author: CakletoN Harris, Chief Justice.

text:
    Swank v. Edmonds.
    5-1424
    309 S. W. 2d 192
    Opinion delivered January 27, 1958.

      Rigby & Tanner, for appellant.

      Catlett & Henderson, for appellee.
   CakletoN Harris, Chief Justice.

James R. Swank and Cecil Ray Edmonds, doing business as Edmonds & Swank, were partners in the business of constructing dwellings in the state of Colorado. In January, 1955, the two men, having become interested in establishing a dog track in Arkansas, came to Little • Rock and contacted the chairman of the State Racing Commission relative to acquiring a permit. It was agreed between Ed-monds, and Swank, a Denver businessman and rancher, that the two should bear equally all expenses incident to promoting the track, and that Swank would receive 50 per cent of Edmonds’ net interest in a company to be organized. The two returned to Denver, and Ed-monds advertised in the Denver Post for people who would be interested in purchasing stock in a race track, advertising costs being borne equally by both parties. Edmonds returned to West Memphis, Arkansas, and in the latter part of March, 1955, Swank and Jules Singer, a Denver attorney, came to West Memphis, and the three men incorporated the Southland Racing Corporation. On April 4th, Swank and Edmonds entered into a written agreement confirming the aforementioned verbal agreement. This was the last direct contact between the two, and Edmonds thereafter spent most of his time in Arkansas, while Swank remained in Colorado. Shortly thereafter, Edmonds sold his interest in the Swank and Edmonds Construction Company to one William T. Kerns. On May 6th, Kerns obtained a release from Swank releasing “C. R. Edmonds and every other person, firm or corporation from any and all claims which I may have or profess to have in and to any stock or other interest in the Southland Racing Corporation * * *” and specifically relinquishing any claims which Swank might have arising from the letter dated April 4,1955, wherein Swank was to accept a 50 per cent interest in the stock retained by Edmonds. In consideration of the release, Kerns delivered to Swank a letter advising that he would (1) give Swank $3,500 (2) exert his best efforts to secure a racing permit in Arkansas, and if successful, assign to Swank 80 per cent of his interest therein, and (3) not relinquish possession of the release until Kerns had secured a contract for the construction of Southland Racing Corporation. Swank contends that Kerns did not comply with any of the provisions. On July 15, Kerns entered into a written agreement with Edmonds wherein Kerns agreed, in consideration of the assignment to him of 15,000 shares of common stock in Southland, to assign to Edmonds the aforementioned release and relinquishment of Swank’s interest in the Southland Corporation. In August, Swank went to the office of Singer in Denver, and in consideration of the issuance of 6,000 shares of Southland Racing Corporation stock, executed a second release. The stock was later sent to Swank, and sold by him for approximately $5,000. In October, 1956, Swank instituted suit against Edmonds, alleging that the releases had béen obtained from him by fraud, and asking that he be awarded 50 per cent of Edmonds’ net interest in Southland. Upon trial, the court dismissed Swank’s complaint for want of equity. From such decree comes this appeal.

Appellant’s principal argument for reversal is based upon a contention that Edmonds, Kerns, and Singer entered into a conspiracy to defraud him of his interest in Southland Racing Corporation. A conspiracy was not alleged in the complaint, nor were Kerns and Singer made parties to the action; in fact, their names do not appear in the pleadings. The complaint simply alleges that the acts of fraud, trickery, and deceit were committed by Edmonds, “his agents, servants, and employees.” At any rate, the evidence falls far short of that necessary to establish a conspiracy. No good purpose would be served in detailing the testimony. Suffice it to say that there is not one iota of evidence . . . conversations . . . letters . . . telephone calls . . . that would establish the three men plotted or conspired together to obtain Swank’s interest in the company, nor is there any evidence to establish that Kerns or Singer was acting under authority of, or at the direction of Edmonds when they obtained the two releases from Swank. Edmonds testified that he had only known Kerns about two weeks when Kerns proposed to buy his interest in the construction firm of Edmonds and Swank. He stated that he had never employed Kerns, and had never known him very well. There is nothing in the testimony that would prove otherwise. Of course, Edmonds was entirely within his rights in disposing of his interest in the construction company.

In addition to the contention that the three men conspired to defraud him, appellant sets out other grounds for reversal. It is alleged that the first release executed by Swank was void for lack of consideration. Swank testified that Kerns did not give him the $3,500, did not exert any efforts to secure a permit for another racing track in Arkansas, and in violation of bis agreement, relinquished possession of the release without securing a contract for the construction of Southland Racing Corporation. As to whether Kerns carried out these conditions is, in our opinion, immaterial, first, because, as previously stated, it was not shown that Kerns was acting in concert with, or under the direction of Edmonds, or that Edmonds even knew the consideration for the release; second, Swank gave a second release in August (which we consider a ratification of the first release) in consideration of receiving 6,000 shares of Southland Racing Corporation stock.

It is next alleged that the releases were invalid because of the actions and conduct of the attorney, Jules Singer. Appellant contends that Singer was in possession of facts relating to the affairs of Southland, and was obligated to convey such information to him (Swank) because of the fiduciary relationship existing between them, before obtaining the second release. Specifically, he contends that Singer knew that Edmonds held 500,000 shares of stock in Southland, and that had he (Swank) been so aware, he would not have settled his 50 per cent share under the original agreement with Edmonds, for 6,000 shares of stock. In the first place, as previously herein set out, there is no evidence that would establish Singer to be Edmonds’ agent, and Ed-monds would not be otherwise responsible for Singer’s misdeeds, if such they were. In the next place, it would appear that Swank could have obtained the information as to the number of shares held by Edmonds, since the prospectus of Southland Racing Corporation was available to the public as of July 15, 1955, and showed that Edmonds held 500,000 shares, and that the South-land stock was valued at $1.00 per share. The evidence showed that the prospectus was available at most securities dealers, and that four dealers in Denver had it. In fact, Swank testified that he later learned the amount of stock owned by Edmonds through such a prospectus obtained from the General Investing Corporation, though he did not state when he obtained same. The stock was not immediately given to Swank, but was sent to him in the latter part of April, 1956, after which, he sold it for $5,000. It is inconceivable that Swank did not know, or could not have known, before that time, the number of shares held by Edmonds, since the prospectus had been out for nine months. Appellee contends that Swank, because the future of Southland Bac-ing Corporation was, at the time, rather precarious, decided he had best accept the 6,000 shares of stock for whatever interest he might have and remove himself from the venture. There is some logic in this argument since a movement had been organized to sponsor an amendment to the Constitution of the State of Arkansas to prohibit all parimutuel betting in the state.

Swank, though one of the original incorporators, contended that from the beginning he was not informed as to the structural set up, or how many shares of stock Edmonds would receive. He testified that he had asked Edmonds, Kerns, and Singer, but received no satisfactory answer. It seems to us rather illogical that a successful businessman, who, according to his own testimony, had been refused information by all three parties, and should accordingly have been “put on guard”, would sign a release without full understanding and knowledge of what he was signing.

Beiterating, we find no evidence that would establish a conspiracy, or establish that Kerns and Singer were acting as agents of Edmonds.

No error appearing, the decree is affirmed.

       Swank’s evidence showed that he made a total expenditure of about $1,100 toward expenses.

       Not referring to Southland.

       The stock was sent later because it was promotional stock and could not be sold until registered by the SEC.

         Swank testified that Edmonds sent him a note inquiring “* * * if it would he O. K. to sell to Kerns, and I couldn’t have stopped him anyway.” This was the only contact between the parties after April 4, 1955.

       This 6,000 shares was part of the 15,000 which Kerns had received from Edmonds.

         Prom the testimony of Swank: “Mr. Digby: Was he representing you, Mr. Swank? A. No. Q. Do you know who he was representing then? Mr. Catlett: Does he know of his own knowledge? Witness: I don’t know anything about his status.”


source: Caselaw Access Project

author: J. SeaborN Holt, Associate Justice.

license: Public Domain

text:
    Fitzhugh v. Goforth.
    5-1423
    309 S. W. 2d 196
    Opinion delivered January 27, 1958.

      Langston & Walker and Wayne Foster, for appellant.

      Martin K. Fulk and Rodney Parham, Jr., for ap-pellee.
   J. SeaborN Holt, Associate Justice.

This suit was begun by appellants to enjoin appellees from obstructing the natural flow of water across certain property adjoining appellants’ home, which property lies outside the City of Little Rock. Appellees answered with a general denial and in a cross-complaint alleged that the property in question was used as a public street and had been so dedicated. In their answer to this cross-complaint, appellants denied any dedication and asserted ownership of the property in themselves. Trial resulted in a decree resolving the issues in favor of appellees and this appeal followed.

For reversal appellants contend there had never been a dedication of the property in question and that any attempted dedication had been abandoned by the public.

The record reflects that on February 4, 1950, appellants acquired Lot 30, Block 3, in Westwood Addition, on which they built their present home. On March 20, 1950, Howard Osborne and wife, by warranty deed, conveyed to H. E. Luke and wife the property involved here, described as the West 50 feet of Lot 29, Block 3, West-wood Addition “to be used for a hard surface road.” As indicated, this 50 foot strip was adjacent to appellants’ property immediately to the east. On August 22, 1950, Luke by warranty deed conveyed to T. M. Tatum and R. M. Allison, along with other property, this same 50 foot strip, the West 50 feet of Lot 29, Block 3, Westwood Addition with this provision: “the above described strip to be used as a street.” On August 28, 1950, by warranty deed, Tatum conveyed to J. T. Cone his interest in other property together with this West 50 foot strip of Lot 29, Block 3, Westwood Addition, the deed containing this provision: “the above described strip to be used as a street.” On September 7, 1950, Osborne conveyed to appellees (The G-oforths) Lot 29, Block 3, Westwood Addition. On July 29, 1953, Cone conveyed to the Fitzhughs, by quitclaim deed, a strip 50 feet wide on the west side of Lot 29, Block 3, West-wood Addition, the property here involved. This deed contained no designation of a street. On August 3, 1953, Allison conveyed by quitclaim deed to the Fitzhughs, this same 50 foot strip, and this deed made no mention of a street.

From the above undisputed record and sequence of deeds, it appears that Howard Osborne was the first dedicator (on March 20, 1950) of the 50 foot strip in question by recorded warranty deed to Luke. When he attempted later to convey all of Lot 29, Block 3, in question, he had prior thereto, as indicated, already dedicated this West 50 foot strip of Block 29 as a street. The subsequent deeds of Luke to Tatum and Allison reaffirm this dedication, so at the time appellant secured a quitclaim deed from Cone on July 29, 1953, and quitclaim deed from Allison on August 3, 1953, conveying their interest, this strip in question had been previously dedicated by recorded warranty deed as a street.

In these circumstances the question presented is, was there a dedication of the street in question to the public’s use and was such dedication accepted by the public. We hold that there was a dedication and an acceptance. We announced the applicable rule here in Hankins v. City of Pine Bluff, 217 Ark. 226, 229 S. W. 2d 231, wherein we said: “The two essential elements of a dedication are the owner’s appropriation of the property to the intended nse and its acceptance by the public. No specific duration of the public user is required to complete the dedication, Ayers v. State, 59 Ark. 26, 26 S. W. 19.”

After a careful review of all the testimony we hold that the findings of the chancellor, that there had been an acceptance of this dedicated street by the public (the user), were not against the preponderance of the evidence.

Appellee Goforth testified that he had used the street, and that the water department had used it in laying a water main in this street. Appellants say in their brief: “Now it is unquestionable that the dedicator, R. M. Allison, on his own initiative sent bulldozers upon-the strip and attempted to establish a right of way across the strip for the use of the general public.” Witness Saunders testified: “Q. Are you telling the court the road was built? A. Well, the right of way was there and it was graded . . . Q. Was it ditched on each side? A. Bladed up on each side, yes, sir . . . Q. Mr. Saunders, did you consider after seeing that road that it was a public street? A. Yes, sir, very definitely. Q. Did you ever drive over it as a member of the public? A. Yes, sir. Q. You did drive an automobile over it? A. Yes, sir. Q: On how many occasions? A. On one occasion only. Q. Did you get through there all right? A. I did it for the purpose to see how it came through from the fire station. Q. How long was that after the road was built? A. Oh, several months after it was bladed up.” Witness Emery testified that he, with Mr. W. R. Davis, a member of the Water Commission, walked over the road inspecting the water mains. Mrs. Horstman testified that she and her husband had walked up and down the street a number of times and she had seen cars go across it and they had received delivery of drain tile from trucks that used the road. Another witness, Walden, testified that he and others drove up the street on several occasions. W. R. Davis, above, a member of tbe Water Commission, testified that tbe water company-laid tbe water main along tbe right of way of tbis road. Other witnesses gave testimony of a corroborative nature as to tbe use of tbis street. Appellant Fitz-bugb admitted that tbis street in question “was graded and crowned off in 1952,” and further testified: “Q. Mr. Fitzbugh, according to tbe original design, which direction did your garage face? A. At one time I planned to face it to Ascension Road. Q. Why tbe change? A. Because I entered off of tbe fifty foot strip. Q. You were going to use tbe fifty foot strip? A. Yes. Q. In other words, if that was going to be a street, you had rather use that street entrance and not have to have a driveway on your yard? A. I bad tbe driveway on tbe yard. I merely did it that way because I wanted it entered from that direction, yes. Q. And at that time you could only have entered from that direction if that was a street? A. No, I could enter my garage from my own property. My garage don’t reach tbe property line on my property. Q. No, but it was most advantageous to enter from tbis street should it be one? A. That’s right, yes, should it be one.”

Mrs. Goforth testified: “When Mr. Osborne conveyed that property to us he conveyed all of Lot 29. Of course we knew by a previous instrument that 50 feet of Lot 29 had been set aside for a hard surfaced street. When we got our first tax statement it was on all of Lot 29 and I protested it at the time, having to pay taxes on the 50-foot strip which was to be a street, and we got a corrected tax statement taking that 50 feet off the property tax.”

While there was evidence introduced which was in conflict with the above, however, as indicated, when all of the testimony is considered we hold that the preponderance thereof supports the court’s findings and decree. Affirmed.


author: Ed. F. McFaddiN, Associate Justice.

text:
    Nolan v. Thomas.
    5-1428
    309 S. W. 2d 727
    Opinion delivered January 27, 1958.
    [Rehearing denied March 3, 1958]

      Crumpler & O’Connor and Keith, Clegg & Eckert, for appellant.

      Jack Machen, for appellee.
   Ed. F. McFaddiN, Associate Justice.

In the Trial Court the appellees were plaintiffs and the appellants Avere defendants; and for convenience we will refer to the parties by trial court designation.

The plaintiffs brought this suit to cancel oil and gas leases and assignments, insofar as the same affected 120 acres of a tract of 160 acres. The reason for cancellation was the defendants’ failure to fulfill the implied covenant to develop the premises for oil and gas. At the conclusion of the plaintiffs’ case, the defendants invoked Act No. 470 of 1949 (§ 27-1729 Ark. Stats., as amended), and filed their written motion to dismiss the complaint, i. e., they claimed that the plaintiffs had not established a case for the relief sought. The Trial Court denied the motion to dismiss, and then granted the plaintiffs their desired relief when the defendants elected to stand on the motion to dismiss. The defendants have appealed.

I. The Buie Announced In Werbe v. Holt. At the outset., it is proper to mention the rule for testing defendants’ motion to dismiss. In Werbe v. Holt, 217 Ark. 198, 229 S. W. 2d 225, we discussed the history and applicability of Act No. 470 of 1949, which is now § 27-1729 Ark. Stats., as amended. We said: “By the overwhelming weight of authority, it is the Trial Court’s duty, in passing upon either a demurrer to the evidence or a motion for judgment in law cases tried without a jury, to give the evidence its strongest probative force in favor of the plaintiff and to rule against the plaintiff only if his evidence, when so considered, fails to make a prima facie case ’ ’. So, the question before us is whether the Chancellor was correct when, after giving the plaintiffs’ evidence its strongest probative force, he held that a case was made so as to require the defendants to offer their proof.

II. The Plaintiffs’ Claim for Cancellation. The opinion of the learned Chancellor is in the record, and it briefly and succinctly states the case. We copy the opinion in full:

“This cause was filed by Plaintiffs against Defendants, seeking cancellation of an Oil and Cas Lease, which was executed in March, 1944 for a period of ten (10) years, covering the SE^ of Section 6, Township 16 South, Range 19 West, Columbia County, Arkansas. The Lease has the usual provision for the payment of delay rentals to he paid for the deferment of drilling from year to year.
“When the lease was about to expire by its own terms, vis, ten years from date of execution, a well was drilled in the Northwest corner of said 160 acre tract. This well has produced and is still producing a small amount of oil. It was completed about the 20th of February, 1954, and has produced from 10 to 20-some barrels of oil per day during this time. No other wells have been drilled on the 160 acre tract.
“Some time in the early part of November, 1954, Lessors wrote Lessees requesting that another well or wells be drilled on this tract seeking further exploration, and from that time until May 1956, some 5 or 6 letters were written, and all of which were answered, and which letters have been introduced, without objection in this case. From the tenor of these answers, it appears that lessees (defendants) do not intend to drill any other wells or make further exploration on this tract of land, notwithstanding they have had the lease for 13 years and have drilled only one well, and it is still producing oil.
“The Court feels that Lessees owed Lessors a dutjr to further develop the leased premises, and that Lessees have had more than three (3) years since the well, which is now producing, was brought in.
“It is true that Lessors do not know whether in fact oil and/or gas can be produced from the remaining acreage, but it is also true that they cannot find out so long as Lessees keep the lease and refuse to make further exploration thereon.
“The Court believes the law to be, and the principles of equity to be: ‘ The production of oil on a small portion of the leased tract cannot justify the Lessee’s holding the balance indefinitely and depriving the Lessor not only of the expected royalty from production pursuant to the lease, but of the privilege of making some other arrangement for availing himself of the mineral content of the lands. ’
“The Conrt therefore feels that the Petition for cancellation of the Lease, insofar as affects the South Half SE% and the Northeast Quarter of said SE%, should be granted.”

Defendants argued below, and urge here: (a) that the plaintiffs had the burden of proving that a prudent operator would have drilled other wells in addition to the one that was drilled; and (b) that the plaintiffs failed to offer such proof. We hold that the plaintiffs made a prima facie case requiring the defendants to go forward and offer their proof on the prudent operator matter when the plaintiffs showed these facts: (1) that the leases here involved were executed in 1944 and allowed delay rentals to be paid each year for ten (10) years; (2) that the delay rentals were paid and no drilling was undertaken on the lease until 1954, when one well was drilled and was a small producer; (3) that the plaintiffs then insisted for more than two years that the defendants should drill other wells; (4) that the defendants consistently refused to drill other wells; and (5) that the plaintiffs are not asking that the lease be cancelled on the 40 acres on which there is a producing well, but are asking for cancellation only on the other three 40-acre tracts.

To support their argument, appellants cite, inter alia, a few sentences from Winn v. Collins, 207 Ark. 946, 183 S. W. 2d 593, about a “prudent operator”. The facts in that case are entirely dissimilar from those in the case at bar. That case involved a fixed mineral (bauxite) and not a transitory mineral like oil or gas. Furthermore, the exploration in that case was in the first year of the lease, whereas, in the case at bar, twelve years after the date of the original lease and more than two years after the discovery well, the defendants were still refusing to develop the three 40-acre tracts here involved. The question is not only whether the plaintiffs in the case at bar had to show that a prudent operator would drill on the other three 40-acre tracts here involved; but the question is also whether the defendants should be allowed to prevail on a policy of refusing to drill and at the same time holding the lease on the undeveloped three 40-acre tracts, thereby preventing the plaintiffs from having the privilege of obtaining other persons who might drill on these three 40-acre tracts. Some of our cases point to the correctness of the Chancellor’s opinion.

In Drummond v. Alphin, 176 Ark. 1052, 4 S. W. 2d 942, the facts showed that in 1919 Alphin executed a lease to Felsenthal on 1710 acres; that in 1923 two wells were drilled as producers on some of the land, but there was no development on any of the other lands; and in August 1926 suit was brought to cancel the leases on all of the undeveloped lands. The opinion recites: “It is true, as appellants assert, that the complaint does not allege that there is a drainage of oil from under these (other) lands by wells which have been drilled by other persons, but it is true also that, unless appellants explore for oil, the lands may remain undeveloped as long as the lease is outstanding.” Under those facts, this Court, after citing many cases, held: “The majority are of the opinion, upon the authority of the cases previously cited herein, that the appellants have failed, beyond a reasonable time, to begin the work of exploration and development as provided in the original leases, after drilling the discovery wells, and that the cancellation of such, portions of the original leases as had not been explored, was properly decreed.”

In Ezzell v. Oil Associates, 180 Ark. 802, 22 S. W. 2d 1015, we said: “So it may be taken, as the well settled rule in this State, that there is an implied covenant on the part of the lessee in oil and gas leases to proceed with reasonable diligence in the search for oil and gas, and also to continue the search with reasonable diligence, to the end that oil and gas may be produced in paying quantities throughout the whole of the leased premises.”

In Standard Oil Co. v. Giller, 183 Ark. 776, 38 S. W. 2d 766, in cancelling a lease on the undeveloped portion of the premises, we quoted from an earlier case: “ ‘Of course, due deference should be given to the judgment of the lessee as operator to determine how many wells should be drilled, but he must use sound judgment in the matter and cannot act arbitrarily. He must deal with the leased premises so as to promote the interest of both parties and to protect their mutual interests; he must act for the mutual advantage and proceed for both of them, and must not consider his own interest wholly or for the most part; he must perform the contract so as to further the original purpose and intention of the parties.’ ”

In Smith v. Moody, 192 Ark. 704, 94 S. W. 2d 357, the lease covered 360 acres of land. Four wells were drilled on one 40-acre tract and the lessee refused to develop any further. The Chancellor cancelled the lease except as to the 40 acres on which the wells had been drilled. This Court affirmed the decree, saying: “Much testimony was offered as to the necessity of drilling other wells, the contention being that the wells now producing were at the edge of the producing fields, and that new wells could not be drilled and operated except at great loss. This contention may he disposed of by saying that, if true, the lessees have not been damaged by the cancellation of so much of the contract of lease as cannot be. profitably performed. (Italics our own.)

In Ms opinion the Chancellor quoted from the holding of the U. S. Supreme Court in Sauder v. Mid-Continent, 292 U. S. 272, 78 L. Ed. 1255, 54 S. Ct. 671, 93 A. L. R. 454; and we adopt as our own the said quotation: “The production of oil on a small portion of the leased tract cannot justify the lessee’s holding the balance indefimtely and depriving the lessor, not only of the expected royalty from production pursuant to the lease, but of the privilege of making some other arrangement for availing himself of the mineral content of the lands.”

Affirmed.

       The quoted statement in the Trial Court’s opinion is from the U. S. Supreme Court’s opinion in Sauder v. Mid-Continent, 292 U. S. 272, 78 L. Ed. 1255, 54 S. Ct. 671, 93 A. L. R. 454.

       As evidence of defendants’ attitude against drilling other wells, we give excerpts from some of the letters written by defendants to plaintiffs: From defendants’ letter of July 19, 1954: “It is hardly worth while to drill a well 3,500 feet at a cost of approximately $25,-000.00 to the company when you only make a 17 barrel a day well. We are not planning to drill another well on the Thomas in the near future.” From defendants’ letter of February 26, 1955: “I would say that a great deal of additional study will have to be given to drilling any further shallow wells, because of the unfavorable results so far.” From defendants’ letter of July 18, 1956:' “Regardless of what some other people might have thought of drilling some of the shallow wells, competent people have been consulting with us and have decided that this would not.be a profitable undertaking for anyone, and there is no point in additional wells being drilled and plugged on the property because it would just condemn it that much more.”

       There is an annotation on the point in 94 A. L. R. 460. See also 24 Am. Jur. page 569.


author: MiNor W. Mill wee, Associate Justice.

text:
    Kyser v. T. M. Bragg & Sons.
    5-1441
    309 S. W. 2d 198
    Opinion delivered January 27, 1958.

      Thorp Thomas, for appellant.

      0. Wendell Hall, Jr., for appellee.
   MiNor W. Mill wee, Associate Justice.

The question presented is whether the amount of $62.00 charged appellants in a conditional sales contract for a power unit purchased from appellees represented finance or interest charges, or merely a portion of a credit purchase price.

On March 24, 1954, the appellants, Lester Kyser and Ernest Kyser, his father, purchased a used “11-40” power unit from appellees, T. M. Bragg and Sons, a partnership and retail machinery dealer at Benton, Arkansas. The parties executed a conditional sales contract on a printed form furnished appellees by Allis-Chalmers Manufacturing Company in which appellants promised to pay appellees $662.00 one year from date with interest “at the rate of 8 per cent per annum until maturity and . per cent per annum from maturity until paid . . .” The only explanation in the contract with reference to the amount in question is set out in a block which reads:

“Resume of Sale
Total purchase price .$600.00
(No insurance or finance charges)
Trade-in . $ 62.00
Cash with order . $
Cash on delivery .$
Unpaid balance . $662.00
(Per foregoing installments) ”

The only items written in on this part of the printed form are the three amounts, $600.00, $62.00 and $662.00; and the word “or” in “(No insurance or finance charges) ” was inked out by appellees when the contract was executed.

Appellants had made no payments on the contract on September 1, 1956, when appellees filed this action to recover $662.00 with interest at 8 per cent from the date of the contract until March 24, 1955, plus 10 per cent per annum thereafter until paid and an attorney’s fee .of 10 per cent of the outstanding balance and costs. In their answer and counterclaim appellants pleaded usury as a defense and asked that the contract be cancelled ■and title to the power unit vested in them. In their complaint appellees asserted that $662.00 represented the “total credit purchase price” of the power unit and attached a purported true copy of the conditional sales contract as an exhibit which had been radically altered so as to eliminate the term “Trade-in” and show separate cash and credit prices. But in their reply to appellants’ counterclaim they alleged the item of $62.00 represented cost of repairs to the unit after they acquired it for $600.00. Trial before the circuit judge without a jury resulted in dismissal of appellants’ counterclaim and judgment for appellees in the sum of $833.50 plus 10 per cent attorney’s fee and costs as prayed in the complaint. In reaching this conclusion the trial court, over 'appellants’ objection, admitted parol testimony to explain the intention of the parties with reference to the item of $62.00. Appellants argue this was error, and that the judgment is contrary to the law and evidence.

It first should.be noted that the $62.00 item is listed ¡in the contract opposite the term “Trade-in” and under the words “No insurance or finance charges”, which appellees altered by inking out the word “or”. Now it is undisputed that there was no “Trade-in”; and that if there had been, the item should have been subtracted from, rather than added to, the amount of $600.00. In these circumstances we think the trial court was justified in concluding that the contract was ambiguous in this respect and in admitting parol testimony to explain the intention of the parties. Parol evidence is inadmissible to vary or contradict the provisions of an unambiguous written contract. Where, however, a written contract is ambiguous on its face, parol evidence is admissible to explain it. In such case the contract is neither varied nor contradicted by parol testimony which merely makes certain that which the face of the contract leaves uncertain concerning the intention of the contracting parties. Montgomery v. Ark. Cold Storage & Ice Co., 93 Ark. 191, 124 S. W. 768.

E. R. Bragg, one of the partners, acted for appel-lees in the execution of the contract. Both appellants testified he told them at the time it was executed that the price of the unit was $600.00 to which he was going to add $62.00 interest for a year, and that they agreed to this arrangement; that nothing was said about repairs or “knocking off” the $62.00 if they paid for the unit within 60 days; and that the amount of $62.00 was written just opposite “finance charges” in the carbon copy of the contract furnished them by Mr. Bragg. They did not notice that part of the contract calling for 8 per cent interest in addition to the $62.00 interest charge.

E. R. Bragg testified he told appellants at the time of the execution of the contract that he paid $600.00 for the power unit and spent $62.00 in repairing it; that the term “Trade-in” should have read “Repair bill”; and that he also told appellants he would knock off the $62.00 if they could pay for it within 60 days but they said they might not be able to do so. Thus the clear import of his testimony is that the appellants could have had the unit for $600.00 on the day of sale, or within 60 days thereafter, but if appellees had to wait one year for their money they would be entitled to said cash price of $600.00 plus the amounts of $62.00 and 8 per cent interest until maturity for their forbearance.

In several recent cases we have held that where contracts of this kind include some hidden or unitemized charge or other item with a meaningless label as a part of the carrying charges, then the lender has the burden of explaining in detail such, mysterious or hidden charge, or it will be considered as part of the interest. As we said in Jones v. Jones, 227 Ark. 836, 301 S. W. 2d 737: “When, as here, the lender writes the contract he has the opportunity to put down in black and white an intelligible description, and the exact amount, of every charge that is being added to the principal of the debt. Last week we pointed out that the practice of attaching meaningless labels to such charges weakens the lender’s position when usury is asserted. Whiddon v. Universal C.I.T. Credit Corp., 227 Ark. 824, 301 S. W. 2d 567. The same criticism can fairly be made of a contract that gives the borrower no information at all about the deferred charges being exacted by the lender. In either case the trier of the facts is justified in assuming, until he is convinced by proof to the contrary, that the difference between the principal of the loan and the face amount of the contract represents interest on the debt.” See also, Sloan v. Sears, Roebuck & Co., 228 Ark. 464, 308 S. W. 2d 802. Even if we accept the explanation of Mr. Bragg in the instant case, the cash estimate or price of the power unit was $600.00 and he charged appellants $62.00 plus 8 per cent interest on the principal indebtedness because appellees had to forego payment in cash and wait one year for their money. The mere fact that $62.00 was also the amount of the repairs placed on the unit does not alter the fact that it represented a part of the interest.

The judgment is accordingly reversed and the cause remanded with directions to dismiss the complaint, and enter judgment for appellants on their counterclaim.


author: George Rose Smith, J.

text:
    Wilhelm v. McLaughlin.
    5-1540
    309 S. W. 2d 203
    Opinion delivered January 27, 1958.

      Rex W. Perkins and G. A. Fuller, for appellant.

      O. E. Williams, for appellee.
   George Rose Smith, J.

In this case the appellants and the appellee filed separate notices of appeal from the decree of the chancery court. The appellee has moved for a dismissal of the appellants’ appeal, on the ground that their notice of appeal was filed before the entry of the decree and was therefore ineffective. The motion presents a question of first impression, and since the point is apt to recur we think it best to dispose of the motion by a written opinion.

The two-day trial in the court below ended on June 25, 1957. At the conclusion of the proof the chancellor stated that he would decide the case immediately, without asking counsel to submit briefs. The chancellor then delivered a comprehensive oral opinion containing findings that were partly favorable to the plaintiff (appel-lee) and partly favorable to the defendants (appellants). On July 5 the defendants filed a notice of appeal “from the entire decree rendered in the above entitled cause . . . on June 25,1957.” The formal decree was evidently signed sometime after the day of trial and was filed in the office of the clerk on July 10.

The statute provides that the notice of appeal must be filed within thirty days from the entry of the judgment or decree. Ark. Stats. 1947, § 27-2106.1. We have held that the period of thirty days is to be calculated from the day on which the judgment is filed with the clerk for entry on the record. Cranna v. Long, 225 Ark. 153, 279 S. W. 2d 828. We adhere to that view and do not mean by this opinion to shorten the time within which a notice of appeal may be filed after the entry of the judgment or decree.

Even though the thirty-day period runs from the entry of the judgment rather than from its rendition, it does not necessarily follow that a notice of appeal filed in. tlie interval between rendition and entry is void. Many situations may be conceived in which needless hardship would result from an inflexible rule nullifying every notice of appeal filed before the entry of the judgment. We know that, despite reasonable precautions on the part of counsel, instances do arise in which the precedent for judgment is signed without notice to the losing party or his attorney, or in which an unforeseen delay intervenes between the signing of the precedent and its filing in the clerk’s office, or in which the clerk fails to make a record of the date on which the signed precedent was received. In any of these situations counsel might, in good faith, lodge the notice of appeal before the judgment was actually entered.

We do not find that this exact point has been decided under the federal rules of civil procedure, from which our statute was copied. The decisions of the state courts, construing statutes having some similarity to ours, are not in harmony, but we prefer the view that gives effect to a notice of appeal such as that filed by these appellants.

In a case like this one the Supreme Court of Washington explained its position with these words: “The statutes governing appeals should be liberally construed, to the end that parties may have a review by this court of the rulings of the superior courts when they so desire. The appeal statute thus construed will require us to give force to a notice of appeal given after the court had announced its decision, although it was before the signing and entering of the formal judgment. For some purposes the judgment may not be complete until thus signed and entered, but, after such announcement, it was so far complete as to sustain a notice of appeal.” Hays v. Dennis, 11 Wash. 360, 39 P. 658; see also Sherbert v. School Dist. No. 85, 169 S. C. 191, 168 S. E. 391. In California it was held for many years that a notice of appeal filed before the entry of the judgment was bad, Tyrrell v. Baldwin, 72 Calif. 192, 13 P. 475, but eventually a rule was adopted that gave validity to a notice of appeal “filed prior to the entry of the judgment, but after its rendition.” Schmidt v. Townsend, 103 Calif. App. 2d 185, 229 P. 2d 488.

In the case at bar the appeal was taken after the court had announced its decision, and the notice of appeal identified the decree as having been rendered on June 25, 1957. There could be no uncertainty about the particular decree which the appellants sought to have reviewed, nor can it be said that the appellee was inconvenienced or prejudiced by the fact that the notice of appeal preceded the entry of the formal court order. In our opinion the language of the statute does not require a dismissal of the appeal in these circumstances.

Motion denied.


author: Paul Ward, Associate Justice.

text:
    Key v. Ark. P. & L. Co.
    5-1430
    309 S. W. 2d 190
    Opinion delivered January 27, 1958.

      Arvin A. Boss and John■ R. Wood, for appellant.

      Lookadoo, Gooch & Lookadoo and House, Holmes, Roddy, Butler and Jewell, for appellee.
   Paul Ward, Associate Justice.

The question considered on this appeal is: Does the one year limitation on filing 'claims, as provided in § 18 Act 319, 1939 (§• 81-1318(a) Ai’k. Stats., parent volume), apply to hospital and medical expenses'? It is appellant’s contention that the Circuit Court and the Workmen’s Compensation Commission erred in holding the limitation does so apply. The facts are not in dispute.

Appellant, Clyde E. Key, while in the employment of appellee, Arkansas Power & Light Company, was permanently injured in 1943. He ivas awarded the full amount of compensation for total and permanent disability, and in June 1950 he received his last and final monthly check in full payment of the initial award.

Appellant at all times after his injury in 1943 received compensation benefits, both .money and medical, until June 1950. It is not contended by appellant that he has received any payment either in money or for medical treatment since the above mentioned date.

In 1945 it was found that appellant had pulmonary tuberculosis and the Commission ordered appellee to pay his expenses to the State Sanatorium at Booneville for treatment where he remained for about four months.

The commission found, and it is not disputed, that the tubercular condition was attributable to the original injury, and also found that appellant had been receiving treatment for this condition since 1953. The Commission further found that appellant had an ulcerated leg condition (attributable to the 1943 injury) for which he had been receiving treatment since 1952.

In February 1955 appellant, for the first time, secured the services of an attorney, and on the 23rd of that month filed a claim for additional medical treatments for the tubercular condition and the ulcerated leg. At the first hearing appellee pleaded the Statute of Limitations referred to at the beginning, and the Referee held appellant’s claim was barred thereby, because it had been more than a year since appellee had made aixy payment to appellant in money or for medical treatment. On October 10, 1956 the same finding was made by the full Commission, and this was affirmed by the Circuit Court on February 22, 1957.

We accept appellant’s statement that “the only issue before the Court is whether the limitations provided by § 18 apply to a claim for medical treatments, such as this claim”.

Since appellant was injured in 1943, Act 319 of 1939 is applicable here. Section 11 of this Act (§ 81-1311 Ark. Stats., parent volume), in so far as it is relevant, reads as follows:

“The employer shall promptly provide for an injured employee such medical, surgical or other attendance or treatment, nurse and hospital service, medicine, crutches, and apparatus as may be necessary during sixty (60) days after the injury or for such time in excess thereof as in the judgment of the Commission may he required. . .” (Emphasis supplied) <

Appellant relies, of course, on that portion of the statute which we have emphasized above. In considering appellant’s argument we will assume that the Commission would have required further medical treatment in this instance had not the Statute of Limitations been interposed by appellee. We readily agree with appellant that the above statute empowers the Commission to require payment of medical and hospital expenses indefinitely provided a claim therefor is filed within one year after the date of the last payment. This was the effect of our holding in the case of Downs v. Miller, 224 Ark. 35, 271 S. W. 2d 623.

For an affirmance of the judgment of the trial court, appellee relies on the limitation statute referred to before. The relevant portion of this statute (Ark. Stats. § 81-1318(a) parent volume) reads as follows:

“The right of compensation for disability under this act (81-1301 — 81-1349) shall be barred unless a claim therefor is filed within one (1) year after the time of injury, .... except that if payment of compensation has been made in any case on account of such injury ... a claim may be filed within one year after the date of last payment.”

Appellant’s claim for medical and hospital treatment was filed in February 1955 while the last payment made to appellant by appellee was in 1950 — a lapse of time greatly exceeding one year.

Appellant earnestly and ably insists that the words “compensation for disability” refer only to the money paid to a claimant on account of the original injury or disability and not to compensation for medical or hospital expenditures. We think, however, that this contention must be rejected because of the definition given to the word “compensation” by the (1939) Act itself. Section 2 of Act 319 of 1939 deals with definitions. Sub-section (i) of said section 2 reads as follows:

“ ‘Compensation’ means the money allowance payable to an employee or to his dependents as provided for in this Act, and includes funeral benefits and allowances for hospital and medical expenses, provided therein;” (emphasis supplied)

It seems to us that the above language is too plain to require or permit interpretation or amplification. For us to hold that the one year limitation for filing a claim did not apply to medical and hospital expenses would smack more of judicial legislation than of judicial interpretation.

We are wholly unable to agree with appellant’s assertion that the case of Downs v. Miller, supra, is in point here. A casual reading of the Downs opinion reveals that the question of limitations was not considered. The limitation statute with which we are concerned here is not even mentioned in the cited case. Nor do we find any isolated language in the Downs opinion which impels a conclusion other than the one we have reached here. We note that we are not here dealing with a claim based on a latent injury or a latent condition which was not recognizable within the statutory period. Appellant makes no such contention.

Appellee also requested us to affirm the judgment of the trial court on the ground that appellant had failed to properly abstract the record as required by rule 9 (d) of this court. We are refusing this request for the reasons set out hereafter. We recognize that the extent of the abstract depends on the nature of the question to he presented on appeal. If the question presented is one of fact obviously a more complete abstract would he indicated than if the question is one purely of law. We realize too that one question of law might require a more complete abstract than some other question of law. The object to be achieved is to abstract only so much of the record as will give the court a clear understanding of the question or questions presented. This objective was stated in Milum v. Clark, 225 Ark. 1040, 287 S. W. 2d 460, this way: “It is the purpose of the revised rule to encourage the submission of abstracts that are confined to these matters pertinent to the points involved on appeal”. The question presented on this appeal is one of law, easily stated and understood, and we think appellant’s abstract meets the objective mentioned above.

Affirmed.


text:
    Briggs v. Jacobs.
    5-1399; 5-1432
    309 S. W. 2d 201
    Opinion delivered January 27, 1958.

      Brown & Compton, for appellant.

      Spencer & Spencer, for appellee.
   Paul Ward, Associate Justice.

Prior to 1937 W. G. Lippmin and W. F. Lippmin (brothers) jointly owned a-3 acre parcel of land near the city of El Dorado. W. F. Lippmin died in January, 1937, leaving as bis only -heirs three minor children who are the appellees. In 1939 W. G. Lippmin, as the duly appointed guardian for the three minor children, secured a court order to sell their own-half interest in said parcel of land. The land was accordingly sold to W. G. Lippmin’s sister who, in less than two months, deeded the land to him — W. G. Lippmin, the guardian.

On May 5, 1942 W. G. Lippmin deeded the parcel of land to Harold Briggs, and on April 23, 1954 appel-lees (the three children) filed suit against Harold Briggs to quiet title in them to an undivided one-half interest, asking for an accounting of rents, and for a division of the land or a sale thereof. After getting a deed to the land in 1942, Briggs has ever since paid the taxes and operated a night club thereon.

A trial was had in March of 1955 and about a year later the Chancellor entered a decree in favor of ap-pellees on all issues, and ordered an accounting, which was later made by a master appointed for the purpose. No appeal was perfected by Briggs from the above decree.

On March 20, 1957 the trial court ordered the property sold and the proceeds divided, but this order was later rescinded when appellant objected that no commissioners had been appointed. On June 21, 1957 the commissioners theretofore appointed by the court reported that the land could not be divided in kind without great prejudice to the owners. This report was approved and the land ordered sold by the court over the objections of appellant.

Case No. 1432

Appellant has appealed from the refusal of the trial court to set aside the order last above mentioned. It is appellant’s contention that the commissioners report, wherein they found the land could not be divided in kind, was fatally defective because the report did not state the reasons for their conclusion. In support of this contention appellant relies on language found in McGee v. Russell, 49 Ark. 104 (at page 109), 4 S. W. 284. In this we do not agree with appellant. In the cited case over 2,000 acres of land were involved and this court said, in effect, there should have been some explanation to the court why the land could not be divided. It also appeared in the cited case that the trial court had twice ordered the land divided if possible to do so. In the case under consideration we are faced with an entirely different set of facts. Here-the land involved consisted of only 3 acres on which is located a house. These facts were made known to the court during the trial of the case and were sufficient, in the absence of proof to the contrary (and there is none in the record), to justify the court in ordering a sale. In fact the court would have been justified, ip. view of the above testimony given at the trial, in ordering a sale without appointing commissioners. See: Moore v. Willey, 77 Ark. 317, 91 S. W. 184, and Arnold v. Arnold, 193 Ark. 109, 97 S. W. 2d 634, wherein we held it was not necessary in all cases for the court to appoint commissioners to ascertain whether partition could be made without a sale. In Ingram v. Raiford, 174 Ark. 1127 (at page 1139), 298 S. W. 507, in this connection we quoted with approval from another one of our decisions as follows: ‘Chancery courts may order a sale of property, if necessary to effect an equitable division thereof among the owners, upon evidence other than, and wholly independent of, a report of commissioners’.”

We note also that the decision in the McGee case, supra, seems to rest on the case of Harden v. Cogswell, 5 Heiskell 549, cited therein. In reading the Harden case (from Tennessee) we find it was construing a statute of Tennessee which is very different from our own.

The order of the trial court in appeal case 1432 is affirmed.

Case No. 1399

During the progress of the litigation set forth above, and more than two years after the question of divesting appellant of his title had been finally submitted to the court, the wife of Harold Briggs, Jean Briggs, on April 5, 1957, filed an intervention on the ground that she had a dower interest in the said parcel of land and also an equal equitable interest with her husband, and asked . . . “that the decree of this court quieting and confirming title to one-half (%) interest in the above described property in the plaintiffs, and the decree of this court ordering a partition and sale of said property should he set aside and held for naught. . . ”

On motion of appellees, the trial court dismissed the intervention of Jean Briggs, and she prosecutes this appeal.

The trial court was correct in taking the action it did. The intervention of Harold Briggs’ wife was in effect a motion to set aside a decree of the Chancery Court which had become final for the reason that no appeal had been prosecuted. Before the trial court would have been justified in setting aside its former decree it would have been necessary for Jean Briggs to assert a meritorious defense. This she wholly failed to do, but was obligated to .do under Ark. Stats. § 29-509, and the decision in Nichols v. Arkansas Trust Company, 207 Ark. 174, 179 S. W. 2d 857, applying said statute.

Affirmed.


author: Sam RobiNsoN, Associate Justice.

text:
    Phillips v. Adams.
    5-1433
    309 S. W. 2d 205
    Opinion delivered January 27, 1958.

      Barrett, Wheatley, Smith & Deacon, for appellant.

      H. L. Methvin and Edward S. Maddox, for ap-pellee.
   Sam RobiNsoN, Associate Justice.

This action was filed by appellees seeking to restrain appellant from building a filling station on a town lot in Harrisburg, Arkansas, the contention being that the station would constitute a nuisance. The chancellor granted the petition, and Phillips, who wants to build the station, has appealed.

The Phillips property is Lot 5, Block 3, Vandi-ver Addition. The lot is in an area consisting of four square blocks which is all residential; no business establishment is located within the four blocks mentioned. State Highway No. 1 enters the town from the south and dead-ends at Jackson Street, which runs east and west. The lot in controversy is on the north side of Jackson Street and slightly to the east of the center of the intersection. It is not located on a corner, but is an inside lot. There is a filling station on the southwest corner of Highway No. 1 and Jackson, and there are other places of business within a few hundred feet to the south and to the east of the Phillips lot.

The chancellor made a clear finding of facts. We quote:

“There is no way that this court can absolutely prevent some hardship from falling upon somebody involved in this litigation. Certainly, there can be no donbt that the people who have come here as petitioners who own property in the area involved are going to he subjected to some inconvenience and annoyance and other types of damage if this service station is completed and operated. On the other hand there certainly can be no donbt that Mr. Joe Phillips owns some property ont there which is his to nse generally as he pleases. Normally we start from the assumption that he has the right to use his property for any lawful business that he might wish to undertake so long as he does not encroach upon the lawful rights of other people who live around him.
“In trying to resolve that problem it seems to us we have to answer about two or three questions. First, is the specific area in which the new station is proposed to be operated an exclusive residential area? We find this is an easy question to answer. It is undisputed that in the area north of Jackson Street and west of Cole Street there has never been any commercial or business building or enterprise of any nature or kind since about 1920. We find, therefore, that the proposed station would be in what has heretofore for thirty years been an exclusively residential area.
“The second question is considerably more troublesome. Will this service station, if put into this residential area, necessarily be a nuisance which will damage the people who live in that area? It may be that different people operate service stations in a different manner. We believe this court will be confined in deciding this case very largely to the testimony of the people who are building this station and who told us what they intend to have and how they intend to operate. Mr. Matthews, representing the oil company which is financing this project and will supervise its operation, says that they plan to use all of the lights of whatever kind they may find necessary and desirable to attract trade. It is a matter of common knowledge that lights which are normally used in the operation of a service station vary from those lights which are low in the building and on the pumps, to those that stand very high on poles around the edge of the area where the station is operated. Those lights, in the opinion of this court, cannot be confined to the area occupied by the service station, bnt of necessity will reflect particularly over the living area of Mr. and Mrs. David Adams, and those lights in some degree will constitute a nuisance which will render the livability of the Adams ’ home less desirable than it would be without those lights. Mr. Matthews testified that it would be the aim and purpose of his company to bring into that station as many motor vehicles that use petroleum products as they could possibly get. In the nature of things that would include the largest Diesel-powered trucks that they could get to stop. Mr. Matthews also testified that the greatest noise created by such a motor occurs when it moves from a dead stop. Therefore, those trucks would certainly create a vast outburst of noise after they pulled into the station and stopped and they got ready to move on. If they are of the size and type of many Diesel trucks moving upon our highways they will create such a noise and vibration that the home of Mr. and Mrs. David Adams might well nigh be untenable for some periods of time. This court will take judicial knowledge of the fact that a service station cannot be operated without fumes (from the gasoline and oils and other volatile substances that are used about it) being given off and permeating the atmosphere. Those fumes that are released, although the service station is operated in the most careful and prudent manner, become of such a nature as to make homes abutting upon or adjacent to the property occupied by a filling station far less desirable and valuable. Therefore, this court finds that the operation of this service station in the most desirable manner possible would create constantly recurring and irreparable damages to Mr. and Mrs. David Adams and to other people in the area.
“There is one other problem involved in this case. That is the equitable problem of Mr. Phillips and the people who are dealing with him possibly having to lose the money that they have already invested out there. The question must be answered as to who is mostly at fault that this business has been allowed to progress as far as it has without somebody making an objection. Certainly it was the duty of these people who are objecting to make their objections known and file their suit at the earliest practicable moment. It was also the duty of Mr. Phillips, and of the officials of the G-ulf Befin-ing Company or the Gulf Oil Company, to exercise ordinary and reasonable diligence in trying to determine whether somebody might claim any damage or whether they might actually face this type of lawsuit. The evidence shows that the defendants exercised diligence to the point of consulting the City Attorney of Harrisburg, but they utterly failed and neglected to question one single, solitary property owner in the specific area involved to see whether some objection would be made and whether a suit of this kind might be forthcoming. The court finds it noteworthy that while the written documents between Mr. Phillips and the oil company were executed in November of 1956, they were not placed upon the public records, where the people in Harrisburg would knoiv of their existence, until after this lawsuit was filed. We find, therefore, that Mr. Phillips and the people who are working with him did not exercise the diligence that would be expected of business men experienced in the ways of construction and necessity for clearing the rights to construct business enterprise in a residential section. The investment already made could, and should, have been delayed by defendants until their legal right to proceed had been determined.”

It is pretty well established that a filling station is not a nuisance per se. Whether a particular station, when put in operation, will be so situated as to constitute a nuisance is a question of fact. In Huddleston v. Burnett, 172 Ark. 216, 287 S. W. 1013, the chancellor made a finding that the proposed station would be a nuisance, and enjoined its construction. The decree was affirmed on appeal. In Fort Smith v. Norris, 178 Ark. 399, 10 S. W. 2d 861, the chancellor’s decree holding that a service station would not constitute a nuisance was affirmed by this Court. Likewise, in Clark v. Hunt, 192 Ark. 865, 95 S. W. 2d 558, the chancellor’s decree holding that a service station would not constitute a nuisance was affirmed. The rule that the chancellor will be reversed on a finding of fact only when such finding is contrary to a preponderance of the evidence is so well known that citation of authority would be superfluous. Ark. Digest, “Appeal and Error”, § 1009(4).

Here we cannot say the finding of the chancellor is not supported by a preponderance of the evidence. In arriving at the conclusion that the service station would constitute a nuisance, the chancellor considered largely the testimony of appellant’s witness, Mr. Matthews, and from his testimony it appears that the service station would be a nuisance to the surrounding property owners.

Appellant also contends that it would be equitable to require appellees to reimburse appellant for money spent on the construction of the station up to the time the injunction was issued. But, as pointed out by the chancellor, equity is not on the side of the appellant in that respect.

Affirmed.


author: CarletoN Harris, Chief Justice.

text:
    Bergmen v. Maberry.
    5-1447
    309 S. W. 2d 305
    Opinion delivered February 3, 1958.

      J. B. Milham, for appellant.

      Festus 0. Butt, for appellee.
   CarletoN Harris, Chief Justice.

Appellant, Rena Bergmen, filed suit against appellee alleging that she went to appellee’s office, accompanied by her husband, for the purpose of obtaining a check which had been issued to Mrs. Bergmen’s husband, and which she alleged was being held by Mr. Maberry. It was alleged that Ma-berry, after knocking Mr. Bergmen off the porch, then struck and knocked appellant off the porch into the yard where she fell on rocks and concrete and sustained various injuries. The complaint sought $10,000 actual damages, and $15,000 punitive damages. On trial, the jury returned a verdict for appellee, and from the judgment comes this appeal.

For reversal, it is first contended that the court erred in not sustaining appellant’s demurrer to the second paragraph of Maberry’s answer. The answer consisted of two parts, first, a general denial, and second, “that if in fact the plaintiff was in anywise injured or incommoded at the time and place mentioned in complaint, that same was due solely and wholly to her own negligence.” We do not agree with appellant’s contention. While Mrs. Bergmen’s negligence would not constitute a defense to an assault and battery action, we consider the allegation in the instant case to be mere surplusage, adding nothing to paragraph one, which paragraph denied the material allegations of the complaint. We do not take the view that such paragraph set up a defense of contributory negligence, nor was any such theory adopted by the court in instructing the jury.

The testimony is not included as a part of the record, hut judging from the instructions offered, the defense advanced by appellee during the trial was that he acted in self defense; appellant complains that the court erred in instructing the jury relative to self defense for the reason that same was not pleaded by appellee. Self defense is a bona ficle defense to a civil action for assault and battery, Downey v. Duff, 106 Ark. 4, 152 S. W. 1010. We are not in a position to pass upon appellant’s contention for the reason that the record before ns does not reflect whether the testimony offered by appellee relating to self defense was objected to at the time by appellant, or whether a motion was made by appellee to treat the pleadings as amended to conform to the proof. In addition, appellant did not designate the points upon which he relied for reversal as required by Act 555 of 1953; appellee, accordingly, had no occasion or opportunity to bring into the record the rulings of the trial court relating to such defense.

Appellant complains that the court erred in giving various instructions (five in number), and in modifying one offered by appellant. As previously pointed out, the testimony is not included in the bill of exceptions. In Tonne, Administratrix v. Kollmeyer, 222 Ark. 23, 257 S. W. 2d 270, this Court said: “* * * If an instruction would be a correct declaration of law upon any state of facts, we must, in the absence of the testimony, presume that proof was offered that made the instruction proper * * We have carefully examined each instruction and, applying the above holding, are unable to say that the court committed reversible error in giving same.

The judgment is affirmed.

      Seetion 11. Statement of Points. No motion for a new trial and no assignment of errors shall be necessary. If the appellant does not designate for inclusion the complete record and all the proceedings and evidence in the action, he shall serve with his designation a concise statement of the points on which he intends to rely on the appeal.

       To the same effect is the holding in Fisher v. Ark. P. & L. Co., 202 Ark. 433, 150 S. W. 2d 959.


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

text:
    Union Life Ins. Co. v. Brewer.
    5-1448
    309 S. W. 2d 740
    Opinion delivered February 3, 1958.
    [Rehearing denied March 3, 1958]

      E. M. Arnold, for appellant; M. J. Harrison, of counsel for appellant.

      Martin L. Green and Edward E. Bedwell, for ap-pellee.
   J. Seaborn Holt, Associate Justice.

This is an action to recover $1,500, statutory penalty, costs, and attorney’s fee, on an accident policy on the life of Yirl Brewer, who was accidentally killed about 1 a. m. on November 19, 1956. Appellant, insurance company, denied any liability on the policy in question on the ground that the policy had lapsed and forfeited for failure to pay the premium when due. By agreement the case was submitted to the trial court on stipulated facts. From a judgment in favor of appellee, beneficiary of the policy in question, comes this appeal.

Appellee sought recovery on two grounds: (1) that at the time of the alleged forfeiture, appellant had in its hands the proceeds of the cash surrender value of a small life policy of the insured in the amount of $18.72, which it should have applied on premium due to prevent forfeiture, and also (2) that appellant by its acts and conduct had waived prompt payment of premiums due, and was estopped to claim a forfeiture. The trial court based its judgment for appellee on appellee’s first ground above. We have concluded, however, that the judgment cannot he supported on that ground, but that there was substantial evidence to warrant a judgment for appellee on the second ground, — and that is, — that appellant had entered into an agreement with appellee sometime around November 14, 15 and 16 to accept the premiums on November 19; that it did accept payment from appellee on that date; and by so doing had waived prompt payment of premiums due in October, thus preventing a forfeiture. “Though error appears upon the record, yet if the judgment of the Court below is correct upon the whole record, it will he affirmed,” Headnote Payne v. Bruton, 10 Ark. 53. “Where the verdict and judgment, upon the whole record, are right, the judgment will be affirmed though the Court may have erred upon some question of law,” Headnote, Sweeptzer v. Gaines et al., 19 Ark. 96. “A judgment may he correct, although based on mistaken reasons,” Williams, Adm., v. Lauderdale, 209 Ark. 418, 191 S. W. 2d 455.

Pertinent facts recited in the stipulation were: “. . . that if said policy was in force on November 19, 1956, the amount due the plaintiff thereunder as beneficiary would be $1,500. (3) That the policies issued to Virl Brewer provided for payment of premiums weekly, and under the terms of the policy, said policy had a four weeks’ grace period, so that failure to pay any weekly premium for a period of more than four weeks would cause the policy to lapse. The weekly premiums due October 15, October 22, October 29 and November 5 were not received or paid on those dates, but were collected by the agent at the plaintiff ’s next door neighbor on Monday, November 19. The end of the grace period for the payment of the premium due October 15, 1956, was November 12, 1956. (4) That Virl Brewer died in the State of Oklahoma as a result of an automobile accident at about 1:30 a. m., Monday, November 19, 1956 . . . (6) That the defendant company as a matter of practice does not require a written application for reinstatement to be signed by a policy holder on policies that have been lapsed less than thirty days but permits its agents to collect premiums on policies lapsed within thirty days and send them to the home office with his report on the then physical condition of the policy holder and for its consideration and its acceptance or rejection of such oral application for reinstatement. It is stipulated that defendant’s agent did not take a written application for reinstatement of any policy held by Virl Brewer when plaintiff saw the agent on or about November 14th, 15th or 16th at which time it was agreed that the premiums unpaid would be left with her next door neighbor on Monday, November 19th. It is further stipulated that on Monday, November 19th the agent went to the home of the next door neighbor of plaintiff and then and there received from said neighbor an amount in cash sufficient to pay all premiums and entered the record of such collection in the premium receipt book normally used for that purpose; and that before the end of that day said agent learned that Virl Brewer had died early that morning at 1:30 a. m. and immediately returned to the house where he had made the collection and marked the premium entry he had made that day ‘void’ and gave the person a temporary receipt for said amount. (7) That under date of November 27th the defendant from its home office in Little Rock forwarded by registered mail its check to plaintiff covering the premiums collected by its agent on November 19; that said registered letter was received by plaintiff on December 3rd and on December 5, 1956, said check was returned to defendant by plaintiff’s counsel . . . (10) That neither the plaintiff nor defendant knew that Virl Brewer was dead when the premium was left with plaintiff’s neighbor and picked up by defendant’s agent on November 19, 1956; . . . (11) That from and since the year 1950, when the insured first bought a policy from the defendant, the defendant’s agent in Port Smith came to the home, or nearby residence, to collect premiums; that the insured did not pay any premiums direct to the home office or at the branch office. ’ ’

The admitted and undisputed facts showed that appellant collected the premiums weekly at the home of appellee or at the home of a nearby neighbor; that the premium payments were never made at any time at the home office or the branch office of appellant; that for several months prior to the death of insured collection of premiums were irregular (as shown by the receipt book in evidence); that appellant and appellee had agreed that the premiums in amount of $2.10 were to be paid in full on Monday, November 19, at the home of a neighbor of appellee; that they were so collected and a receipt given in accordance with this agreement. On these basic facts we hold that there was some substantial evidence that appellant by the above agreement entered into with appellee had waived the right to claim a forfeiture and lapse of policy in question.

Our well established general rule, as announced in many of our cases, is as follows: “Forfeitures are not favored in law, and courts are always prompt to seize hold of any circumstances that indicate an election to waive a forfeiture, or an agreement to do so, on which the party has relied and acted. Any agreement, declaration, or course of action on the part of an insur-anee company which leads a party insured honestly to believe that, by conformity thereto, a forfeiture of his policy will not he incurred, followed by due conformity on his part, will estop, and ought to estop, the company from insisting on a forfeiture, though it might be claimed under the express letter of the contract . . , as is said in 14 R. C. L. 1181 Sec. 357, ‘waiver of a forfeiture, though in the nature of an estoppel, may be created by acts, conduct, or declarations insufficient to create a technical estoppel, and the courts, not favoring forfeitures, are inclined to grasp any circumstances which indicate an election to waive a forfeiture.’ American Life Assn. v. Vaden, 164 Ark. 75, at page 88, and cases there cited.” American Ins. Union v. Benson, 172 Ark. 1043, 219 S. W. 1007.

‘ ‘ If an insured has been lead to believe by a course of dealing that premiums will be accepted after they are due, it has been held that payments may be made after such time, although the insured is then dead . . . Nor can a policy be forfeited because the premiums were past due at the insured’s death, where it is reasonable to suppose that such premiums would have been accepted had the insured lived . . . , (Section 8562) And it has been frequently stated that such a waiver may be manifested by conduct as well as by words, or by oral, as well as written, statements. (Sec. 8403) . . . Policy conditions as to forfeiture for the nonpayment of premiums or premium notes are regarded as being for the benefit of the insurer, and hence may be waived by it . . . (Sec. 8401),” Volume 15, Appleman on Insurance.

“Forfeitures are so odious in law that they will be enforced only where there is the clearest evidence that such was the intention of' the parties. If the practice of the company and its course of dealings with the insured and others known to the insured have been such as to induce a belief that so much of the contract as provides for a forfeiture in a certain event will not be insisted on, the company will not be allowed to set up such forfeiture as against one in whom their conduct has induced such belief.” Sov. Camp WOW v. Newsom, 142 Ark. 132, 219 S. W. 759, 14 A. L. R. 903.

Appellant also contends that the trial court erred in allowing an attorney’s fee without first having heard evidence tending to establish the proper amount. See Union Central Life Ins. Co. v. Mendenhall, 183 Ark. 25, 34 S. W. 2d 1078. A search of the record (not abstracted by appellant) discloses that the judgment of the trial court contains this recital: “. . . the face amount of the policy was in the sum of $1,500, and the plaintiff herein is entitled to said sum, plus 12 per cent penalty, plus reasonable attorney’s fees. It is therefore, ordered and decreed, that the plaintiff do have and recover against the defendant the sum of $1,500, the sum of $180.00 being a 12 per cent penalty, for an attorney’s fee in the sum of $250.00, and for her costs, . . .” In this connection, appellee says, “it is admitted that no proof was taken as to the amount (of attorney’s fee) and it is admitted that there was no hearing concerning the amount of a reasonable fee, but since the issue is not properly before the court, then the objection should be dismissed,” and appellant says: “The opinion and order of the court reflects the trial court’s views which resulted in judgment for appellee in the sum of $1,500 together with penalty and an attorney’s fee.” Appellant has not abstracted the judgment of the trial court in which an attorney’s fee was set by the court as fair and reasonable, and absent any showings, on appellant’s part, that the fee was not a reasonable one, we think appellant may not now complain.

The judgment is affirmed.

Mr. Justice George Bose Smith dissents.

George Rose Smith, J.,

dissenting. The policy sued upon lapsed, at the expiration of the grace period, on November 12. There is no proof that the policy had ever been allowed to lapse before; so of course there is no proof of a custom on the part of the insurer to accept the payment of premiums after the expiration of the grace period. By the terms of the contract, however, the insured was entitled to have the policy reinstated, upon the payment of the past-due premiums and the submission of evidence of good health.

Brewer died soon after midnight on the morning of November 19. That afternoon Mrs. Brewer, without knowledge of her husband’s death, left the amount of the overdue premiums at her neighbor’s house. The insurer’s agent, also without knowledge of Brewer’s death, went by and picked up the money. When the agent, still later in the day, learned of Brewer’s death he returned to the neighbor’s house, canceled the receipt in the premium book, and left a temporary receipt with the neighbor. Eight days later the insurer forwarded its check for the amount of the premiums collected on November 19. This tender was refused by Mrs. Brewer.

On these facts alone it could not be seriously contended that the agent’s acceptance of the premiums effected a reinstatement of the policy. As far as I know, the authorities are uniform in holding that the insurer is not bound by its acceptance of premiums, upon a lapsed policy, without knowledge of the insured’s earlier death. Appleman on Insurance, § 2058; Sovereign Camp, W.O.W., v. Cox, 221 Ala. 58, 127 So. 847; Dillon v. National Council, 244 Ill. 202, 91 N. E. 417; Boll v. Catholic Knights, 220 Wis. 312, 265 N. W. 70. At most the insurer is required, in this situation, to return the premiums without unreasonable delay, but that requirement was met in this case.

The majority impose liability on the ground that Mrs. Brewer and the insurer’s agent, two or three days before November 19, agreed that she would leave the premiums with her neighbor on that day. What happened, according to the stipulated facts, was that Mrs. Brewer visited the agent’s office to obtain a check for the cash value of a different policy which Brewer had elected to surrender. On that visit, the stipulation states, “it was agreed by and between plaintiff and Durham [the agent] that plaintiff would get the check endorsed by Virl Brewer and would leave certain premiums on [the policy in question] at the home of her next door neighbor on Monday, November 19. ’ ’

To say that ‘ ‘ it was agreed ’ ’ does not, in my opinion, satisfy the plaintiff’s burden of proving a binding contract. It is not suggested that there was any consideration for this agreement. Had Brewer lived and had Mrs. Brewer changed her mind about reinstating the policy, surely no one supposes that the insurer could have enforced this asserted agreement. Furthermore, the agreement certainly contemplated, as an implied condition, that Brewer would be alive on November 19. This is necessarily so, for there is no suggestion that the collecting agent had the authority to waive the requirement that the insured be in good health at the time of reinstatement. For these reasons I am unable to say that the supposed agreement entitles the plaintiff to recover.


author: Ed. P. McFaddin, Associate Justice.

text:
    Plant v. Cameron Feed Mills.
    5-1435
    309 S. W. 2d 312
    Opinion delivered February 3, 1958.

      Alfred Featherston, for appellant.

      Townsend & Townsend, George E. Steel and Wright, Harrison, Lindsey .& Upton, for appellee.
   Ed. P. McFaddin, Associate Justice.

This is a suit by appellant to enforce his lien under § 51-601 et seq. Ark. Stats, on a building on leased land (§ 51-606 Ark. Stats.) in the City of Nashville, Howard County, Arkansas.

Appellant, Robert Dale Plant, is an individual who claims that under contract he performed labor on, and furnished materials used in, the building involved. Ap-pellee, Cameron Peed Mills, Inc. (hereinafter called “Cameron”), is an Arkansas corporation, in existence long prior to January 1, 1956, and domiciled in Pulaski County, Arkansas. Appellee, Peterson, Garbi & Joseph, Inc. (hereinafter called “Peterson”), is an Arkansas corporation, domiciled in Pulaski County, Arkansas, engaged in the general contracting business, and actually constructed the building here involved. Appellee, Nashville Peed Mills, Inc. (hereinafter called “Nashville”), is an Arkansas corporation organized after January 2, 1956.

A recital as to dates is necessary. On January 1, 1956 Mr. White, acting for Peterson, employed appellant to perform labor on, and furnish materials used in the construction of, a building in Nashville, Howard County, Arkansas. Mr. White told appellant — at the time of original employment — that the building was the Cameron Peed Mills building. Acting under the contract, appellant performed services and furnished materials from January 1, 1956 to May 16, 1956. His account remained unpaid in the claimed balance of $1,167.50 as of June 1, 1956; and on that day appellant and his attorney addressed letters to Cameron and Peterson, informing each corporation as to appellant’s claim.

On June 4, 1956 the President of Cameron Feed Mills, Inc. wrote the attorney for Mr. Plant as follows:

“We are in receipt of a letter sent to Cameron Feed Mills by you . . . The general contractors for our building now under construction at Nashville, to whom a copy of this letter is being sent, tell us that Mr. Plant’s hills have been paid on time as presented, and are unable to explain the item of $1,167.50 which you claim. Therefore, please furnish us and Peterson, Garbi, & Joseph an itemized statement of the labor and materials to which you refer. We have checked your bills to them and find there are some 10 or 12 items that have been paid in the last month or so. Please let us have your reply by return mail.”

Cameron sent a copy of the above letter to Peterson; and that corporation on June 4th wrote appellant’s attorney a letter asking for an itemization of the $1,167.50. On June 7, 1956, $190.00 was paid on appellant’s account, leaving a balance of $977.50. On June 18, 1956 appellant filed with the Circuit Clerk of Howard County a notice of lien, which described the property, briefly stated the amount of labor and materials, and showed the balance to be $977.50.

On June 30, 1956 (well within 90 days from the last item furnished) appellant filed suit in the Howard Chancery Court against Cameron and Peterson, praying, inter alia, for judgment for $977.50 and a foreclosure of appellant’s lien on the building. Service on each of the defendant corporations was duly obtained on the agent or proper officer in Pulaski County.

On August 23, 1956 Cameron filed its “Motion to Quash Service and Dismiss,” claiming: (a) that it owned no property in Howard County; (b) that it did not contract with Peterson to build a building in Howard County; (c) that it did not have a building constructed in Howard County; and (d) that because of these matters it can be sued only in Pulaski County. Likewise, Peterson filed its motion, claiming: (a) that Peterson was domiciled in Pulaski County and entitled to be sued in that County; (b) that Cameron did not employ Peterson to construct the building in question; (c) that the building was not built for Cameron; and (d) that the plaintiff has not given statutory notice in the statutory manner to the owner of the property upon which he claims a materialmen’s lien, and that he is not entitled to a lien on said property.

On September 10,1956 appellant filed an amendment to his complaint stating that Nashville Peed Mills, Inc. was an Arkansas corporation, organized by the shareholders of Cameron, was the same as Cameron, and had the same officers and agent for service of process as Cameron; that the two corporations are identical; and that Nashville Peed Mills, Inc. should be added as a defendant. On October 1, 1956 Nashville filed its “Motion to Dismiss and Quash,” claiming, inter alia:

“That plaintiff has not given statutory notice in the statutory manner to this defendant, Nashville Peed Mills, upon whose property this plaintiff claims a lien and that, therefore, plaintiff is not entitled to a lien against the property owned by this defendant.
“That the action brought by this plaintiff against the defendant, Nashville Peed Mills, was not instituted within the statutory time provided for by law, in that the claim against this defendant was not filed until after more than ninety (90) days had elapsed since the last work was claimed to have been performed. ’ ’

The chancery hearing from which comes this appeal was on the motions of the three defendants; and the merits of the furnishing of labor and materials by the plaintiff were postponed nntil the final determination of the present appeal. The Chancery Court sustained the motions of Cameron and Peterson and dismissed them from the suit. As to Nashville Peed Mills, Inc., the Chancery Court held that the appellant had no lien. Prom such decree appellant brings this appeal.

I. The Case Against Cameron And Peterson. All the facts heretofore recited were shown in the evidence. Appellant filed a suit on June 30th, which was well within the ninety days from the furnishing of the last items of labor and material, so, even if there had been no compliance with § 51-613 Ark. Stats., such failure would have been no defense. Simpson v. J. W. Black Lbr. Co., 114 Ark. 464, 172 S. W. 883; Pfeiffer Store Co. v. Brogdon, 125 Ark. 426, 188 S. W. 1187; and Robins v. East Ark. Builders’ Supply Co., 199 Ark. 1174, 137 S. W. 2d 924.

We hold that, under the facts developed in this case, Cameron and Peterson are estopped from claiming that Cameron was not the owner of the building, and that.it was not constructed by Peterson. Mr. White, acting for Peterson, told appellant that the building was being built for Cameron, and appellant acted on that representation. The President of Cameron wrote appellant’s attorney: “The general contractors for our building now under construction in Nashville . . . tell us that Mr. Plant’s bills have been paid . . .” It is clear that both Cameron and Peterson have admitted that the building was being constructed for Cameron; and nothing was said to the contrary by anyone until after this suit had been filed. The Trial Court was in error in sustaining the motions of Cameron and Peterson.

II. The Case Against Nashville. After the building was commenced by Cameron, that corporation organized the Nashville Feed Mills, Inc. as a subsidiary or allied corporation to operate the local business of Cameron in Nashville, Arkansas. When such operation began, the stationery and supplies of Cameron were used by Nashville, which could not have made the original contract with Peterson on or before January. 1, 1956 (when Peterson first employed appellant) since Nashville was not in existence until after January 1, 1956. For purposes of this suit it was established that Nashville is identical with Cameron. Though the corporations are legally separate entities, it would constitute a constructive fraud in this case to allow Nashville to now claim an entirely separate existence from Cameron. To prevent such result, equity pierces the fiction of the corporate entity. Rounds & Porter Lumber Co. v. Burns, 216 Ark. 288, 225 S. W. 2d 1. In 13 Am. Jur. 162, “Corporations, ”§ 8, the holdings are summarized: “ A subsidiary or auxiliary corporation which is created by a parent corporation merely as an agency for the latter may sometimes be regarded as identical with the parent corporation, especially if the stockholders or officers of the two corporations are substantially the same or their systems of operation unified.” While this rule of piercing the fiction of the corporate entity is to be applied with great caution (Atkinson v. Reid, 185 Ark. 301, 47 S. W. 2d 571; and Mannon v. R. A. Young & Sons Coal Co., 207 Ark. 98, 179 S. W. 2d 457), nevertheless we conclude that justice requires that such rule should be ajiplied in the case at bar.

The decree is reversed and the cause is remanded for further proceedings not inconsistent with this opinion.

George Rose Smith, J., dissents as to liability of Nashville Feed Mills Inc.

      The letter to Cameron read: “You and all of you will take notice that the undersigned has a claim against all of Block 113 Newton, Nashville and the building now under construction thereon for $1,-167.50 for labor done and performed and materials furnished in the construction of said building which is located on said property all of which was done and furnished within the past sixty days. The last item being furnished on May 16, 1956. You will take notice that on or after the 12th day of June, 1956 the undersigned will file with the Clerk of the Howard Circuit Court the account required by Sec. 51-601 through 51-627 of Arkansas Statutes 1947 of the State of Arkansas.”

       In the complaint there was also a claim for personal judgment for an additional item of $3,000.00 against Peterson for damages for breach of contract. This damage claim, of course, had no place in the lien claim matter here adjudicated and is in no wise covered by the present opinion.

       Its articles of incorporation were dated January 3, 1956 and were filed with the Secretary of State on January 13, 1956.