author:
Frank Holt, Justice.
      George Howard, Jr., Justice,

text:
    THE RELIABLE LIFE INSURANCE COMPANY v. Evelyn B. HARVEY
    77-257
    562 S.W. 2d 601
    Opinion delivered March 20, 1978
    (In Banc)

      Atchley, Russell, Waldrop & Hlavinka, by: Michael Stevens, . for appellant.

      Williams & Kemp, by: Dennis K. Williams and Karlton Kemp, Jr., for appellee.
   Frank Holt, Justice.

This case was submitted to the court on stipulated facts and motions by each of the parties for summary judgment. Appellee is the named beneficiary in a life insurance policy, the premium being payable annually, semi-annually, quarterly or monthly. The insured, appellee’s deceased husband, paid the premiums annually. Upon his death appellant paid the face amount of the policy and refused to refund pro rata the last annual premium. This action resulted. The trial court granted appellee’s motion for summary judgment and awarded her approximately $240 or two-thirds of the last annual premium paid. Appellant contends the court erred because a premium paid on a life insurance policy is non-apportionable and non-refundable, in the absence of a contractual agreement or statutory authority, once the risk attaches even though the insured dies within the period covered by the premium. We agree.

This appears to be a case of first impression in our state. Here the policy provided that initially it became effective upon payment of the first premium and delivery of the policy to the insured. The policy had been renewed annually for several years. The inception of appellant’s liability or the date its risk attached was the date the premium was paid. The general and well settled rule is that “in the absence of statutory or contract provision to the contrary, if a legal risk has once attached or commenced, there can be no apportionment or return afterward of the premium, so far as that particular risk is concerned.” Couch on Insurance 2d § 34:9; accord, 43 Am. Jur. 2d Insurance § 629; see also Tyrie v. Fletcher, 2 Cowp. 666, 98 English Reprint 1297 (1777); North New York Sav. Bank v. Federal S. & L. Ins. Corp., 515 F. 2d 1355 (D.C. Cir. 1975); and Crouch v. Southern Surety Co., 131 Tenn. 260, 174 S.W. 1116 (1916). In Couch, supra, it was also said:

This rule is based upon just and equitable principles, for the insurer has, by taking upon himself the peril, become entitled to the premium, and although the rule may result in profit to the insurer, it is but a just compensation for the dangers or perils assumed.

Further, here there was a savings to a policy holder by payment of the premium annually instead of monthly, quarterly or semi-annually. Also there was no applicable contractual provision involved as in Krouner v. Companion Life Ins., 50 Misc. 2d 894, 271 N.Y.S. 2d 835 (1966) cited by appellee. Therefore, there being no statutory or contractual provision contrary to this general rule of law, the trial court erred in granting appellee’s motion for summary judgment. We need not discuss the appellant’s other contention for reversal.

Reversed and remanded for proceedings not inconsistent with this opinion.

Harris, C.J., and Howard, J., dissent.

George Howard, Jr., Justice,

dissenting. I am compelled to dissent from the holding of the majority which reverses and remands this case to the trial court on the premise that “The general and well settled rule is ‘that in the absence of statutory or contract provision to the contrary, if a legal risk has attached or commenced, there can be no apportionment or return afterward of the premium, so far as that particular risk is concerned’.” A very close scrutiny of the insurance policy involved in this action clearly does not sustain the majority’s view and conclusion and consequently, the trial court should be affirmed.

Relevant parts of the insurance policy issued to the decedent by appellant, The Reliable Life Insurance Comaany, provides as follows:

“Premium. This Policy is issued in consideration . . . of the premium, payable as hereinabove stated, .... This Policy shall be placed in force upon payment of the first premium and the delivery of this Policy during the lifetime and good health of the Insured and shall be continued by a like payment at the premium intervals, specified above as determined from the Policy Date, in each year during the continuation of the Policy. Premiums shall be paid in advance at the Home Office or to an authorized agent of the Company. The payment of any premium shall not maintain the Policy in force beyond the date when the next payment becomes due, and if any premium be not paid when due, this Policy shall be void and all premiums forfeited to the Company, except as hereinafter provided. (Emphasis added)
“Grace in Payment of Premiums. In the payment of any premium under this Policy, except the first, a grace period of thirty-one days without interest will be allowed, during which time the Policy will remain in force, but if the Policy shall become a claim by death within the grace period the current premium then unpaid shall be deducted from the amount of insurance payable.” (Emphasis added)

In Krouner v. Companion Life Insurance Company, 271 N.Y.S. 2d 835, the identical issue was involved as is involved in the instant case, but the conclusion in the case sustains the position of the trial court and consequently, is contra to the position taken by the majority in the instant case.

The Court in Krouner in rejecting the same argument advanced by appellant in this case, which the majority has accepted, stated that such argument and, consequently, the position of the majority in this case, cannot be countenanced in view of the language contained in the policy relating to the payment of premiums which was similar to the provisions quoted above. In this regard, the Court, in Krouner, specified:

“. . . This language flies in the face of the argument of defendant that once a premium payment is made, the company is entitled to retain it, whether the insured dies on the day following the period of payment or on the last day of the period for which the premium payment keeps the policy in force. By this language the defendant itself is construing the policy to mean that upon the death of the insured, there should be a monthly probation of the last premium payment. To be consistent with the construction placed on the language of this policy by the defendant on this motion, the policy should have provided that in the event of death during the grace period, the company would deduct the first semiannual premium payment from the benefits payable under the policy. The provision for the deducting of only one-sixth of the premium where death occurs during the grace period is the only evidence of the actual construction of the policy by the defendant. A construction which would permit the retention of the full semiannual premium even though death occurred during the first month after the premium was paid would certainly be inconsistent with the language of the policy as stated herein. Since no specific provision was made in the policy permitting the retention of such premiums, and in the light of the grace period provision, this court feels compelled to grant the motion of plaintiff.
“It is difficult for this court to condone the practice on the part of the defendant in the drawing of this life insurance contract, and in providing for a division of a premium payment into monthly parts, to the end that said company would be protected from any monetary loss, and yet leave the interests of the assured unprotected to the extent of that portion of the premium to which defendant makes no claim in said policy.
“It is the court’s belief that justice, equity and good judgment dictate that plaintiff should not be deprived of the unearned portion of the premium paid on this policy by plaintiff’s intestate, on the 6th day of July, 1965.”

Although the author of this dissenting opinion has not been able to find a case directly in point, the obiter dieta contained in the case of Smith v. John Hancock Mutual Life Insurance Comiany, 195 Ark. 704 (1938), gives sanction to the reasoning of the court in Krouner that requires a refund of premium. In this regard, only that portion of the dicta that relates to the issue involved in quoted:

“The value contended for did exist as of November 11, and at that time a failure to pay the premium, or failure to pay the note and interest, or both, could not void the policy. But the premium payment of August 11 extended the policy not to November 11, but, conditionally, to November 11 plus 31 days. It is true that if the assured had died within the grace period the company had the right to deduct from any amount due him that proportion of the premium earned between November 11 and the date of death, but during the period of grace the policy could not be cancelled or converted because of failure to pay the premium on or before November ll.” (Emphasis added)

The above provision from Smith v. John Hancock Mutual Life Insurance Company, supra, is cited for the purpose only to show that we have said that if an insured’s death should occur while the insured is in default in the payment of a premium and death occurs during the period of grace, the insurer is permitted to deduct from the proceeds only that portion of the premium earned from the due date of the premium to the date of death. We made that observation even though the decedent’s premium was payable annually. John Hancock Mutual Life Insurance Company was not entitled to recover any premium beyond the date of death. Smith, therefore, is in harmony with Krouner v. Companion Life Insurance Company, supra.

In essence, the appellant itself, by the language contained in the grace period provision, construes the policy to mean that upon the death of an insured during the grace period, but in default in the payment of a premium, the appellant is entitled to claim the unpaid premium on a monthly proration even though the decedent is legally covered and Reliable is legally obligated to pay. Reliable Life Insurance Company, the appellant, has a built-in security to protect itself from any monetary loss. While on the other hand, the insured is afforded no protection or recourse for recovery where a premium is prepaid, as in the instant case, and death results leaving approximately two-thirds of the premium unearned by the insurer. In the absence of a provision in the policy permitting the insurer to retain such premium, and in light of the grace period provision contained in the policy, the unearned premium should be returned to the beneficiary or the estate of the decedent. Not only is this position dictated by good judgment, equity and justice, it is supported by our language quoted above from the case of Smith v. John Hancock Life Insurance Company, supra. Such a posture is indeed in line with Krouner v. Companion Life Insurance Company, supra, and requires the affirmance of the holding of the trial court granting the unearned premium to the widow of the decedent.

Finally, inasmuch as the issue in this case is to be determined from a construction or interpretation of the policy prepared by appellant, the majority has misconceived the fundamental issue involved, consequently, the cases cited and relied upon in the majority’s opinion are not relevant in the resolution of the issue in question.

Harris, C.J., joins in this dissent.

      We have held many times that where a contract is involved in litigation, the contract must be strictly construed against the party preparing it. Foster v. Universal C.I.T. Corporation, 231 Ark. 230, 330 S.W. 2d 288 (1959).

      The followcng is the relevant provision contained in the insurance policy in issue in Krounder. Although the language is not identical word for word, the substance of the provision is identical to the provisions contained in the policy involved in the instant case:
      “. . . ‘Premiums’: ‘All premiums are paid in advance by the assured * * * on or before each premium due date. The payment of any premium shall not maintain the policy in force beyond the due date of the next premium, except to the extent hereinafter provided.’.
      . . ‘A grace period of thirty-one (31) days will be granted for the payment of every premium due after the initial premium during which time this payment shall remain in force * * * If the insured’s death occurs within a grace period, a portion of any unpaid premium covering such grace period shall be deducted in determining the death claim proceeds.’ ”

      The majority found in its opinion that the premium was payable annually, semi-annually, quarterly or monthly. The majority also found that the decedent paid the premiums annually. The record also reflects that the appellee, beneficiary under the policy, paid to appellant the sum of $368.80, on May 5, 1974, for one year’s premium in advance. However, the insured died on September 4, 1974, and consequently, appellee demanded a refund of two-thirds of the alleged unearned premium paid in the sum of $245.86. The majority states that “there was a savings to a policy holder by payment of the premium annually instead of monthly, quarterly or semi-annually.” This would have no material bearing in this case inasmuch as it is generally known that there is a savings when a premium is paid annually instead of on a monthly, quarterly or semi-annually basis. The same fringe benefit was afforded to the policy holder in Krouner, consequently, this is not relevant to the issue in question.

        Krouner v. Companion Life Insurance Company, supra, makes it crystal clear that an insurance company can avoid the issue presented in this case by simply putting a provision in the policy expressly stating that unearned premiums are not returnable.


source: Caselaw Access Project

author: Darrell Hickman, Justice.

license: Public Domain

text:
    ARKANSAS SECURITIES DEPARTMENT et al v. ROLLER FUNERAL HOME, Mountain Home, Arkansas
    77-262
    562 S.W. 2d 611
    Opinion delivered March 20, 1978
    (In Banc)

      John E. Pruniski, III; and Bill Clinton, Atty. Gen., by: Nathan M. Norton, Jr., Dep. Atty. Gen., for appellants.

      Catlett & Stubblefield, for appellee.
   Darrell Hickman, Justice.

The only issue on this appeal concerns the validity of an order issued by the Arkansas Securities Commissioner. The order, which was based on Rule 6 of the Rules of the Arkanuas Securities Department Relating to Prepaid Funeral Expenses, provided that the Roller Funeral Home of Mountain Home, Arkansas, had to revise its contracts regarding prepaid funeral benefits. The contracts had to provide that a buyer had the right to cancel the contract at any time, with or without cause, and withdraw all funds less interest paid into the trust account.

Roller appealed the order to the Pulaski County Circuit Court. The court held the commissioner was in error because there was nothing in the Arkansas statutes which would permit a buyer to cancel without cause such a contract and that the commissioner lacked the authority to make such a rule.

While we believe the commissioner has the authority to promulgate reasonable rules to administer the act, we agree with the circuit court that the statutes do not permit a buyer to cancel a contract without cause. The portion of Rule 6 which is in question reads:

If the withdrawal from the trust account is to be paid upon a cancellation of the agreement by the buyer, the certificate of authority to withdraw the funds shall be issued by the Securities Commissioner upon receipt of a notarized affidavit of the buyer stating his desire to cancel the agreement and requesting the withdrawal from the trust account.

The Securities Commissioner’s rule-making authority is founded on statute. Ark. Stat. Ann. § 67-1703 (Repl. 1966). However, that rule-making authority does not give the commissioner authority to make a rule or regulation that is not authorized or is contrary to Arkansas law.

We understand that some flexibility is required in interpreting the act or the death of the beneficiary would be the only event that would allow the withdrawal of trust funds. Ark. Stat. Ann. § 67-1706 (Repl. 1966). However, we can find nothing in the statutes to authorize a rule which would permit a buyer of prepaid funeral benefits to withdraw all the money paid into the trust fund without cause or reason at any time. Therefore, we affirm the decision of the circuit court in reversing the order of the commissioner.

Affirmed.

Byrd, J., not participating.


author: Darrell Hickman, Justice. John A. Fogleman, Justice,

text:
    Jerry Lynn MORGAN et al v. Reba GREEN
    77-315
    562 S.W. 2d 612
    Opinion delivered March 20, 1978
    (In Banc)

      Eldridge & Eldridge, for appellants.

      Lightle, Tedder, Hannah & Beebe, for appellee.
   Darrell Hickman, Justice.

This appeal questions whether a clause in a will granted a mere life estate, or gave the life tenant an absolute power of alienation. The chancellor, after careful consideration, decided on summary judgment the will of Eva Morgan did not grant her son, Jeff Morgan, the power to sell sixty acres — it only gave Morgan a life estate. We disagree with the chancellor and reverse his decision.

The relevant portions of Morgan’s will provided:

Section III: I give, devise and bequeath to my beloved son, Jeff Morgan, a life interest in the real estate described herein with the right to mortgage, sell or in any manner to alienate the said property during his lifetime with remainder over
Section IV: At the death of Jeff Morgan, the remainder over is vested in the following persons or their heirs and assigns as tenants in common . . .
(Emphasis added.)

Eva Morgan died in 1959 and her son took possession of sixty acres of land devised to him. In 1963, Jeff Morgan sold the land by warranty deed. He died in 1973, and appellee, Reba Green, who stood to have an interest in the sixty acres if it had remained unsold, filed suit to set aside the deed.

The case was decided on summary judgment for Green. The present owner brings this appeal.

It is our duty in interpreting documents to apply our best judgment consistent with certain rules of construction. We seek to find the intent of the testator. This intention is gathered from a consideration of the entire instrument. Jackson v. Robinson, 195 Ark. 431, 112 S.W. 2d 417 (1938); Lawrence v. Lawrence, 225 Ark. 500, 283 S.W. 2d 697 (1955). Words and sentences used in a will are to be construed in their ordinary sense so as to arrive at the real intention of the testator. Morris v. Dosch, 194 Ark. 153, 106 S.W. 2d 159 (1937). We do not consider, as a controlling factor, whether a power of sale is in the same clause as the grant of a life estate or in a separate clause. Union & Mercantile Trust Co. v. Hudson, 143 Ark. 519, 220 S.W. 820 (1920). Applying these rules of construction to Morgan’s will we merely have to examine her words. Her son Jeff was granted a life estate “with the right to mortgage, sell, or in any manner to alienate the said property during his lifetime ...” This simply means that he was given the right to sell, the real estate — not just his interest in the property. We pointed out in a similar case that such words would be meaningless if they did not grant the life tenant the power to sell the property. He already has the right to sell his interest. Pearrow v. Vaden, 201 Ark. 1146, 148 S.W. 2d 320 (1941).

We do not find the words “remainder over” in the will granted to Green a vested remainder interest in the property. The words simply provided for the disposition of the property if Morgan did not dispose of it during his lifetime.

It is not necessary for us to reach the other argument raised by the appellants since the decree is reversed and remanded with directions to enter a decree for the appellants.

Reversed.

Fogleman and Howard, JJ., dissent.

John A. Fogleman, Justice,

dissenting. I dissent because I agree with the chancellor’s careful analysis of our decisions on the question involved. I also agree with the careful, thorough analysis of our cases by the Hon. John E. Miller, the distinguished Judge (now Senior Judge) of the Western District of Arkansas, in Bone v. United States, 238 F. S. 97 (1965). The majority’s categorical statement, that the phrase quoted simply means that the life tenant was given the right to sell, not his life estate, but the real estate, is simplistic and not supported by our decisions. Pearrow v. Vaden, 201 Ark. 1146, 148 S.W. 2d 320 cannot be viewed in isolation and there were factors involved in Pearrow not present here, as I will presently demonstrate.

In his opinion the chancellor stated that our cases reflect no inconsistency, but, to the contrary, disclose a uniformity of application of established rules of construction. That opinion so clearly demonstrates the correct rule and its correct application that I reproduce it, omitting introductory and concluding paragraphs, viz:

The Court begins with the proposition that, subject to some limitations upon restraints on alienation and other considerations of sound public policy, a testator may make such disposition of his property and impose upon it such conditions as to vesting of the gift as he deems proper. It is not necessarily the selection of words and phrases nor the sequence in which he uses them that governs. In every case the court seeks to determine and give effect to his intention as manifested by the will as a whole.
That this is the rule applied in this line of cases is clear from a reading of Goolsby, Archer and Union Merchantile Trust. Goolsby first announced the rule, Archer attempted to clarify it and Union Merchantile Trust should have put it to rest.
The confusion following the Goolsby decision appears to have resulted in part from lack of clarity (which the court admitted and attempted to explain in Archer) and in part from a difference in schools of legal thought at the time. At the time Goolsby was decided there were three distinct authorities on the subject. One line contended that upon the creation of a life estate, the testator could not in any case grant to the life tenant more than those words imply. A second line contended that whenever and however a power of disposition was granted a life tenant, the estate was, as a matter of law, one in fee simple. Still a third was persuaded that a testator could, by proper manifestation of intent, couple a life estate with a power of disposition, which, though not converting to fee simple, if exercised could defeat the estate of the remainderman.
. There were many who thought that Goolsby committed the Court to the first of those lines of authority, i.e., that whenever a life estate was coupled with power of disposition, that power was so annexed to the life estate as to be limited to it. Archer made it quite clear that the court had not so intended “though it contained language which could be so interpreted.” Archer also appears to make it clear that the court had in fact committed itself to the third of those schools of thought by adopting through its approval of the rule of construction from Giles v. Little, 104 U.S. 291:
It is contended that even conceding that the will gave the widow an estate for life, yet it conferred on her during widowhood the power to convey the fee, and she having so conveyed, the defendants in error who claim under her have good title. But the Court says, ‘the authorities are averse and show that when a power of disposal accompanies a bequest of a life estate, the power is limited to such disposition as a tenant for life can make, unless there are other words clearly indicating that a larger power was intended.’ ” (Emphasis as shown in the Goolsby opinion.)
The Archer opinion explains Goolsby as applying that rule to the will before it and finding “no other words indicating that a larger power was intended. ” To the contrary, it appears that the court considered the coupling of the power and estate in one section was “indicative” of an intent to limit, which indication was, indeed, bolstered by subsequent restrictions placed on the widow’s treatment of assets. The Archer opinion pointed out that the placing of the power in a separate paragraph of the will was an “indication” that the broader power was intended, otherwise no meaning could be attached to it. It was from the words and their position in the will that the Court found the “indication that a larger power was intended.”
It should also be clear from the Archer decision that the supplying of emphasis in the Goolsby case was unfortunate, for it was the succeeding phrase which the court there was actually applying, and has applied in all subsequent cases brought to the Chancellor’s attention.
Archer itself spawned two new misconceptions. By calling attention to the Court’s comments in the Goolsby case to the positioning of the grant and power as “indication” of intent to limit that power, it led some to believe that as a matter of law the testator could not enlarge the life estate within the same clause even if there was a clear manifestation of contrary intent and that any will in which the grant and power appeared in separate clauses, as a matter of law, extended the power.
Both were dispelled in Union Merchantile Trust v. Moore [Hudson], 143 Ark. 519. The will before that court did contain the life estate and power of disposal in a single paragraph of the will. However subsequent paragraphs, by limiting the remainder interest to that part of the estate, “not disposed of” were held to supply “those other words clearly indicating that a larger power was intended.” The Court there said:
“It is contended that Archer v. Palmer was based on the fact that the life estate and power were not contained in the same clause. We cannot agree.
“The Court by the cases cited shows that it intended to follow current authority on the question in this country which holds that when a whole will is considered and read together and shows that it was the manifest intention of the testator to give a life estate to the life tenant with the added power in the life tenant to dispose of the whole estate during his life time, and that power was exercised, and estate vests in those to whom the life tenant has granted it.”
To the Chancellor it is clear from these cases that the court has consistently followed its initial approval of Giles v. Little, supra. In the Goolsby case, as a rule of construction, the coupling of the estate and power in one clause was an indication of intent, to limit the power, which indication was not overcome by subsequent words indicating that the larger power was intended. In the Archer case, applying the rule of construction that each paragraph must be given some meaning if possible, the separation of the clauses containing the estate and power was an indication that the larger estate was intended, there being no words in other clauses of the will manifesting a contrary intent. In the Mercantile Trust case, unlike Goolsby, the indication drawn from inclusion of both in the same clause was overcome by subsequent words indicating that the larger power was intended.
The will of Eva Morgan now before the Court is in essence a two paragraph will. In paragraph III she devises an estate for life to Jeff Morgan, coupling it with what appear to be broad powers of disposition. In paragraph IV she names the remaindermen to take the whole estate in remainder after the death of Jeff.
The Morgan will, unlike that in Goolsby or Douglass v. Sharp, does not contain additional clauses which make the indication to be drawn from the coupling of the estate and power in a single clause more manifest, nor, as in Union Merchantile Trust words which overcome that indication in favor of a finding of contrary manifestation. It simply grants the life estate and power in a single clause and by subsequent words grants what appears to be the entire estate in remainder. There is nothing in Eva Morgan’s will which manifests an intention to grant a larger power than that which a life tenant could make.
In the absence of a more recent pronouncement, it would appear that the rule of construction first announced in Giles v. Little, cited with approval in Goolsby, Archer and all subsequent cases is applicable here, i.e. the coupling of a power of disposition to the grant of a life estate limits the disposition to that which a life tenant can make, in the absence of subsequent words manifesting an intention to grant a larger power. There are simply no such words here. There is no attempt to limit the estate of the remaindermen to the unexercised power nor inference to be drawn by the use of separate clauses. Paragraph IV purports to grant the entire estate in remainder.
The Court cannot supply words, but is limited in its function to interpreting the words used by the testator. The guidelines layed out by our precedents admit of only one interpretation of this will. As was said by the court in Piles v. Kline [Fields v. Kline], 161 Ark. 418:
“Wills must be read in their entirety in order to give effect if we may, to all the language the testator has employed. If that language is clear, we have only to declare the intention there expressed. If, however, the will is ambiguous or the intention of the testator is not clear, we must invoke the aid of settled rules of construction with reference to which the will is said to have been made, although the testator may have been wholly ignorant of the rules. The application of these rules may in some instances operate to defeat the intention of the testator, but if so, the fault is his and lies with him in failing to clearly express his intention.”
The Chancellor therefore construes this will as having granted to Jeff Morgan only a life estate and that the powers conferred were limited to that estate. Upon his death the estafe conveyed to the defendants herein terminated and plaintiff’s right of entry as one of the remaindermen arose.

We have never heretofore departed from the rule adopted in Patty v. Goolsby, 51 Ark. 61, 9 S.W. 846, from Giles v. Little, 104 U.S. 291, 26 L. Ed. 745 (1881). See Douglass v. Sharp, 52 Ark. 113, 12 S.W. 202; Lester v. Kirtley, 83 Ark. 554, 104 S.W. 213; Archer v. Palmer, 112 Ark. 527, 167 S.W. 99. This case is the first departure and, since the Giles rule is a rule of property in Arkansas, the effect of this departure can be devastating to the attorneys and testators who have drawn wills in reliance on our decisions.

The explanation that “remainder over” does not vest a remainder will come as a surprise, and perhaps severe shock to the hundreds of will draftsmen to whom “remainder over” has always done just what the majority says that it does not do. “Remainder over” is commonly and universally used to vest a remainder after the termination of a life estate or to describe a remainder so vested. See, e.g., Ollar v. Roy, 212 Ark. 682, 207 S.W. 2d 313; Thoma v. Coats, 205 Okla. 688, 240 P. 2d 736 (1952); Smith v. Frost, 144 Ga. 115, 86 S.E. 235 (1915); 4 Thompson on Real Property (Perm. Ed.) 737, 738, § 2204; 12 Am. Jur. Legal Forms, 132, 146, 147, Titles, Forms 77, 166.29, 166.78, 166.79; 5 Nichols, Cyclopedia of Legal Forms, Annotated 97, 99, § 5.354, 5.362; Modern Legal Forms, Title, § 3253; 4 Page on Wills 671, 673, 676, §§ 37.38, 37.42. The expression was so used in Goolsby and in Archer.

It is true that the statement was made in Pearrow v. Vaden, 201 Ark. 1146, 148 S.W. 2d 320, that a life tenant had the right to sell his life estate without any grant of that power by the will. But that statement is taken out of context and was not the sole basis for the decision. It was only one circumstance. The pertinent will clauses in Pearrow were:

Second: To my beloved wife, Dona Pearrow, I give and bequeath all of my remaining properly of whatever kind, real, personal and mixed and of whatever nature during her lifetime with the right to dispose of any or all of said property in the event that her financial condition or health make it necessary to do so.
Third: To each of my children, Mamie P. Vaden, Charlie Pearrow, A. J. Pearrow, Jr., Walter Pearrow, Roy Pearrow, and Julian Pearrow or to the heirs of such as may die before me, I give and bequeath the sum of one dollar in cash to be paid out of any property left by me at my death.
Fourth: At the death of my wife, Dona Pearrow, I direct that all property remaining from my estate be divided among my children, Mamie P. Vaden, Charlie Pearrow, A. H. Pearrow, Jr., Walter Pearrow, Roy Pearrow, and Julian Pearrow as follows, to-wit:
“That to my daughter, Mamie P. Vaden, I give and bequeath one-fourth (!4) of all of the property remaining undisposed of at the death of my wife, Dona Pearrow, and to my sons, Charlie Pearrow, A. J. Pearrow, Jr., Walter Pearrow, Roy Pearrow, and Julian Pearrow, I give and bequeath the reminaing three-fourths (3/4) of my property as remains unsold or undisposed of at the death of my wife, Dona Pearrow, share and share alike, the heirs of any such sons who may have died in the meantime to receive whatever interest their father would have received in this estate had he been living. [Emphasis added.]

We first distinguished Goolsby and Douglas v. Sharp, supra thus:

*** Thg cases of Pally v. Goolsby, 51 Ark. 61, 9 S.W. 846, and Douglass v. Sharp, 52 Ark. 113, 12 S.W. 202, relied upon by counsel for the defendant are not applicable. There is nothing in either case to indicate that the testator intended to give the life tenant the absolute power to dispose of the fee in the estate. Such intention is clearly indicated by the unrestricted power of disposal expressly granted by the second clause of the will under consideration, and this view is materially strengthened when we consider the language in the first part of the third clause. [The above was quoted from Union & Mercantile Trust Co. v. Moore, supra.]
Now, Pearrow’s will does not grant to the widow the absolute right to convey the fee title under any and all circumstances. There is imposed a condition which must exist before this power may be exercised, that is, “that her financial condition or health make it necessary so to do.”
This is a condition not so uncertain that it may not be definitely determined, as was the question whether the widow would remain unmarried, the condition upon which the widow in the case of Douglass v. Sharp, supra, was allowed to convey. The will there construed provided that “in the event that she (the widow) marries, then all of my property, real and personal estate, notes and accounts shall go to my children now living or who may be at the time of my wife’s death or marriage, to be divided equally between them, share and share alike.” In other words, the power in that case was too contingent to be enforceable, as it was always dependent upon the widow remaining unmarried.

The statement which the majority relies on must be read in context. We said:

It is not essential here to determine whether one, to whom a life estate has been conveyed and upon whom a power to sell the remainder has been conferred, has the ultimate right to determine whether the condition has arisen under which the power may be exercised, for the reason that in the decree from which is this appeal, where the remaindermen were present, it has been found and was determined, that the life tenant’s financial and physical condition made it necessary for her to sell her estate, and that power was granted her by the decree, but her right to sell was limited by the decree to her life estate.
We think the proper construction of the will does not thus limit the interest which the widow may convey. Had she been given a life estate without any power to convey, she could have sold that estate. We think the title the widow may convey is not confined to her life estate, but covers the fee title to so much of the property as may be subject to the power. If the will conferred the right only to sell the life estate, the power is meaningless, as she had the right otherwise to sell her life estate, and the provisions of the fourth paragraph for the division of all property remaining at the death of the widow would be equally meaningless.
Paragraphs 2 and 4 of the will must be read together and when so read effect may be given to them only by holding that it was the testator’s intention that his children should divide among themselves, in the proportions indicated, any of the devised property ivhich the widow had not conveyed in her lifetime for the permissible purposes, because that and that only would be the “property remaining.” [Emphasis added.]

“Remainder over” is not, and cannot be, synonymous with “property remaining.” The majority has made it say what was said in a whole paragraph in the Pearrow will.

This case is not controlled by Union & Mercantile Trust Co. v. Moore, 143 Ark. 519, 220 S.W. 820, either. The will clauses construed were:

Second. I give, bequeath and devise all the rest and residue of my estate owned by me at the time of my death, real, personal and mixed to my mother, Charlotte D. Turner, to have, hold, use and enjoy during her natural life, it being my desire that she shall have the absolute right to sell or incumber it without any restrictions whatever.

The first part of clause three of the will reads as follows:

Upon the death of my mother, the title to all my property, real, personal and mixed, undisposed of by her, as well as any of it which remains by conversion into other property, shall vest in John M. Moore, Henry D. Parker and William B. Smith, as trustees, or in such of them as are then living.

We said:

The second clause of the will in express terms bequeaths and devises all the rest and residue of the estate of the testatrix to her mother, “to have, hold, use, and enjoy during her natural life, it being my desire that she shall have the absolute right to sell or incumber it without any restrictions whatever.” This gives to the mother of the testatrix a life estate and an added power of disposal of the whole estate. It contemplates a possibility that a portion of the property may remain undisposed of under the power of disposal granted to the life tenant. This construction of the second clause is in harmony with the provision in the first part of the third clause of the will, which provides that upon the death of the mother the title of all the property undisposed of by her shall vest in John M. Moore, Henry D. Parker, and William B. Smith, as trustees. Other clauses of the will define the trust. [Emphasis added.]

Again Goolsby and Douglass were appropriately distinguished, thus:

The cases of Patty v. Goolsby, 51 Ark. 61, 9 S.W. 846, and Douglass v. Sharp, 52 Ark. 113, 12 S.W. 202, relied upon by counsel for the defendant, are not applicable. There is nothing in either case to indicate that the testator intended to give to the life tenant the absolute power to dispose of the fee in the estate. Such intention is clearly indicated by the unrestricted power of disposal expressly granted by the second clause of the will under consideration, and this view is materially strengthened when we consider the language in the first part of the third clause.

It should be noted that when the two clauses here are read together and the proper connotation of the words “remainder over” are used, this will is decidedly different. They are:

III
I give, devise and bequeath to my beloved son, Jeff Morgan, a life interest in the real estate described herein with the right to mortgage, sell, or in any manner to alienate the said property during his lifetime with remainder over to the persons described in the following paragraph.
IV
At the death of Jeff Morgan, the remainder over is vested in the following persons, . . .
It is obvious by now, that I would affirm the decree.

I am authorized to state that Mr. Justice Howard joins in this opinion.

      See Patty v. Goolsby, 51 Ark. 61, 9 S.W. 846; Archer v. Palmer, 112 Ark. 527, 167 S.W. 99; Union Merchantile Trust v. Moore, 143 Ark. 519, 220 S.W. 820; Douglass v. Sharp, 52 Ark. 113, 12 S.W. 202; Fields v. Kline, 161 Ark. 418, 256 S.W. 355.

      The style of this case in the Arkansas Reports is Union Mercantile Co. v. Hudson. This seems to be erroneous, as the Hudson case appears as 220 S.W. 465 and has no bearing on the subject. It was unpublished in the Arkansas Reports. See 144 Ark. 642.


text:
    Larry Bee BLY v. STATE of Arkansas
    CR 77-193
    562 S.W. 2d 605
    Opinion delivered March 20, 1978
    (In Banc)

      William R. Bullock and John M. Bynum, for appellant.

      Bill Clinton, Atty. Gen., by: Jesse L. Kearney, Asst. Atty. Gen., for appellee.
   Darrell Hickman, Justice.

Larry Bee Bly was convicted of capital murder in the Pope County Circuit Court and sentenced to life imprisonment without parole. On appeal he alleges five errors, two of which have merit and require reversal.

Bly was accused of participating in the murder and robbery of his drinking friend, Ed Burns. The main witness against Bly was Marty Tumbleson, a fifteen year old accomplice to the murder. The testimony of Bly and Tumbleson does not vary a great deal except as to the actual “robbery” and killing of Burns.

Bly had been crippled since his brother shot him in the back in 1973. Bly began to drink heavily and became a friend and drinking partner of the deceased, Ed Burns, who lived near Clarksville, Arkansas.

On October 13, 1976, Bly and Burns were driving around drunking and decided that young Tumbleson should be found to drive the car. Tumbleson, the brother of Bly’s girlfriend Jennifer Tumbleson, had driven the two in the past. They found Marty at a service station around 9:00 p.m. and he agreed to drive them. At the service station, where Tumbleson was found, it was decided that the car needed gas. Burns apparently had $4.00 and agreed to give $2.00 towards gas. Bly felt Burns should give all the money for the gas. There may have been an argument between Burns and Bly at this time but it was apparently nothing out of the ordinary. All three parties left in the car and they drove out into the country eventually stopping at a cemetery.

It is at this point that the testimony of Bly and Tumbleson began to differ. Tumbleson testified that Burns and Bly got into an argument at the cemetery over the $2.00 that Burns refused to pay for the gas. According to Tumbleson, Bly took the $2.00 from Burns. Later Bly started beating Burns severely. After driving awhile they stopped on a backwoods road and got out. Bly asked Tumbleson for his knife and stabbed Burns in the heart one or more times. Then Bly encouraged Tumbleson to stab Burns. Tumbleson dragged the body down, near a lake and returned to the car. Bly told Tumbleson to go back and cut Burns’ throat to make certain he was dead. Tumbleson admitted he cut Burns’ throat.

Bly’s story is that when he woke up the back door of the car was open, the back seat was covered with blood and Tumbleson was returning from the lake down the road with a rag in his hand. He informed Bly that he had killed Burns. Bly said he was scared, decided that he would be accused of the killing because he had been seen with Burns, and thought that flight would be the best answer. He was admittedly drunk, as was Burns. Tumbleson had also been drinking.

Bly’s and Tumbleson’s testimony as to subsequent events did not vary substantially. They picked up Bly’s girlfriend and took off for Mississippi. The next day they returned to Hazen, Arkansas, where the boy was let out to hitchhike home. Bly and his girlfriend went back to Mississippi and on to New Orlenas. Bly was arrested in New Orleans but waived extradition.

Tumbleson made at least four separate statements to the police. At first he denied his participation. His story changed each time until his last statement, which was substantially the same as his testimony.

It is our duty in a capital felony case to examine the entire record for not only errors raised on appeal but also those that may be found in the record. Where the sentencing procedure is separate from the trial procedure, as it was here, we also review the sentencing procedure for errors. See Giles v. State, 261 Ark. 413, 549 S.W. 2d 479 (1977). In reviewing the evidence in this case we find that the state’s case was based on Tumbleson’s testimony. Being a capital murder, it was charged that Bly robbed Burns of $2.00 and then killed him. Tumbleson did not actually testify that Bly “robbed” Burns of $2.00. He merely said Bly took the money away from Burns at the cemetery. This is the extent of the proof as to the “robbery.” Sometime later, how long we do not know, Burns was killed.

Evidence that a robbery was committed is critical because without it there can be no conviction of capital murder in this case.

The only evidence of robbery is testimony that Bly took $2.00 from Burns. The definition of robbery is:

A person commits robbery if with the purpose of committing a theft or resisting apprehension immediately thereafter, he employs or threatens to immediately employ physical force upon another. Ark. Stat. Ann. § 41-2103 (Crim. Code 1976).

The evidence in this case certainly cannot be characterized as substantial evidence that Bly committed a robbery. Even if we concede there is room for argument on this issue, when we consider the jury’s findings as to aggravation and mitigation, we are convinced that the conviction cannot stand. The jury found:

(1) That the murder was committed by someone other than Bly [which could only be Tumbleson.]
(2) That the murder was not committed for pecuniary gain.
(3) That the murder was not committed for the purpose of avoiding or preventing a lawful arrest or effecting an escape from custody.

All of these findings are inconsistent with the finding that Bly was guilty of capital murder as charged. If Bly did not kill Burns, if it was not done for pecuniary gain, and, if it was not done to prevent a lawful arrest — that is to prevent discovery of the robbery — then it would not be a murder committed while engaged in the prepetration of a robbery as charged.

Considered as a whole, the question of whether there even was a robbery, the obvious remoteness of the “robbery” from the killing, and the inconsistent findings by the jury in determining the sentence, require us to reverse the case.

There were several other questions raised which may arise on retrial.

The jury requested that it be permitted to rehear part of the testimony of the state medical examiner. The trial judge announced that this would be done but after a brief recess decided to replay the entire testimony. This was probably error. However, the record is not clear that Bly’s objection was correctly made. In the event of a retrial, if this matter comes up again, the court should read or present only that portion of the testimony that the jury requested.

Bly also argues that two photographs were admitted of Burns’ body which could only inflame the passions of the jury. We disagree. Hulsey v. State, 261 Ark. 449, 549 S.W. 2d 73 (1977). It is unlikely that any other objections made by Bly will occur on retrial.

We could reduce the sentence, as we have in some cases, since there was substantial evidence to support a homicide conviction. See Ark. Stat. Ann. § 27-2144 (Repl. 1962). Bly’s testimony placed him at the scene of the murder and there was other evidence tending to corroborate the testimony of Tumbleson as required by our decision in Underwood v. State, supra. However, we cannot say what sentence the jury would have imposed if it found Bly guilty of a lesser degree of homicide. We know of no way to cure the errors except to remand the case for a new trial.

Reversed and remanded.

Harris, C.J., and Fogleman, J., dissent.

John A. Fogleman, Justice,

dissenting. I respectfully dissent from the reversal of the judgment in this case. First, but perhaps incidentally, I disagree with the statement that there is no substantial evidence of robbery.

Bly admitted that he knew that Burns had $4.00 when Bly, Burns and Tumbleson started riding around with Tumbleson as chauffeur. He admits that he and Burns had a disagreement when Burns refused to pay $2.00 for some gasoline. Bly admitted that he knew that Burns had $2.00 left in his billfold after paying for the gasoline. Bly didn’t know whether he had any money himself at the time. The billfold was found empty near the body. Between the road and the place the body was found, two dimes, two pennies and a quarter were scattered on the ground. Bly did not know whether he could remember Tumbleson’s buying $1.40 worth of gas and $.60 worth of cigarettes at Southpark after the killing but before picking up Jennifer.

Tumbleson said that Bly started beating Burns when Burns put up a fuss about Bly’s having taken Burns’ billfold, and having returned it after having removed the money from it, and when Burns made disturbances which might have aroused the man with whom Burns lived and one of Burns’ neighbors. The medical examiner found numerous scratches and “grazes” about Burns’ face and forehead. His report stated that the right cheek was bruised. Although he was of the opinion that a fist would be calculated to deliver a blunt force injury and that there was no evidence of a blunt force injury, he said that it was possible that the bruise on the right cheek was caused by a fist and that the scratches and “grazes” could have been caused in a scuffle. He said that bleeding about the face might have been obscured or might have disappeared by the time the body was found, partly because a rain between the time of the killing and the discovery of the body would have tended to wash away blood that might have been on Burns’ face.

Bly and Burns were together shortly before Burns was killed. They picked up Tumbleson between 9:00 and 9:30 p.m. They were seen together after the killing, but without Burns, shortly after 11:00 p.m., when they picked up Tumbleson’s sister, Jennifer, who lived with Bly. Jennifer borrowed $20.00 from her employer. Bly said that he asked Jennifer to do this and to buy some gasoline, which she bought on credit. He said that he told Jennifer, “I’m going to have to get out of here.” He said he was afraid because he had the idea “they” were going to suspect him. Prior to picking Jennifer up, Bly said that there had been a lot of blood on the back seat of his car, and he wanted it out, so he helped Tumbleson clean the car up.

According to Bly, he, Tumbleson and Jennifer went and got their clothes, “hit the freeway” and eventually wound up in Jackson, Mississippi en route to New Orleans. At Jackson, Bly said he sobered up and knew that he was going to get in trouble. Then, he said, they returned to Arkansas and came as far as Hazen, where they let Tumbleson off with the admonition to “Just fend for yourself.” Bly said he did this because he knew he was going to get in trouble himself. On the way to Arkansas they had stopped at a roadside park where Bly said he threw his clothes away, even though he said they had no blood on them and that he did it only to get Tumbleson to throw his clothes away. Bly said he was then “scared of getting in trouble.” He admitted throwing away the knife that inflicted the fatal wounds. He threw it out the window as they were driving down the road back to Arkansas. After the knife was thrown away, Bly said that they “washed out the car.”

The evidence indicates that Burns had no opportunity to spend his remaining money or otherwise dispose of it. Even under Bly’s version, there is a reasonable inference that either Bly or Tumbleson took Burns’ money. It is hard to find any motive for Tumbleson to have killed Burns unless he was influenced to do so by Bly or unless Tumbleson took Burns’ money himself.

Bly said that, after dumping Tumbleson to “fend for himself,” he and Jennifer went to New Orleans where, after they had remained for about two weeks, he asked Jennifer to call her mother. When Jennifer called, her mother reported there was a “fifty-two state alarm out” for Bly for capital felony murder. Shortly thereafter, said Bly, he was arrested in New Orleans by “the FBI.”

As the quoted portion of Ark. Stat. Ann. § 41-2103 (Supp. 1977) clearly demonstrates, the force or threat of force need not precede or accompany the theft. Any physical force is any bodily contact, restraint, or confinement or the threat thereof. Ark. Stat. Ann. § 41-2101 (Supp. 1977). Clearly, the jury could properly infer from all the circumstances disclosed by the evidence that physical force was used on Burns in order to prevent apprehension by keeping him from making an outcry and attracting the attention of the man with whom he lived or his neighbor. In considering when a robbery has been completed, in Dickson v. State, 197 Ark. 1161, 127 S.W. 2d 126, we said:

Robbers would accomplish very little in taking the money and attempting to escape, leaving the victim to spread immediate alarm. The idea is to get possession of the money and prevent an alarm so that possession of it might be kept or retained. The keeping, or retention, of it was an object of their plans as much so as getting the money. And in furtherance of this plan Mr. Cooley was driven to the country, and in order that they might have more time to escape, he was stripped of his clothing so that he would be reluctant to enter a home or get to a telephone in the immediate community.

It is true that some of our decisions prior to the adoption of the Arkansas Criminal Code, of which the cited sections are a part, would require that the requisite force or threats be prior to or contemporaneous with the taking. See e.g., Parker v. State, 258 Ark. 880, 529 S.W. 2d 860. But, in the adoption of the Criminal Code, it is certain that the General Assembly felt that the previous definitions of robbery, either by our statutes or by common law, were too narrowly restricted in this respect. The present statute codified the statement quoted from Dickson. The statute should not be narrowed or redefined in the first case arising after the adoption of the code. The wisdom of extending the definition of the crime of robbery is a matter addressing itself to the legislative branch, not this court.

As to the trial court’s failure to limit the repetition of the medical examiner’s testimony to that specific portion of it about which the jury inquired, I do not feel that appellant is in any position to complain, because he never requested that it be so limited. As I see it, he only objected to any of the testimony of this witness being repeated at all.

There does seem to be some conflict in the jury’s finding of guilt on the charge of capital felony murder and the special findings in the sentencing procedure. Although l do not feel that these special findings should control the general finding in every instance, it seems to me that there may have been error in the jury verdict, to the prejudice of the defendant, which clouds the sentencing procedure. This would have no effect except as to the punishment imposed and the degree of the offense. The error may properly be attributed to the sentencing procedure, or at most, to the finding as to the degree of the crime.

We have usually corrected errors in the sentencing procedure or in the jury’s verdict finding a defendant guilty of a higher degree of crime than the evidence will support by a reduction of the judgment to the proper degree or by a reduction of the sentence. For a discussion in this regard, see Giles v. State, 261 Ark. 413, 549 S.W. 2d 479 and the cases cited below. Murder in the first degree is the next lower degree of homicide included in capital murder. See Ark. Stat. Ann. §§ 41-1501, -1502 (Supp. 1977). There is an abundance of evidence to show murder in the first degree and any error here may be corrected by reducing the judgment to one of guilt of murder in the first degree and the punishment to life imprisonment. See Collins v. State, 261 Ark. 195, 548 S.W. 2d 106; Wilburn v. State, 253 Ark. 608, 487 S.W. 2d 600; Walker v. State, 91 Ark. 497, 121 S.W. 925; Williams v. State, 66 Ark. 264, 50 S.W. 517; Crowe v. State, 178 Ark. 1121, 13 S.W. 2d 606; Bagley v. State, 247 Ark. 113, 444 S.W. 2d 567; Rorie v. State, 215 Ark. 282, 220 S.W. 2d 421; Abbott v. State, 256 Ark. 558, 508 S.W. 2d 733; Blake v. State, 186 Ark. 77, 52 S.W. 2d 644; Hildreth v. State, 215 Ark. 808, 223 S.W. 2d 757.

As early as Simpson v. State, 56 Ark. 8, 19 S.W. 99, we held that first degree and second degree murder were but statutory regulations of the punishment of the crime of murder, and that the remedy in cases where the jury has found a degree of murder which the proof does not warrant, the verdict stands for the offense of murder but fails as to the degree and, where the jury has erred in fixing the sentence, the prisoner is not prejudiced if the verdict is referred to the lower degree of the offense, and a new trial should not be awarded for an error not prejudicial to the defendant. There we directed the trial court to sentence the accused for murder in the second degree, pointing out that in Brown v. State, 34 Ark. 232, where the verdict was for manslaughter without specifying whether it was voluntary or involuntary, this court had fixed the punishment at the highest punishment authorized for the lower degree, involuntary manslaughter. In Brown, we resolved a doubt about the jury’s knowledge of the fact that they could have sentenced the defendant to a lesser degree of the crime, by imposition of the highest punishment for the lower degree.

This situation is quite different from Bailey v. State, 206 Ark. 121, 173 S.W. 2d 1010, where we reduced the punishment to the minimum for the next lower degree of homicide because we were there remedying an error of the trial court in failing to instruct on the lower degree. It is also to be distinguished from such cases as Walker v. State, 91 Ark. 497, 121 S.W. 925, where the jury’s error was in the sentencing procedure and the punishment was reduced to the minimum for the degree of homicide of which the defendant was found guilty. To the same effect is Crowe v. State, supra, and Williams v. State, 183 Ark. 870, 39 S.W. 2d 295, where the punishment for first degree murder was reduced from death to life imprisonment.

This case is more like Blake v. State, supra, where we reduced the punishment to the maximum for second degree murder because the evidence was insufficient to support a verdict for first degree murder, but sufficient to support conviction of the lower degree. This case is also to be distinguished from Bagley v. State, supra, where we declined to correct error by reducing the punishment or entering a conviction for a lesser degree of homicide, because we felt that the evidence clearly supported the highest degree of murder and because there was error in the court’s indicating that the defendant had some duty to show mitigating circumstances when the law did not require this.

There is not a shadow of a doubt that the jury in this case would have returned a verdict of guilt of murder in the first degree if it had not felt that appellant was guilty of the higher degree of crime. The evidence would have supported such a verdict beyond any question. Even though the jury thought that Tumbleson inflicted the fatal wound, it is not reasonable to believe that the jury thought that Bly’s participation was relatively minor. Obviously, in marking the particular “mitigating circumstance” on the verdict form, the jury had in mind that Bly was an accomplice to the stabbing and throat-cutting of his drinking companion. It. would simply defy reason to believe that this 15-year-old boy concocted and executed this vicious execution with only minor help or encouragement from his sister’s paramour.

I would reduce the judgment to conviction of murder in the first degree and the sentence to life imprisonment, eliminating the phrase “without parole.”

I. am authorized to state that the Chief Justice joins in this opinion.


author: George Howard, Jr., Justice.

text:
    Doug CONEY v. Ray STEWART
    77-273
    562 S.W. 2d 619
    Opinion delivered March 20, 1978
    (Division I)

      McArthur & Johnson, for appellant.

      House, Holmes & Jewell, for appellee.
   George Howard, Jr., Justice.

The question for review is whether the trial court’s finding that appellant had breached the implied warranty of proper design and installation of a septic tank system, in a new house sold to appellee, is supported by substantial evidence.

THE FACTS

On July 11, 1973, appellee purchased a new house from appellant, a residential building contractor in the Little Rock area. The house, which is located at Mabelvale, Arkansas, was sold as a package deal, including all plumbing and a septic tank system, for a total purchase price of $24,349.00.

Appellee encountered his first problem with the septic tank system in August, 1973, and appellant immediately corrected the problem by replacing a crushed pipe embedded in the soil leading from the house to the septic tank. Appellee’s second problem developed in October, 1973, when appellee discovered that waste would flow on the floors of the bathrooms when use was made of the commodes. The overflow of the commodes, as well as water “bubbl[ingj up in the back yard”, during heavy rains, continued intermittently from October, 1973, to 1976. Appellant made a futile effort to correct the problems by, inter alia, constructing a “slush pit” acorss appellee’s yard and as a consequence of constructing the “slush pit”, appellee was prevented from cutting the “grass around it [the slush pit] and stunk real bad.” During the non-use of appellee’s bathroom facilities during this period, appellee and his family were required to use either the facilities of neighbors, relatives or public establishments.

As a further consequence of these problems, complaints were registered by appellee’s neighbors with the Pulaski County Health Department. The Pulaski County Health Department advised appellee by written communication that his septic tank system was creating a health hazard in the community and that appellee had thirty days to take corrective action, otherwise, legal action would be instituted against appellee.

In an effort to remedy the problem, in order to provide for the personal comfort and convenience of his family and to avoid litigation with the Pulaski County Health Department, appellee consulted a soil engineer who concluded that the soil was not suitable for the system designed and installed by appellant. Pursuant to the engineer’s recommendations and advice, appellee installed a jet. aeration system as a replacement of the septic tank system.

On August 17, 1976, appellee instituted an action against appellant for breach of implied warranty praying damages in the sum of $3,425.00.

HOLDING OF THE TRIAL COURT

The trial court held that the evidence established “an apparent defect in design from the time that the septic tank was being installed” and awarded the appellee a judgment in the sum of $3,234.00 for the installation of a replacement system.

CONTENTION OF APPELLANT FOR REVERSAL

The trial court erred in awarding a judgment against appellant inasmuch as appellee failed to present sufficient evidence to establish a breach of the implied warranty of proper construction and sound workmanship.

THE DECISION

Appellant’s argument is essentially to the effect that the evidence “to establish a breach of the implied warranty of proper construction and sound workmanship” is not supported by the evidence. But we find from the record that the trial court’s holding was to the effect “there was no defect in the material or workmanship, but it seems apparent to the Court there was an apparent defect in design from the time the spetic tank was being installed.”

After reviewing the record, we are persuaded that the trial court’s finding is supported by substantial evidence and, accordingly, the trial court’s holding is affirmed.

It is settled law in Arkansas that the rule of caveat emptor is no longer applicable to the sale of new housing by a vendor-builder to the purchaser; and that there is an implied warranty that goes with the sale of new housing by such a vendor-builder that it is constructed in a good workmanlike manner and is fit for human habitation. Wawak v. Stewart, 247 Ark. 1093, 449 S.W. 2d 922 (1970). Indeed, the implied warranty extends to a septic tank and drain field system where, as here, the system is an integral part of the house; and the breakdown of the system is tied to the design and installation and, moreover, the system failed before a minimum life expectancy had been realized by appellee.

Appellant argues that the septic tank was installed in good faith with the approval of the Pulaski County Health Department and the Arkansas Department of Health, Division of Sanitation Services; and that appellee has failed to establish that the system was improperly installed or that its malfunction was due to any failure in the construction of the system in a workmanlike manner. Appellant’s argument is neither convincing nor persuasive.

The evidence reflects that on July 3, 1973, appellant received the following communication from the Pulaski County Health Department relating to the septic tank system:

“Dear Sir:
This is to certify final inspection has been made on the septic tank facilities of above lot.
Installation has followed engineer’s plot plan but it is very wet and there is doubt in my mind if it will function properly.
By direction of Gordon P. Oates, M.D., Health Officer.”
(Emphasis added)

This information was not communicated to the appellee. However, appellant led appellee to believe that the house and the septic tank system was conducive for human habitation and that the system had been constructed in a workmanlike manner.

In addition, the evidence supports a finding that the final approval given by the State Department of Health, Division of Sanitation Services, for the installation of the tank system was based upon a percolation test conducted in 1965 before the lot on which appellant constructed the house was graded and leveled by appellant. Moreover, the lot in 1965 was vacant. Consequently, at the time the Arkansas Department of Health issued its final approval, the Department was unaware of the grading and leveling of the lot that had been done by appellant in preparation for installing the system. Furthermore, the percolation test of 1965 was given tentative approval in connection with the proposed construction of a dwelling house entirely different from the one in question.

It must be emphasized that the buyer-appellee in negotiating the purchase of the house involved was not on an equal bargaining position with the vendor-builder; the buyer was compelled to rely upon the skill and knowledge of the builder regarding the service and performance to be realized from the septic tank system. The defects were not discoverable by inspection. A substantial part of the septic tank system was buried underground and appellee possessed no expertise in plumbing or the septic tank system. On the other hand, appellant bargained from a position of superior knowledge of the structure that he had designed and installed. A home buyer should be able to place confidence and reliance on the vendor-builder who sells a new house. Consequently, a buyer has every reason to believe that his new house is reasonably fit for habitation. Anything less would, indeed, be a manifestation of injustice which this Court cannot condone or sanction.

Affirmed.

We agree.

Harris, C.J., and George Rose Smith and Hickman, JJ.

      The jet aeration system has been characterized as a miniature sewage plant.

      A percolation test determines the type of soil involved and the suitability of the soil for the absorption of liquids in terms of minutes and from this data a recommendation can be made as to the size of the septic tank required for the proposed structure.

      Before appellant graded the lot in question, the lot sloped upwards from the street, or the front part of the lot, approfimately 4.9 feet to the back of the lot. Inasmuch as the flow from the plumbing in the house would have to flow downhill with gravity, appellant graded from one to one and one-half feet of soil from the back yard immediately behind the house and said grading extended approximately 50 feet from the house. Consequently, the grading excavated substantially all of the top soil conducive to excellent performance of the septic tank system, thus leaving a clay type soil unsuitable for percolation.


author: George Rose Smith, Justice.

text:
    Ina Lea (Miller) LEWIS v. Jimmie R. MILLER and Mona Sue MILLER, his wife
    77-307
    563 S.W. 2d 435
    Opinion delivered March 27, 1978
    (Division I)

      Phillip J. Taylor, for appellant.

      James L. Langston, for appellees.
   George Rose Smith, Justice.

On October 20, 1976, Jimmie R. Miller and his wife filed this suit asking for a decree declaring that Miller’s former sister-in-law, the appellant Tna Lea (Miller) Lewis, no longer has her original one-fourth lessee interest in a 10-year lease upon certain business property in Fort Smith. The controversy arose because the lease granted to the lessees what has proved to be a valuable option to purchase the leased premises for $55,000. This appeal is from a decree finding that Mrs. Lewis orally relinquished her interest in the lease and also is barred by laches from asserting that interest. We must reverse the decree as being clearly against the weight of the evidence.

When the 10-year lease was executed on February 19, 1968, Jimmie Miller and his brother Cecil were engaged in several businesses together. The lease was signed by the brothers and their wives as lessees. The leased premises were and still are the site of a fast-food store, the operation of which has been Jimmie Miller’s responsibility from the beginning.

According to the appellees’ proof, the Miller brothers terminated their business association at a joint meeting in a lawyer’s office on May 31, 1968. Jimmie testified that both the wives attended that meeting. Jimmie Miller and his wife executed a deed conveying certain real estate to Cecil and Ina Lea. Jimmie testified that in return Cecil and Ina Lea orally relinquished their interest in the fast-food store, which had been leased about three months earlier.

Mrs. Lewis denies that she even attended the meeting in question and denies that she ever relinquished her interest as lessee. All the subsequent actions of the parties confirm her position. We refer briefly to some of the testimony:

(a) In 1969 Jimmie, who had other interests, decided that he did not want to continue to operate the fast-food store. On August 28, 1969, while Cecil and Ina Lea were still married, the two couples executed an 8-year sublease to C. R. Plank. That Cecil and Ina Lea joined in that sublease is hardly consistent with their having already relinquished their interest in the principal lease.
(b) Toward the end of the 10-year lease the value of the option to purchase became apparent. When the lessor of the premises sought to buy back the option to purchase, Jimmie told him that he would have to talk to Cecil — even though it is now contended that Cecil had released his interest many years earlier.
(c) In that same connection Jimmie went to Ina Lea and sought to obtain an assignment of her interest in the lease.
(d) Nine days before the suit was filed, Cecil finally made a written assignment of his interest to Jimmie. Cecil testified, however, that if Jimmie and his wife should die before the expiration of the 10-year lease, Cecil would expect that he and Ina Lea would be responsible for continuing to pay the rent (thereby, of course, keeping the option to purchase in force). Cecil also testified that if Jimmie succeeded in selling the option or the premises, he supposed that Jimmie would give him some of the money, as they were brothers.
We need not narrate the testimony in further detail. Even apart from the possible effect of the statute of frauds (Ark. Stat. Ann. § 38-105 [Repl. 1962]), which is argued, the almost undisputed proof shows that Mrs. Lewis did not relinquish her interest in the lease.
The chancellor’s finding of laches rests on two circumstances, but neither is persuasive. First, Mrs. Lewis did not actively assert her interest in the lease until shortly before this suit was filed. There was, however, no reason for her to do so. The 8-year sublease specified exactly the same rent, S550 a month, as that specified in the principal lease. By agreement the subtenant paid the rent directly to the principal lessor and was never delinquent in his payments. Therefore Mrs. Lewis had no rights that could have been actively asserted. Her situation was similar to that of a remainderman, who is not required to assert a possessory right during the life of the life tenant. Smith v. Kappler, 220 Ark. 10, 245 S.W. 2d 809 (1952).

Second, Mrs. Lewis’s interest as lessee was not mentioned in the divorce decree which she obtained on May 3, 1971. Again, however, there was no particular reason for it to be mentioned. Mrs. Lewis had joined in the execution of the sublease almost two years earlier. No action under the terms of the tease or sublease was called for. The potential value of the option to purchase was apparently not yet realized. Cecil and Ina Lea’s separate rights in the tease were individual contractual rights, not affected (as is dower, for example) by the continuation or termination of the marriage. There being no reason for either Ina Lea or Cecil to raise any issue about the tease in the divorce case, their failure to do so cannot be regarded as laches on the part of either. It will be remembered that many years after the divorce decree Cecil recognized his continued interest in the tease by assigning it to Jimmie. If the divorce decree concluded the parties’ rights in the tease, that assignment was unnecessary.

Before concluding this opinion we think it appropriate to again call the bar’s attention to the necessity for abstracting written exhibits instead of reproducing them in the abstract and brief. Here the material parts of the tease, of the sublease, and of the divorce decree could have been abstracted in a few sentences. Instead, the appellant’s abstract reproduces those and other written instruments in full, some 18 legal-sized pages, although most of their contents are not relevant to the case. We therefore recopy here, for the information of attorneys, the per curiam order that was entered on February 13, 1978, and was published as follows in the Advance Reports for that date:

NOTICE TO ATTORNEYS
February 13, 1978
Re: Attaching Exhibits to Abstract of the Record
PER CURIAM. In recent years a practice has grown up by which counsel attach to their abstracts and briefs typewritten, photographed, or Xeroxed copies of written exhibits, such as deeds, insurance policies, and similar instruments or documents. This practice is contrary both to Rules 8 and 11, which require that abstracts and briefs be printed, and to Rule 9 (d), as amended on February 9, 1976, which provides for the attachment of only those exhibits “which cannot be abstracted in words.” Counsel’s failure to abstract such exhibits frequently makes it impossible for the members of the court to properly consider the exhibits as reproduced. Effective April 1, 1978, the clerk will not accept abstracts and briefs not complying in this respect with the court’s rules.

Reversed and remanded for the entry of a decree in favor of the appellant.

We agree.

Harris, C.J., and Hickman and Howard, JJ.


author: Conley Byrd, Justice.

text:
    Ronnie DAVIS v. Joseph E. KOLB et al
    77-260
    563 S.W. 2d 438
    Opinion delivered March 27, 1978
    (Division II)

      William H. Hodge, for appellant.

      Rose, Nash, Williamson, Carroll, Clay & Giroir, by.: Allen W. Bird II, for appellees.
   Conley Byrd, Justice.

Appellant Ronnie Davis obtained a timber deed to a 294 acre tract from the appellees, Joseph E. Kolb, et al. The consideration recited in the timber deed was: “First $10,500 to [appellees]; next $2,000 to [appellant], all remaining to be divided fifty/fifty after payment of costs of removal of timber. ” The chancellor set aside the timber deed on the basis that appellant had misrepresented his experience and knowledge as a timber buyer to the appellees and that since appellant was not an experienced timber buyer, the deed was not supported by consideration. For reversal appellant contends:

I. The chancellor’s Finding of no consideration is clearly against the preponderance of the evidence.

II. The particular misrepresentation found was not a sufficient ground for cancellation of the timber deed because it was not material to the execution of the deed.

The record shows that during the negotiations, appellant led the appellees to believe that appellant was knowledgeable about the value of timber and that appellant was going to cut and remove the timber. Appellant, does not deny that he told appellees during the negotiations that the timber was worth $18,000 to $20,000. After obtaining the contract, appellant started trying to sell his contract to someone else and readily admits that he was shocked to find out that the timber had a value in excess of $50,000.

While we do not disagree with the reasoning of the chancellor, and without intending to indicate that his hndings are not sufficient to affirm the setting aside of the deed, we affirm upon the basis of Ark. Stat. Ann. § 85-2-302 (Add. 1961), which provides:

“(1) If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.
(2) When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose and effect to aid the court in making the determination.”

The Uniform Commercial Code is made applicable to timber sales, by Ark. Stat. Ann. § 85-2-107 (Supp. 1977).

When we add to the undisputed facts the further fact that appellant had no capital invested and no risk, it would be unconscionable for any court to enforce the contract. See Annotation 18 A.L.R. 3d 1305.

Affirmed.

We agree: Harris, C.J., and Focjleman and Hoi.t, JJ.


text:
    Mary M. CORZINE v. Mary K. FORSYTHE
    77-265
    563 S.W. 2d 439
    Opinion delivered March 27, 1978
    (In Banc)
    [Rehearing denied April 24, 1978.]

      Gus R. Camp, for appellant.

      Branch & Thompson, for appellee.
   Darrell Hickman, Justice.

This is an appeal of a case brought in the Clay County Chancery Court to set aside a deed and recover four rings.

The appellant, Mary Corzine, sued her niece, Mary Forsythe, the appellee, claiming a lack of delivery of the deed and that possession of the rings and access to the deed were obtained by fraud, deceit and misrepresentation. The chancellor found the deed was delivered to the appellee but ordered the rings, which the appellee claimed were given to her by the appellant, returned. We agree with the chancellor’s decision.

The appellant raises three errors on appeal: the chancellor was wrong in finding there was a valid delivery of the deed; the court erred in permitting an attorney to testify regarding transactions between himself and the appellant, violating the attorney-client privilege; and, the court erred in prohibiting the introduction of a hospital record.

The appellant executed a deed in September, 1975, granting two lots to the appellee. She placed the deed in a lockbox in the Bank of Rector.

In 1976, the appellant broke her hip and was hospitalized. The appellee made three trips from her home in Illinois to see her aunt. During her second visit the appellee obtained a key to the appellant’s lockbox and said she was instructed to record the deed. She also said she was given four rings by the appellant. The lawyer who drafted the deed testified that he was instructed by appellant in a note delivered by appellee to record the deed. He stated he waited several days before acting and called the appellant at the hospital to confirm that she wanted the deed recorded. He said he was assured the appellant wanted the deed recorded. It was.

Fraud is no issue on appeal and the court’s ruling regarding the rings was not appealed.

First is the question of delivery. The appellant’s evidence, mostly testimony by herself and a friend, was to the effect that she was under sedation in the hospital and did not intend to deliver the lockbox key nor the rings to her niece. She said her niece took the items without authority.

The appellee testified that she was given the key to the lockbox and a note to the appellant’s lawyer asking that the deed be recorded. She also said she was given the rings. The lawyer, who was accused by the appellant of being a part of the scheme, rebutted the appellant’s statement.

The appellant argues there was insufficient testimony to support the finding of the chancellor that the deed was delivered. There was no question that the appellant executed the deed. However, she said she did not want the deed delivered until her death. We have held a presumption of valid delivery attaches when a deed is recorded. Wilson v. McDaniel, 250 Ark. 316, 465 S.W. 2d 100 (1971). There was ample evidence to support the chancellor’s finding that the deed had been delivered. It was the appellant’s burden to prove by clear, cogent and convincing evidence that she was incapable of having the necessary mental capacity for delivery of the deed. See Whatley v. Corbin, 252 Ark. 561, 480 S.W. 2d 142 (1972). We cannot say the chancellor’s finding was against the preponderance of the evidence.

The appellant also argues that the attorney’s testimony violated the attorney-client privilege and, therefore, should not be considered. An attorney is not bound by an obligation of secrecy when he is accused of a breach of duty to the client. See Rule 502(b)(2), Ark. Stat. Ann. § 28-1001 (Supp. 1977). In this case the attorney had been accused of being a part of a scheme to deprive the appellant of her property. Therefore, his testimony was admissible.

The chancellor would not admit into evidence a hospital record offered by the appellant. The appellant argues that the record showed that she was under sedation during this period of time. We review chancery cases de novo. Mercantile Bank v. Phillips, 260 Ark. 129, 538 S.W. 2d 277 (1976). We find it harmless error in this case that the record was not admitted. There was testimony by the appellant, corroborated by a witness, that she was under sedation during this period of time. However, the chancellor made a finding that she made a valid delivery of the deed. We cannot say that finding is against the preponderance of the evidence.

It might be argued that the finding of the chancellor in ordering the rings returned is inconsistent with his finding that the deed was delivered. Obviously the appellant was attached to the rings and the appellee stated she had no objections to returning the rings. We do not find the chancellor’s order to return the rings necessarily inconsistent with his finding that the deed was delivered.

Affirmed.

Howard, J., dissents.


text:
    R. H. SIKES v. Joseph William SEGERS, Jr.
    77-318
    563 S.W. 2d 441
    Opinion delivered March 27, 1978
    (In Banc)

      C. W. Knauts, for appellant.

      Shaw & Ledbetter, for appellee.
   Darrell Hickman, Justice.

R. H. Sikes, appellant, brings this appeal from a summary judgment entered by the Washington County Circuit Court in favor of appellee, Joseph William Segers, Jr.

The court ruled that appellant did not timely file an affidavit in response to appellee’s motion for summary judgment; therefore, appellee’s motion, which was supported by affidavits, was found to be uncontroverted and the summary judgment was granted. The court also granted the summary judgment on the theory that this action was barred by the doctrine of “collateral estoppel and/or res judicata.”

The history of this litigation goes back several years and a summary of the facts is necessary in order to understand the two basic issues presented to us on appeal.

The litigation began when appellant and his wife, Jolene, went to appellee’s law offices regarding a divorce. Appellee filed a divorce action against appellant in the Washington County Chancery Court on behalf of Jolene. The divorce was uncontested and a decree was entered in August, 1973, incorporating a property settlement and child custody agreement signed by both parties.

Less than a month later appellant filed a motion to set aside the decree and agreement. The motion alleged: that the appellee had agreed to act as attorney for both appellant and Jolene, and upon this advice, appellant signed the waiver of notice and property agreement; that after the decree was entered Sikes learned that appellee had established a “meretricious liaison” with Jolene; and, that both Jolene and appellee willfully and intentionally concealed this relationship from appellant for the purpose of fraudulently inducing Sikes to sign the property settlement agreement.

A motion to quash service of this motion was granted by the chancery court. Other pleadings were also filed in the chancery court including a petition by Jolene citing appellant for contempt and praying for judgment for back child support.

Appellant filed a second motion to set aside the decree and property agreement which was identical to the first. This motion was never ruled upon; however, the chancellor did enter an order regarding back child support, alimony and other incidental matters involving the property settlement. A notice of appeal was filed regarding this order, but an appeal was never pursued by appellant.

In January, 1974, appellant and Jolene signed a new property and child support agreement. Part of that agreement stated that appellant agreed to dismiss his motion to set aside the divorce decree. This agreement was never confirmed by a chancery court order. Jolene, pursuant to the agreement, filed a release of the judgment of contempt against appellant.

In February, 1976, appellant filed suit against appellee alleging malpractice and alienation of affections. The allegations in this suit were similar to those in the motions to set aside the divorce decree.

A non-suit was taken, but the case was refiled within a year on January 17, 1977. It is from this case that the summary judgment was entered and this appeal is brought.

At trial level appellee filed a motion to dismiss; denied the allegations in the complaint; and, raised the issues of limitations, laches, res judicata and collateral estoppel. Appellee and his partner (who was dismissed from the lawsuit without objection) also filed a motion for summary judgment with affidavits, briefs and notice that consisted of some twenty-seven pages.

The affidavits stated essentially that appellee never agreed to represent appellant; that he only agreed to represent Jolene; that he did not have a relationship with Jolene; and, that he was in no way guilty of malpractice. One affidavit merely identified a long handwritten letter from Jolene to appellee reciting her memory of conversations with appellant. This affidavit, signed by an attorney, was obviously nothing but hearsay. There was no affidavit of Jolene Sikes.

The chancery court action did not involve appellee as a party but was merely a suit between appellant and Jolene. No judgment was entered approving this agreement which would serve as a bar to an action between appellant and appellee. The doctrines of collateral estoppel and res judicata apply only to final orders or adjudications. See Missouri Pacific R.R. Co. v. McGuire, 205 Ark. 658, 169 S.W. 2d 872 (1943); 46 Am. Jur. 2d Judgments § 394 (1969).

This brings us to a question regarding notice of the summary judgment hearing. Appellee’s motion for summary judgment was received by appellant’s attorney on May 2, 1977. A notice was attached to the motion stating that hearing was set in the Washington County Circuit Court on May 12.

On May 3, the trial judge wrote a letter to appellant’s attorney notifying him of the hearing. This letter was received no sooner than May 5.

Appellant’s attorney responded to the motion for summary judgment by generally denying the allegations. The response stated that there was not sufficient time to obtain supporting affidavits and specifically requested that the court grant leave to introduce oral testimony at the hearing in order to rebut appellee’s affidavits. This motion was filed on May 11, the day before the hearing.

At the hearing the parties announced ready to proceed. The circuit judge ruled that the action for alienation of affections was barred by the statute of limitations but, that the malpractice action was not so barred. Neither of these rulings has been appealed.

Appellant’s attorney attempted to have appellant testify orally as a substitution for affidavits. The court was reluctant to grant this request and called a brief recess for the parties to find authority for such a procedure. Appellant’s attorney could not find any authority and he offered appellant’s written affidavit which had been drafted during the interim.

The court questioned whether the affidavit had been timely offered, but permitted it to be filed stating that timeliness was a matter of law that he would decide later. In a written opinion dated June 15, the judge ruled that the affidavit was not tendered timely.

The affidavit controverted the allegations and statements in the motion for summary judgment. As such it raised a factual issue which required the trial court to overrule the motion.

The trial court based its ruling on one sentence contained in Ark. Stat. Ann. § 29-211(c) (Repl. 1962):

The adverse party prior to the day of the hearing may serve opposing affidavits.

When all of the facts of this case are considered we conclude that the trial court abused its discretion.

We feel the appellant’s attorney, although mistaken, acted in good faith by asking for an opportunity to present oral testimony before the hearing. Although the Arkansas summary judgment law does not authorize oral testimony, it does not specifically prohibit it either. See Ark. Stat. Ann. § 29-211 (Repl. 1962). We conclude it does not permit oral testimony.

Considering all the facts and circumstances of this case, we must conclude the only fair and reasonable action would have been to permit the affidavit to be filed.

Therefore, we reverse the decision of the trial court in granting appellee summary judgment, and remand the case for further proceedings.

Reversed and remanded.