author: Sam Bobinson, Associate Justice.

text:
    Vanlandingham v. Gartman.
    5-2957
    367 S. W. 2d 111
    Opinion delivered April 29, 1963.

      Barber, Henry, Thurman & McCasJdll, for appellant.

      Joe W. McCoy, for appellee.
   Sam Bobinson, Associate Justice.

Appellee, Mildred Gartman, was sitting in her automobile which was properly parked in front of her home in Sheridan, Arkansas, when appellant, Harold Vanlandingham, drove his car into the back of the Gartman automobile. Mrs. Gartman was seriously injured. She filed this suit against Vanlandingham. He defended on the theory that he ran into the Gartman car in order to avoid striking a little girl that ran across the road in front of him. He was drinking at the time, and there was evidence to the effect that there was no little girl involved. The plaintiff recovered a judgment in the sum of $20,000.00. Vanlandingham has appealed.

There are two issues: First, appellant contends that the court made a reversible error in refusing to give his Instruction No. 2, as follows: “If you believe from the evidence that the sole, direct and proximate cause of the injuries, if any, of Mildred Gartman was some act or omission or conduct on the part of some third party, then it would be your duty to return your verdict in favor of the defendant, Harold Vanlandingham.”

"While Instruction No. 2 may be a correct statement of the law, appellant was in no way prejudiced by the court’s refusal to give it in view of other instructions given at appellant’s request. Appellant’s requested Instruction No. 4 given by the court is as follows: “Under the law no one is legally liable to another for damages caused by an unavoidable mishap.

“If you find and believe from the evidence in this case that insofar as Harold Vanlandingham was concerned, the mishap was an unavoidable one and was not the result of negligence on his part, then your verdict will be in favor of the defendant.”

The court also gave appellant’s Instruction No. 5, as follows: ‘ ‘ When the driver of an automobile is suddenly confronted with an emergency not created by his own negligence, he is not held to the same accuracy of judgment as is required of him under ordinary circumstances.

“If, therefore, you find that Harold Vanlandingham was suddenly confronted with an emergency not created by any negligence on his part, then you will test his conduct by what a reasonably prudent person might have done under the same or similar circumstances, and if you find that he made a choice of conduct such as a reasonably prudent person might have made under those circumstances, then he would not be guilty of negligence, even though it might afterwards appear that it would have been wiser or better for him to have chosen a different course of conduct.”

Jurors are presumed to be intelligent people. They must have understood from the instructions given that appellee could not recover if her injuries were caused solely by some third person. The court is not required to give repetitious instructions. Little Rock Railway & Electric Co. v. Green, 78 Ark. 129, 93 S. W. 752; Nuckols v. Flynn, 228 Ark. 1106, 312 S. W. 2d 444.

The next issue is whether the trial court erred in permitting attorney for plaintiff, appellee, to use a chart he had prepared to illustrate his argument to the jury on the question of damages, particularly damages for pain and suffering. There was evidence that appellee had suffered and would continue to suffer considerable pain. She had asked for a judgment in the sum of $25,000.00. In arguing the amount of damages that should be awarded for pain and suffering, appellee’s attorney illustrated his argument with a chart showing that she had already suffered 521 days, and further, if this item was computed at the rate of $12 per day it would amount to $6,144.00. He further illustrated on the chart that since appellee had a life expectancy of 34 years, if allowed $0.50 per day for future suffering, it would amount to $6,205.00. The trial court overruled appellant’s objection to the use of the chart.

In a matter of this kind the trial court must exercise a sound discretion. If the chart was used in a manner to make it appear to the jury that evidence had been introduced to the effect that appellee’s pain and suffering was worth $12 per day and in the future would be worth $0.50 per day, it would be error to permit the use of the chart because, of course, no such evidence was introduced ; but where, as here, it is perfectly clear that the figures on the chart or blackboard were nothing more than argument by counsel, we cannot say there was an abuse of discretion by the trial court in permitting its use. In John A. Westland, Inc. v. O’Bryan Construction Co., Inc., 187 A. 2d 507, Jan. 2, 1963, the court said: “Neither blackboards nor other forms of visual display may be used with uninhibited freedom. Bone v. General Motors Corporation, Mo., 322 S. W. 2d 916, 71 A. L. R. 2d 361; see also Killary v. Burlington Lake Champlain Chamber of Commerce, Inc., Vt., 186 A. 2d 170. Courts set themselves against the use of these methods to mislead, or where the use is not fairly based on the evidence. But, by and large, this is an area where the trial court’s authority over the conduct of the trial gives it large discretion, and its exercise of control will not be disturbed lightly. The complaining party must demonstrate prejudice to procure this Court’s intervention. The defendant has not done so here.”

This point has been before a good many courts in the past few years. There is a note on the question of per diem or similar mathmatical basis for fixing pain and suffering in 60 A. L. R. 2d 1347. There is a long annotation on the question of the use of a blackboard, chart, diagram, or placard not introduced in evidence relating to damages in 86 A. L. R. 2d 239. Practically all the cases dealing with the subject are cited. See also Ark. Law. Rev., Vol. 17, No. 1.

In numbers, the cases are about equally divided on the question. We feel, however, that the weight of authority is to the effect that it is not an abuse of discretion for the trial court to permit the use of a blackboard or chart as was done in the case at bar. Several theories have been advanced as a basis for excluding per diem amount arguments for damages for pain and suffering, including: that there is no evidentiary basis for converting pain and suffering into monetary terms; it is improper for counsel to suggest a total amount for pain and suffering, and therefore wrong to suggest per diem amounts; that to do so amounts to the attorney giving testimony, and expressing opinions and conclusions on matters not disclosed by the evidence; and juries frequently are misled thereby into making excessive awards.

In Ratner v. Arrington, 111 So. 2d 82, a great many of the cases in point are cited, and there the court said:

“The items or elements of damages listed on the chart in this case, and which thus were argued to the jury, all were supported by some evidence of established or calculable monetary value, except the elements of ‘pain and suffering’ and ‘physical disability and inability to lead a normal life. ’ As to those two elements, we are not prepared to hold that it was prejudicial error for the trial court to allow counsel for appellee, in argument to the jury, to suggest an amount which he felt would be proper and reasonable to be awarded as damages therefor. Nor do we hold it was error to include a suggested per diem amount approach to such an award.”

In the case at bar, along with other allegations, the plaintiff alleged that she had been damaged by reason of physical pain and mental anguish endured in the past and which she would suffer in the future by reason of the injury sustained. Of course, no witness can say a person has been damaged so much per day by reason of such suffering, and neither can a witness say that a person has been damaged $5,000.00, or any other amount, by reason of suffering; but a plaintiff can allege great pain and suffering and can prove such assertion in various ways. On the other hand, a defendant can deny that there has been any pain and suffering. This is frequently done and evidence is introduced to that effect.

As we see it, there is no sound reason why an attorney in the case should be precluded from arguing the amount of damages that should be awarded for pain and suffering, assuming of course, that evidence has been introduced showing pain and suffering, as was done in the case at bar. Likewise, the defense attorney can argue that none or very little damage has been suffered in that respect. Of course it behooves the courts to see that no unfair tactics are used; for instance, although an attorney might use a chart or blackboard to illustrate his argument, it would not be fair to place the illustration where it could be seen by the jury at times when the attorney was not using it in making his argument. If the jury could see it all day it would be the same as arguing the case all day.

In the case at bar, no unfair tactics were used. It was made perfectly clear that the chart was merely an illustration of the argument; that it was not evidence; and the court specifically limited the jury’s view of it to the time counsel was actually making his argument.

We find no error.

Affirmed.


source: Caselaw Access Project

author: Jim Johnson, Associate Justice. Carleton Harris, Chief Justice

license: Public Domain

text:
    Spence v. Vaught.
    5-2958
    367 S. W. 2d 238
    Opinion delivered April 29, 1963.
    [Rehearing denied May 27, 1963.]

      Barber, Henry, Thurman & McCaskill, for appellant.

      Mehaffy, Smith, Williams, Friday & Bowen, by B. Ben Allen and Boyce R. Love, for appellee.
   Jim Johnson, Associate Justice.

This case involves the Arkansas guest statutes, Ark. Stats. §§ 75-913 - 75-915. The action was instituted by appellees DeWitt Vaught and Georgia Vaught, his wife, against appellant Lucy Spence for damages resulting from an automobile accident occurring on February 11, 1962. Appellant and appellee Mrs. Vaught had attended Sunday School and church at Houston, Arkansas, although they lived in Perryville. Mrs. Vaught had gone to Houston with her daughter, who left early. Mrs. Vaught asked appellant, who is Mr. Vaught’s aunt, for a ride back to Perryville. About two miles out of Houston the automobile veered to the right off the road and into a ditch. The automobile turned over, injuring appellee severely.

Trial of the case before a jury resulted in a verdict in favor of appellees. For reversal of the judgment on the verdict, appellant contends that there is no evidence of wilful and wanton misconduct on the part of the appellant and a verdict for the appelant should have been directed by the trial court.

The Arkansas guest statute referred to above, Ark. Stats. § 75-913, reads as follows:

‘ ‘ No person transported as a guest in any automotive vehicle upon the public highways or in aircraft being-flown in the air, or while upon the ground, shall have a cause of action against the owner or operator of such vehicle, or aircraft, for damage on account of any injury, death or loss occasioned by the operation of such automotive vehicle or aircraft unless such vehicle or aircraft was wilfully and wantonly operated in disregard of the rights of others.”

The operative portion of § 75-915 is as follows:

“No person transported or proposed to be transported by the owner or operator of a motor vehicle as a guest, without payment for such transportation, nor the husband, widow, executors, administrators or next of kin of such person, shall have a cause of action for damages against such owner or operator, or other persons responsible for the operation of such car, for personal injury, including death resulting therefrom, by persons while in, entering, or leaving such motor vehicle, unless such injury shall have been caused by the wilful misconduct of such owner or operator. ’ ’

Each personal injury ease involving the guest statutes must be examined on its own. As we said in Harkrider v. Cox, 230 Ark. 155, 321, S. W. 2d 226.

“ [I] t is a question in each case whether the particular facts therein made a jury question as to wilful and wanton negligence.

. . . “In McAllister, Administrator v. Calhoun, 212 Ark. 17, 205 S. W. 2d 40, we quoted with approval from Splawn, Administratrix v. Wright, 198 Ark. 197, 128 S. W. 2d 248: ‘Whether an automobile is being operated in such a manner as to amount to wanton and wilful conduct in disregard of the rights of others must be determined by the facts and circumstances of each individual case.’ ”

The evidence presented in the case at bar is, naturally, controverted. According to Mrs. Vaught’s testimony, the car had begun to make a singing noise, then a grinding noise, and then a swerve lasting over some period of time, with Mrs. Vaught making warnings to appellant to slow down to see what the trouble was, and with appellant ignoring her warnings. According to appellant, the accident happened very quickly, with there being a sudden swerve and the car veering into the ditch, and at no time were there any warnings from Mrs. Vaught. Appellee Vaught and another witness testified that there was a rim cut on the highway and rubber marks about 3/10ths of a mile or more long leading up to the rim cut. Appellant’s husband testified to a gouge or cut in the highway made by a tire rim about 15 to 20 feet from where the car ended up, but would swear to no other marks. Mrs. Vaught testified appellant was driving 50 to 60 miles per hour and did not slow up. Appellant testified that her speed was 45 to 50, that the accident was instantaneous and that she never could find the tire or wheel marks.

Appellant moved for a directed verdict at the close of appellees’ testimony, which was overruled. The criterion for trial courts in considering motions for directed verdicts is well-stated in Smith v. McEachin, 186 Ark. 1132, 57 S. W. 2d 1043:

“ It is a rule of universal application that, where the testimony is undisputed and from it all reasonable minds must draw the same conclusion of fact, it is the duty of the court to declare as a matter of law the conclusion to be reached; but, where there is any substantial evidence to support the verdict, the question must be submitted to the jury. In testing whether or not there is any substantial evidence in a given case, the evidence and all reasonable inferences deducible therefrom should be viewed in the light most favorable to the party against whom the verdict is directed, and if there is any conflict in the evidence, or where the evidence is not in dispute but is in such a state that fair-minded men might draw different conclusions therefrom, it is error to direct a verdict. ’ ’

Examining the record to determine “the state of the evidence”, it is relevant to review the types of negligence and their standards for determination. Negligence is the failure to use ordinary care. Johnson v. Coleman, 179 Ark. 1087, 20 S. W. 2d 186. Gross negligence is the failure to use even slight care. Memphis & L. R. R. R. v. Sanders, 43 Ark. 225. Wilful negligence is the same as gross negligence with the added factor that the actor knows, or the situation is so extremely dangerous that he should know, that his act or failure to act will probably cause harm. Scott y. Shairrick, 225 Ark. 59, 279 S. W. 2d 39.

Applying these standards to the situation as testified to by appellee, it is not illogical to conclude that appellant was negligent when she failed to slow down after the car started humming; she was grossly negligent when she failed to slow down after the car began swerving; and she was wilfully or wantonly negligent in failing to slow down after the grinding noise started, the car swerved more violently, she was twice warned to slow down, and she still continued to drive at the same speed of about fifty miles per hour. Viewing the evidence and all reasonable inferences deducible therefrom in the light most favorable to the party against whom the directed verdict was sought, we find that fair-minded men might draw different conclusions therefrom, and that therefore the trial court did not err in failing to direct a verdict for appellant.

Appellant’s remaining point urged for reversal is that the giving of plaintiffs’ (appellees’) instruction No. 5 constituted prejudicial error.

Plaintiffs’ requested instruction No. 5 reads as follows :

‘£ The plaintiffs have alleged that the defendant was negligent in one or more of the following respects:
(2) failing to keep her vehicle under proper control and
(3) in operating the automobile at a speed in excess of that which was reasonable and prudent under the circumstances then existing.
“You are instructed that under the laws of the State of Arkansas it was the duty of the defendant, Lucy Spence, to exercise ordinary care in the operation of her vehicle to avoid injury to others, and that a failure on her part to exercise such care would be evidence of negligence. Ordinary care requires every person who operates a motor vehicle upon a public highway to keep his or her vehicle under such control as will enable him or her to check its speed, or to stop it absolutely, if necessary to avoid injury where danger is apparent or reasonably to be anticipated by the exercise of ordinary care. Further, it was the duty of the defendant to exercise ordinary care to operate her vehicle at a speed no greater than was reasonable and prudent under the circumstances, and that a failure to do so would be evidence of negligence.
“You are further instructed in that connection that the lawful maximum speed at which the defendant’s vehicle might have been operated at the time and place of the accident here involved was that speed which was reasonable and prudent under the circumstances, but not to exceed 60 miles per hour in any event, and should you find that defendant’s vehicle was being operated at the time and place of the accident here involved at a speed which was not reasonable and prudent under the circumstances this would be evidence of negligence to be considered along with other circumstances in the ease.”

Appellant forceably contends that the giving of this instruction was error because it refers to the duty to exercise ordinary care, and, this being a guest statute case, this instruction could only lead to the confusion of the jury and probably caused the jury to conclude that appellant was under a duty to exercise ordinary care rather than under a duty to avoid being guilty of wilful and wanton misconduct.

A careful review of the record reveals that not only was wilful and wanton negligence or misconduct defined or required in plaintiffs’ instructions No. 1, No. 3, No. 9 and No. 11, but also in plaintiffs’ instruction No. 6, given immediately after the alleged erroneous instruction. Instruction No. 6 reads as follows :

“Now should you find from a preponderance of the evidence that the defendant, Lucy Spence, was guilty of negligence in one or more of the respects alleged by the plaintiff, as just related to you, this negligence, without more, would not entitle the plaintiffs to maintain this action, or to recover their damages, if any. As you have previously been instructed, to recover in this action, if at all, plaintiffs must prove by a preponderance of the evidence that the defendant was guilty of wilful and wanton conduct. They must prove not only that the defendant was negligent, but also that she knew, or had reason to believe, that her act of negligence was about to inflict injury, and that she continued in this course of conduct with a conscious indifference to the consequences thereof, exhibiting a wanton disregard of the rights and safety of others.”

When all the instructions are thus considered, we cannot say that they incorrectly presented the law, or that the jury could have been misled thereby. Pinkerton v. Davis, 212 Ark. 706, 207 S. W. 2d 742.

Affirmed.

Harris, C. J., and George Rose Smith, J., dissent.

Carleton Harris, Chief Justice

(dissenting). In my opinion, the present decision by the court greatly weakens the effectiveness of the Guest Statutes. Appellee, in arguing for affirmance of this case, makes a statement in her brief with which I entirely agree. After reviewing a number of cases, decided under the Guest Statutes, she states, “This review also indicates a trend of the Court toward allowing guest cases to go to the jury under more liberal requirements of proof than in the earlier cases decided immediately after passage of the Guest Statutes.” Certainly, I cannot believe that the verdict for appellee would have been upheld under earlier decisions.

In Splawn v. Wright, 198 Ark. 197, 128 S. W. 2d 248 (decided in May 1939) the guest was a young lady, riding with another young lady and a young man. The driver was operating the automobile at a speed of approximately 45 miles per hour on a gravel road, and on a foggy, rainy night. In making a curve, the car began to slide and the guests remonstrated with the driver, telling him that he was driving too fast. Later, when the driver reached down to adjust the heater, he lost control of the car, and the guest was injured. The case was allowed to go to the jury, but this court reversed on the basis that there was not sufficient evidence of wilful and wanton negligence to make a jury question. In Edwards v. Jeffers, 204 Ark. 400, 162, S. W. 2d 472, decided in June, 1942, the driver and guest were ladies who were close friends. According to testimony, the driver was traveling along a gravel road which had several sharp turns; the car failed to complete one turn, and the driver lost control, the automobile turning over in a ditch. The guest testified that the car was moving at a speed of 70 to 80 miles per hour, and further that she warned the driver several times by saying, “Irene, you are driving too fast over this road,” and called to the driver’s attention the fact that the gravel was loose and there were curves on the road. According to the witness, the operator of the car never did slow down. Again, the trial court allowed the ease to go to the jury, but again this court reversed and dismissed on the basis that the testimony fell short of that degree of wilful and wanton misconduct that would warrant a recovery under the statute.

In Cooper v. Calico, 214 Ark. 853, 218 S. W. 2d 723, a driver, who had been drinking intoxicants, endeavored to move his car from one place on a parking lot to another. In doing so, he allowed the back end of the automobile to protrude over the paving of Highway No. 71, north of Fayetteville. Admittedly, he did not look up or down the highway before attempting to move, because he had not intended to back onto the highway. An approaching vehicle hit the car and injured a guest, a young high school girl. The young lady recovered judgment in the trial court, but this court reversed the judgment, stating:

“No one could successfully deny that his conduct was careless. Certainty he was negligent in not stopping and looking in each direction before placing his Chevrolet and his passengers in a position of peril. But even gross negligence, under the Guest Statutes, is not enough. There must be a wilfulness, a wantonness, an indifferent abandonment in respect of consequences, applicable alike to self and guests.”

Numerous other cases could be cited to the same effect.

I certainly agree that Mrs. Spence was guilty of ordinary negligence, but I cannot agree that her negligence reached the category of wilful and wanton misconduct. It is obvious from the proof that a tire on the Spence automobile was losing air, which occasioned the “humming” sound that was heard. The majority state:

“ * * * it is not illogical to conclude that appellant was negligent when she failed to slow down after the car started humming; she was grossly negligent when she failed to slow down after the car began swerving; and she was wilfully or wantonly negligent in failing to slow down after the grinding noise started, the car swerved more violently, she was twice warned to slow down, and she still continued to drive at the same speed of about 50 miles per hour.”

From the evidence, all of the above took place in less than a minute, and, as far as wilful and wanton negligence is concerned, (according to the majority, “when the grinding noise started”) this only lasted for a very few seconds! On a clear day and straight highway, Mrs. Spence was driving at a moderate and legal rate of speed. Because of her inability to recognize that the tire was going flat, the accident occurred. I reiterate my belief that she was guilty of ordinary negligence, but I do not consider that these circumstances establish wilful and wanton negligence.

I, therefore, respectfully dissent.

I am authorized to state that Justice George Bose Smith joins in this dissent.


author: Frank Holt, Associate Justice.

text:
    Saf-T-Boom Corp. v. Union National Bank.
    5-2966
    367 S. W. 2d 116
    Opinion delivered April 29, 1963.

      Moses, McClellan, Arnold, Owen & McDermott, by E. M. Arnold and W. É. Henslee, for appellant.

      Chowning, McHaney, Mitchell, Hamilton & Burrow Pope, Pratt <& Shamburger, by Donald 8. Ryan, for appellee.
   Frank Holt, Associate Justice.

This action stems from a controversy about the ownership of a $5,644.80 check made payable to the appellant, Saf-T-Boom Corporation. The check ivas accepted and paid by the appellee, Union National Bank, upon an unauthorized endorsement.

The appellant demanded that the Bank make good to it, as the named payee, the check which appellee, Robert L. James, had negotiated upon his unauthorized endorsement. The Bank refused and then froze or impounded the balance in James’ personal account which was the sum of $1,204.58. Thereupon the appellant filed suit against the appellee, Union National Bank, for wrongful payment to James of the $5,644.80 check. The Bank denied liability and as an affirmative defense alleged, inter alia, that the check was given to appellant without consideration and was not drawn in payment of an existing obligation to the appellant. The Bank cross complained against James for any amount that might he awarded to the appellant on its complaint. James denied liability to the Bank for cashing the check upon his unauthorized endorsement and cross complained against his employer, Saf-T-Boom Sales and Service Corporation, for sales commissions earned but unpaid to him, together with certain advances made by him to the company. Saf-TBoom Sales and Service Corporation denied the validity of James’ complaint and filed a cross complaint against James for conversion of the $5,644.80 check as company funds belonging to it and in addition thereto asked for damages because of the loss of its franchise rights due to James’ unauthorized endorsement, or conduct, all of which James denied.

The appellant, Saf-T-Boom Corporation, is an Arkansas corporation and is the owner and manufacturer of a safety device for crane-type heavy equipment. On February 1, 1960, appellant entered into a contract with appellee, Saf-T-Boom Sales and Service Corporation, a separate and distinct Arkansas corporation, which contract granted to it the exclusive franchise to market these devices within the United States with the exception of the State of Arkansas. On February 1, 1961, Saf-T-Boom Sales and Service Corporation made a contract with the appellee, Robert L. James, by which he became its general manager and sales representative. He was, also, a director of Saf-T-Boom Corporation. In June of 1961, Robert L. James and Jack E. Hill, a fellow salesman, sold twelve of these safety devices, or $5,644.80 worth of them, to the Elliott Equipment Company of Nashville, Tennessee. Based on this sale, the Sales and Service Corporation forwarded a purchase order to Saf-T-Boom Corporation which in turn filled the order by causing the twelve devices to be shipped direct to Elliott, the purchaser. The appellant billed Saf-T-Boom Sales and Service Corporation for the amount of the sale, less the sale commission of 50%. The Sales and Service Corporation billed Elliott. In paying for these devices Elliott, the purchaser, made the $5,644.80 check payable to Saf-T-Boom Corporation, the appellant, and mailed it to 1613 Main Street, Little Bock, Arkansas, which address was the joint office of both corporations. On July 3, 1961, upon receipt of the check at this address, James proceeded, without authority, to endorse the check “Saf-T-Boom Corporation—B. L. James, Director” and added, “Bobert L. James,” his personal endorsement. He then presented the check for payment to appellee, the Union National Bank of Little Bock. The Bank honored his endorsement and deposited $5,044.80 in Bobert L. James’ personal account and gave James the balance of $600.00 in cash. The check was duly paid by the drawee bank at Nashville, Tennessee. At the time of this transaction the appellant, Saf-T-Boom Corporation, maintained its corporate bank account with the appellee, Union National Bank. The Bank had on file the resolution of the appellant’s Board of Directors and a signature card authorizing the recognition by the Bank of only two signatures. It is undisputed that James had no authority to endorse this check. Neither did he have authority to negotiate checks for the Sales and Service Corporation.

At the time of this transaction, James contended that his employer, the Sales and Service Corporation, was indebted to him for commissions in the sum of $7,156.25. As distributor, the Sales and Service Corporation was indebted at this time to Saf-T-Boom Corporation, the owner and manufacturer of the safety device, in the amount of $8,874.54.

This litigation was submitted to the Circuit Judge, sitting as a jury, who found that the purchaser, Elliott, was indebted to appellee, Saf-T-Boom Sales and Service Corporation; that the check in question was erroneously made payable to the order of appellant, Saf-T-Boom Corporation, and that the Sales and Service Corporation was the legal owner of the check; that James should have delivered the check to his employer, the Sales and Service Corporation; that Sales and Service Corporation was indebted to James for commissions earned in the sum of $7,156.25; that James had possession of $4,480.00 from the proceeds of the Elliott check; the Court then held that appellant was not a “holder of the check for value” and dismissed the complaint of the appellant; the court also dismissed the cross complaint of the Bank against James and gave him judgment against the Sales and Service Corporation for $2,676.25 [after allowing a credit of $4,480.00] on his cross complaint; the court then rendered judgment against the Bank for $1,204.58, representing the impounded funds in James’ personal account, in favor of the Sales and Service Corporation. From this judgment appellant brings an appeal.

For reversal, Saf-T-Boom Corporation, the sole appellant, contends that as the named payee it is the owner of the check and, since the appellee-bank wrongfully paid the check to James, the Bank is liable to the appellant as payee for the full amount thereof.

In this State we have long adhered to the general rule that when a bank has obtained possession of a check upon the unauthorized or forged endorsement of the payee’s signature and then collects the amount of the check, as was done in this case, the bank is liable to the payee for the entire proceeds of the check, notwithstanding the proceeds thereof were paid to the person who negotiated the check. This question was first considered in Schaap v. First National Bank of Ft. Smith, 137 Ark. 251, 208 S. W. 309, and there our court quoted with approval this language:

“ ‘No equitable considerations can be invoked to soften seeming hardships in the enforcement of the laws and rules fixing liability on persons handling commercial paper. These laws are the growth of ages and the result of experience, having their origin in necessity. The inflexibility of these rules may occasionally make them seem severe, but in them is found general security. ’ ’ ’

Further, Mr. Justice Hart, speaking for our court, said:

“ * * * The general rule is that an unauthorised indorsement is a nullity. * * * In such cases the bank cannot avoid liability by showing that its conduct was governed by good faith and the payee is entitled to recover unless he has been guilty of fraud or negligence in the matter.” [Citing cases — emphasis added] There is no evidence of fraud or negligence by the named payee in this case.

The basis for the almost universal approval of this rule can be summarized in the statement that the possession of a check based upon a forged or unauthorized endorsement of the payee’s signature is wrongful and when the money is collected on such a check the collecting-bank is liable as for moneys had and received, the bank receiving the proceeds for the use of the payee. Therefore, when the bank received the money on the check it had no more title to the money than it had to the check. 9 C. J. 8., Banks & Banking, § 254, pp. 526 & 528; 31 A. L. R. 1068; 67 A. L. R. 1535; 7 Am. Jur., Banks, § 597, p. 432.

In this case it is undisputed that appellee, Robert L. James, had no authority, expressed or implied, to endorse the check in question. When a check is offered to a bank the obligation is upon the bank to determine if the endorsement is genuine and made by the payee or one duly authorized by the payee. Certainly it is a highly suspicious circumstances to cash or credit to one’s personal account a check made payable to a corporation.

The Bank and James assert that the appellant was not the owner or holder in due course because the check was not supported by any consideration. We do not consider this contention as a material issue in this case when viewed in the light of our long established rule of law relating to an unauthorized endorsement.

In appropriate proceedings in law or equity the remaining rights as between the various parties, of course, may be further enforced or adjudicated.

We hold that the appellant’s right of recovery for the full proceeds of the check from the Bank is complete and the Court erred in holding to the contrary. The judgment is reversed and the cause remanded with directions to enter a judgment in favor of Saf-T-Boom Corporation against the Bank for $5,644.80 and interest.

       See also Wayne Tank & Pump Co., v. Bank of Eureka Springs, 172 Ark. 775, 290 S. W. 370; Shultz Const. Co., v. Crawford County Bank, 182 Ark. 569, 32 S. W. 2d 177.

       For recent cases in other jurisdictions on the question of ownership or bank’s liability, see Brede Decorating, Inc., v. Jefferson Bank & Trust Co., (Mo. 1961) 345 S. W. 2d 156; AEtna Casualty & Surety Co., v. Lindell Trust Co., (Mo. 1961) 348 S. W. 2d 558; Leadbetter v. Meadow Brook National Bank, (N. Y. 1963) 236 N. Y. S. 2d 659.


author: Carretón Harris, Chief Justice.

text:
    Baker v. Cash.
    5-2978
    367 S. W. 2d 225
    Opinion delivered May 6, 1963.

      John B. Driver, for appellant.

      Roy Dm%user and Eugene W. Moore, for appellee.
   Carretón Harris, Chief Justice.

Helen Cash, appellee herein, was a nominee for the office of school hoard director at the regular school election held in St. Joe School District No. 69 of Searcy County, on December 5, 1961. Her name was printed on the ballot. Noel Baker, Jr., appellant herein, qualified as a write-in candidate for the same position. Two hundred thirty-five (235) ballots were cast at the election, and at the conclusion thereof, the election officials certified appellee as the duly elected director of said school district. Within the time prescribed by law, appellant filed his complaint alleging that he received a majority of the votes cast in said election, and that the judges and clerks at said election had wilfully refused to count and tabulate 176 ballots which had been cast by legal electors of the district for him as a write-in candidate for the aforesaid office. One hundred seventy-one (171) names were then listed as individuals who allegedly voted for contestant. Appellant then prayed that these uncounted ballots be counted and tabulated, and that he be declared the duly elected school director. Appellee filed an answer denying that Baker had received a majority of the legal votes cast, but stated that she had no objection to a recount of the ballots, “and the legal votes received by each party hereto be determined and ascertained. ’ ’ The case was heard on April 27, 1962, at which time the court announced:

“Under the pleadings in this case, it seems that the only way it can be determined which of these candidates received the highest number of legal votes is to open the ballot box and count the votes. First, it will be necessary that it be shown that the ballot box is intact, that it is in the same condition it was immediately after the election, in other words that the ballots have not lost their integrity. It will be necessary to show that before they would be legal evidence. ’ ’

Appellant then called as his witness Mrs. Jimmie Lee Falls, County and Circuit Clerk of Searcy County. Mrs. Falls testified that the ballot box was in the same condition (at the time of the hearing) as when delivered to her by the judges of the election immediately after the certification of the vote. She stated that she sealed the box on the night of December 5. “I took a strip of paper and put it across on it and sealed it. I put scotch tape on it on each side and I initialed that piece of paper that I sealed it with.” She testified that the ballot box was still in the same condition as when she sealed it.

Following her testimony, the court stated:

1 ‘ The Court thinks it has been sufficiently established that the ballot box is intact and the ballots are in the same physical condition that they were at the time they were delivered to the Clerk, so it is hereby ordered that the Clerk as official custodian of the ballot box bring the box into open Court and to open it for the inspection of interested parties.”

The ballot box was then opened, and the ballots were individually counted by the clerk, the court reporter, and the attorneys for both parties, the court directing that the ballots should be challenged by counsel as the count proceeded. During the count it developed that a number of ballots reflected that both candidates had been voted for, i. e., an “x” had been placed in the square opposite the name of Helen Cash, and the name of Noel Baker, Jr. had been written in on the next line, and an “ x ” placed in the square by his name.

After completing the counting, appellant called his father, Noel Baker, as a witness. Baker testified that he saw each ballot as it was counted on December 5, 1961, and no ballot that was counted at that time contained an “x” in both squares. Noel Baker, Jr., then testified that the ballot box had a different appearance at the present (time of the hearing) than when delivered to the clerk on December 5. He stated, “Well, when it was delivered to her, she took an envelope and rolled it up and took mucilage and stuck it over the box like that.” Upon request, appellant was given 10 days in which to file a. motion challenging the integrity of specific ballots, though the court held that the integrity of the ballot box and verity of the ballots as evidence had not been destroyed. Thereafter, appellant filed his motion asking the court to direct the County Clerk to bring into court the official list of electors voting at the election, together with the tally sheets, and, further, to direct the County Treasurer to produce the stub box containing the signature of the voters. Further :

‘ ‘ That when said votes were opened it was disclosed that Forty-seven (47) or more votes which were cast for Contestant disclosed that said voters wrote in the name of Noel Baker, Jr., and placed an “x” in the square opposite his name written in and that according to affidavits hereto attached subsequent to said Election, an “x” had also been placed after the printed name of Helen Cash; thus further destroying the verity of these ballots and further that Forty-seven (47) ballots marked in this manner are too many to have been marked inadvertently by the voters and further that many of the ballots show to have been pulled from the sealed box through the slot by a wire. ’ ’

The motion was supported by the affidavits of 159 qualified electors who stated that they had voted for Baker, “and that if an “x” appears after the name of Helen Cash, Contestee, it was placed therein by some other person, after they had placed their ballot in the ballot box on the day of the election. ’ ’

This motion was denied, following which the court rendered its findings of fact and conclusions of law, as follows:

“After a recount of the ballots in open Court in the presence of the parties and attorneys, and after hearing all the testimony in the case, the Court finds the following facts:
“That a total of 235 ballots were cast in the school election in St. Joe District; that 70 ballots were cast for the contestee which are not contested, and that 53 ballots were cast for the contestant which are uncontested; that 47 ballots were cast on which there was a write-in and both boxes were marked with an “ x ”; that 23 ballots were cast on which there was no write-in name and both boxes were marked with an “x”; that 21 ballots were cast with neither box marked with an “x”; that 8 ballots were cast with no write-in name and an “x” marked in the box below the name of the printed candidate Helen Cash; that 13 ballots were challenged because of irregularities in the name of the write-in candidate.
“It was stipulated by the parties, and the Court so holds that the 47 ballots on which both boxes were marked with an “x” are not legal votes.
“As to the 23 ballots with no write-in name but both boxes marked with an “x”, it could not be reasonably contended that the voters of these ballots intended to vote for the contestant, since they did not write his name on the ballot. The more serious question is whether or not they should be counted for the contestee. The ballots indicate to the Court that they were intended to be votes for the contestee. Of course, the extra “x” mark is superfluous. It doesn’t appear to the Court that this is a strong enough reason to disfranchise these voters.
“The 21 ballots which have no “x” mark in either box are irregular and cannot be counted for either candidate.
“It is the opinion of the Court that the 8 ballots with no write-in name, but the “x” mark is in the box below the name of the printed candidate, and no “x” mark following the name of the printed candidate, are illegal votes, and cannot be counted.
“With reference to the 13 miscellaneous challenges, ballots No. 277, 56, 73 and 57 are for Frank Winder as a write-in candidate, obviously these ballots cannot be counted. Ballot No. 11 was cast for W. R. Baker as a write-in, and ballot No. 54 was cast for James Baker as a write-in; obviously these cannot be counted for the contestant. The other 7 miscellaneous challenged ballots, while irregular in form have some indication that the voters intended to cast their ballots for the contestant, and these 7 votes are allowed for the contestant.
“Therefore, the Court finds that the contestant received 60 legal votes and that the contestee received 93 legal votes in said election.”

Thereupon, the court entered its judgment finding that Helen Cash was the duly elected school director of St. Joe School District No. 69, and from such judgment appellant brings this appeal.

The above findings concisely state the view of the trial court, and we proceed to briefly review those findings.

While no formal stipulation was entered into that ballots carrying an “x” in both boxes would not count for either side, the parties agreed to treat such ballots in that manner, and in tabulating the individual votes, used that method. The court’s finding that the parties had stipulated that such votes would not be counted is supported by the record; for that matter, appellant does not dispute the fact. We hold that the court ruled correctly as to these 47 ballots.

We likewise agree with the court’s determination as to the 23 ballots with no write-in name, but with an “x” appearing in both boxes. The “x” in the box after a blank was meaningless, and the court properly counted these votes for appellee.

Certainly the action of the court in holding that the 8 ballots were not votes for either candidate cannot be complained of by appellant since there was no possible way that the votes could have been counted for him.

Six (6) ballots were cast for other write-in candidates, and appellant cannot claim these votes. Seven (7) votes, though irregular in form, were allowed for Baker.

The court erred in one respect, vis., in its ruling relative to the 21 ballots wherein Noel Baker, Jr.’s name was written in but no "x” was placed in the box opposite his name. In Clement v. Davis, Law Rep. of Dec. 17, 1962, 362 S. W. 2d 706, decided subsequent to the trial court’s decision in this case, we held that it is unnecessary to the validity of a write-in vote that a cross mark appear in the square at the right of the name. Baker should therefore have been allowed 21 more votes, but this would not change the outcome of the election.

When all the votes that Baker could possibly lay claim to (counting both those for “Noel Baker, Jr.,” and “Noel Baker”) are added, we find a total of 128. Yet, appellant’s motion was supported by the affidavit of 159 persons. Obviously, a large number of these persons were in error, since there is no contention that Baker’s name was erased from any ballot. Favorable action by the court on Baker’s motion would have had the same effect as holding another election, to which relief appellant was not entitled.

Since the error herein pointed out does not change the result of the election, the judgment is affirmed.

       THE COURT: The Court has already passed on the question of the integrity of the ballot box. Testimony was taken on that this morning, and both parties had an opportunity to question the condition of the ballot box fully this morning and testimony was offered and further testimony could have been offered as to the appearance and' condition of the box, as to whether or not it showed any signs of being tampered with, and that question I think was fully developed this morning, so far as the appearance of the box itself is concerned.

       Also, on some of these ballots, the name of “Noel Baker” rather than “Noel Baker, Jr.” was written in.

       Broken down as follows: 60 allowed by the court, 47 not counted for either side, and 21 with no “x” in the box.


author: Ed. F. McFaddin, Associate Justice. George Eose Smith, J.

text:
    Black and White, Inc. v. Love.
    5-2984
    367 S. W. 2d 427
    Opinion delivered May 6, 1963.
    [Rehearing denied June 3, 1963.]

      Wright, Lindsey, Jennings, Lester & Shults and Philip S. Anderson, Jr., for appellant.

      William Slater Hollis, for appellee.
   Ed. F. McFaddin, Associate Justice.

This case arises because a passenger was injured in a taxicab. The appellee, Black & White, Inc., is an Arkansas corporation, engaged in the operation of taxicabs in the City of Little Rock. On the night of October 24, 1958, Mr. and Mrs. W. C. Love, visitors in Little Rock, along with three other married couples, had a late supper at a restaurant located on Thirteenth Street in Little Rock, and all decided to return to their hotel. Mr. Love called Black & White for two cabs. In a few minutes when the first cab arrived at the restaurant, the driver inquired of Mr. Love if he was the person who had ordered two cabs, and Mr. Love responded in the affirmative. The four ladies entered that cab, to be transported to the hotel; and the four men followed in another cab which came in a few seconds. En-route to the hotel the cab occupied by the ladies was involved in a traffic mishap and Mrs. Love was injured.

Mr. and Mrs. Love, as plaintiffs, filed action on July 27, 1961, against Black & White, alleging that Mrs. Love was injured because of the negligence of the driver of the cab in which she was riding as a passenger, and that both Mr. and Mrs. Love suffered damages because of her injury. The defendant filed a general denial on August 11, 1961. After the expiration of three years from the date of Mrs. Love’s injury, there was an unsuccessful attempt by Mr. and Mrs. Love to add Checker Cab Company as a defendant. The sole defendant, Black & White, Inc., claimed, inter alia, that it was not a Black & White cab in which Mrs. Love was injured. Jury trial resulted in a verdict and judgment for Mr. and Mrs. Love for a total of $2,298.00; and Black & White brings this appeal, urging ten points, which we group in suitable topic headings.

I. Admission Of Evidence, (a) The Court permitted Mr. Love to testify that he looked in the telephone directory and found the telephone number for Black & White and called that number and ordered two cabs to be sent to the restaurant. The appellant claims the admission of this evidence was error. We hold against the appellant on this point. Certainly Mr. Love’s testimony, that he ordered two cabs from Black & White, had a direct bearing on the case. Mr. Love testified that he placed his wife in a Black & White cab. Mrs. Love became a passenger in the cab in which her husband placed her. She did not have to personally order the cab. Her husband did that for her; and she testified that she was injured while a passenger in a Black & White cab in which her husband had placed her.

(b) Mr. Love was permitted to testify that when the first cab arrived at the restaurant, the driver inquired of Mr. Love if he was the party who had ordered two cabs. We find no error in the admission of this evidence. Mr. Love’s testimony, as to the inquiry made by the driver, was cogent evidence that the cab came in response to Mr. Love’s order. Unless the driver knew of the order which had been made to Black & White for two cabs, the driver could hardly have made the inquiry which he did.

(c) The police officer, who investigated the traffic mishap while both vehicles were at the scene, testified that his report, made at the time, showed that the cab was a Black & White cab. We find no error in the admission of this evidence. The mishap occurred on October 24, 1958, and the witness was testifying on September 26, 1962. He had a right to refresh his memory and refer to his official report made at the time of the mishap. The defendant had the right to cross examine the witness, as was skillfully done, but such right of cross examination did not render erroneous the admission of the testimony on direct examination.

(d) Anticipating that the defendant would introduce evidence — at it did — that Checker Cab Company was an entirely separate corporation from Black & White, the plaintiffs, over the objection of the defendant, were allowed to prove:

“. . . that there is one radio dispatcher for both the Checker Cab Company, Inc. and Black and White, Inc., who dispatches the nearest cab to the scene where the customer is to be picked up whether said cab be a Checker or a Black and White cab, so that it would be possible for a person calling Black and White Cab Company to be picked up by a Checker cab . . . There is one switchboard located at 114 East Markham which receives all incoming calls for both Checker Cab Company, Inc. and Black and White, Inc. and which is operated by one person. Both the radio dispatcher and the switchboard operator were on the payroll of Black and White, Inc. only on October 24, 1958 and for a long period of time before that.”

The Court allowed the foregoing quoted testimony; and we find no error committed. The plaintiffs were making an effort to pierce the fiction of the corporate entities of Black & White, Inc. and Checker Cab Company ; and the way the two corporations operated — like a joint venture — was a cogent fact which the plaintiffs were entitled to show.

II. Remarles Of The Trial Judge In The Presence Of The Jury. The defendant introduced evidence to the effect that there were in fact three corporations: (1) Capital Auto Leasing & Renting Corporation, which actually owned the motor vehicles and leased them to either of the other two corporations; (2) Black & White, Inc., which operated a taxicab business; and (3) Checker Cab Company, which also operated a taxicab business. Then on rebuttal the plaintiffs offered in evidence the entire stipulation heretofore mentioned in the footnote in Topic II, supra. The facts had been stipulated, but the defendant had all the time preserved its objection to admissibility. This stipulation covered, inter alia: (1) the identity of the shareholders and officers of each of the three corporations; (2) the division of the.salaries of the officers between the three corporations; (3) “That it is the nature of the business of both Checker and Black & White cab companies for drivers to drive either company’s cab when the particular cab that has been assigned to them is being repaired or maintained”; (4) that the officers of the three corporations are identical; (5) that for several months prior to this accident all the cab drivers simply rented their cabs for $10.00 for twelve hours, and there was no written contract between the companies, and the cab drivers’ rental agreement was a day to day proposition.

When the plaintiffs offered the stipulation in rebuttal, the defendant questioned the relevancy and/or materiality of the stipulation, and the Court said: ‘ ‘ gentlemen, I believe I will let that stipulation be introduced in the record without benefit of it going to the jury because I think what the Court is going to tell the jury to some extent renders this testimony which has just been introduced, and this stipulation, immaterial.”

The appellant complains that the language of the Court, as above quoted, was a comment on the weight of the evidence. But under the facts in the case at bar, we hold against the appellant’s contention. The Trial Court was merely telling the attorneys that his instructions would render the stipulation immaterial as evidence for the jury to consider, which was true. The instructions given by the Trial Court rendered his remark entirely harmless.

III. Instructions. We come then to the hig issue in this case, and this relates to the instructions. The appellant here complains of four of these instructions; but what we say about Instruction No. 4 will dispose of appellant’s arguments on all four. The Court’s Instruction No. 4 reads:

“You are instructed that if you find from a preponderance of the evidence that on the 24th day of October 1958, at about 11:00 P.M., the plaintiff, William C. Love, called the Defendant, Black & White Cab Companjr, Inc. and requested that it send two cabs to the Brown Jug Restaurant for the purpose of transporting the plaintiffs as passengers in the cabs from said restaurant to their hotel, in Little Rock, and if you further find that pursuant to said call, if any, the Black & White Cab Company dispatched two cabs to the designated address and that one of such cabs, if any, so sent, undertook to transport the plaintiff, Mrs. Love, to her hotel, you are told that the question of the ownership of the cab would be immaterial since under such findings, if any, by you, the Black & White Cab Company would be legally responsible for a failure, if any on the part of the driver of the cab so dispatched to exercise the highest degree of care toward a passenger in the cab.”

In effect, by this instruction the Court told the jury that if Mr. Love called the Black & White Company and ordered two taxicabs, and Black & White elected to send a Checker cab, then Black & White would be liable for the acts of the driver of the Checker cab, just as it would have been liable for the acts of the driver of a Black & White cab. We find no error in the said instruction under the peculiar factual situation shown in this case (and we have not been able to find another case exactly the same). Whether the Trial Court gave the instruction on the theory of joint venture, or on the theory of piercing the entity of the corporate fiction, is not disclosed by the record; but either theory would have justified the instruction.

It was shown here that the two corporations (Black & White and Checker) were so interwoven that there was only one radio dispatcher for both corporations; and the dispatcher sent the nearest cab to where the customer was to be picked up, regardless of whether it was a Checker cab or a Black & White cab. When Mr. Love ordered two cabs from Black & White (as the uncontradicted evidence shows that he did) then Black & White certainly engaged in a joint venture with Checker in sending a Checker cab, if such was actually sent. The operator on the switchboard and the radio dispatcher for the cabs were both on the exclusive payroll of Black & White at the time here involved. Thus the evidence showed a joint venture between the two corporations.

Furthermore, the two corporations were owned by the same stockholders, operated by the same officers, and the cabs were interchanged. It would be putting fiction above right and justice to allow Black & White to hide behind the corporate entity of Checker in this case. In Rounds and Porter Lbr. Co. v. Burns, 216 Ark. 288, 225 S. W. 2d 1, we said: “It is only when the privilege of transacting business in corporate form has been illegally abused to the injury of a third person that the corporate entity should be disregarded.” See also Plant v. Cameron, 228 Ark. 607, 309 S. W. 2d 312.

There are a wealth of cases involving liability of taxicabs claimed to be owned by one party and driven by another, and to discuss these cases would unduly extend this opinion. But the general trend of the holdings seems to be summarized by the Supreme Court of Florida in Economy Cabs v. Kirkland, 174 So. 222:

‘ ‘ One of the first principles of hornbook law we were taught in the law school was that for every wrong the law provides a remedy. If the law is to be circumvented by litigants as proposed here, then we were taught a futile lesson. They should not be permitted to parade under a flag of truce to garner a profit and then raise the black flag when called on to make restitution for damage perpetrated. Callas v. Independent Taxi Owners’ Ass’n, 62 App. D. C. 212, 66 F. (2d) 192; certiorari denied, 290 U. S. 669, 54 S. Ct. 89, 78 L. Ed. 578; Vance v. Freedom Oil Works Co., 113 Pa. Super. 280, 173 A. 496; Bank of U. S. v. Dandridge, 12 Wheat. (U. S.) 64, 6 L. Ed. 552. This rule applies to and governs all persons to whom defendant furnished transportation, including the plaintiff and those who deal with Economy Cabs as a corporation. Third parties who happen to own a cab and use it in the name of the company at the call of the company and under the colors of the company will be treated as the company. Anderson v. Yellow Cab Co., 179 Wis. 300, 191 N. W. 748, 31 A. L. R. 1197; Burke v. Shaw Transfer Co., 211 Mo. App. 353, 243 S. W. 449; Rhone v. Try Me Cab Co., 62 App. D. C. 201, 65 F. (2d) 834.”

Under the peculiar facts in this case we find that the Court was justified in giving the Instruction No. 4; and finding no error in the entire case the judgment is affirmed.

George Eose Smith, J., dissents.

George Eose Smith, J.

(dissenting). I think the trial court made a mistake in telling the jury, in Instruction 4, that if Black & White sent a Checker cab in response to Love’s telephone call then as a matter of law Black & White would be liable for the cabdriver’s negligence. It seems to me that the trial judge really decided a question of fact that should have been left to the jury.

No particular significance can be attached to the fact that Black & White and Checker employed a common dispatcher. A cab company must evidently have someone continuously on duty to answer telephone calls for cabs, but in a city the size of Little Eock the calls cannot be so numerous as to take up much of the dispatcher’s time. Hence it is sensible for two or more cab companies to reduce their overhead expense by using the same dispatcher, and this is true whether the companies are allied through stock ownership or are completely unrelated.

A joint adventure is in the nature of a partnership; each of the parties must contribute property or services to the undertaking and have a right to share in the profits of the business. State ex rel. Atty. Gen. v. Gus Blass Co., 193 Ark. 1159, 105 S. W. 2d 853. We ought not to declare, as the majority opinion seems to do, that whenever two taxicab companies employ the same dispatcher they become joint adventurers as a matter of law and therefore assume liability for each other’s negligence. It may be that in the case at bar there was sufficient evidence to justify a finding that a joint adventure existed, even though there was no such allegation in the complaint, but if so the issue was nevertheless one of fact, upon which reasonable men might have differed. It should have been submitted to the jury.

The majority’s alternative reason for upholding the instruction stands no better. As we observed in Bounds & Porter Lbr. Co. v. Burns, 216 Ark. 288, 225 S. W. 2d 1, it is only when the privilege of transacting business in corporate form has been illegally abused to the injury of a third person that the corporate entities should be disregarded. In the case at bar Black & White and Checker had the same officers and were owned by the same stockholders, but these facts alone do not destroy their separate identities. There is no. proof that, until this case arose, the existence of the two corporations had ever confused anyone. There is no proof that, until this case arose, the existence of the two corporations had ever worked to the injury of any third person. In fact, all that happened here was that Black & White concealed its position, by filing only a general denial, until after the statute of limitations had run against Checker. While there is evidence that would justify the jury in disregarding the corporate entities, the issue was one of fact that ought not to have been taken from the jury by the trial judge.

       The issue of whether the driver of the taxicab was negligent is not presented on this appeal.

       The parties had entered into a lengthy stipulation concerning the two corporations (i. e., Black & White, Inc. and Checker Cab Company), the identity of the stockholders, the blending of businéss by the two corporations, etc., etc. The stipulation was as to facts, with defendant preserving its objection as to the admissibility. The Court admitted into evidence to the jury the portion shown in the quotation above. The matter of this stipulation is further discussed in Topic II, Infra.

       See Martin v. Weaver (Tex. Civ. App.), 161 S. W. 2d 812; and see 48 C. J. S. p. 809 et seq., “Joint Adventures” § 2 et seq.

       On piercing the fiction of the corporate entity in taxicab cases, see particularly Callas v. Independent Taxi Owners, 66 F. 2d 192.

       Our own case of Adams v. Summers, 222 Ark. 924, 263 S. W. 2d 711, has only an indirect bearing on the point here; but see Annotations in 120 A. L. R. 1351 and 131 A.L.R. 797, entitled, “Relation between taxicab company and drivers or owners of cars not owned by company, as regards responsibility for injury or damage.” See also Rhone v. Try Me Cab Co., 65 F. 2d 834; Assoc. of Independent Taxi Operators v. Kern (Maryland), 13 A. 2d 374; Mull v. Colt Co., 31 Federal Rules Decisions 154; and 13 C. J. S. p. 1314, “Carriers” § 701.


author: George Eose Smith, J. Ed. P. MoP addin, Associate Justice Paul YTard, Associate Justice

text:
    Killgo v. James, Executrix.
    5-2936
    367 S. W. 2d 228
    Opinion delivered May 6, 1963.

      Clayton Farrar and Wood, Chesnutt $ Smith, by Bay S. Smith, Jr., for appellant.

      M. C. Lewis, Jr., for appellee.
   George Eose Smith, J.

In 1949 Charles and Euby Killgo bought a home in Hot Springs, as tenants by the entirety. In 1954 the couple were divorced by a decree of the Garland Chancery Court. The decree approved a property settlement by which the parties agreed to sell the home later on and divide the proceeds. The property had not been sold, however, when Charles died in October of 1959. His heirs, the appellants, then brought this suit for partition against Charles’s former wife, Euby Killgo Dunn, upon the theory that the property settlement and divorce decree had converted the tenancy by the entirety into a tenancy in common, in which case the plaintiffs would have inherited a half interest in the property upon Charles’s death. The chancellor rejected that theory, holding that the tenancy by the entirety had continued in existence, so that at Charles’s death the title vested by survivorship in Euby Killgo Dunn. Mrs. Dunn died pending this appeal; the cause has been revived against her heirs and personal representative.

The principal issue—whether the estate was changed into a tenancy in common—turns upon the construction of this language in the settlement agreement: “It is understood that the decree to be entered herein is to provide that Charlie C. Killgo is to have possession, use and control of the [home], together with the furniture therein, until such time as the parties to this case may agree on a sales price for such, at which time, on such agreement, the proceeds are first to be used to reimburse Charlie C. Killgo for all monies he has paid or will pay on the mortgage on same after date of August 1953, after which the balance of the proceeds is to be divided between the parties hereto equally.”

The 1954 divorce decree recited the substance of the paragraph just quoted and concluded by declaring that “the property rights settlement between said parties . . . is hereby approved and confirmed in all particulars.” (We should add that at Charles’s death there was pending a suit for partition that Ruby had filed in 1957, in which she charged that Charles had violated the settlement agreement by refusing to consider a sale of the property. We do not dwell upon this earlier case, as we think it had no effect upon the title, either directly or by way of an estoppel.)

The chancellor was right in holding that the agreement and decree did not change the parties’ estate into a tenancy in common. It will be seen upon reflection that the Killgos, like any married couple in the same situation, had a choice of two courses. First, they could, without affecting the nature of their tenancy by the entirety, have simply agreed that they would attempt to sell the land, with the proceeds to be divided equally. In that case the estate by the entirety, with its characteristic right of survivorship, would undoubtedly continue to exist until a sale was accomplished. Secondly, the Killgos, at least by invoking the chancellor’s statutory power over tenancies by the entirety, could have agreed that the estate would immediately become a tenancy in common, thereby utilizing the divorce decree to extinguish the right of survivorship. Ark. Stats. 1947, § 34-1215; Brimson v. Brimson, 227 Ark. 1045, 304 S. W. 2d 935.

We think it plain that the agreement in the case at bar falls in the first category. We cannot find one sentence or even one word, in the agreement or in the decree, to support the conclusion that the parties had an affirmative intention to bring about an immediate termination of the tenancy by the entirety. It is desirable that titles to real property rest in certainty and stability. For a couple to declare that they will sell a piece of property at some future date and divide the proceeds is not even a roundabout way of saying that they will also become tenants in common at once. The language that the Killgos selected, with the advice of counsel, is perfectly consistent with a desire on their part to leave the estate untouched until a sale should be completed. We do not feel justified in rewriting the contract by reading into it an additional clause that the parties chose to leave out.

There is a second point in the case. The appellants asked in their complaint that the property be ordered sold and that the proceeds be applied first, in accordance with the property settlement agreement, to recompense the plaintiffs for mortgage payments totaling $1,640 that were made by Charles Killgo after August of 1953, with the remaining proceeds to be divided equally between the opposing litigants. Even though we are'holding that the tenancy by the entirety continued in force, there is still the question whether the appellants are entitled to assert a charge against the property for the mortgage payments that are involved.

A majority of the court have concluded, although not upon the same reasoning, that the appellants are entitled to charge the property with the mortgage payments. Justices Ward, Robinson, and Johnson are of the opinion that the tenancy by the entirety was converted into a tenancy in common, in which case the mortgage payments are recoverable as a matter of course under the settlement agreement. Justice McPaddin joins in the majority opinion with respect to the tenancy by the entirety but, for the reasons stated in his concurring opinion, is of the view that the mortgage payments are recoverable. The Chief Justice, Justice Prank Holt, and the writer would affirm the decree.

The decree is accordingly affirmed in part and reversed in part, and the cause is remanded for further proceedings.

MoP addin, J., concurs; Ward and Johnson, JJ., dissent.

Ed. P. MoP addin, Associate Justice

(concurring). I agree with that part of the Majority Opinion which holds that the entirety estate had not been dissolved at the time of the death of Charles Killgo; but I am of the opinion that Mr. Killgo’s estate is entitled to recover the $1,640.00 which he paid after August 1953 to retire the principal indebtedness on the mortgage of the entirety estate.

When Mr. and Mrs. Killgo were divorced they entered into a property settlement agreement which provided :

“It is understood that the decree to be entered herein is to provide that Charlie C. Killgo is to have possession, use and control of the place of the parties . . . together with the furniture therein, until such time as the parties to this case may agree on a sales price for such, at which time, on such agreement, the proceeds are first to be used to reimburse Charlie C. Killgo for all monies he has paid or ivill pay on the mortgage on same after date of August 1953, after which the balance of the proceeds is to be divided between the parties hereto equally.” (Emphasis supplied.)

The settlement agreement was approved by the divorce decree, and it determined the disposition to be made of the proceeds of the sale of the premises. The Chancery Court held that Mr. Killgo’s occupancy of the property required him to pay the taxes, insurance, repairs, and interest on the mortgage indebtedness; that portion of the decree is not questioned. But the Chancery Court held that Mr. Killgo’s occupancy of the property also required him to pay the principal on the mortgage indebtedness. That holding is challenged because it is in direct opposition to the terms of the property settlement agreement of the parties (approved by the Court) which specifically recited that on the sale of the property, Mr. Killgo could recover all principal payments he made on the mortgage after August 1953; and these principal payments were definitely established at being $1,640.00.

In Jones v. Jones, 236 Ark. 296, 365 S. W. 2d 716, the parties to a divorce suit made a property settlement agreement by the terms of which the husband was to make the mortgage payments on the entirety prop-erty until it should be sold; and we enforced the agreement between the parties. So the Jones case is authority for the statement that Mr. Killgo could have enforced the agreement and recovered the $1,640.00 if the sale had taken place in his lifetime. I maintain the property settlement agreement gave Mr. Killgo a chose in action against the property and his former spouse. The fact that the sale did not take place during the life of Mr. Killgo does not prevent the rights of Mr. Killgo from passing to his estate as any other chose in action. In Smead v. Chandler, 71 Ark. 505, 76 S. W. 1066, Justice Battle said:

' ‘ The terms or phrases ‘ choses in actions ’ and debt ’ are used by courts to represent the same thing when viewed from opposite sides. ‘ The chose in action is the right of the creditor to be paid, while the debt is the obligation of the debtor to pay. ’ ”

That a chose in action passes to the estate of the deceased is established by unlimited authority. See C. J. S. Yol. 26-A, Page 533 et seq., “Descent and Distribution” § 8. The Supreme Court of Utah, in the case of Harper’s Estate, 265 P. 2d 1005, held that all property rights granted the husband by a divorce decree vested in his heirs, even when his death occurred prior to the time when the decree became absolute. So I maintain that Mr. Killgo’s estate received the chose in action for the $1,640.00 and his estate should have a first lien on the property for such amount.

Paul YTard, Associate Justice

(dissenting). In order to make clear my disagreement with the result reached by the majority it is necessary to consider the matter under two headings.

One. It is my conviction that when Charles and Buby Killgo secured a divorce in 1954 after they had entered into a property settlement (approved by the court) according to the terms set out in the majority opinion, the settlement was final and amounted to a dissolution of the estate by the entirety. There certainly can be no doubt that this was the intention of Mr. Killgo, Mrs. Killgo, and the chancellor, and this was definitely true after the time for appeal had elapsed. It must be kept in mind that we are not here dealing with a temporal order such as an order for child support or alimony but we are dealing with property rights that have been fixed and are unchangeable except by agreement of the parties.

As I interpret the majority opinion, it rests primarily, if not entirely, on the fact that the chancellor did not use certain "magic words” to dissolve the estate by the entirety. It is conceded, of course, that the chancellor did have power to dissolve the estate by the entirety in this instance because the estate came into being after the passage of Act 340 of 1947 (Ark. Stats. § 34-1215). In my opinion it was not necessary for the chancellor to make a specific finding that he was dissolving the estate by the entirety. I am firmly of the view that the decree in this case dissolved the estate by the entirety just as effectively as if the magic words had been used, and that view is supported by respectable authority.

In the case of United States v. 48.9 Acres of Land, etc., 85 F. Supp. 133 (W. D. Ark.), this same question arose in connection with condemnation of certain lands at one time held as an estate by the entirety by a Mr. and Mrs. Cox. It appears that they were divorced and had a property settlement which in effect was an agreement to divide the proceeds from the sale of the land. The question presented for decision was whether or not the decree of the chancellor amounted to a dissolution of the estate by the entirety. The court decided that the estate had been dissolved and in my opinion the reasoning for that decision is pertinent and controlling here. Among other things the Court said:

"... a reference to the divorce decree discloses that the parties themselves did dispose by agreement of the lands held by the entirety, and I know of no reason why that agreement, when approved by the Court in the divorce case, was not valid, and in my opinion, the decree of the Court, based upon the agreement of the parties recited therein, did vest the entire title to the lands in A. J. Cox.
£ * *
"It is true that the agreement did not specifically mention such an estate, but the agreement did include the identical lands here involved and it was clearly the intention of the parties to definitely and completely settle their respective rights and the title to the lands as between them.
“Each understood the ownership and it was clearly their intention to dispose of the estate by the entirety, which as above stated, could have been done by the execution of a deed, but the parties chose to settle the matter by agreement. . . . ”

Incidentally, that estate by the entirety was created before 1947 and so that chancellor had no power to dissolve without the consent of the parties.

To the same effect is the decision of Sheldon v. Waters, 168 F. 2d 483 (5th Cir. 1948), which interpreted the statute dealing with the dissolution of estates by the entirety in the State of Florida. The District Court, in effect, held that an approved agreement to terminate the estate by the entirety in property held by a man and wife was not operative or effective, but the Circuit Court of Appeals reversed that decision using the following language pertinent to this case:

“We conclude there was some sort of agreement between Mr. and Mrs. Waters, for there was conduct by one inconsistent with the continuance of the tenancy by the entirety, acquiesced in by the other. ’ ’

Two. In my opinion it is immaterial in this case that the land was to be sold when the husband and wife agreed on a price. Any other view would make it possible for either one of them to defeat the entire property settlement by refusing to be agreeable. It can hardly be argued that if one party refused to agree, the other party could not have redress in a court of equity. In this case the wife (whose heirs were awarded all of the land) went into court and asked to have the agreement enforced, seeking only her one-half. This amounted to a recognition on her part that the property settlement was binding on both of them. This was the effect of the holding in the case of Taylor v. Taylor, 153 Ark. 206, 240 S. W. 6, where the Court said:

' ‘ She does not seek to have that decree set aside, hut on the contrary seeks to uphold it. It was for her benefit, and she can not consider it valid for one purpose and invalid for another. She must accept or reject it in its entirety. ’ ’

In the case of Graham v. Graham, 199 Ark. 165, 133 S. W. 2d 627, it was pointed out that in a divorce suit between Charlie Graham and Mattie Graham, the court ordered the home place to be deeded by the husband to the wife. Apparently the deed had never been executed and in considering this point, the Court said:

“If Chas. G. Graham was directed by the court to deed the property to Mattie Graham, and there was no timely appeal from such order, title would vest without further formality, the deed being only the evidence or muniment of that which had been done.”

The above case has been cited with approval in Person v. Johnson, 218 Ark. 117, 235 S. W. 2d 876, and Cook v. Cook, 233 Ark. 961, 349 S. W. 2d 809. It is my conclusion, therefore, that it is immaterial that the agreement to sell the property and divide the proceeds had not been carried out in. the case under consideration. Based on the reasoning in the cases just cited, chancery court, being a court of equity, will treat that which ought to have been done as having been done.

Johnson, J., joins in this dissent.

       For other definitions of chose in action see Black’s Law Dictionary.