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

text:
    BENTON STATE BANK v. Frank R. WARREN and wife
    77-22
    562 S.W. 2d 74
    Opinion delivered March 6, 1978
    (In Banc)

      Hall, Tucker, Lovell & Alsobrook, by: O. Wendell Hall, Jr., for appellant.

      Owens, McHaney & McHaney, by: John C. Calhoun, Jr., for appellees.
   George Rose Smith, Justice.

The appellees, the Warrens, are engaged in building and operating apartments in California and elsewhere in the United States. In 1974 the Warrens, as owners and general contractors, began the construction of a 111-unit apartment complex at 2000 Reservoir Road in Little Rock. Four separate sub-contracts — for concrete work, rough carpentry, finish carpentry, and heating and air conditioning — were let to Harps General Contractors.

Harps failed to pay its suppliers of labor and materials, even though adequate progress payments were made from time to time by the Warrens. Those progress payments were made by checks payable jointly to Harps and to the appellant, Benton State Bank, which had lent money to Harps and had taken an assignment of Harps’s right to receive progress payments. Eventually the Warrens had to take over and complete Harps’s four subcontracts. Various unpaid materialmen brought this suit against Harps and the Warrens, asserting liens against the apartment property. The Warrens cross-complained against Harps and the bank for any loss that the Warrens might ultimately sustain. That loss proved to be $13,367.12, for which the chancellor entered judgment in favor of the Warrens against Harps and the bank. The bank appeals. The sole question is whether the loss should be borne by the bank or by the Warrens. As we view the case, that question in turn depends upon which was more seriously at fault in allowing the loss to occur, both being at fault to some degree.

The facts, though undisputed, are not simple. The subcontract between Harps and the Warrens for rough carpentry is typical of the four subcontracts. The agreement provides that the Warrens will pay Harps $55,080 for its performance of the subcontract. On the tenth of each month the Warrens will make a progress payment to Harps for 90% of the work done in the preceding month. If there are unpaid suppliers of labor and materials the Warrens at their option may make the progress-payment checks payable jointly to Harps and to the suppliers. The contract also provides that Harps’s right to compensation under the contract is assignable. Any assignment is subject to the Warrens’ rights against Harps.

Shortly before construction began, the bank made a $60,000 loan to Harps to pay a tax delinquency owed by Harps, secured by a lien on some cattle. Later on Harps, as additional security, assigned to the bank its right to the progress payments under its subcontracts with the Warrens.

The president of the bank testified that the bank agreed to make additional loans to Harps of up to 75% of the amount due upon each application by Harps for a progress payment. In practice, the matter was handled in this way: Harps signed a printed form of application for each progress payment. The form set out the amount due and requested payment of 90% of that amount. Harps certified on each form that all bills for labor and materials covered by earlier progress payments had been paid. Those certifications were false. Harps was delinquent all along in the payment of its outstanding accounts, as the bank had reason to know even if it did not have actual knowledge.

Whenever Harps submitted an application for a progress payment to the bank, the bank would advance money to Harps, as it had agreed to do. The bank president testified that he understood generally that the advances were to be used by Harps to meet its payroll. The bank sent each progress-payment application to the Warrens, with a covering letter like this one: “Enclosed is a copy of [Harps’s] Application for Payment . . ., which has been assigned to us. Please make your check payable to Benton State Bank, as per our agreement with Harp’s Construction Company, and sign [an acceptance of the assignment] in the space provided at the bottom of this page, and return the original to us.”

The Warrens, upon the receipt at their California office of each application for a progress payment, would send their check for the requested amount to the bank. The checks were payable jointly to Harps and to the bank and bore this statement above the payee’s endorsement: “By endorsement of this check payee acknowledges payment for labor, materials, or both, in construction at the following address: 2000 Reservoir Road, Little Rock, Ark.” Such progress-payment checks totaled $82,686.24. Of that amount the bank used $27,271.86 to repay itself for loans on the Warren project, used $9,393.42 to repay itself for other loans, and deposited the balance of $46,020.96 to Harps’s general account at the bank.

The procedure that we have outlined was followed by the parties for several months. Finally, however, a representative of one of the unpaid materialmen visited the Warrens’ superintendent at the project site and expressed concern about getting money that was overdue from Harps for materials delivered to the job. The Warrens at once made an investigation and learned that Harps was delinquent in its indebtedness to its suppliers and was unable to demonstrate its solvency. The Warrens then took over the responsibility for completing the work, arid this suit followed.

In our study of the case we have been assisted not only by the briefs of opposing counsel but also by a brief, submitted at our request, by counsel for the Permanent Editorial Board for the Uniform Commercial Code.

The case falls within the general purview of the Code, which applies by its terms to any transaction which is intended to create a security interest in accounts. Ark. Stat. Ann. § 85-9-102(1) (Supp. 1977). Harps’s right to progress payments from the Warrens was an “account” as that term is defined in § 85-9-106. The Warrens were “account debtors” with respect to that account. § 85-9-105. Hence Harps was the assignor of an account, and the bank the assignee, as a result of Harps’s assignment to the bank of its right to progress payments.

Section 85-9-318 (1) (a) provides that the rights of an assignee (the bank) are subject to all the terms of the contract between the account debtor (the Warrens) and the assignor (Harps) and to any defense or claim arising therefrom. It follows that the bank necessarily took some risk in lending Harps up to 75% of the amount specified in each application for a progress payment. That is, if the Warrens, upon receipt of an application, had discovered that there were outstanding bills for labor and materials, the Warrens, under the subcontract, could have made their check payable jointly to the bank and to the suppliers of labor and materials. In that situation it cannot be doubted that the bank’s interest in the check would have been subordinate to the suppliers’ primary right to payment. That is so because the bank’s rights as assignee were subject to any claim by the Warrens against the bank’s assignor, Harps, who was primarily liable to its own suppliers.

That, however, is not what happened. Instead the Warrens, with no knowledge of Harps’s indebtedness to its suppliers, made their checks payable to Harps and to the bank. The bank cashed the checks and applied part of the money to its own loans to Harps. The narrow question is: In that situation, are the Warrens entitled to recover from the bank their payments up to the amount of their net loss, $13,367.12? '

This precise question seems to have been considered in only one case, Farmers Acceptance Corporation v. DeLozier, 178 Colo. 291, 496 P. 2d 1016, 10 UCC Rep. 1099 (1972). That case was nearly identical to this one, in that a subcontractor had assigned his contract rights to a lender, the general contractor had made a progress payment to that lender, and the general contractor then sought to recover its payment when it sustained a loss as a result of the subcontractor’s failure to pay its suppliers. In holding that the general contractor was entitled to recover the amount that the lender had applied to its own loan to the subcontractor, the court relied upon Code provisions that we have mentioned and upon this sentence in a law review article by Professor Grant Gilmore: “[W]here the assignor fails to perform the contract, the assignee cannot retain mistaken, or even negligent, payments made to it by the [debtor] unless there has been a subsequent change of position by the assignee. ” Gilmore, The Assignee of Contract Rights and His Precarious Security, 74 Yale L.J. 217, 235, n. 35 (1964-65).

We need not say whether we would agree with Gilmore’s statement in every case, no matter how negligent the account debtor might be or how innocent of fault the assignee might be. The issue is open to some exercise of judgment, for the precise point is not covered by any specific provision in the Uniform Commercial Code. In fact, Gilmore’s sentence is, in context, merely his summary of the holding in Firestone Tire & Rubber Co. v. Central Nat. Bank, 159 Ohio St. 423, 112 N.E. 2d 636 (1953), a pre-Code case.

In the case at bar the equities clearly do not stand entirely in favor of either party. No doubt the Warrens were remiss in making no apparent effort to verify Harps’s representations that all previous bills for labor and materials had been paid. On the other hand, the bank was certainly not an innocent recipient of the progress payments, without notice of possible claims on the part of the Warrens against Harps.

The bank knew that Harps had been compelled to borrow a large sum to pay delinquent federal taxes. It. knew that another bank had refused to make that loan. It was in close touch with Harps’s financial difficulties and knew, for instance, that shortly before the last progress payment was made at least eleven checks written by Harps on the bank had been dishonored. It had solid reasons for suspecting the truth of Harps’s assertions, which the bank forwarded to the Warrens, that all past-due bills for labor and materials had been paid. It was on notice that its endorsements on the progress-payment checks recited that the money was furnished to pay for labor and materials. The president of the bank, a law school graduate, knew that unpaid laborers and materialmen could file liens against the project. He knew that part of the earlier progress payments had been applied by the bank to its own loans to Harps and assumed that additional progress-payment money had been used by Harps to meet its payrolls. The question would naturally arise, How had Harps been able to pay its suppliers when it had to borrow against the progress payments to meet its payrolls? When all the circumstances are considered, we cannot say that the Chancellor’s decision in favor of the Warrens is clearly against the preponderance of the evidence.

Affirmed.

Byrd, J., dissents.

Conley Byrd, Justice,

dissenting. The provisions of the Uniform Commercial Code, so far as here applicable provide:

“Ark. Stat. Ann. § 85-9-318 (Supp. 1977) (1) ‘. . . the rights of an assignee are subject to (a) all the terms of the contract between the account debtor and assignor and any defense or claim arising therefrom; . . . ’ ”

The term “rights” is defined, Ark. Stat. Ann. § 85-1-201 (Supp. 1977) as follows:

“(36) ‘Rights’ includes remedies.”

Thus when we look at Ark. Stat. Ann. § 85-9-318, supra, with the definition of “rights” superimposed, we then read it as saying “. . . the [remedies] of an assignee are subject to (a) all the terms of the contract between the account debtor and assignor and any defense or claim arising therefrom; ...”

Notwithstanding the specific language of the Uniform Commercial Code and its specific definitions, the majority has now interpreted Ark. Stat. Ann. § 85-9-318 to place a liability upon the assignee. The Benton State Bank was not pursuing a remedy as to the accounts in question from which the Warrens could make any defense or claim arising from the pursuit of such remedy. The bank had no need to pursue a right (remedy) against the account debtor because all such accounts had been paid — in fact the bank was no longer an assignee as to those accounts.

The effect of the majority’s view is to make every Banker, who has taken an assignment of accounts for security purposes, a deep pocket surety for every bankrupt contractor in the state to whom it has loaned money. Will the majority apply the same reasoning to product liability arising from such transactions under the innumerable warranty provisions? If so, what limitations will be applied to the bank’s liability in such situations?

I also disagree with the majority that the bank had such notice of the unpaid bills that it was not a bona fide purchaser of the accounts.

For the reasons herein stated, I respectfully dissent.


source: Caselaw Access Project

author: George Rose Smith, Justice.

license: Public Domain

text:
    Tommy MARONEY, A Taxpayer v. UNIVERSAL LEASING CORPORATION et al
    77-215
    562 S.W. 2d 77
    Opinion delivered March 6, 1978
    (Division I)

      James C. Cole, for appellant.

      Hall, Tucker, Lovell & Alsobrook, for appellees.
   George Rose Smith, Justice.

This taxpayer’s action seeks a declaratory judgment declaring that a certain 12.5-acre tract of land is still owned by Hot Spring county, despite the county’s purported conveyance of the land in 1972. The two defendants demurred to the complaint, on the ground that the suit was barred by limitations. This appeal is from an order sustaining the demurrer and dismissing the complaint.

The complaint alleges that in 1972 the county judge and the county clerk, without any order having been made by the county court, executed a deed purporting to convey the tract to the defendant Athelone S. Williams, for so long as the property should be used for industrial purposes. In 1974 the grantee in turn conveyed the property to her codefendant, Universal Leasing Corporation. The complaint alleges that the 1972 conveyance was void and that the land is still owned by the county. The demurrer raises the defense that the complaint was not filed until 1977.

The demurrer should have been overruled. The Constitution vests exclusive jurisdiction over county property in the county court. Ark. Const., Art. 7, § 28 (1874). We have repeatedly held that the county judge has no authority to make contracts for the county without the approval or ratification of the county court. Needham v. Garner, County Judge, 233 Ark. 1006, 350 S.W. 2d 194 (1961); Watts & Sanders v. Myatt, County Treasurer, 216 Ark. 660, 226 S.W. 2d 800 (1950); Lyons Machinery Co. v. Pike County, 192 Ark. 531, 93 S.W. 2d 130 (1936).

The appellees insist, however, that under Act 193 of 1945 this suit should have been brought within two years after the execution of the 1972 deed. Ark. Stat. Ann. §§17-304 et seq. (Repl. 1968). That statute authorized the county court (not the county judge) to convey county property after an appraisal of its value. Section 6 of Act 193, relied upon by the appellees, provides that any conveyance not made pursuant to the terms of the act may be canceled in a taxpayer’s suit brought within two years after the sale of the county property. § 17-309.

The two-year limitation, which is curative in nature, cannot be given effect in the situation now presented. No doubt such a curative provision could remedy, after the lapse of two years, a mere procedural defect such as an irregularity in the appraisal of the property. But here the deed was void from the outset, for want of constitutional power in the county judge to execute it. Inasmuch as the legislature could not in the first instance have authorized the county judge to execute a valid deed to the property, it could not achieve the same result by a curative act. Simpson v. Teftler, 176 Ark. 1093, 5 S.W. 2d 350 (1928).

Reversed, the demurrer to be overruled.

We agree.

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


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

text:
    INDUSTRIAL, INC. et al v. Edward D. PIERCE
    77-344
    563 S.W. 2d 1
    Substituted opinion delivered March 20, 1978
    (In Banc)

      Burrow & Sawyer, for appellants.

      Putman, Davis, Bassett, Cox & Wright, for appellee.
   George Rose Smith, Justice.

This is a workmen’s compensation case. The full commission dismissed the claim as barred by limitations, with no indication that continuing jurisdiction might be asserted upon some other basis. The circuit court reversed the commission’s decision. We review the evidence in the light most favorable to the decision of the commission, its findings being controlling over those of the administrative law judge. Burks, Inc. v. Blanchard, 259 Ark. 76, 531 S.W. 2d 465 (1976).

Pierce was injured on June 7, 1973. He was paid temporary disability benefits until he returned to work in October, 1973. He also received medical benefits until December, the last medical bill being paid by the insurance carrier in May, 1974. After Pierce returned to work he continued to suffer pain and was urged from time to time by his employer to go to a doctor, the employer explaining that the bill would be paid either by workmen’s compensation or by the employer’s coverage through Blue Cross-Blue Shield. Pierce, however, did not seek medical attention until August 6, 1975, which was more than two years after the injury and more than one year after the carrier’s last payment of a medical bill. The claim was therefore barred by the language of the statute. Ark. Stat. Ann. § 81-1318 (b) (Repl. 1976).

Even though compensation was last actually paid in May, 1974, the claimant argues that compensation was nevertheless “furnished” by the employer when the claimant consulted a physician at the employer’s suggestion. If that physician’s fee had been paid by the employer or its insurance carrier, we do not rule out the possibility that the statute of limitations might have been set in motion. See Reynolds Metal Co. v. Brumley, 226 Ark. 388, 290 S.W. 2d 211 (1956). But here it is not shown that the employer or carrier paid for the services received by the claimant after the statute had run. We find that there is substantial evidence to support the commission’s view that an employer’s offer to provide medical services from one source or another does not amount to the “payment of compensation” within the language of the statute.

Reversed.

Hickman and Howard, JJ., dissent.

George Howard, Jr., Justice,

dissenting. I am compelled to dissent from the holding of the majority in denying the claim of appellee for additional benefits on the grounds that appellee’s claim is barred by statute of limitations inasmuch as his claim for additional compensation was not filed within one year from the date of the last payment of benefits, or within two years from the date of the injury. It is my conviction that the holding of the circuit court, as well as the administrative law judge’s holding, in favor of the appelleeclaimant, are supported by substantial evidence for two reasons and, accordingly, should be affirmed.

I.

The record reflects that in addition to temporary total disability sustained by appellee-claimant for which he received temporary total disability benefits for a period of seventeen weeks at the rate of $63.00 per week, appellee-claimant also sustained permanent disability to the body as a whole, but the rate of this permanent disability has not been decided, nor has appellee-claimant received any benefits for any total permanent disability. Consequently, the Workmen’s Compensation Commission has never lost jurisdiction of the case since there is an unresolved issue yet to be decided. Therefore, appellee-claimant’s request for additional temporary benefits is not a new claim as such, but is simply an amendment to his existing unresolved claim and the statute of limitations has no applicability to this proceeding.

II.

Secondly, the employer of appellee-claimant testified that he was personally aware that appellee-claimant was having problems with his leg after he returned to work and even admonished appellee-claimant to seek medical assistance. However, appellee-claimant, in striving to be loyal to his employer and in an effort to meet pressing financial obligations, continued to work in order to avoid losing any time from his employment. An employee with this type of interest and concern about his employer’s business should not be penalized on a technicality void of either substance or compassion. The posture taken by the majority can only encourage procrastination and dilatory tactics involving industrial personal injury claims.

Moreover, the conduct of the employer in advising the appellee-claimant to seek medical assistance and further advising him as late as 1975 that the medical expenditures would be borne by the employer’s insurance coverage is sufficient to find a waiver or even estoppel on the part of respondents in seeking to deny appellee-claimant’s request for benefits.

In Reynolds Metal Company v. Brumley, 226 Ark. 388, 290 S.W. 2d 211, we emphasized that it is the Court’s “settled policy of giving a broad and liberal construction to provisions of the Compensation Act to effectuate its purposes and the further policy of resolving doubtful cases in favor of the claimant.” The holding of the administrative law judge and the circuit court, because of the unusual circumstances in this case, certainly promotes the policy announced in Reynolds.

Hickman, J., joins in this dissent.

      The record reflects that appellee-claimant sustained certain facial disfigurement and injury to his right ankle resulting in an undetermined impairment in the use of his right leg.


text:
    Pat AKINS v. Charles B. PIERCE et al
    77-245
    563 S.W. 2d 406
    Opinion delivered March 6, 1978
    (Division I)
    [Rehearing denied April 17, 1978.]

      Autrey, Weisenberger, Lingo & Johnson, by: LeRoy Autrey and Donald W. Lingo, for appellant.

      Smith, Stroud, McClerkin, Conway & Dunn, by: Charles A. Morgan, for appellees.
   George Rose Smith, Justice.

This action in replevin was brought by the appellees, Pierce and Pierce Film Productions, to recover possession of a 1971 model Ferrari car, a vehicle of very substantial value. The action was eventually dismissed by the plaintiffs as to all the defendants except the appellant Akins. During the pendency of the case in the trial court, there were a great many pleadings, hearings, and court orders. This appeal is from two or more interlocutory orders finding the appellant to be in contempt of court and from a final judgment awarding the appellees possession of the car, double damages totaling $40,000, and an attorney’s fee. Various points for reversal are presented.

The facts material to the cause of action are pertinent as background information. Before the suit arose Akins, the defendant, may have had possession of the car in California, where he resides. Pierce had or obtained possession of the car and took it to his home in Miller county, Arkansas. Akins employed an automobile-retriever company, Alert Recovery, which took possession of the car without legal proceedings and brought it to Pulaski county.

In October, 1975, Pierce filed this suit in Miller county to replevy the car. He alleged that he owned it and that Akins and the automobile-retrieval people had wrongfully taken it. He also alleged that he had sold another car to Akins, executing the title papers in blank, and that Akins had acquired paper title to the Ferrari by fraudulently filling in the title papers to indicate that Pierce had sold the Ferrari to Akins. Akins denied the allegations of the complaint, asserting that he had bought the Ferrari from Pierce.

The appellant first argues that the complaint did not state a cause of action in replevin. That argument cannot be sustained. Replevin is a possessory action, it being incumbent on the plaintiff to show that he is entitled to immediate possession of the chattel in question. Garrett v. McAtee, 195 Ark. 1123, 115 S.W. 2d 1092 (1938). Here the complaint alleged that the defendants had wrongfully taken the car from the plaintiffs. It makes no difference that Akins may have had a certificate of title under the California motor vehicle registration laws. We have held that such a certificate is not title itself but only evidence of title. Robinson v. Martin, 231 Ark. 43, 328 S.W. 2d 260 (1959). The law of California is not shown to be different from our own. Unquestionably the plaintiffs could assert title to the Ferrari by pleading facts showing that Akins’s ostensible title was invalid.

Second, it is argued that the court should have granted Akins a continuance, because his health prevented him from coming to Arkansas for the trial. The court did grant a temporary continuance to allow Akins to appear before a disinterested doctor in California and be examined. The court was justified in concluding that Akins evaded the appointment that had been arranged and in fact had no intention of ever submitting himself to the jurisdiction of the court. There was no abuse of discretion in the court’s denial of a further continuance.

Third, it is argued that Akins’s request for a jury trial should have been granted. Here the record is difficult to follow. The court’s memorandum opinion recites that a jury trial had been waived. It is indicated elsewhere that the case had been set several times for non-jury trial, which may have been the basis for the finding of a waiver. There is also an indication that a local rule of procedure, duly filed with the clerk of this court, had not been complied with by the defendant in his request for a jury trial. The procedure specified in Rule 4 of the Uniform Rules for Circuit and Chancery Courts (Ark. Stat. Ann., Vol. 3A, Supp. 1977, p. 170) is clearly directory only and therefore would not invalidate a reasonable local rule not directly contrary to it. Finally, it is impossible to say from the record that the trial court ruled upon the motion. Counsel have not cited any such ruling, nor have we been able to find one. Of course counsel must, to lay a foundation for appellate review, present a motion to the trial judge and obtain a ruling upon it. Flake v. Thompson, 249 Ark. 713, 460 S.W. 2d 789 (1970). Here we are unable to say that counsel actually obtained a ruling upon the motion.

Fourth, and the principal point, the award of $40,000 double damages and of an attorney’s fee is challenged. The record sustains the award as far as single damages of $20,000 are concerned. Soon after the suit was filed the plaintiffs executed a surety bond and obtained an order authorizing the sheriff of the county in which the car was located to take possession of the car. The order was not actually delivered to the sheriff of Pulaski county, where the car was, but there is no doubt that the attorney who then represented Akins knew about the order. In spite of the Order Akins’s counsel, in the mistaken view that the California certificate of title was unassailable, arranged for the car to be returned to California. That was done at Akins’s demand (as indicated at page 491 of the record). Thus the plaintiffs made a prima facie case by showing that the Ferrari had been wrongfully removed to California and had been returned in a damaged condition. That prima facie case was not contested. There was substantial evidence showing that the car was worth $30,000 before it was damaged and $2,500 afterwards.

The award of double damages and of an attorney’s fee, however, cannot be sustained. In making those awards the trial court cited the provisions of § 6 of Act 144 of 1973. Ark. Stat. Ann. § 34-2124 (Supp. 1977). That section is primarily a criminal law which makes it a misdemeanor, punishable by a fine and imprisonment, for any person, in a possessory action such as this one, to “wilfully and knowingly” damage the property, to remove it from the jurisdiction with intent to defeat an order of delivery, or to do other acts not now pertinent. The state also provides for an attorney’s fee. The trial judge relied upon the statute in awarding double damages and an attorney’s fee.

Those awards cannot be upheld. Section 34-2124 is criminal in nature except for the final clause, which allows a civil award to the plaintiff of “double the amount of damage done to the property,” plus an attorney’s fee. As a penal law the section must be strictly construed. The reference to double damages and attorney’s fees can refer back only to the initial prohibition of willful and knowing damage to the property, because there is no language whatever indicating that double damages are to be allowed for the other acts made criminal by the section. Here there is no proof, nor even any suggestion, of willful and knowing damage to the Ferrari. Hence the award of damages in excess of $20,000 and the award of the attorney’s fee must be set aside.

Lastly, the appellant challenges the finding that he was in contempt of court (for which the court did not actually reach the point of assessing a penalty). There is really more than one reason why we cannot sustain the conviction for contempt, but it will suffice to note that the court relied solely upon its finding that Akins had committed a misdemeanor, in violation of § 34-2124, supra, by removing the Ferrari from the state. Akins’s commission of a criminal offense, for which he had not been charged by information or indictment, was not in itself a basis for a finding that he was in contempt of court. There is no showing that he ever received, or even knew about, the order directing the sheriff to take possession of the car. We realize that this point is perhaps moot, since the court did not impose any punishment and may not be in a position to do so, Akins still being in California; but we have thought it fair to set the question at rest, lest the possibility of future punishment be left hanging in the air.

With the indicated modifications the judgment is affirmed.

We agree.

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


author: John A. Fogleman, Justice. Carleton Harris, Chief Justice, George Howard, Jr., Justice,

text:
    McCOY FARMS, INC. et al v. J & M McKEE et al
    77-201
    563 S.W. 2d 409
    Opinion delivered March 6, 1978
    (In Banc)
    [Rehearing denied April 17, 1978.]

      Freeland & Gafford, Oxford, Miss.; Gaughan, Barnes,

      Roberts, Harrell & Laney, and Wright, Lindsey & Jennings, for appellants.

      Brown, Compton & Prewelt, Ltd., for appellees.
   John A. Fogleman, Justice.

This appeal was taken from a decree foreclosing a purchase money mortgage on farm lands which had been conveyed by appellees to appellants. The mortgage secured the payment of a promissory note dated February 1, 1976, executed by appellants for $539,200 with interest at 8’/2% per annum, payable on February 1, 1977. Appellants defended the mortgage foreclosure action on the ground that the note was usurious. It was the contention of appellants that this note was usurious because it was actually executed on August 30, 1976, but backdated to February 1, 1976. The court rejected this contention. We find no reversible error on trial de novo and affirm.

At the outset, we dispose of one of appellants’ points for reversal by sustaining their contention that the chancellor erred in excluding documents and testimony offered by them to show the facts and circumstances relating to the note and mortgage and their execution. Such evidence is admissible on the issue of usury. American Physicians Insurance Co. v. Hruska, 244 Ark. 1176, 428 S.W. 2d 622; Textron v. Whitener, 249 Ark. 57, 458 S.W. 2d 367. It was error to exclude this evidence and we consider all such proffered evidence on trial de novo. Price v. Price, 258 Ark. 363, 527 S.W. 2d 322.

We also find that the chancellor erred in excluding appellants’ Arkansas attorney from the courtroom on motion of appellees’ attorney when the latter stated that he might find it necessary to call appellants’ attorney as a witness. Neither our statutes on sequestration of witnesses nor the Code of Professional Conduct requires this, when an attorney is called as a witness by, and testifies on behalf of, an adverse party.

Rule 615 of the Arkansas Uniform Rules of Evidence was in effect at the time of the trial. It requires that the court order witnesses excluded at the request of a party. Ark. Stat. Ann. § 28-1001 (Supp. 1977). But it does not authorize exclusion of a person shown by a party to be essential to the presentation of his cause. A party’s only lawyer would certainly fall into the category of those who are not to be excluded. This would require the court to determine the question of essentiality of the presence of a potential witness to the presentation of a party’s case and that question would arise when a party is represented by more than one attorney. The trial judge in such cases must have some latitude of discretion, which would be narrowed under circumstances prevailing here, i.e., when the witness to be excluded is the party’s only Arkansas attorney in a case in a court of this state.

In adopting the Uniform Rules of Evidence, the General Assembly did not specifically repeal Ark. Stat. Ann. § 28-702 (Repl. 1962) governing sequestration of witnesses, although there was a specific repeal of the very next section, § 2, Act 1143 of 1975. The adopting act did contain a general repealer. In our view of this case, however, it is not necessary that we decide whether there is an irreconcilable conflict in the two statutes.

The earlier statute [Ark. Stat. Ann. § 28-702 (Repl. 1962)] only applied to sequestration (or segregation) of witnesses of the party adverse to the party requesting exclusion. Appellants assured the court that they had no intention of calling this attorney as a witness. Still, the request was made by appellees and the chancellor was persuaded to honor it. The application of the rule of sequestration under this statute to any witness was, at the most, discretionary with the court. St. Louis, I.M. & S. Ry. Co. v. Pate, 90 Ark. 135, 118 S.W. 260 (1909); Southern Anthracite Coal Co. v. Bowen, 93 Ark. 140, 124 S.W. 1048. See also, Copeland v. State, 226 Ark. 198, 289 S.W. 2d 524; Benson v. State, 149 Ark. 633, 233 S.W. 758. The trial court had discretion in determining which witnesses may be put under the rule and which ones, if any, may be excused from the rule. Arkansas Motor Coaches v. Williams, 196 Ark. 48, 116 S.W. 2d 585; Home Mutual Fire Ins. Co. v. Riley, 252 Ark. 750, 480 S.W. 2d 957.

The rule against the attorney who becomes a witness continuing as an advocate was not designed to permit a lawyer to call opposing counsel as a witness and thereby disqualify him. See Code of Professional Responsibility, DR 5-102 (B). Galarowicz v. Ward, 119 Utah 611, 230 P. 2d 576 (1951); Phillips v. Liberty Mutual Ins. Co., 43 Del. Ch. 436, 235 A. 2d 835 (1967); Beavers v. Conner, 258 So. 2d 330 (Fla. App., 1972). The language of Jones v. Hardesty, 261 Ark. 716, 551 S.W. 2d 543, relied upon by appellees to justify the action taken, does not support their position. It is true that the attorney there testifying had been called to the witness stand by adverse counsel, but the cause for this court’s concern was the fact that the testifying attorney thereafter cast himself in the role of witness for his own client.

We have held that it was within the trial court’s discretion to permit an attorney for a party to testify in a case, even though the rule has been invoked. Arkansas Motor Coaches v. Williams, supra; Oakes v. State, 135 Ark. 221, 205 S.W. 305. But we have not hesitated to reverse a judgment for abuse of that discretion. Rushton v. First National Bank of Magnolia, 244 Ark. 503, 426 S.W. 2d 378. A judgment will not be reversed, however, because of the court’s action with reference to exclusion of witnesses, in the absence of gn abuse of discretion. Mikel v. State, 182 Ark. 924, 33 S.W. 2d 397.

We are admonished by statute that no judgment shall be reversed or affected by any error or defect in tjle proceedings which does not affect the rights of the adverse party. Ark. Stat. Ann. § 27-1160 (Supp. 1977). In any event, we should not reverse the action of the trial court in the exercise of discretion in a matter of practice and procedure, when there has been no prejudice to the complaining party in the ultimate result. Naler v. Ballew, 81 Ark. 328, 99 S.W. 72; Kansas City Southern Ry. Co. v. Murphy, 74 Ark. 256, 85 S.W. 428; St. Louis, I.M. & S. Ry. Co. v. Boback, 71 Ark. 427, 75 S.W. 473; St. Louis I.M. & S. Ry. Co. v. Devaney, 98 Ark. 83, 135 S.W. 802; Railway Co. v. Sweet, 57 Ark. 287, 21 S.W. 587. See also, State v. Jennings, 10 Ark. 428; Globe Life Ins. Co. v. Humphries, 258 Ark. 118, 522 S.W. 2d 669; Bates v. Simmons, 259 Ark. 657, 536 S.W. 2d 292; Parker v. Wells, 84 Ark. 172, 105 S.W. 75; Kelly v. DeWees, 200 Ark. 770, 140 S.W. 2d 1011. Error unaccompanied by prejudice, commonly called harmless error, is not ground for reversal. Keathley v. Yates, 232 Ark. 473, 338 S.W. 2d 335; Christmas v. Raley, 260 Ark. 150, 539 S.W. 2d 405; Railway Co. v. Sweet, supra. The harmless error rule applies even when the error is of constitutional proportions. Chapman v. California, 386 U.S. 18, 87 S. Ct. 824, 17 L. Ed. 2d 705, 24 ALR 3d 1065 (1967), reh. den. 386 U.S. 987, 87 S. Ct. 1283, 18 L. Ed. 2d 241; Gilbert v. California, 388 U.S. 263, 87 S. Ct. 1951, 18 L. Ed. 2d 1178 (1967).

We do not see how appellants have been prejudiced by the exclusion of its only Arkansas attorney from the proceedings. The facts seem to be undisputed. The legal question seems to have been adequately presented. It has been presented here on trial de novo and the law firm of the excluded attorney has apparently participated in appellants’ brief, as its name appears thereon. Yet no attempt was made to have a review or rehearing in the trial court with the participation of Arkansas counsel or to offer evidence that had not been offered at the trial or to present any legal argument that might have, but had not, been made. We find no prejudice to appellants by the exclusion of their Arkansas attorney on the possibility that he might be called as a witness by appellees.

Although we might say that there was an abuse of the trial court’s discretion in denying appellants’ motion for a continuance to obtain other Arkansas counsel, if there had been any showing that prejudice resulted, in the absence of any such showing, there is no ground for reversal. Mammoth Spring School District No. 2 v. Fairview School District No. 7, 190 Ark. 769, 80 S.W. 2d 615; Missouri Pac. R. Co. v. Berry, 191 Ark. 1165, 83 S.W. 2d 531; Missouri & N.A.R. Co. v. Robinson, 188 Ark. 334, 65 S.W. 2d 546; Barrett v. Berryman, 127 Ark. 609, 193 S.W. 95. Even when there is a clear abuse of discretion in the denial of a motion for continuance, the error is not reversible unless there is a showing of prejudice. Finch v. State, 262 Ark. 313, 556 S.W. 2d 434 (1977). Even though a motion for new trial is not required, as a prerequisite to appellate review, it is still a procedure available for showing prejudice in a ruling of the trial court when it was not possible to make that showing at the time of the ruling. Finch v. State, supra. Even though it is doubtful that, strictly speaking, a motion for new trial is appropriate in a chancery case, a bill of review or petition for rehearing can serve the same purpose in chancery. Midwest Lime Co. v. Independence County Chancery Court, 261 Ark. 695, 551 S.W. 2d 537. If there had been any prejudice to appellants in exclusion of their Arkansas attorney from the proceedings, it might have been shown, or at least alleged, in a bill of review or petition for rehearing.

Where the decision and judgment is correct on the undisputed evidence, the appellant is in no position to complain. Yutterman v. Grier, 112 Ark. 366, 166 S.W. 749. Since, as we view the matter, the procedural error, granted that there was an abuse of discretion in the matter, did not and could not have affected the correct result reached by the trial court, there is no prejudice, and consequently, no reversible error.

The real issue in this case is whether the note sued on was usurious. The transaction commenced with the execution of a contract for the sale of certain farmland by appellees to appellants David B. Boone and Oval McCoy, Jr. The purchase price was $889,200, of which $60,000 was payable in cash at the time of closing (of which a $50,000 promissory note, due and paid on January 7, 1976, was a part) the assumption of an indebtedness of $290,000 to Connecticut General Insurance Company and a balance of $539,200 to be evidenced by a promissory note due February 1, 1977. The contract, dated November 13, 1975, provided for closing of the sale on February 1, 1976. Although the contract provided that possession of the property be given on delivery of a deed, the contract contained a clause permitting the purchasers to occupy the land after execution of the contract for the purpose of farming, ditching, leveeing, discing and making improvements on the land at their own expense, and without any right to recover any expenditures made for the purposes from the sellers.

A promissory note bearing interest anterior to its date which does not provide on its face for an interest rate in excess of the maximum permissible rate, is presumed to have been given upon a state of facts which authorized the taking of the instrument and to be lawful and valid. Ewing v. Howard, 74 U.S. 499, 19 L. Ed. 293 (1869); Gettingerv. Lattingtown Harbor Development Co., Inc., 17 AD 2d 629, 230 NYS 2d 765 (1962); Williams v. Bronston, 190 Cal. App. 2d 812, 12 Cal. Rptr. 463 (1961); Franklin National Bank v. Feldman, 42 Misc. 2d 839, 249 NYS 2d 181 (1964). See also, Ansley v. Bank of Piedmont, 113 Ala. 467, 21 So. 59 (1896). An antedated note is not usurious, as a matter of law, when the amount of interest paid would exceed the permissible rate applied to the principal for the period between the date it was delivered and the due date, unless it was antedated merely to avoid the law of usury. Ansley v. Bank of Piedmont, supra.

It has been held that a note bearing interest from the proper date for closing a sale and purchase of real estate would not be usurious when it was given and dated on a postponed date of closing, when the postponement was solely at the request and for the convenience of the purchaser. Gettinger v. Lattingtown Harbor Development Co., supra. It was recognized that, in case of specific performance, the seller might well have been entitled to interest from the original closing date. A note given for a debt due before its execution is not usurious when interest at a legal rate runs from the due date, even though the notes evidencing the debt are not signed until a later date. Burleson v. Morse, 172 S.W. 2d 361 (Tex. Civ. App., 1943).

Since the note must be presumed to have been valid on its face, the burden fell upon appellants to show by clear and convincing evidence that it was void for usury. Peoples Loan & Investment Co. v. Booth, 245 Ark. 146, 431 S.W. 2d 472; Brown v. Central Arkansas Production Credit Ass'n., 256 Ark. 804, 510 S.W. 2d 571; Commercial Credit Plan v. Chandler, 218 Ark. 966, 239 S.W. 2d 1009; Smith v. Mack, 105 Ark. 653, 151 S.W. 431. Usury will not be presumed, imputed to the parties or inferred, if the opposite result can be fairly and reasonably reached. Hayes v. First National Bank of Memphis, 256 Ark. 328, 507 S.W. 2d 701; Davidson v. Commercial Credit Equipment Corp., 255 Ark. 127, 499 S.W. 2d 68; Briggs v. Steel, 91 Ark. 458, 121 S.W. 754. In determining whether the note was usurious, the matter must be viewed as of the time it was made in the light of all attendant circumstances germane to the transaction. Hayes v. First National Bank of Memphis, supra; Brown v. Central Arkansas Production Credit Ass’n., supra; Key v. Worthen Bank & Trust Co. N.A., 260 Ark. 725, 543 S.W. 2d 496.

When we consider the note in question in light of the circumstances under which it was executed, and the evidence in the light most favorable to appellants, appellants’ burden was insurmountable and only one result can be reached, i.e., the one reached in the trial court. Shortly after the contract was signed, appellants availed themselves of the right under the contract with appellees to go upon the property, at their own risk, to make improvements. They spent. approximately $135,000 in building 8 Vi miles of levees and discing the land. Appellants McCoy and Boone refused to close on February 1, 1976, the closing date provided for in the contract, because appellees refused to convey to appellant McCoy Farms, Inc., assignee of McCoy and Boone, but not a party to the contract, unless McCoy and Boone joined in the execution of the deferred purchase money notes so that they would be personally liable. The appellees had agreed to sell to the purchasers (McCoy and Boone) or to anyone they might name, but the terms of the contract specified that a part of the purchase price be in the form of a promissory note executed by the purchasers for $539,200, due February 1, 1977, with interest at 8/2 % per annum. McCoy Farms, Inc. filed suit against appellees for specific performance. Appellees counterclaimed, seeking judgment for $50,000 as liquidated damages for breach of contract.

Trial commenced on July 26, 1976, but at the noon recess, the parties entered into a stipulation settling the controversy. It was dictated into the record by appellees’ attorney. In pertinent part, it was:

. The plaintiff, McCoy Farms, Inc., agrees that effective August 30, 1976, they will cause J. M. McKee and Margaret McKee to be made whole under the terms of the provisions of the contract dated on or about November 13, 1975. That on August 30, 1976, the contract will be closed in the same manner and with the same terms and provisions as it would have been closed had no controversy amen in the previous closing date. In order to make John McKee and Margaret McKee whole to payments acquired, plus proportionate interest on $10,000.00 at eight and a half percent interest, the net result will be that on August 30, 1976, the new closing date, the parties will then stand in the same position as they would have on November 13, 1975. The Note will be signed and endorsed personally by David B. Boone and Oval McCoy, Jr., and McCoy Farms, Inc., and the Mortgage executed properly under the contract will be applied ****
Let the record further show that the parties agree that the present action shall not at this time be dismissed but shall be held in abeyance with the Court retaining jurisdiction with proper Orders, Judgment and Decrees as they may be approved under the pleadings thus far and this Stipulation, and, after the matter has been closed on August 30, 1976, the initial complaint, counterclaim and all matters will be dismissed with prejudice and each party will bear their own costs.
“In other words exactly in accordance with the terms of the contract, Tour Honor. Everything like it was back to that. ” [Emphasis ours.]

In appellees’ counterclaim, they had sought to recover $50,000 in damages from appellants Boone and McCoy. Thus, Boone and McCoy stood to lose $50,000 plus the cost of the improvements made by them at their own risk, if they lost the suit they brought. The settlement made was, in effect, a specific performance of the contract as written, which may have seemed to appellants preferable to the risk inherent in the trial and ultimate resolution of the issues in the case.

If appellees had sought and been granted specific performance, they would have had a firm basis for asking that they recover interest from the original closing date. Specific performance is an equitable remedy which compels the performance of a contract on the precise terms agreed upon or such a substantial performance as will do justice between the parties under the circumstances. It is a means of compelling a contracting party to do precisely what he should have done without being coerced by a court. 81 CJS 701, Specific Performance, § 2; 71 Am. Jur. 2d 10, Specific Performance, § 1; Restatement of the Law, Contracts § 358, Comment a, § 359 (2), § 360 (b), § 326 (c). The object in such cases is to place the party without fault in as nearly the same position as he would have been had there been no default by the other party. Pillsbury v. J. B. Streeter, Jr. Co., 15 N.D. 174, 107 N.W. 40 (1906). The guiding principle in such cases is to relate the contract back to the date set therein. Ellis v. Mihelis, 60 Cal. 2d 206, 32 Cal. Rptr. 415, 384 P. 2d 7 (1963); Meyer v. Benko, 55 Cal. App. 3d 937, 127 Cal. Rptr. 846 (1976). Although, strictly speaking, legal damages are not awarded when specific performance is decreed, a decree should, as nearly as possible, require performance in accordance with the terms of the contract, one of which is the date fixed by it for completion; and, when that date is past, the court, in order to relate the performance back to it, gives the complainant credit for any losses occasioned by the delay. Ellis v. Mihelis, supra.

The contract in this case called for closing on February 1. It provided for interest on the deferred purchase price from the date of closing. As a general rule, in a specific performance case where the purchaser of land is in default, he is to be charged with interest from the time the purchase price should have been paid under the contract. Kirkland v. O’Kelly, 218 Ala. 68, 117 So. 420 (1928). The allowance of interest during a period of default is a proper and equitable adjustment in arriving at justice between the parties to a specific performance suit. Pillsbury v. J. B. Streeter, Jr. Co., supra. See also, Ellis v. Mihelis, supra; Meyer v. Benko, supra; Loveless v. Diehl, 236 Ark. 129, 364 S.W. 2d 317.

It is the policy of the law to encourage settlement of litigation and to uphold and enforce contracts of settlement if they are fairly arrived at and not in contravention of law or public policy. St. Paul Fire & Marine Insurance Co. v. Wood, 242 Ark. 879, 416 S.W. 2d 322; Burke v. Downing Co., 198 Ark. 405, 129 S.W. 2d 946; Jacobs v. American Bank & Trust Co., 175 Ark. 507, 299 S.W. 749. There is no contention that the stipulation for settlement was not arrived at in good faith or that there was no consideration for the settlement. Certainly the stipulation could not be said to be illegal for usury, if the equity court could have awarded the interest of which appellants complain. The only question before us is the interpretation of the contract. In view of the italicized parts of the stipulation, we interpret it to call for the execution of the note, exactly as it would have been executed if the transaction had been closed on February 1, 1976. The parties had a right to make any settlement satisfactory to themselves. Burke v. Downing Co., supra.

Appellants seem to imply that they executed the note under some sort of duress because appellees demanded that it be dated as it was. Although we feel that appellees properly made such a demand, it is difficult to see how appellants can claim that they were coerced when the lawsuit that was settled was still pending and was not to be dismissed until the stipulation fór settlement had been carried into effect. Certainly they could have resorted to the trial court to enforce the stipulation for settlement and resolve disputes about its terms. Jannarone v. W. T. Co., 65 N.J. Super. 472, 168 A. 2d 72 (1961); Gottl v. Cummings, 152 Colo. 57, 380 P. 2d 556 (1963); Bankers Fidelity Life Ins. Co. v. O'Barr, 108 Ga. App. 220, 132 S.W. 2d 546 (1963); Autera v. Robinson, 419 F. 2d 1197 (D.C. Ct. App., 1969); All States Investors, Inc. v. Bankers Bond Co., 343 F. 2d 618 (6 Cir., 1965), cert. den. 382 U.S. 830, 86 S. Ct. 69, 15 L. Ed. 2d 74.

Appellants complain that they were wrongfully evicted from the property after they went into possession to make improvements and after the dispute had arisen, and, this being so, they could not be required to pay interest until possession was restored after the closing which took place on August 30. A complete answer to this question is that both parties claimed that the other had breached the contract and this dispute was resolved by the settlement.

The judgment is affirmed.

Chief Justice Harris and Justices Hickman and Howard dissent.

Carleton Harris, Chief Justice,

dissenting. My dissent is based on the fact that the trial court excluded appellants’ Arkansas attorney from the courtroom on motion of appellees’ attorney, and, further, excluded relevant evidence. These two matters will be discussed together. Indeed, the majority itself finds both rulings to be erroneous.

There is no point in my setting out why the former ruling was an abuse of discretion since the majority concede that this action by the court constituted error; however, the majority go on to say that the error was not prejudicial, and I suppose this is based on the fact that out of state counsel, T. H. Freeland, III, of Oxford, Mississippi, proceeded with the case. I do not see how this finding of no prejudice is so clear. Case after case holds that where this court finds error, unless such error is clearly not prejudicial, we reverse; or to state it another way, where error is shown, it is presumed that such is prejudicial unless it affirmatively appears otherwise. Ark. State Highway Commission v. Spence, 254 Ark. 423, 494 S.W. 2d 469. There are dozens of cases to the same effect. Of course, the word “affirmatively” means that the burden is on the party, who benefited from the error, to establish clearly that there was no prejudice. I cannot agree that this has been done.

In the first place, there is no way of knowing how the Arkansas attorney would have handled matters had he been participating. For instance, he might have been able to persuade the court that the evidence heretofore mentioned, consisting of documents and testimony offered by appellants to show facts and circumstances relating to the note and mortgage and their execution, was pertinent and relevant — a fact which the majority concede. This testimony was excluded by the trial court, but the majority say, in effect, that that really makes no difference since “we consider all such proffered evidence on trial de novo. ” While this has been done in the majority of cases, I think it is also true that in most of these cases the trial court heard the proffer and simply held such evidence inadmissible. In the instant case, according to the record, the chancellor left the courtroom and returned to chambers, appellants making their proffer in his absence, and he did not return to the courtroom until the proffer of evidence had been concluded. Accordingly, he did not know what specific evidence was being tendered. I certainly cannot say that his decision would have been exactly the same had this evidence been accepted — perhaps so — perhaps not, but at any rate, the trial court should have, in my view, the opportunity to hear, and consider, the evidence which the majority admit was entirely admissible.

This lawsuit involved quite a bit of money and appellants had employed an Arkansas attorney to assist in their representation; yet, this attorney, for no valid legal reason, was prohibited from rendering the service for which he had been employed. The Mississippi counsel then immediately moved for a continuance in order that he might employ some other member of the Arkansas Bar, but this was refused. Since I consider the exclusion of Mr. Gaughan to have constituted prejudicial error, certainly I also consider it prejudicial error to refuse to grant the continuance. There was no reason in advance for out of state counsel to feel that Mr. Gaughan would not be able to participate, since the latter attorney would not be called for appellants, and Freeland was thus left helpless other than to proceed to trial himself. I know that I would personally dislike going to a sister state, where rules of procedure and evidence may well differ from that in Arkansas, to try a case without the help of an attorney of that locality.

Let us remember that a trial should not only be fair (and I do not question the fair-mindedness of the chancellor whom I consider to be a conscientious jurist), but the trial should also have every appearance of fairness, and I can certainly see where appellants could feel that they were mistreated when the Arkansas attorney that had been employed was prohibited from engaging in the trial, and they were further denied the opportunity to obtain other counsel licensed in this state.

It is my view that this court, having found that the exclusion of the testimony herein mentioned was error, and having found that the Arkansas attorney was improperly excluded, should remand this casé for further proceedings.

Hickman, J., joins in this dissent.

George Howard, Jr., Justice,

dissenting. The majority concedes that the chancellor erréd in excluding appellants’ Arkansas attorney fr;om the courtroom on motion of appellees’ attorney under the pretext that appellees’ attorney might find it necessary to call appellants’ Arkansas attorney as a witness. Thus, leaving appellants without the aid and assistance of their Arkansas attorney who was well versed in Arkansas law and trial procedure. Appellants had only their Mississippi attorney who stated that his familiarity with Arkansas law and trial procedure, at best, was limited. However, the majority goes on to affirm the ruling of the trial court by finding that appellants have not been prejudiced by the exclusion of its only Arkansas attorney from the proceedings, the position taken by the majority is untenable for two major reasons and consequently, I must dissent from the holding of the majority.

First, the right of a litigant to counsel of his choice is so fundamental and basic under American Jurisprudence that prejudice is presumed to have resulted without the Court having to indulge in nice and dainty calculations as to the amount of prejudice arising from its denial.

In Powell v. Alabama, 287 U.S. 45 (1932), the United States Supreme Court, in emphasizing the right of a party to be heard by a counsel of his choice and that that choice may not be diminished by nefarious platitudes, made the following observation:

“If in any case, civil or criminal, a state or federal court were arbitrarily to refuse to hear a party by counsel, employed by and appearing for him, it reasonably may not be doubted that such a refusal would be a denial of a hearing, and, therefore, of due process in the constitutional sense.” (Emphasis added)

The majority has further found that even though appellants’ Arkansas attorney was excluded from the proceedings, “[t]he legal question seems to have been adequately presented.” But under the instructions of Powell v. Alabama, supra, appellants were not even afforded a legitimate hearing. In other words, the proceedings below were a mere formality.

In Reynolds v. Cochran, 365 U.S. 525, which involved a habeas corpus proceeding, the trial court proceeded with the hearing in the absence of petitioner’s retained counsel; petitioner advised the court that his counsel was on the way and was due to arrive on the date of the trial, and asked that the trial be postponed until his counsel arrived; the court denied a continuance and concluded, as the majority has concluded in this action, that if it was error to proceed without petitioner’s counsel, it was harmless error in that the only fact at issue in the proceeding had been admitted by the petitioner. The Supreme Court in reversing the trial court concluded that a party has a constitutional right to be heard by counsel of his choice and a failure to hear a party by counsel, employed by and appearing for him, in any civil or criminal case, denies a party a hearing and therefore denies him due process of law in the constitutional sense.

In Prudential Ins. Co. of America v. Small Claims Court of City and County of San Francisco, et al, 77 Cal. App. 2d 379, 173 P. 2d 38 (1946), the court made the following statement:

. . There can be little doubt but that in both civil and criminal cases the right to a hearing includes the right to appear by counsel, and that the arbitrary refusal of such right constitutes a deprivation of due process.” (Emphasis added)

Secondly, the majority takes the position that inasmuch as the proceedings in this case are reviewed de novo, there has been an independent review and consideration of all of the evidence in the record, consequently, there is no merit to appellant’s contention that he has been prejudiced one way or the other in the trial court. Thus, the majority found that the transaction is not usurious and therefore, the trial court should be affirmed. But it must be remembered that during oral argument, and indeed this is to be gleaned from the record, counsel for appellants stated that because of the trial court’s ruling in excluding certain evidence, but proffered by the counsel for appellants, all of the evidence available to appellants to support its defense of usury was not introduced. Hence, the majority in order to defend the posture which it has assumed in this case has had to speculate on the weight, materiality and authenticity of the evidence that is not in the record. Indeed, the majority has exceeded the scope and latitude of appellate review.

Finally, the following from 16 Am. Jur. 2d P. 973, Section 569, sums up succinctly the thread intended to be woven in this dissent:

“. . . no one may be legally divested of his property unless he is allowed a hearing before an impartial tribunal, where he may contest the claim set up against him, and be allowed to meet it on the law and facts and show if he can that it is unfounded. He must be given his day in court.” (Emphasis added)

      Another of the justices has pointed out in a dissent a couple of instances where the Mississippi attorney needed advice on procedural points.

      The court had excluded the evidence on the basis that any occurrences prior to the compromise settlement were irrelevant and not material to the cause of action.

      Some trial courts even-require that a non-resident attorney associate a lawyer residing and admitted to practice in the State'of Arkansas with him in the litigation.

      Rule 615 pf the Unifprm Rules ef Evidence, which became effective July 1, 1976, and, censequently, in fprce during the trial ef this case, provides: At the request cf a party the ccurt shall crder witnesses excluded se that they cannet hear the testimony ef ether witnesses, and it may make the order of its own motion. This rule does not authorize exclusion of (1) a party who is a natural person, or (2) an officer or employee of a party that is not a natural person désignated as its representative by its attorney, or (3) a person whose presence is shown by a party to be essential to the presentation of his cause. (Emphasis added)
      During oral argument, counsel stated that this rule was not called to the attention of the trial court, consequently, it seems that both counsel and the court were unaware of the existence of this rule.

      On one occasion, the Mississippi attorney solicited advice from the trial court on a point of procedure; and on another occasion, counsel for appellees volunteered advice to the Mississippi counsel on a point of procedure during the course of the trial.

        See: People v. Bryant (1969) 79 Cal. Rptr. 549, 275 C.A. 2d 215, [although a criminal case] the court held that the deprivation of effective counsel is of sufficient constitutional significance to merit reversal even without actual prejudice.


author: John A. Fogleman, Justice.

text:
    E. C. BARTON AND COMPANY d/b/a EUDORA LUMBER COMPANY v. Hubert NEAL and Tom and Carolyn JONES
    77-228
    562 S.W. 2d 294
    Opinion delivered March 6, 1978
    (In Banc)

      W. K. Grubbs, Sr., for appellant.

      Holloway & Haddock, by. James W. Haddock, for appellees.
   John A. Fogleman, Justice.

Hubert Neal, a building contractor, built a dwelling house for Tom and Carolyn Jones. He purchased materials to use in the construction from E. C. Barton & Company d/b/a Eudora Lumber Company, and for use on other construction jobs, one of which was a dwelling house for Bobby Stepp on a lot adjacent to that on which the Jones house was built. Neal became delinquent in his accounts. The lumber company sued Neal and the Joneses, seeking to recover $2,982.12 for materials it alleged were furnished for use in the construction of the Jones dwelling. The company sought judgment and a lien on the Jones property. The Joneses filed a third party complaint against Neal seeking judgment over against him for any amount they were required to pay the lumber company. Neal and the Joneses, in separate answers, denied all material allegations of the complaint.

The chancery court found that between May 22, 1975 and September 3, 1975, appellant delivered materials of the value of $2,978.08 to Neal to be used in the construction of the Jones house for which receipts were given by Neal or one of his employees, and that all of these materials except that represented by three of these invoices were delivered to Neal or his employees at the appellant’s place of business but that there was no proof that the materials were ever delivered to the job site. The three invoices totalled $1,063.87. The court gave judgment for this amount, and granted a lien on the Jones property to secure its payment. We affirm because we cannot say that the decree was clearly against the preponderance of the evidence.

The three tickets for which the judgment was given were signed by an employee of appellant and showed delivery to the Jones job site. Appellant recognizes that, under our decisions, the burden is on the materialman to show that the materials for which he claims a lien were used in the improvement on which a lien was sought, but is critical of the reasoning upon which this rule rests, saying that it results from a misapplication of language in Central Lumber Co. v. Braddock Land & Granite Co., 84 Ark. 560, 105 S.W. 583, 13 Ann. Cas. 11. This rule has been stated and followed,, however, without exception. See Stone Mill & Lumber Co. v. Finsterwalder, 249 Ark. 363, 459 S.W. 2d 117; Lyle v. Latourette, 209 Ark. 721, 192 S.W. 2d 521; Half Moon Gin Co. v. E. C. Robinson Lumber Co., 207 Ark. 483, 181 S.W. 2d 239; Marianna Hotel Co. v. Livermore Foundry & Machine Co., 107 Ark. 245, 154 S.W. 952; Reiff v. Redfield School Board, 126 Ark. 474, 191 S.W. 16. We do not consider Hill v. Imboden, 146 Ark. 99, 225 S.W. 330 to be an exception, although appellant views it as such. In Hill, we simply held that the evidence was sufficient to meet the lien claimant’s burden and that the findings of the chancellor in that case were not against the preponderance of the evidence.

Appellant seems to think that Pratt v. Nakdimen, 99 Ark. 293, 138 S.W. 974, Ann. Cas. 1913A 872, tended to limit the application of the Central Lumber Company case, to render the “use” requirement improper. We do not agree. We simply pointed out in Pratt, that the question in the earlier case was “When does the lien of the material furnisher attach under the mechanic’s lien statute?” while the question in Pratt was whether the contractor had an ownership in the materials subject to attachment after they had been delivered to the building site but before they had been used in the building. The fact remains that the language used in Central was a construction of the language of Ark. Stat. Ann. § 51-601 (Repl. 1971), giving the lien. Reiff v. Redfield, supra. This conclusion is inescapable when the language of the opinion in Central is considered. We said:

Statutes like this, using almost the same language, have been construed differently; some courts holding that the materials furnished for the building must be actually used in its construction or repair before it can become a lien under such statutes, while others hold the actual use of the materials is not requisite, if they are furnished for the particular building or improvement. Phillips on Mechanics’ Liens (3d Ed.) §§ 148-162; 2 Jones on Liens (2d Ed.) § 1329; 20 Am. & Eng. Encyc. 346, and cases cited.
We prefer the former construction. We think the statute was intended to enforce justice; that the party who has enhanced the value of the property by the incorporation therein of his material or labor shall have security in the same for the amount due therefor. In this way the owner is compensated for the incumbrances, and justice is done to all parties.

That construction of the statute became as much a part of the statute as the words of the statute itself, and change is a matter that addresses itself to the General Assembly, not this court. Merchants’ Transfer & Warehouse Co. v. Gates, 180 Ark. 96, 21 S.W. 2d 406. This rule is particularly applicable when, as here, the construction has been followed for many years. O ’Daniel v. Brunswick Balke Collender Co., 195 Ark. 669, 113 S.W. 2d 717. We are not persuaded that our construction of the statute has been so clearly erroneous that we should not continue to follow it.

Appellant contends that the evidence in the case clearly established a prima facie case to support a judgment and lien for the full amount of the invoices introduced (except for a trivial amount of $4.04) and that, by failing to give judgment for that amount, the chancery court arbitrarily rejected evidence of delivery of the materials to the building site and that the finding that proof of delivery was insufficient except as to those invoices for which judgment was given was erroneous.

We have always held that the lien claimant established a prima facie case by showing that the materials for which he claimed a lien were delivered at or near the building site at the place designated by the contracting party and that the building was constructed of materials of the description of those furnished; and, when this is shown, the burden rests upon the owner to show that they were not so used. Central Lumber Co. v. Braddock Land & Granite Co., supra; Half Moon Gin Co. v. E. C. Robinson Lumber Co., supra. See also, Long v. Abeles & Co., 77 Ark. 156, 93 S.W. 67; Fine v. Dyke Bros., 175 Ark. 672, 300 S.W. 375, 58 ALR 907.

The evidence of delivery and use here was based upon testimony of John Hicks, appellant’s manager, and that of Hubert Neal, the contractor. We do not agree with appellant that the evidence here is “as much as” that we found sufficient to meet the burden in Hill v. Imboden, supra, where we held that the chancellor’s finding sustaining the lien was not against the preponderance of the evidence. In Hill, the contract of the supplier was with the owner and the only question at issue was whether the evidence was sufficient to establish that all the items of materials on the account were delivered to appellant or to the premises where they were to be used in the construction of buildings. The contract was to supply all the materials for the buildings. The supplier produced delivery slips he had made out when materials ordered by the owner or workmen in charge of work on the buildings were loaded on appellant’s wagon for delivery, but not all of the slips had been signed by the owner or by workmen on the job, although it was the duty of the driver to procure a receipt so signed on a copy of a slip and it was the custom of the workmen on the job to sign the slips. In spite of this, and the failure of the supplier to produce the driver to show delivery, it was held that the evidence was sufficient to support the trial court’s finding that the evidence of delivery was sufficient because the supplier testified he had given the owner an itemized account identical to that on which suit was brought, the owner not only made no objections to it, he promised to pay it and the owner had called the supplier out to view the buildings constructed, expressed himself as being satisfied and did not make any objection to the account.

There is no such evidence here. John Hicks, appellant’s manager, testified that the tickets or invoices were made out by salespersons employed by the lumber company in the regular course of business when orders were made and showed the job to which the material was to go on the basis of information supplied by the person ordering the material. He did not know whether any of the tickets could be mixed up as to jobs to which the material was to go. The material, he said, was delivered to the person who initialed them and all bore the signature of the person as the recipient of the material. Hicks testified the material was picked up by the person who signed the tickets as the recipient. He stated the material would have been picked up by Neal or one of his employees in all cases, except where the tickets showed delivery by appellant’s driver. He said he had been to the Jones house and that it contained material of a type similar to that described in the tickets, but admitted he could not be sure there was sheetrock in the Jones house and the material listed could have been for either of the two houses being constructed side by side by Neal at the time. The frier of fact would have been justified in drawing the inference that the absence of the signature of anyone as recipient of the material indicated that it had not been delivered or received by the person who purportedly ordered it. There was no evidence of tacit approval of the itemized account by the owner in this case, or of the owner’s actually having seen the account before the lien was filed.

Neal testified that he had reviewed the invoices and that there would be very little, if any, that did not go into the Jones house. It seems from his testimony that he had been also doing a repair job on a house called the Old Hensley residence at about the same time he was building the Jones and Stepp houses. Appellant argues that the testimony of Neal concluded the matter and that the chancellor could not. ignore it in the absence of contradictory testimony. Of course, Neal did not testify as to any specific item and his ambiguous statement certainly cannot be taken as positive evidence that all of the items went to the Jones house. Of course, Neal was a party to the action and his testimony cannot be taken as uncontradicted. It is true, as appellant points out, that we have not applied this rule literally, but have said that “where the uncontradicted testimony of an interested witness is unaffected by any conflicting inferences to be drawn from it and is not improbable, extraordinary, or surprising in its nature, or there is no other ground for hesitating to accept it as a truth, there is no reason for denying the finding of verity dictated by such evidence.” Knighton v. International Paper Co., 246 Ark. 523, 438 S.W. 2d 721.

The inference could be drawn from Neal’s testimony that there was at least some doubt that every item on the account went to the Jones house. Just how much “very little” amounts to we do not know and the chancellor could not have known. Furthermore, a fact finder is not bound to accept sketchy and conclusionary testimony of a party to a suit as uncontradicted. Smith v. Cruthis, 255 Ark. 217, 499 S.W. 2d 852.

There was also some basis for the trier of fact to question the credibility of this witness. There is evidence from which the chancellor would have been justified in finding that Neal had deliberately misapplied a payment made to him by the Joneses to another account with appellant. The owners’ check for this payment was not delivered to appellant, but Neal gave his own check for the amount of the payment to Hicks, who testified that Neal told him to apply it to the account for the repair job. Neal denied that he told Hicks to make this application, but assumed that the check represented the payment by the Joneses and that it should have been applied to the Jones material account, as it appears to have ultimately been. Even though Neal was furnished statements by appellant showing that this payment was credited to the repair job and was not credited to the Jones account, he made no objection until appellant threatened to file a lien, and he was asked to get a lien release. Neal also testified that he had made two $1,500 payments to appellant at about the same time, one of which was from the Stepp job and the other from the Jones job. Hicks testified that this was not so. It is clear that the first check given by Neal for this payment “bounced,” and was charged to Neal’s personal account, but that about three months later, Neal gave cash to appellant in lieu of the check. It is not arbitrary for a fact finder to disregard testimony of a party it does not believe, if there is any basis for its disbelief. See Roberts v. Keasler, 207 Ark. 655, 182 S.W. 2d 382.

There is no explanation of the reason that Neal would take the money of appellees and cause it to be credited to another account, leaving the Joneses vulnerable to a lien which would require them to make a double payment of that amount; but, if he did, he certainly was not favoring them and he may have been biased against them in his testimony. We cannot say that the trial court arbitrarily disregarded the testimony of Neal on this point. It had the right to weigh Neal’s testimony in the light of his conduct and all the attendant circumstances. Bridges v. Shapleigh Hardware Co., 186 Ark. 993, 57 S.W. 2d 405. To say the least, his conclusionary statement is contrary to the fair inference that neither he nor any of his employees actually received the materials listed on tickets which did not bear the signature of the recipient.

The chancellor was not bound to accept this testimony of Neal as true, since a reasonable inference contrary to this testimony could have been drawn from the facts stated or from other facts and circumstances shown by the evidence unfavorable to his conclusion. Harris v. Bush, 129 Ark. 369, 196 S.W. 471.

The decree is affirmed!

Harris, C.J. and Byrd, J., dissent.


author: Conley Byrd, Justice. Carleton Harris, Chief Justice,

text:
    THE LADISH COMPANY v. William BREASHEARS et al
    77-222
    563 S.W. 2d 419
    Opinion delivered March 6, 1978
    (In Banc)
    [Rehearing denied April 17, 1978.]

      Gilker & Swan and Richard D. Ries, for appellant.

      Thelma M. Lorenzo, for appellees.
   Conley Byrd, Justice.

William Breashears was making $3.65 per hour as a drawbench operator, before appellant, The Ladish Company and the Boiler Makers Union signed an agreement on May 3, 1976. As a result of the union contract, Breashears was paid $4.00 per hour retroactive to March, 1976. Breashears pursuant to the union contract would have received another $0.40 per hour in raises by the first of the year. Sometime between May 3, 1976, and May 21, 1976, appellant decided that, due to economic conditions, it had to cut the second shift on which Breashears worked. Appellant offered the other employees other employment with one drop in classification. However, with respect to Breashears and Roger Trusty, both drawbench operators, appellant proposed to drop them two classifications to production processing work at a wage rate of S3.50 per hour. There were no wage increases for a production processing worker at S3.50 per hour. Breashears did not recall anyone telling him that when production picked back up, he would be put back on the drawbench. Breashears told appellant “I would rather draw unemployment and haul hay ever now and then, because I would be better off doing that than making S3.50 an hour and that while I was drawing unemployment 1 would be able to look for another job.”

The Board of Review found that Breashears left his job because of reduction in pay and a reclassification to a lower level. The Board of Review then concluded that this caused the work to become unsuitable and that Breashears left his last work for good cause within the meaning of Ark. Stat. Ann. § 81-1106(a) (Supp. 1975). 7'he circuit court affirmed the action of the Board of Review in awarding unemployment benefits.

For reversal, appellant here contends the circuit court erred as a matter of law in upholding the Board of Review’s finding that Breashears had good cause to voluntarily leave the proffered work. In making this contention, appellant candidly admits that the resolution of the case rests with the determination of whether or not the job offered Breashears was suitable. Appellant points to Ark. Stat. Ann. § 81-1106(c)(1) (Supp. 1975), which provides:

“(1) In determining whether or not any work is suitable for an individual and in determining good cause for voluntarily leaving his work under subsection (a) of this section, there shall be considered among other factors, . . . the degree of risk involved to his health, safety and morals, his physical fitness and prior training, his experience and prior earnings, the length of time of his unemployment, his prospects for obtaining work in his customary occupation, the distance of available work from his residence and prospects for obtaining local work.”

When we consider that the findings of the Board of Review must be affirmed on appeal when supported by substantial evidence, we conclude that there was substantial evidence to support the finding by the Board of Review. In addition to the testimony set forth above, which has been stated in the light most favorable to the Board’s finding, the testimony also shows that the union representative told Breashears that he should have been dropped only one classification and that Breashears then would have received $3.75 per hour.

Appellant makes much of the fact that the $0.50 reduction would have amounted to only a 1216% reduction in wages. In making this contention appellant ignores the fact that Breashears in approximately six months would have been earning $4.40 per hour as a drawbench operator and that the difference between that wage and the $3.50 per hour as a production process worker would have amounted to $36.00 per week. As pointed out in Dubkowski v. Administrator, Unemployment Compensation Act, 150 Conn. 278, 188 A. 2d 658, 97 A.L.R. 2d 1120 (1963), “Before work calling for less competence and lower remuneration can be found to be suitable, a claimant is entitled to a reasonable length of time within which to find work at his higher skill.”

Affirmed.

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

Carleton Harris, Chief Justice,

dissenting. I cannot agree with the decision of the majority. In the first place, it does not appear that the Board of Review considered any factors other than the reduction in pay and the reclassification to a lower level, while Ark. Stat. Ann. § 81-1106 (c) (1) (Supp. 1975), provides various other requirements that shall be considered, as follows:

“(1) In determining whether or not any work is suitable for an individual and in determining good cause for voluntarily leaving his work under subsection (a) of this section, there shall [my emphasis] be considered among other factors, . . . the degree of risk involved to his health, safety and morals, his physical fitness and prior training, his experience and prior earnings, the length of his unemployment, his prospects for obtaining work in his customary occupation, the distance of available work from his residence and prospects for obtaining local work.”

That only the reduction in pay and reclassification were considered is clearly shown by the Board of Review decision which reads:

“The Board finds that the claimant left his job because of reduction in pay and a reclassification to a lower level. This caused the work to become unsuitable; therefore, the claimant quit with good cause connected with the work.”

I submit that, under the evidence, these were not sufficient reasons to hold that the claimant quit with good cause.

First, the testimony was positive by James Zydzik, department head of tubular manufacturing, that Breashears was told that the transfer was temporary. Mr. Breashears does not deny this statement; he only says that he “doesn’t remember” being so told. The reason for dropping the job classification two steps instead of one is not shown, and I do not know whether it was a question of seniority, or what., but I do know that the union did not file a grievance because of Breashear’s transfer to other work, and appellee admitted that he did not ask the union to file a grievance. It would appear that this reduction was controlled by the collective bargaining agreement, and the filing of a grievance would have been the proper procedure to follow. Instead of doing that, Breashears simply quit.

A number of cases from other states are listed in appellant’s brief involving amounts ranging to reductions in wages frmm 12% to 50% where unemployment compensation was not allowed, and in others from 25% to 44%, which were allowed.

Appellant states in its brief:

“In fact, no court in any jurisdiction has ever held that any reduction in wages of less than 25% was substantial enough to render work unsuitable. Should this Court now hold that the 12 1/2% reduction in the instant case was substantial enough to render the work unsuitable, Arkansas would become the most liberal jurisdiction in its application of Unemployment Compensation laws.”

I have only made a cursory examination of the cases, but there is no contradiction of this statement.

Certainly, when we consider, other than the 50 cent reduction per hour in pay, the criteria set forth which the General Assembly has said shall be considered, the work appears entirely suitable. There is no evidence that the production processing job which Breashears was offered involved any risk to his health, safety or morals, and there is no evidence concerning the distance of available work from his home or prospects for obtaining local work in his customary occupation. There would have been no change in his working hours and he had been engaged in production processing previously, and was qualified for the job.

One fact has made quite an impression on me, and that is reflected by the answer to a question propounded to Mr. Breashears on cross-examination as follows:

“Buehgler: O.K. and. did you also not make the statement that you’d rather draw unemployment and haul hay ever now and then; that you could be better off doing that?
Claimant: Than making the S3.50 an hour, yes sir.”

Mr. Breashears subsequently attempted to minimize or modify this statement by saying that while drawing unemployment he would also be able to look for another job. Of course, I do not know how he could haul hay and look for a job at the same time, but it is certainly very clear that, he voluntarily ended his employment solely because of the pay decrease.

I thoroughly agree with the purposes of the Unemployment Compensation Act, set out in the declaration of state public policy as follows:

“Economic insecurity due to unemployment is a serious menace to the health, morals, and welfare of the people of this State. Involuntary [my emphasis] unemployment is therefore a subject of general interest and concern which requires appropriate action by the Legislature to prevent its spread and to lighten its burden which may fall with crushing force upon the unemployed worker and his family. . . . The Legislature, therefore, declares that in its considered judgment, the public good, and the general welfare of the citizens of this State require the enactment of this measure, under the police power of the State, for the compulsory setting aside of unemployment reserves to be used for the benefit of persons unemployed through no fault of their own. [My emphasis.]”

When, because of economic reasons, a company is forced to “cut back,” and a worker is offered a job at only 50 cents an hour less than he had been drawing (and this reduction only temporary), has the same work hours, is familiar with the duties, and there is no additional safety risk, that worker has no legitimate reason to quit. In other words, he is not involuntarily unemployed, and I would deny unemployment benefits.

It follows that, in my view, the Board of Review having failed to consider any of the criteria mentioned other than the reduction in pay and classification, there was not substantial evidence to support the decision.

I would reverse.

I am authorized to state that Hickman and Howard, JJ., join in this dissent.

      The majority also mentioned this section, but after setting out these requirements, the court majority proceeds to ignore them, the first sentence thereafter in the opinion reading:
      “When we consider that the findings of the Board of Review must be affirmed on appeal when supported by substantial evidence, we conclude that there was substantial evidence to support the finding by the Board of Review.”

      In Dubkowski v. Administrator, Unemployment Compensation Act, 150 Conn. 278, 188 A. 2d 658, the only case cited by the majority, three employees were transferred to lower rated jobs because of a slack in business and were reclassified from skilled work to unskilled. The first two, as well as being reclassified from the higher category, received a pay reduction of 28%, and the third a reduction of approximately 25%.

      It would certainly be most unusual if this worker could find similar employment as a drawbench operator, and, as a new employee, earn as much as he was earning with appellant company, or even as much as the offered employment. The appeals referee found that the rate, of pay was above the prevailing wage in the area for this type of work.


author: Conley Byrd, Justice.

text:
    Alan STUART v. STATE of Arkansas
    CR 77-201
    563 S.W. 2d 398
    Opinion delivered March 6, 1978
    (Division II)
    [Rehearing denied April 17, 1978.]

      Appellant, Pro Se.
    Bill Clinton, Atty. Gen., by: Jesse L. Kearney, Asst. Atty. Gen., for appellee.
   Conley Byrd, Justice.

Appellant Alan Stuart was found guilty of operating an overloaded vehicle carrying water drilling equipment in violation of Ark. Stat. Ann. § 75-801 (a) (Supp. 1977). Subsection (b) of that statute provides:

“The provisions of this article governing size, weight, and load shall not apply to fire apparatus, road machinery, or to implements of husbandry, including farm tractors, temporarily moved upon a highway, or to a vehicle operated under the terms of a special permit issued as herein provided.”

For reversal appellant contends that the trial court erred in failing to recognize that Ark. Stat. Ann. § 75-107 (Repl. 1957) and Ark. Stat. Ann. § 75-108 (Repl. 1957), exempt self contained well-boring rigs from all other statutes. We find no merit to these contentions. Ark. Stat. Ann. § 75-801, supra, as subsequently amended, was enacted pursuant to Acts 1937, No. 300 which was “An Act regulating Traffic On Highways and Defining Certain Crimes in the Use and Operation of Vehicles. . . .” That Act contained its own definitions of the words and phrases used in the Act which are now codified in Ark. Stat. Ann. § 75-402 (Repl. 1957). The exemptions upon which appellant relies are exemptions to the Vehicle Registration and Licensing Act, Acts 1949, No. 142 — i.e. the exemptions are set out in Ark. Stat. Ann. § 75-107 and Ark. Stat. Ann. § 75-108, are not applicable to the weight provisions contained in Ark. Stat. Ann. § 75-801, supra.

Furthermore, appellant is not entitled to have his well drilling rig exempted as an “implement of husbandry” pursuant to subsection (b) of Ark. Stat. Ann. § 75-801, supra. The term “husbandry” is ordinarily applied to matters involving agriculture. See Sproles v. Binford, 286 U.S. 374, 52 S. Cf. 581, 76 L. Ed. 1167 (1932).

Affirmed.

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