusive use of the person so named, and may be paid to either during the lifetime of both, or to the survivor after the death of one of them; and such payment aj^d the receipt or acquittance of the one to whom such payment is made shall be a valid and sufficient release and discharge to said bank . . .” (Emphasis Supplied).

Appellee takes the position here, and the trial court held, that Ark. Stats. § 67-521 should be considered together with the testimony, facts and circumstances disclosed by the record in a case of this kind to arrive at the intent of the depositor. Although, we must admit, the Pye case, supra, is susceptible of the interpretation placed on it by appellant yet we think the weight of our decisions supports the view of appellee and the trial court. We shall now examine some of these cases.

In Black v. Black, 199 Ark. 609, 135 S. W. 2d 837, this Court had occasion to consider a “joint account” as affected by § 727a of Pope’s Digest (now Ark. Stats. § 67-521). There the Court gave the money to the widow (the survivor) but only because they were husband and wife and not because of the effect of the statute. Among other things the Court said:

“While we think and hold that the widow has title to the bank deposit as surviving tenant by the entirety we do not ascribe her title to this section of the statute. It will be observed that the application of this statute is not limited to deposits by husband and wife, but applies to joint deposits of any two persons, and was, we think, passed for the protection of the bank in which the deposit was made. It permits the bank to pay out the deposit in accordance with the apparent intent of the depositors, and protects the bank in doing so; . . . The statute effects no investiture of title as betiveen the depositors themselves but only relieves the bank of the responsibility and duty of making inquiry as to the respective interests of the depositors in the deposit until one of the joint tenants shall give notice in writing that the joint ownership has been dissolved”. (Emphasis Supplied).

This Court again discusses Ark. Stats. § 67-521 in connection with a joint account in Powell v. Powell, 222 Ark. 918, 263 S. W. 2d 708, and there weighed the-evidence bearing on intent. At one place the Court said: “Collateral facts tending to show intent are these: (Setting out in detail those facts)”. Again it was said: “There is abundant evidence that either before or' shortly after the last will was destroyed by Powell he stated that his intentions were to have all of the children share in the estate”. (Emphasis Supplied). In Vincent, Administratrix v. Vincent, 224 Ark. 449, 274 S. W. 2d 772, this Court once more approved the introduction of testimony to show the intent of a. depositor in creating a joint account. It was there said: “Here there is an affirmative finding that Vincent knew what he was doing; that he executed the card for the-purpose of creating- the joint tenancy, with survivor-ship, and if his purpose had been otherwise there was ample opportunity to express a contrary view, or pursue a different course”. In Tesch v. Miller, 227 Ark. 74, 296 S. W. 2d 392, a joint bank account was created with right of survivorship. The trial court held, under Ark. Stats. § 67-521, the money passed to the survivor. On appeal this Court (at Page 77 of the Arkansas Reports) quoted at great length from the testimony to show the intent of the depositor.

Referring back to § 67-521, heretofore copied, the first two lines appear to indicate a situation where a depositor creates a joint account with someone else and not to a situation where a depositor places money in a bank in his own name and later permits the name of another be added to the account. We believe this difference is significant from practical standpoint. In the first instance there can be less doubt as to the intent of the depositor than there is in the latter instance. We think that it is a matter of common knowledge that most people have confidence in the officers of a bank and that few people take the time to read the “fine print” written on the back of a signature card. In the case under consideration it would have indeed, been difficult for the deceased, to have read and understood the exceedingly “fine print” on the back of the cards she signed. The record shows that she did not at any time go to the bank or talk with any of the officers of the bank but merely signed the cards that were presented to her. We mention these things because we think they are the basis for the reason why the Court should look into the intent of the signers of a signature card.

As intimated above we think it is significant here that the joint account was not originally created as such. This also seems to be the view expressed in our former decisions. In the Powell case, supra, the Court in this connection said: “Here the deposit was not originally made by Powell in his and another’s name, but assuming, without deciding, that unrestricted directions to the bank to permit designated persons to check against the balance and to take the remainder following the depositor’s death meet the statutory requirements . . .” In Harbour v. Harbour, 207 Ark. 551, 181 S. W. 2d 805, the Court among other things said: “The Arkansas statute on ‘joint accounts’ is § 727a of Pope’s Digest, and it is predicated on the fact that the deposit shall be made ‘in the name of such depositor and other person’ ”. (Emphasis Supplied).

Applying the “intent” rule to the case under consideration we think the trial court must be affirmed. It would unduly lengthen this opinion to set out in detail all the testimony bearing on the intent of Mrs. Witten. Suffice to point out the following, [a] Mrs. Witten had previously executed a will by which she left this property to her younger niece, Ida Jo; [b] She explained why she wanted Ida Jo to have the money— the reason was that Ida Jo was still in school and needed help; [c] She had promised Ida Jo’s father (now deceased) that she would look after and take care of Ida Jo; and [d] The lack of any showing that Mrs. Witten read or understood the very small print on the back of the signature cards, or ever gave any directions to any employees of the banks. In view of all of these things we cannot say that the Chancellor’s finding that Mrs. Witten did not intend to give the bank accounts to appellant is against the weight of the testimony. We point out also that in any event (and regardless of the intention of Mrs. Witten) the Chancellor’s finding must be affirmed in regard to the $2,159.59 Savings Account No. 4931 in the Texarkana National Bank, because there is no language on the signature card creating a joint account with the right of survivorship.

It follows from what we have stated above that the decree of the trial court must be, and it is hereby, affirmed.

Affirmed.

Robinson, McFaddin, George Rose Smith, JJ., dissent.


text:
    Mitchell v. Mitchell.
    5-2086
    333 S. W. 2d 741
    Opinion delivered April 4, 1960.

      Herrn Northcutt, for appellant.

      Murphy é Arnold, Oscar Ellis, for appellee.
   Paul Ward, Associate Justice.

This litigation is an effort on the part of appellants (heirs of N. W. Mitchell) to cancel a deed which N. W. (Nathe) Mitchell executed to his son, conveying 160 acres of land in Fulton County, Arkansas. The trial court refused to cancel the deed and appellants prosecute this appeal.

N. W. Mitchell had lived for many years on his 160-acre farm in Fulton County, where, apparently, his oldest son Vergal Mitchell (by his first wife) was born and reared to manhood. After the death of his first wife Mitchell married again and of that union a son, Frank Mitchell, was born — his last wife having died in 1951. It also appears that Yergal Mitchell left Arkansas, married and established a home in Earlsboro, Oklahoma, and that sometime thereafter his half brother, Frank Mitchell, became a resident of Michigan. After Nathe Mitchell’s wife died in June of 1951 it appears that he decided to deed his farm to his son, Yergal Mitchell, on condition that his son take care of him the remainder of his life. The deed was executed on March 12, 1952, and soon thereafter Nathe Mitchell went to live with his son, Yergal, in Oklahoma where he resided for a total of some ten to fifteen months. However, between the time that Nathe Mitchell went to Vergal’s home in Oklahoma and the time of his death in January of 1954 he made numerous trips back to his old homestead in Fulton County.

The Complaint was filed by appellant, Frank Mitchell and three other people who apparently were all of the heirs (except Yergal Mitchell) of N. W. Mitchell, against the defendant Yergal C. Mitchell (the son of N. W. Mitchell by his first wife). In substance the Complaint states: On the 12th day of March 1952 N. W, Mitchell by Warranty Deed conveyed to the defendant, Yergal Mitchell, the subject lands in Fulton County; the consideration for said deed was ‘ ‘ that, the defendant ■should provide care for the deceased for the remainder of his life, that the defendant was to furnish food; and medical and doctor’s care also for that time”; that defendant failed to comply with thé consideration expressed in the deed (a copy being'attached); that at the time of the execution of the deed “the defendant exercised considerable influence and had the trust of said N. W. Mitchell and occupied a favorable position in his confidence ’ ’; that at the time of the execution of the deed the said N. W. Mitchell was of such advanced age, mentally and physically impaired, that he was incapable of transacting business and executing the deed; and that the said N. W. Mitchell was subjected to duress, force and threat by the defendant. The prayer was that the deed be cancelled and that the defendant be required to account for all rents derived from the land. After several motions and other pleadings were filed and disposed of the defendant filed a general denial.

After the pleadings were made up Yergal C. Mitchell died and on motion of appellants the widow and children of Yergal Mitchell were substituted as defendants and are the appellees in this appeal.

Appellants in their Designation of the Record and Points to be Relied Upon on this appeal included this statement: “Plaintiffs (appellants) are relying upon the following point: ‘that the defendant, Vergal Mitchell, deceased, failed to comply to the consideration expressed in the deed’ ”. Appellants, in urging this Court to reverse the trial court rely upon two points which as we understand them are as follows: (1) That the deed was fraudulently procured by Vergal Mitchell, and, (2) Vergal Mitchell did not discharge the obligations imposed upon him by the deed.

Before discussing the testimony it is first in order to determine just what issues are presented by this appeal.

Appellees’ contention, as we understand it, is that appellants (as the heirs of N. "W. Mitchell) cannot maintain this action on the basis that Vergal Mitchell did not live up to his implied promise to take care of N. W. Mitchell during his lifetime. In support of this contention they rely upon a statement made by this Court in Cannon v. Owens, 224 Ark. 614, 275 S. W. 2d 445. This is the statement: “It is true when a promise of future support is made in good faith, the cause of action for its breach is personal to the promisee and cannot be asserted by his heirs”, citing Priest v. Murphy, 103 Ark. 464, 149 S. W. 98 and Jeffery v. Patton, 182 Ark. 449, 31 S. W. 2d 738. This contention must fail in this case, however, because the deed in question is not based upon a promise by the Grantee (Vergal Mitchell) to support the Grantor during his lifetime, but the duty to support N. W. Mitchell during his lifetime is a condition upon which the deed was executed. The deed in question is a regular Warranty Deed. The Grantor was N. W. Mitchell, a single man, and the consideration was $1.00 and other considerations. The Grantee was Vergal C. Mitchell. After the description of the land there appears the following: ‘ ‘ This deed is made on the condition that the GRANTEE herein is to provide and care for the GRANTOR herein during the remainder of his life, furnishing food, clothing, medical and doctor’s care”. In the Cannon case, supra, the opinion states: “That the appellants were named as remaindermen in return for their promise to support Mrs. Vannatter for the rest of her life . . .” (Emphasis Supplied). It appears, therefore, in the Gannon case the deed was based on a promise and not a condition. In the Priest case, supra, there is this statement: “If their father had made the grant in consideration of his own support, he could, upon a proper showing, have had the deed cancelled for a failure of such consideration; and if it had been made on such condition, he or they, his heirs, upon the condition broken, could have set it aside, but the grantor did not think it necessary to convey the property upon condition . . .” (Emphasis Supplied). To the same effect is the holding in the Jeffery case, supra, which is clearly shown by the following statement in the opinion: “If the consideration for the deeds was an undertaking on the part of the grantees to support and maintain the grantor, their father, for the remainder of his life and there was a failure on their part to comply with the undertaking, the grantor himself could have sued at law for the amount of the consideration after it became due, or treated the contract as void and brought suit in equity to cancel and set it aside for failure of consideration. If the conveyances had been made on such conditions, he or his heirs upon the condition broken could have set it aside”. (Emphasis Supplied). We agree, therefore, with appellants that they (as heirs of N. W. Mitchell) would have a right to set the deed aside upon showing that the conditions of the deed were not complied with. We point out also, as is conceded by appellees, that appellants would have a right to set the deed aside upon showing that it was procured by fraud on the part of Yergal Mitchell, and, further, that any failure on the part of Yergal Mitchell to comply with the conditions of the deed might be considered as some evidence of fraud. See the opinion in the Cannon case, supra.

The appellants alleged in their petition, as heretofore pointed out, that Yergal Mitchell secured the deed from his father by the exercise of undue influence at a time when his father was mentally and physically impaired. We will not discuss that ground for reversal separately because there is little if any evidence to sup-. port it and also because appellants appear to have waived it in their argument.

After a hearing upon the testimony produced by both sides the Trial Judge found that the preponderance of the evidence shows that Vergal Mitchell did not practice any fraud upon his father in the procurement of the deed and also that the preponderance of the evidence shows that there was no failure of consideration. Our analysis of the testimony as hereafter summarized leads us to agree with the findings of the Chancellor.

N. W. Mitchell’s children all moved away and left him and he lived alone after the death of his second wife in 1951. In 1926 Vergal went to Earlsboro, Oklahoma, where he and his family resid.ed. .until his death, and his half brother, Frank Mitchell, became a resident of Michigan. Some four months after the death of his second wife N. W. Mitchell (sometimes referred to as “Nathe”) was taken by Vergal to his home in Oklahoma where he remained until some time in February of 1952 when he returned home. At that time Nathe was approximately 82 years of age. There were approximately 25 acres of land in cultivation on the farm which was probably worth $3,000.00 or $4,000.00. On or about March 11th Vergal, being informed that his father wanted to return to Earlsboro, came to Arkansas to get him. On the 12th day of March Nathe told his nephew that he was going to make. Vergal a deed to the old home place, stating that he had rather live on the old home place but he could not ask Vergal to quit his job and come to Arkansas. Nathe also stated “It looks like there’s not anybody else going to take care of me from now on . . .” Pursuant to that decision Nathe had his nephew to take Vergal and himself to Salem for the purpose of making the deed, which was drawn up and executed in the office of one Orval Benton, an abstracter and former County Treasurer and State Representative of Fulton County. Mr. Oscar Ellis, a long time friend and often an attorney for Nathe, was present and dietated much of the language that was used in the deed. After the deed was executed and recorded the same day all parties returned to Nathe’s home place and within a few days thereafter Vergal took his father to his home in Earlsboro, Oklahoma. From the day of the execution of the deed until Nathe’s death in January of 1954 Nathe actually spent approximately two-thirds of his time with Vergal in his home at Earlsboro, Oklahoma. Several times Nathe would make trips back to the old home place, stay a while and then return to Earlsboro. On each of these occasions he was transported both ways by Vergal at Vergal’s expense. Not only is there no intimation in the record that Vergal or his family in any way mistreated his father but the uncontradicted testimony is that Nathe was well pleased with the treatment he had received. He once stated that they treated him too good. There is nothing in the record to show Vergal and his family were not ready and willing to keep Nathe in their home at all times and to look after him in a proper manner. There is no showing that any of Nathe’s relatives did anything for him in a material way except what was done by his son, Vergal.

The only one of the appellants to testify was Frank Mitchell, the half brother of Vergal Mitchell. In substance he stated that on one or more occasions his father paid his way back to the old home place and on one occasion his father stated that Vergal was “sassing” him and that he did not want to live with Vergal but wanted to live at the old home place and that it was costing him too much to live at Vergal’s house. However, the testimony of the other witnesses and the statements made by Nathe himself do not corroborate Frank Mitchell’s testimony.

There is nothing in. the record which indicates in any way that Vergal Mitchell practiced any fraud upon his father in the procurement of the deed. On the whole we are unable to say that the findings of the Chancellor in favor of appellees are against the weight of the evidence.

Affirmed.

McFaddin, J., concurs.

Johnson, J., dissents.


author: Sam Robinson, Associate Justice. George Rose Smith, J.,

text:
    City of Little Rock v. Moreland.
    5-1997
    334 S. W. 2d 229
    Opinion delivered April 4, 1960.
    [Rehearing denied May 9, 1960]

      Spitzberg, Bonner, Mitchell & Hays, for appellant.

      John W. Bailey and Moses, McClellan, Arnold, Owen (3 McDermott; By. Wayne W. Owen, for appellee.
   Sam Robinson, Associate Justice.

In building a reservoir in connection with the city water supply system, the City of Little Rock acquired 15,000 acres of land west of the City. Of the property sought to he condemned, 1,300 acres belonged to the appellees, hereinafter referred to as the Morelands. To acquire the 1,300 acres the City filed condemnation proceedings. Upon a trial of the issues the City was allowed to condemn only 1,165.1 acres of the Moreland property, for which the owners were given judgment in the sum of $211,425, which amounts to about $181 per acre. Both sides have appealed. The City contends that the amount of the judgment is excessive and that the entire 1,300 acres is needed for the reservoir. The Morelands contend that the amount of the judgment is not sufficient to pay full value for the land; that the property is worth at least $775,000 and, further, that the City does not need for the reservoir the 134 acres it seeks in addition to the 1,165.1 which the trial court held the City could take. On appeal there are three issues. First, the correct value of the land taken. Second, the date that should be considered in fixing the valuation. Third, the question of whether the City should be allowed to condemn the entire 1,300 acres, that is, the 134 acres in addition to the 1,165.1 allowed by the trial court.

Before any suit was filed, the parties entered into an agreement that, pending negotiations regarding the value of the land, the City could take possession of the property up to an elevation of 290 feet above sea level. It was further agreed that the City would file condemnation proceedings within thirty days after the time the Morelands might notify the City to file suit. The parties were unable to agree on the price, and the Morelands notified the City to commence the action within thirty days, as agreed upon. The City failed, however, to file the suit within the prescribed time, and the Morelands filed suit in the circuit court for damages. The City answered and cross complained, asking for condemnation of the 1,300 acres. The ease was transferred to chancery court. Upon a trial there, the City was allowed to take only 1,165.1 acres and the Morelands were given judgment for $211,425. The above mentioned agreement between the parties whereby the City was given permission to take the land up to the 290 foot elevation, pending-negotiations, contained a provision that in determining the valuation of the land such value should be the market value as of September 16, 1956.

The Moreland family has owned the property involved for many years, the present owners having inherited it. Prior to the time the City decided to construct a reservoir on the property, the Morelands had suspected that the lands contained some kind of minerals or earth that might he of exceptional value. After the suit was filed, the Morelands obtained the services of a geologist and began a systematic examination of the land, including the subsoil, to a depth of about 45 feet in places. As the result of such tests, it was determined that a large part of the property consisted of what is known as bloating clay, which has considerable more value than ordinary dirt. The clay is used in making light-weight aggregate, which in turn is used in manufacturing concrete blocks and other concrete products.

The City contends that even assuming the bloating clay has an exceptional value, such value should not be considered in arriving at the value of the land because on September 16, 1956, the time fixed for the valuation, it had not been definitely established that the land contained bloating clay. The City points out that this Court has held many times that the date of the taking is the date to be considered in determining the value of the land. Actually, the land had just as much value at the time of the taking as it has had at any time since that date. Nothing has changed to give it any different valuation. True, facts have been developed since the taking that show the land’s true value. But the value was there at the time of the taking, and the facts were fully developed before any valuation was agreed upon and before any court fixed such valuation. It would be a harsh rule to say that the State, or some subdivision thereof, or some private corporation, could take private property containing a deposit of diamonds and pay therefor the price of land having very little value because at the.very moment of the taking it was not known that the diamonds were there. This problem has been before the courts three times. In each instance it was held, and we think correctly so, that the property owner could recover the actual value of the land. City of Los Angeles v. Pomeroy, 124 Cal. 597, 57 Pac. 585; Tyson Creek Railroad Co. v. Empire Mill Co., 31 Idaho 580, 174 Pac. 1004; In re Board of Water Supply, 205 N. Y. S. 237.

For its next point the City contends that the' land has a market value from a low of $43,831 to a high of $55,250, and the fact that the land contains bloating clay gives it no added value whatever. On the other hand, the Morelands contend that the bloating clay makes the property worth over a million dollars. Both sides have tried this case in a most able manner and it is hard to see how either side could have done anything that was not done in developing its side of the case. The record and exhibits are voluminous; it would be wholly impractical and would extend this opinion to an unreasonable length to here abstract all the evidence. The Morelands produced evidence to the effect that the land contains bloating clay, which makes it worth somewhere between $775,000 and $1,735,320. The City produced direct and circumstantial evidence to the effect that the clay adds no value to the land.

The evidence is rather conclusive that bloating clay is highly desirable in the manufacture of light-weight aggregate. The evidence produced by the Morelands shows that there is no plant in Pulaski County producing lightweight aggregate; that the material sells for $4.50 per ton at a plant at Memphis and the same price at Baton Rouge, Louisiana; that the freight on the material from those points to Little Rock just about doubles that price; it sells for $8.00 at Little Rock. And the evidence further tends to prove that it would be entirely practical and economical to build a plant in Pulaski County to use the Moreland clay in the manufacture of light-weight aggregate. On the other hand, the City produced evidence to the effect that a large part of the Moreland land is covered with scrub timber, which would have to be cleared; that lime concretions are found in the deposit to an average thickness of 11 feet; that all of the clay below the lime concretion zone is below the water table in a river bottom, with a large watershed upstream; that beneath the clay deposit the soil is such that it permits free movement of underground water; that the deposit is subject to periodic flooding by the Arkansas River: that Pulaski County contains enormous reserves of plastic clays, some of which have bloating qualities; and that the Moreland clay is 20 to 25 miles from Little Rock. The City argues that these asserted facts render the Moreland bloating clay worthless as such, and, further, that by mixing coal with other plastic clays and then firing the mixture at a very high degree of heat such clays will bloat. But, on the other hand, it does not appear that the fact that part of the Moreland property overflows occasionally will seriously interfere with obtaining the clay. And, moreover, concrete blocks made of light-weight aggregate from the Moreland clay were manufactured and introduced in evidence. They show no signs of being affected by lime. There is evidence that there are deposits of the clay on Palarm Creek and White Oak Bayou in Pulaski County, but it is not shown whether such deposits are available for the manufacture of light-weight aggregate. According to the undisputed evidence, light-weight aggregate is used extensively in the building business. But the City argues that the available market in Pulaski County would not justify the development of the Moreland clay. There is, however, evidence to the contrary. Moreover, it does not appear that Little Rock would be the only available market for light-weight aggregate produced in Pulaski County. If the material produced in Baton Rouge and Memphis can be sold in Little Rock, the inference is that the same material produced here could be sold at a distance from this locality. There is certainly no evidence to the contrary.

With regard to other bloating "clay that may be found in the county, it will be recalled that the More-lands were allowed about $181 per acre for their land. According to the undisputed evidence, bloating clay is a sedimentary deposit found in alluvial lands. Usually alluvial lands are the best farm lands, and there is no substantial evidence in the record that alluvial lands in Pulaski County that might contain the sedimentary deposit known as bloating clay can be purchased for as little as $181 per acre. It is a matter of common knowledge that much of the alluvial land in this State made by deposits from the Arkansas and Mississippi Rivers sells for a much higher price. All in all, we cannot say the amount of the judgment is contrary to a preponderance of the evidence.

Next we come to the question of whether the City should be allowed to condemn the 134 acres in addition to the 1,165.1 acres allowed by the chancery court. We think the City has a right to condemn the entire 1,300 acres. The Morelands contend that the 134 acres in question are not absolutely necessary in establishing the reservoir and that according to such cases as Selle v. City of Fayetteville, 207 Ark. 966, 184 S. W. 2d 58, the land must be absolutely necessary to the project before condemnation will be decreed. Here the preponderance of the evidence.proves that the City needs this 134 acres-for three reasons: First, it will enable the City to run straight lines in establishing the boundary of the property ; this will greatly facilitate the identification of the boundary line and the legal description. Second, if the boundary follows a contour line it would require the services of an engineer to tell if anyone were trespassing. Third, it is very important to maintain sanitary conditions in the watershed of the reservoir insofar as it is possible to do so. All the 1,300 acres are in the watershed except about 9 acres that are required to square up some corners.

In the circumstances we believe it can fairly be said that it is absolutely necessary for the City to have the entire 1,300 acres. Of course, the value of the 134 acres was not included in the judgment rendered. There is no bloating clay under the 134 acres and according to the preponderance of the evidence this particular 134 acres is worth $4,725. The decree of the chancery court must be amended to permit the City to condemn the 134 acres in addition to the 1,165.1, and the amount of the judgment must be increased by the sum of $4,725, making a total judgment of $216,150. As modified the decree is affirmed.

George Rose Smith, J.,

dissenting. The situation in this case is rather like that considered in Hoy v. Kansas Turnpike Authority, 184 Kan. 70, 334 P. 2d 315. That was an eminent domain proceeding involving land that eontained extensive deposits of stone suitable for commercial use. The court observed, however, that the eastern third of the state was underlaid with rock, and in view of this fact the opinion stressed the point that the abstract value of the stone whs not to bo considered independently and without regard to its effect upon the market value of the land. In the language of the court:' “While the owner should be given by way of compensation for his land its fair market value for any use for which it has a commercial value in the immediate present or which may reasonably be anticipated in the near future, the uses which may be considered must be so reasonably probable as to have an effect on the present market value of the land. ’ ’

In the case at bar the greater part of the Morelands ’ proof was directed toward showing (a) that their land contains deposits of commercially usable bloating clay and (b) the extent of those deposits. This presents the basic factual situation of the Hoy case, that the land contains a mineral for which there is a market. The Morelands had the burden of carrying their proof one step farther, by showing to what extent the market value- of their land was enhanced by the presence of the clay. It is on this point that I think the weight of the evidence to be decidedly in favor of the appellant.

On this issue the testimony offered by the landowners lacks persuasiveness. Their principal witnesses were geologists. These men were qualified to test the clay and determine its bloating characteristics, but they had no real knowledge of matters that would be considered by a prospective purchaser of the Moreland deposits, such as the cost of building a light-weight aggregate plant, fuel costs, transportation costs, the actual demand for lightweight aggregate in the Little Rock area, etc. Some of these witnesses valued the Moreland clay at more than a million dollars; but their estimates were naked figures, conjured up without supporting reasons, and might equally well have been either multiplied or divided by ten.

The city met the issue squarely and introduced testimony that I find convincing. Among its witnesses were men with practical experience in the business of making lightweight aggregate material and in the construction of plants for that purpose. The witness Willson, for example, is an engineering officer for Texas Industries, Inc., which has plants in eight states and is the world’s largest producer of one type of lightweight aggregate. Willson was intimately familiar with the problems involved in constructing and operating such plants; he had actually designed and assisted in the construction of three of them. He and other equally well qualified witnesses, all wholly disinterested, had made a careful survey of the many factors affecting the market value of the appellees’ deposits of bloating clay. It was their informed opinion, supported by cogent reasons based upon practical knowledge and experience in the industry, that the existence of the clay did not substantially increase the market value of the Moreland lands.

The testimony is too extensive to be detailed, but one point established by the city may be mentioned. According to the undisputed testimony of Willson and other witnesses there are two methods of producing lightweight aggregate. In one, bloating clay is subjected to extreme heat, which causes the clay to expand and become a light, porous material. In the other, pulverized coal is first mixed with a non-bloating plastic clay. The coal is then burned away, leaving a light, porous material. The final product of the two methods is exactly the same. Neither process has any particular advantage over the other; in fact,. Texas Industries, Inc., uses one process at some of its plants and the other process at other plants.

Although the known deposits of bloating clay in Arkansas are few there is an abundance of plastic clay suitable for the production of lightweight aggregate. Indeed, this plastic clay is about as common as the stone in the Hoy case. I find no reason to doubt the conclusion of the city’s expert witnesses, that a company erecting a lightweight aggregate plant in the Little Rock area would not pay an inflated price for the Moreland bloating clay when unlimited quantities of the equally satisfactory plastic clay could be obtained for the price of the land valued for agricultural purposes. This is a chancery case, and in my opinion the award is contrary to the preponderance of the evidence. I therefore dissent.


author: Jim Johnson, Associate Justice.

text:
    Siesta Cafe v. State.
    5-2069
    333 S. W. 2d 722
    Opinion delivered April 4, 1960.

      C. Floyd Huff, Jr., for appellant.

      Bruce Bennett, Atty. General, By: Clyde Calliotte, Asst. Atty. General, for appellee.
   Jim Johnson, Associate Justice.

This is a civil action brought by the Prosecuting Attorney to have the appellant’s place of business declared to be a public nuisance. Ark. Stats. (1947) § 34-101 et seq. The trial court found the place to be a nuisance and entered an order directing that it be closed until further orders of that court and that appellant be restrained and enjoined from such further operation of said place or the maintenance of the nuisances found to exist; and such judgment is challenged by this appeal.

The establishment in question, known as the ‘ ‘ Siesta Cafe”, is situated on the Arkadelphia Highway approximately six miles from Hot Springs in a thickly populated area near Lake Hamilton, and consists of a beer tavern, dance hall, motel comprised of 3 or 4 cabins, and adjoining living quarters occupied by appellant and her husband. It is shown that disturbances of the peace occurred in said place, that gambling was carried on, that frequent illegal sales of intoxicating liquor were made, that illegal sales of beer to minors were made, and that patrons were solicited by female employees or habitues who proposed to engage in prostitution. The place was closed under a temporary order on the 10th day of March 1959. No further action was taken upon the matter until the 8th day of June 1959 when appellant filed a petition requesting a hearing and praying that the court set aside its order padlocking the establishment; and that appellant be allowed to reopen and conduct her business in a lawful and peaceful manner. Insofar as the record shows, no action was had upon this petition. The establishment remained padlocked in the meantime. On the 2nd day of September, appellant, through other counsel, filed an additional motion requesting a hearing be held on the petition filed on June 8th. Hearing was had on September 9th and at the conclusion thereof the court entered an order making the temporary injunction permanent, and further denied to appellant the right to use the property for any purpose and ordered that the premises be kept under padlock for an indefinite period of time. From such order comes this appeal.

Appellant urges that the trial court erred: (1) in stating that the appellant had the burden of introducing evidence in order to overcome the previous temporary injunction; and (2) in allowing the introduction into evidence of the criminal record of the husband of the appellant.

As to the first point, when the appellant refused to go forward with any proof, the State thereupon proceeded to introduce an abundance of testimony disclosing the illegal acts set out above, so the statement of the court did not harm the appellant. Section 34-102 confers jurisdiction of this case upon Chancery and Circuit Courts and Section 34-105 applies Chancery rules of procedure; and this is true whether the action is before the Chancellor or Circuit Judge. It follows, therefore, that since the court did hear the evidence under Chancery rules, and since the State did offer ample proof to support the order of the court, whatever error the court might have made' as to the burden of proof was harmless. Alston v. State, 216 Ark. 604, 226 S. W. 2d 988.

As to the admissibility of the criminal record of the husband of the appellant: the Circuit Judge admitted this record because appellant’s husband, D. C. Peterson, had joined with his wife in the Motion for Hearing, and because there was evidence that he also assisted in the operation of the cafe and exercised other acts of ownership. See: Section 34-119. Even assuming it was inadmissible in the form and manner indicated in this record, there was an abundance of other substantial testimony presented on behalf of the State to sustain the findings of the court, and this being treated as a chancery case we will exclude such testimony found to be incompetent. There remains an abundance of evidence to sustain the trial court’s finding as- to the acts of nuisance. Walsh v. Fairhead, Executrix, 215 Ark. 218, 219 S. W. 2d 941 (1949).

The third point urged by appellant is that the court erred in its final order by denying appellant the right to operate her cafe premises in a legitimate and lawful manner and by further ordering that her place of business be kept padlocked for an indefinite period of time. After a careful review of the record, we conclude that the court’s order is too broad. The statute contemplates that the initial order shall merely abate the nuisance. Ark. Stats. § 34-117. The more severe course of closing the establishment for a year is authorized only in a .contempt proceedings for a violation of the final injunctive order. Ark. Stats. § 34-118; Futrell v. State, 207 Ark. 452, 181 S. W. 2d 680; State ex rel Attorney General v. Williams, 222 Ark. 966, 264 S. W. 2d 417; Lawson v. State, 226 Ark. 170, 288 S. W. 2d 585. Therefore, the order will be modified in accordance with the Williams ease to enjoin appellants from using the property or permitting it to be used as a public nuisance.

Affirmed as modified.