author: Carreton Harris, Chief Justice.

text:
    Leo Garner v. American Can Company, et al
    5-4878
    440 S.W. 2d 210
    Opinion Delivered April 28, 1969

      Daily & Woods for appellant.

      Shaio, Jones & Shaw for appellees.
   Carreton Harris, Chief Justice.

On February 9, 1959, appellant, Leo Garner, sustained a crushing injury to his left hand, which required extensive surgery, and partial amputation, the injury occurring in the course of appellant’s employment with the Dixie Cup Division of American Can Company. A bone graft was taken from the claimant’s right lower leg for the purpose of repairing the left hand, and after the surgery, Garner developed thrombophlebitis, secondary to the removal of the bone graft. Later, he developed multiple pulmonary embloi (blood clots in the lungs). This condition required ligation of the large blood vessels. Garner has continued to suffer with thrombophlebitis, and he has deep venous thrombosis in both legs. Appellant has not worked since October, 1966.

The appellee, American Mutual Liability Insurance Company carried the Workmen’s Compensation In suranee for the Dixie Cup Division of American Can- Company at the time of the injury in 1959, and records reflect that it has paid Garner approximately $8,800.00 temporary total benefits, and $4,200.00 permanent partial benefits for a total of $12,500.00, in addition to a large amount of medical expenses. On November 30, 1965, Garner sustained another injury in the course of his employment with the same employer; however, by that date, American Can Company was self-insured. The company paid Garner a total of $33.00 temporary total benefits, and medical expenses of $52.00. Both American Mutual and American Can Company denied further medical treatment and compensation benefits to appellant as of October, 1966. A hearing was conducted before a referee for the Compensation Commision on January 27, 3967, at which time the referee found, inter alia, that Garner had been paid all compensation benefits and medical expenses by American Can Company to which he was entitled as a result of the injury of November 30,' 3965; that Garner’s present condition and medical expenses were the result of his injury of February 9, 1959; that appellant had already been paid $12,500.00, the maximum allowed in compensation benefits, by appellee on account of the injury on February 9, 1959, and that the claim had been controverted by both respondents. American Mutual was ordered to pay the medical bills incurred by Garner, and Garner’s attorney was awarded the maximum attorney’s fee to be based on the amount of the medical bills. American Mutual agreed to pay the bills, but appealed from that portion of the award ■which directed the company to pay an attorney’s feet Garner cross-appealed against the insurance company only, asserting that he was entitled to more than $12,-500.00 compensation benefits, because of the 1959 injury. The 1965 injury involving the American Can Company, self-insured, was not embraced further in the proceedings after the referee’s decision. On appeal, the full commission ordered American Mutual to pay the reasonable medical expenses incurred by Garner for the treatment of an ulcer on the front of his right leg below the knee, and the company was further ordered to pay Garner’s attorney the maximum attorney’s fee based upon medical expenses so incurred, and the treatment, skin graft, and care of the ulcer. The commission then added:

“The commission wishes to make clear that the attorney’s fee does not apply to the medical expenses incurred in connection with the other parts of claimant’s body that require treatment because of claimant’s thrombophlebitic condition.”

Garner was denied compensation over and above the $12,500.00 previously paid to him. On an appeal to the Sebastian County Circuit Court, Fort Smith District, an order was entered affirming the opinion and award of the commission. From the judgment so entered, appellant brings this appeal. For reversal, it is asserted that the court and the commission erred in denying Garner further compensation benefits from American Mutual. It is also asserted that error was committed in limiting the attorney’s fee to the medical expense incurred for treatment of the ulcer on Garner’s right leg, rather than allowing an attorney’s fee on the basis of the medical expenses incurred in connection with all parts of appellant’s body that require treatment because of the thrombophlebitic condition. We proceed to a discussion of these contentions.

Appellant argues that he is entitled to receive not only the maximum of $12,500.00 mentioned in Ark. Stat. Ann. § 81-1310(a) (Repl. 1960), but is also entitled to 150 weeks’ compensation under the provisions of (5) of Sub-section (c) of Section 81-1313. It is his opinion that the sections should be construed separately, as though unrelated to each other, rather than being con-st rued together as interpreted by the commission and Circuit Court. Subsection (a) of 81-1310, before being amended in 1965, provided that:

“Compensation to the injured employee shall not be allowed for the first seven [7] days’ disability resulting from injury, excluding the day of injury. If a disability extends beyond that period, compensation shall commence with the ninth [9th] day of disability. If the disability extends for a period of four [4] weeks, compensation shall be allowed beginning the first day of disability, excluding the day of injury.
“Compensation payable to an injured employee for disability shall not exceed sixty-five per centum (65%) of his average weekly wage at the time of the accident, and shall not be greater than thirty-five dollars ($35.00) per week, nor less than seven dollars ($7.00) per week and shall be paid for a period not to exceed 450 weeks of disability, and in no case shall exceed twelve thousand five hundred dollars ($12,500.00), in addition to the benefits and allowances under section 11 [§ 81-1311] hereof. The minimum and maximum limitations of time and money expressed in the foregoing sentence shall apply in all cases pertaining to the payment of money compensation on account of disability.”

It is then pointed out that Sub-section (c) of § 81-1.313, which deals with scheduled permanent injuries, does not use the word, “disability,” and it is asserted that >§■ 81-1310 is a section dealing entirely with compensation to be paid an injured employee for disability.

Appellant’s argument is largely predicated on the 1965 amendment to 81-1310, found in the 1967 supplement as § 81-1310.1. As amended, the section provides:

‘£ Hereafter, the maximum amount to be paid in Workmen’s Compensation benefits under Initiated Act No. 4 of 1948 % 81-1349] as amended, shall not exceed sixty-five (65) per cent of a workers average weekly wage at the time of the accident, but in no event'shall a worker or his dependents receive in excess of thirty-eight dollars and fifty cents ($38.50) per week, and in no event shall the compensation period exceed 450 weeks nor shall the total amount- paid exceed fourteen thousand five hundred dollars ($14,500.00), provided that this limitation shall not apply to medical benefits as now provided by law, nor shall this limitation preclude the payment to dependents of a deceased worker of additional benefits as now provided by law, not to exceed fourteen thousand five hundred dollars ($14,500.00). Minimum compensation to be paid shall be not less than ten dollars ($10.00) per week. Hereafter, all the actual costs for medical and hospital treatment in hernia cases determined to be compensable shall be paid by the employer or by the insurance carrier for such employer. ’ ’

It will be noted that the amendment changes the maximum figure per week that could be drawn from $35.00 to $38.50, the minimum, from $7.00 per week to $10.00 per week, and the maximum amount of money that can be paid is changed from $12,500.00 to $14,500.00. However, these particular changes are not pertinent to appellant’s argument, for he recognizes that his compensation is governed by the provisions of the act which were in force at the time of his injury. It is asserted that the 1965 amendment carefully uses the language, “the maximum amount * * * shall not exceed * * * in no event shall the total amount” exceed $14,000.00. Appellant says that these restrictions are not in Section 81-1310, and he attaches great significance to that fact. In other words, he feels that the language used, “maximum amount,” and “total amount,” was intentionally employed by the General Assembly as a matter of changing the original section. It is argued that, prior to 3 965, Sections 81-1310 and 81-1313 were entirely separate, each providing separate compensation; but that the 1965 amendment (§ 81-1310.1) simply means that all benefits received under both § 81-1310.1 and 81-1313 shall not exceed a total of $14,500.00.

Appellant attaches more importance to the words, “total amount,” and “maximum amount,” than we consider to be justified, and we find no legislative motive in the different words used. In the first place, while it is true that the word, “disability,” does not appear in Sub-section (c), § 81-1313, the whole section is devoted to disability. The very opening line states:

“The money allowance payable to an injured employee for disability [emphasis supplied] shall be as follows * #

Thereafter follow Sub-section (a), Sub-section (b), and Sub-section (c), all dealing with different types of disability. Section 81-1310 provides that compensation for disability shall be paid for a period not to exceed 450 weeks, “and in no case shall exceed“2A $12,500.00, in addition to the benefits and allowances under Section 81-1311.” This last, as previously mentioned, deals with medical and hospital services and supplies, and it is noticeable, contrary to appellant’s argument, that the section specifically points out that benefits under § 81-1311 are in addition to the $12,500.00. It would appear that, if this maximum did not include all other benefits, the legislature could just as easily have said, “in addition to the benefits and allowances under Sub-section (c), § 81-1313.” If there was any significance in the choice of words used in the 1965 amendment, we think the reason is set out in the emergency clause, which reads, as follows:

‘4 It has been found and is declared by the General Assembly that the welfare of both employer and employee is of primary interest to the public; that maximum and minimum benefits presently payable under the Workmen’s Compensation Law are inadequate due to the steadily increasing cost of living and should be increased immediately to meet said increase in the cost of living, that certain disability benefits should be clarified [emphasis supplied], and that the immediate passage of this Act is necessary in order to alleviate the aforementioned. Therefore, an emergency is hereby declared to exist, and this Act being- necessary for the preservation of the public peace, health and safety shall take effect and be in full force from and after its passage and approval.”

It will be noticed that the italicized phrase uses the word, “clarified,” rather than “changed.” Rince appellant admits that the amendment clearly covers both disability and scheduled permanent injuries, the only purpose in clarifying would have been to make clear that § 81-1330 also included both.

As to the second point, we are also unable to say that the commission and trial court erred. The insurance company continued, during the course of the years, to furnish medical treatment for appellant after February, 1959. At the time of the second injury, he was still being furnished this treatment, but American Mutual denied responsibility for medical bills after October, 1966. It was the view of appellee at that time that the treatment needed by Garner -was a result of the 1965 injury, thus due to be taken care of by American Can Company. On November 18, 1966, Robert Law, Branch Claim Manager for appellee, wrote the Dixie Cup Division of American Can Company relative to a bill which had been received by American Mutual in connection with the November 30, 1965, injury. In the letter, Mr. Law stated-

“They [the doctors] advise us they put Mr. Garner in the hospital, as per the attached bill, which is dated October 5th, so that this is your responsibility and not ours. We understand that he has need for continued treatment and hospitalization in a connection avíüi the present difficulty which arose out of his November 30, 1965, accident. Since Ave are not responsible for this bill, A\Te are sending it to you so you may place it in line for payment. ’ ’

The denial of medical benefits by appellee is discussed in the commission’s opinion, as follows:

“I,t is evident from the evidence (hat the controversy that arose over the payment of certain medical, doctor and hospital bills was due, at least in part, to an error or mistake on the part of Dr. F. II. Lockwood. In 1963, Dr. Lockwood began treating claimant for a thronibophlebitic condition that resulted from claimant’s admitted compensable injury on February 9, 1959, (WCC File No. A904876) at which time American Mutual was the workmen’s compensation insurance carrier for the employer. Said carrier continued to pay for the necessary medical attention occasioned by the aforesaid condition apparently until after claimant sustained another injury to his left leg when it was struck by a roll of paper on November 30, 1965, at which time the employer Avas self-insured. * * * Claimant continued working for respondent employer' up until sometime in October, 1966, when an ulcer developed on the front of his right leg below the knee. A skin graft was applied in an attempt to cure said ulcer. At the hearing before the referee on February 7, 1967, Dr. Lockwood at first testified to the effect that the ulcer on the front of claimant’s right leg below the knee Avas causally connected with the injury on November 30, 1965, as he Avas assuming that that was the site of the injury on November 30, 1965. However, on cross-examination, by counsel for the employer, the records and reports of Dr. Lockwood established that Dr. Lockwood Avas mistaken and that tlie injury on November 30, 1965, was to claimant’s left leg. After this matter was called to Dr. Lockwood’s attention, he stated that the ulcer that was found on the claimant’s right leg below tlie knee in October, 1966, had no causal relationship to the November 30, 1965, injury. To add to the confusion and to the controversy of liability of certain medical expenses, claimant testified before the referee to the effect that tlie November 30, 1965, injury was to his right leg, at the site of the ulcer, for which a sldn graft was applied after the claimant quit work in 1966. The Commission is of the opinion that the overwhelming preponderance of the evidence is that the November 30, 1965, accidental injury was to the claimant’s left leg, as is shown by the reports of Dr. Lockwood and the report of Dr. T. P. Foltz * * *.
‘ ‘ * * * The record, as a whole, establishes that the ulcer was due to the thrombophlebitic condition that resulted from the February 9, 1959, accident injury for which American Mutual is liable. The Commission is not without some sympathy for American Mutual because they were apparently misled to some degree by Dr. Lockwood although that does not negate the fact that they actually controverted the responsibility for the needed medical attention. ’'

The commission then pointed out that, though American Mutual actually controverted the legal obligation to provide the needed medical attention, the controversy that arose between American Mutual and American Can Company was certainly due in part to this mistake of Dr. Lockwood, as well as a mistake on the part of the claimant, and the finding was then made that the attorney’s fee would not be based on any medical expense except that related to treatment of the ulcer.

Let it be remembered that appellee had faithfully paid all medical- expenses in connection witli the 1959 injury, and at the hearing before the referee, Mr. Law announced that the company was still ready and willing to-pay the medical treatment and hospitalization, except for the specific injury of 1965. We think the circumstances set out in the commission’s opinion were due to be considered in determining the attorney’s fee.

Ark. Stat. Ann. § 81-1332 (Eepl. 1960) provides that whenever the commission finds that a claim has been controverted, it shall direct that legal services be paid for by the employer or carrier in addition to compensation,- that such fees should be allowed only on the amount of compensation controverted and awarded. In Sisk v. Philpot, 244 Ark. 79, 423 S.W. 2d 871, we pointed out that a great deal of discretion is placed in the commission in approving attorney fees within the percentage limitations of the statute. In the case before us, the commission found that American Mutual Liability Insurance Company had only controverted the claim with reference to medical, doctor and hospital bills incurred by the claimant for the treatment of the ulcer on the front of his right leg below the knee, and we think there is substantial evidence to support this finding. Certainly, we are not able to say that the commission abused its discretion. Appellant contends that the issue is not one involving abuse of discretion on the part of the commission, but rather is whether American Mutual controverted the claim for medical expense. For the reasons heretofore given, we think appellant’s argument is in error, and wo are of the ojoinion that the cases cited by him are not controlling under the circumstances herein.

Affirmed,

      This section provides for medical, surgical, hospital, and nursing service, and medicine, crutches, artificial limbs, and other apparatus as may be necessary after the injury.

       & 2A Our emphasis.

      After all, there is no requirement that the commission give the maximum attorney’s iee.


source: Caselaw Access Project

author: (xeokge Bose Smith, Justice. J. Feed Jones, Justice.

license: Public Domain

text:
    Arkansas State Highway Commission v. Lyman Dixon et al
    5-4858
    439 S.W. 2d 912
    Opinion Delivered April 28, 1969

      Thomas B. Keys and James K. Biddle for appellant.

      Felver A. Roivell, Jr. for appellees.
   (xeokge Bose Smith, Justice.

The Highway Commission brought this condemnation suit to acquire 1.78 acres as a right of way for Interstate 40 across the appellees’ 320-acre farm. The jury fixed the landowners’ compensation at $5,500.00. The Commission, in seeking a new trial, insists that there was no substantial evidence to support the amount of the verdict.

We find it necessary to discuss only the testimony of the witness Lloyd Pearce, a real estate expert, who testified for the landowners. On direct examination Pearce valued the 320 acres at $109,275 immediately before the taking and at $103,725 immediately after the taking — a difference of $5,550, which slightly exceeds the amount of the jury’s award. As a qualified, expert who had familiarized himself with the property, Pearce was properly permitted to state his opinion without first enumerating the facts upon which it was based. Arkansas State Highway Commn. v. Johns, 236 Ark. 585, 367 S.W. 2d 436 (1963). Counsel for the Highway Commission might then have shown by cross-examinalion tlmt Pearce had no substantial basis for his opinion. In fact, however, counsel did not pursue that course, their cross-examination being confined principally to a few questions about comparable sales in the vicinity.

After the construction of the highway 25 acres in the southwest corner of the appellees’ land will be on the unprotected side of a levee. The principal landowner, Lyman Dixon, testified that those acres will have no value in the future, because the levee will completely cut off his access to that part of the farm. In this court the Commission insists that the 25 acre-tract cannot properly be assigned no value whatever. On that premise it is argued that Pearce’s valuation after the taking cannot be regarded as substantial evidence, because, it is said, he too assigned no “after” value to the unprotected 25 acres.

That argument misconstrues Pearce’s testimony. Before the taking the 25 acres outside the levee were accessible, by means of a ramp. Of the 25 acres, 10.3 acres were in cultivation and 14.7 acres were in woods. Pearce, in arriving at his “before” value, used the following figures, later rounding off the total to $109,-275.00:

295 acres at $350 an acre $ 103,250.00

10.3 acres at $300 an acre 3.090.00

14.7 acres at $200 an acre 2.940.00

Total “before” value $ 109,280.00

If Pearce had actually assigned no value at all to the 25 unprotected acres after the taking, as the Commission suggests, then according to Pearce the landowners’ total damage would have been as follows:

1.78 acres taken, at $350 an acre $ 623.00

10.3 acres isolated, at $300 an acre 3,090.00

14.7 acres isolated, at $200 an acre 2,940.00

Landowners’ total damage $ 6,653.00

In fact, as we have already said, Pearce fixed the landowners’ total damage at only $5,550.00. lienee even upon .the Commission’s theory he assigned a value of $1,103.00 ($6,653.00 minus $5,550.00) to the unprotected 25-acre tract after the taking. We have no basis fox-saying that such an “after” valuation of the 25 acres is wholly without foundation. To the contrary, the Commission’s own expert witness, Zack Mashburn, in arriving at his “before” value of the unprotected tract, said that he threw in the 15 wooded acres “as nothing, because I don’t think it would be worth anything on the market.” Upon the record as a whole we find Pearce’s testimony to constitute substantial evidence adequate in itself to sustain the amount of the verdict.

Affirmed.

Jones, J., concurs.

J. Feed Jones, Justice.

I concur with the majority in affirming the judgment of the trial court in this case, but I do so only in recognition of this court’s limitations in appellate jurisdiction.

I recognize that this court is committed to the ‘ ‘ substantial evidence” rule in jury cases and if there is any substantial evidence to support the verdict of a jury, we affirm the judgment rendered thereon. Hot Springs Street Railway Company v. Hill, 198 Ark. 319, 128 S.W. 2d 369. Except, of course, in such cases where the verdict is rendered on an erroneous instruction, or under the influence of passion or prejudice, or where the amount of the verdict and judgment shocks the sense of justice. Ark. Stat. Ann. § 27-1903 (Repl. 1962); Ark. State Highway v. Carder, 228 Ark. 8, 305 S.W. 2d 330; Little Rock & Fort Smith Ry. Co. v. Baker, 39 Ark. 491.

The only point raised by the appellant in the case at bar is that “there was no substantial evidence in the record to support the verdict and the appellant is entitled to have judgment modified and the trial court directed to enter a judgment in the sum of $500.00 in favor of the appellees.” This court simply does not have the constitutional power, nor the legislative authority, to do what the appellant requests under the facts in the record before us in this case.

Arkansas Statutes Annotated § 27-1903 (1962) provides as follows:

“The verdict of any jury rendered in any action for the recovery of damages where the measure thereof is indeterminate or uncertain, shall not he held to he excessive, or he set aside as excessive except for some erroneous instruction, or upon evidence., aside from the amount of the damages assessed, that it was rendered under the influence of passion or prejudice. Provided, that the circuit judge presiding at the trial may on motion for a new trial filed by the losing party, if he deems the verdict excessive, indicate the amount of such excess, and thereupon, if the losing party shall offer to file and enter of record a release of all errors that may have accrued at the trial if the prevailing party will remit the amount so deemed excessive, and the prevailing party shall refuse to remit the same, the verdict shall be set aside.” (Emphasis supplied.)

In the case at bar the instructions to the jury are not questioned. There is no evidence, aside from the amount of the damages assessed, that would indicate the verdict was rendered under the influence of passion or prejudice, and since we are not legally permitted, physically able, or professionally qualified, to view the land and make our own appraisal, but must rely on the record before us, we are unable to say that the amount of the verdict shocks the sense of justice.

The sworn testimony of legally qualified expert appraisers, when based on legally acceptable and properly obtained information, has always been accepted as substantial evidence in arriving at the fair market value of the property appraised, and such testimony should he reliable in arriving at the fair market value and resulting damages in highway condemnation cases.

A matter that has become shocking, however, and leaves the substantial nature of evidence in considerable doubt, is the wide difference we find in the appraisals of the so-called experts in highway condemnation cases.

In the case at bar the highest damages estimated by Ihe’ Highway Commission’s expert witnesses were $500.00 and the lowest estimate by the property owners’ experts was $5,500.00. The property owner himself testified that his damage was $7,307.00. Judgment was entered upon the jury’s verdict for $5,500.00.

Tn the case of Arkansas State Highway Comm. v. Wahlgreen, 246 Ark. 472, 438 S.W. 2d 694, the highest estimate of damage by the Highway Commission’s experts was $9,000.00, and the lowest estimate by the land owner’s experts was $58,600.00. The owner himself testified that his damage was $83,000.00. Judgment was entered on the jury’s verdict for $60,000.00.

In the case of Arkansas State Highway Comm. v. Hawkins, 246 Ark. 55, 437 S.W. 2d 218, the highest estimate by the Highway Commission’s experts was $3,-250.00, and the lowest estimate by the land owner’s experts was $44,500.00. The owner’s own estimate of damage was $77,500.00. Judgment was entered on the jury’s verdict for $55,000.00.

In the case of Arkansas State Highway Comm. v. Mans, 245 Ark. 357, 432 S.W. 2d 478, the highest estimate of damage by the Highway Commission’s experts was $6,150.00, and the lowest estimate by the land owner’s experts was $21,300. The owner’s own estimate was $21,500.00. Judgment was entered on a jury verdict for $16,400.00.

In the case of Arkansas State Highway Comm. v. Dean, 244 Ark. 405, 425 S.W. 2d 306, the highest estimate of damage by tlie Highway Commission’s experts was an enhancement- in value of $44,600.00, and the lowest estimate by the land owner’s experts was $91,650.00 damages. The owner’s own estimate was $114,196.00. Judgment was entered on the verdict for $41,500.00.

In the case of Arkansas State Highway Comm. v. Darr, 246 Ark. 205, 437 S.W. 2d 463, the highest estimate of damages fixed by the Highway Commission’s expert appraisers was $23,500.00 and the lowest estimate fixed by the land owner’s appraisers was $38,500.00. The land owner estimated her own damage at $98,500.00. Judgment was entered on a jury verdict for $50,000.00.

All the verdicts rendered in the cases, supra, were within the bounds of the value evidence produced by the land owners and their expert witnesses and all the judgments, except in Dean and Darr, were sustained by some substantial evidence. In each of these cases all the expert appraisers used the same criteria in reaching their conclusions, both as to the value of lands taken and damage to flio remaining lands because of the taking. They simply had different opinions as to values, both as to enhancement and damages, and with the few comparable sales in the area, they reached widely different conclusions. Tn no case has the value of adjacent lands been enhanced by the construction of an interstate highway.

It is perfectly obvious from these cases that there is something wrong with the market value appraisals in highway condemnation cases and it would appear that either the Highway Commission, or the land owners, are using appraisers whose qualifications as experts exceed their ability as appraisers of the true market values of, and damage to, the lands involved. In any event, such differences in the opinions of experts cast considerable doubt on the substantial quality of their testimony, but having no better evidence in the records coming to this court on appeals, we have no alternative except to base our opinions on the evidence we do have. Consequently, I have no other alternative except to concur in the affirmance of the judgment in the ease at bar.


author: George Rose Smith, Justice.

text:
    Lawrence Lavender, Sr. v. Southern Farmers Ass'n.
    5-4905
    440 S.W. 2d 241
    Opinion Delivered April 28, 1969
    [Rehearing denied June 2, 1969.]

      Levine & Williams and Gregory & Clay comb (of counsel on appeal) for appellant.

      Smith, Williams, Friday & Bowen by Boyce R. Love for appellee.
   George Rose Smith, Justice.

On the night of October 26, 1967, a tractor-trailer combination belonging to the appellee collided with three cows, overturned, and sustained damage stipulated to be $7,287.42. The appellee brought this action for its loss, asserting that the appellant had unlawfully allowed the animals to run at large on the highway. Ark. Stat. Ann. § 41-430 (Repl. 1964); Rogers v. Stillman, 223 Ark. 779, 268 S.W. 2d 614 (1954). In appealing from a judgment for the plaintiff the appellant contends that there was no substantial evidence to support tlie jury’s verdict.

tYe cannot sustain that contention. At the time of the accident Lavender (the appellant) and his family were in Colorado on a hunting trip. Lavendar had left his livestock in charge of his son-in-law, Leslie Curbow, who lived on Mr. Lavender’s place, next to the corral where the cattle were kept. Leslie’s brother, Billy Cur-bow, was tlie principal witness for the plaintiff.

Billy, who testified by deposition before entering the military service, lived in the neighborhood and reached the scene of the accident about five minutes after it happened. lie testified that the three cow’s belonged to Mr. Lavender; he “personally” saw Lavender’s brand on the animals. lie went on to say that the cows had been at large for about three weeks and that he and his brother had been chasing them that same afternoon. According to Billy, the cattle escaped from a pasture that had not been used since the preceding spring. The fences wrere in disrepair; “. . . several places where you could walk through the fence, or step over the fence, or places there just wasn’t a fence.”

The defense testimony was directed towuird rebutting Billy Curbow’s deposition. Mr. Lavender admitted in a discovery deposition that some of his cattle had gotten out, but lie disclaimed negligence by saying that “someone” had a uweck and ran over his fence and that a tree blew down across the fence, while he was in Colorado. Leslie' Curbow denied that he and Billy had chased the cowas that very afternoon. Leslie testified that the three animals belonged to Mr. Lavender’s son and had escaped a few hours before the accident by pushing aside the lower corner of a gate that was fastened by a chain about three and a half feet above the ground.

From what wre have said it will be seen that the decisive issue for the jury was simply that of. deciding which witnesses to believe. The appellant argues that J3illy Ourbow’s testimony was “inconsistent and unclear,” but we certainly cannot say that it was not evidence of substantial quality. It may be compared to Hie testimony of the plaintiff in St. Louis S.W. Ry. v. Ellenwood, 123 Ark. 428, 185 S.W. 768 (1916), where we said, in language equally applicable to the case at hand: “In the case at bar the conditions surrounding tbe plain-lift, as testified to by the defendant’s witnesses, furnish a very strong argument against the credibility of his testimony, but this is as far as the record authorizes, us to go. It can not be said that the testimony of the plaintiff is contradicted by tli.e physical facts or is opposed to any unquestioned law of nature. His testimony related to matters, situations and conditions which might or might not have existed, and his right to recover depended wholly upon the truth or falsity of his testimony. His testimony was, therefore, evidence of a substantial character and if believed by the jury, was sufficient to warrant a recovery in this case.” There is nothing we need add to that statement.

Affirmed.


author: John A. Fogleman, Justice.

text:
    Charles Spangler, Edward Lothrop and Lewis Chevaillier v. Comer Lumber & Supply Company
    5-4891
    439 S.W. 2d 792
    Opinion Delivered April 28, 1969

      Keith, Clegg & Eckert for appellants.

      Bernard Whetstone for appellee.
   John A. Fogleman, Justice.

The trial court held fhal appellants were liable for oil well drilling supplies furnished by appellee for the drilling of a well by one A. A. Morgan. The judgment was based upon a finding' of the trial court, sitting without a jury, that appellants were joint venturers with Morgan. Appellants’ point for reversal is their assertion of error in the finding as to the joint venture. The question for our determination is whether there was substantial evidence to support this finding. We hold that there Avas.

Parties to the proceedings in the loAver court Avho are not parties to this appeal, knoAvn as the WAG- group, AA'ere the joint oAvners of the working interests in an oil and gas lease covering the lands on which the well was drilled. This group engaged one Beverly Johnson to drill the well on a farmout agreement. Beverly Johnson arranged a sub-farmout agreement with one A. A. Morgan, under which the obligation to actually drill the well devolved upon Morgan. The terms of this subfarmout agreement are not clearly shown. Morgan owned the necessary drilling equipment hut did not have the capital necessary to drill the well to casing point, to perform the necessary tests or to complete the well, if the tests were such as to justify completion.

Beverly Johnson remembered little of his agreement with either the WAG group or with Morgan. He had some recollection of a letter from the WAG- group with reference to the terms, but stated that he had turned this letter over to people in Marshall, Texas, because lie had given the deal to them. He could only remember that the WAG group had retained an overriding royalty. Johnson did not have a drilling rig and made the farmout agreement on the hope that he could get someone to drill the well for a lesser interest in the oil lease than the WAG group would assign to him under the farmout agreement. The lease was not to be assigned by the WAG group until the well was drilled and completed. Johnson was unable to contract for the drilling of the well upon terms which would permit him to retain any interest. He recalled having arranged with A. Á. Morgan to drill the well for a fixed amount of money plus an interest in the lease. He testified that the money for the drilling was furnished by people to whom he sold interests at various places. Johnson said these interests were sold on the basis of the well being drilled and completed for a fixed amount of money to he paid contingent upon completion. Johnson hoped to make some profit as operator of the well for the owner of the lease. He would have been paid by the month for supervision and operation of the leases under the arrangement he anticipatecl. The agreement with Morgan was an oral one, and Johnson could not recall the terms as to the amount of money involved or the extent of the interest. Johnson testified that one of the appellants, Charlie Spangler, from Marshall, Texas, was one of those involved in the “first deal.” Johnson was paid for looking after the first well by Spangler after a second well was completed. This payment was'for supervision and engineering. His testimony on this 'point is somewhat equivocal as demonstrated by the following portion thereof:

“Q. Now, when you made this second deal you still ended up getting a brokerage fee or whatever kind of fee you call it on the second well, is that right?
A. T got paid for my services looking after the first well and the second well down to casing point.
Q. Who paid you for your services for looking after the first -well?
A. I was paid after the second well was completed.
Q. Who paid you?
A. Mr. Spangler, the operator.
Q. In what form was the payment?
A. Money.
Q. Why would Mr. Spangler be paying you for your services in the first well if Mr. Woodward engaged you?
A. T said the first well, I was paid for my supervision and engineering the completion of it aft- or the second well was drilled, and so maybe I didn’t get anything on the first one, just got paid on the second well for the whole deal.
Q. Paid in cash?
A. Tes sir.
Q. By Mr. Spangler?
A. Mr. Spangler and his partners.”

Johnson stated that the second well was drilled under an arrangement with Spangler and his-partners in Marshall, Texas, who he said had interests in the first well.

A. A. Morgan could not recall ever having a letter from Johnson and doubted that Johnson had one from the WAG- group about the arrangement among the parties. The entire agreement between Johnson and Morgan was oral. He confirmed Johnson’s testimony that he (Morgan) was to get a certain amount of money and a certain interest in the lease if he had completed the well. As he recalled the payment was to have been ‡18,»00 or 9,000 in cash and a one-fourth of the working interest. He stated that his undertaking was a turn-key job, i.e., he was to drill the well to casing point and run and record an electric log after the required depth of drilling had been reached. According to him, he was to bear all of the cost of drilling and testing to that point, when he was to turn the well over to the interested parties free of cost. The only written evidence of the agreement was a letter from Morgan to appellants. The text of this letter is as follows:

“This letter will serve as evidence of our agreement that you are owners respectively to the following extent:
Edward Lothrop
Charles Spangler 12/64th interest to casing ’point Lewis Chevaillier 14/64tb interest to casing point
The.se interests being in a well knowm as the State Moore #1 located in Southeast (SB) Southeast (SB) Sec. 5, Township 20, Range 27 West, Lafayette County, Arkansas, containing forty acres more or less.
Tt is understood that completion costs will be paid on a pro-rata basis by the interest holders. ■
Upon completion of title opinion by attorneys you will be forwarded proper assignments.”

Morgan stated his conclusion that appellants were not partners with him and also stated that they did not have any right to tell him how to drill the well or from whom to buy the materials. He stated that the appellants were joint venturers with him, but explained that he meant that they were, only if the well had been completed. • As he put it, “If we had made a well and completed it, why everybody would have gotten a pro rata part of it, now, if that’s what you’re talking about. If it had made a producing well, everybody would have got their right part.” He compared the deal with one in which a contractor builds a house for a certain amount of money on a turn-key basis,' paying all the expenses and delivering the house to the owner free of expense to him. Although Morgan admitted that appellants had advanced substantial moneys to him, for which he felt an indebtedness to them because of his failure to perform his contract, he testified in response to leading' questions that appellants contributed nothing to the cost and expense of drilling the well and that they were under no obligation to contribute anything.

Appellant Spangler stated that his business and residence addresses were in Marshall, Texas. He stated that he dealt in oil leases, royalties and in the buying of interests in wells. He had conducted such operations in Arkansas during the three or four years preceding. The contract with Morgan was not his first in Arkansas. The Morgan deal was about the fourth well in which Spangler was interested in Arkansas. lie testified that Morgan came to Marshall and visited in the home of appellant Lothrop around Thanksgiving in 1959. Morgan sought to interest Spangler and Lothrop in a. deal for the drilling of the well. According to Spangler, Morgan wanted to sell more of an interest than they wanted, so they got some of their friends to participate in the transaction with them. Spangler stated that under the arrangement with Morgan, he, Lothrop and their associates put up approximately $21,000 before Morgan did anything, in return for which Morgan was to drill the well to casing point, and, if it were a producer, Spangler and his associates would pay their proportionate part of the completion costs and receive a certain interest in the well. Appellant Ohevaillier was interested in the same manner as Lothrop and Spangler, according to Spangler, although Lothrop and Spangler were to have a 12/64ths interest jointly and Ohevaillier was to have a 14/64ths interest. Spangler admitted that it was a fair statement to say that he was putting up part of the cost of drilling’ the well in return for which, if if. became a producer, he was to share in the profits. While he never went to the well site during the course of drilling, he admitted receiving cards from Morgan, at intervals, stating the depth at which he was drilling. Tn response to a request by appellee’s attorney that he state the agreement as to the first well, Spangler said:

* The first wep wag with-we worked with A. A. Morgan and we had, the throe of us, Lothrop, Ohevaillier and I, and our associates, had 26/64tbs in the first well that we bought for a lump sum payment of a well drilled to casing point.”

Tn answer to another question, Spangler testified:

”1 put up the amount that was required to drill the first well and the second well to casing point and I did not obligate myself for anything other than the drilling of the first well and the same thing in drilling the second well. It was a fixed amount of money which I was putting up and under no conditions unless it was a completed well was I ever to put up any more money in the drilling of either wells.”

Appellant Lothrop testified that he came in on the well at the time Morgan came down to Marshall to talk about it. According to him, he put up a certain amount of money at the same time Spangler did to buy a fractional working interest in a well. He was a good friend of Morgan and came to visit him at the well site on one occasion while the drilling was going on. He stated that, at the time of the visit, he had an interest in the well, provided Morgan ever got to casing point. Lothrop said that appellants did not have any right to control any of the drilling of the well, nor were any of them competent to do so. He stated that he paid a fixed sum for a- specified fractional working interest in the well but that the working interest was never delivered because 'Morgan was never able to fulfill his contract.

In order to determine whether or not there is substantial evidence to sustain the court’s findings, w.e must consider the testimony in the light most favorable .to appellee and draw all inferences favorable to appellee that may be reasonably drawn. In doing so, we take note of the following testimony: that the only written evidence of the agreement between Morgan and appellants states no terms except the interests owned by appellants and the obligation of the parties for completion costs; that this letter purports to be evidence of an agreement by Morgan that appellants “are owners” to the extent stated “to casing point;” (emphasis ours) that appellants advanced substantial amounts of money for the drilling; that Morgan made fitful reports of progress to Spangler; that Morgan was both a drilling contractor and the holder of the sub-farmout rights on the lease; that appellants immediately made arrangements for the drilling of a second and successful well without any participation by Morgan after he lost the first one; that Johnson turned over his letter of agreement from the WAG Corporation to appellants, stating that he gave the deal to them; Johnson’s statement that the money paid Morgan was furnished by people to whom he, Johnson, sold interests; Johnson’s answer as to payment for his supervision and engineering on the first well; the rejection of Morgan’s offer of leases in Michigan to appellants in an effort by him to repay them for advances, which he said were unearned; testimony b}^ Spangler that in three previous transactions in Arkansas over the preceding three or four years he had paid a lump sum for an interest in a well drilled to casing point and obligated himself to pay part of the completion costs thereafter. We are unable to say that this testimony does not constitute substantial evidence to support the finding of the circuit judge.

Appellants rely principally upon two cases. They are Stone v. Riggs, 163 Ark. 211, 259 S.W. 412, and Brooks v. McSpadden, 219 Ark. 718, 244 S.W. 2d 144. In the former case there was a written contract, and the court was not left to the recollections of oral agreements among parties which probably never were too clearly expressed. Butlcr-McMurray Drilling Go., under that contract, hired a drilling outfit to Riggs and Pautz, for which they were to receive as compensation a one-eighth interest in certain oil leases. The drillers had no interest whatever in the development of the leased property otherwise. The agreement specifically provided that Riggs and Pautz should bear all the expense of labor, material, and other costs of putting down the wells. Butlor-McMurray had nothing whatever to do with the drilling operations. The circuit court and this court held that the agreement on its face and attending circumstances showed that no partnership existed. Thus, no reliance was placed upon the oral testimony of interested parties as to the effect of their agreement.

In the Brooks case, this court affirmed the holding of a chancery court that one Eberle was not a joint venturer with McSpadden in the drilling of a well. Brooks and Jean Lumber and Supply Co. had furnished drilling materials for operations engaged in by McSpadden. Watt was a professional contracto]', who owned drilling rigs, with whom McSpadden made arrangement to drill the well in question for $21,000 plus an interest in the production. Eberle was said to have supplied $19,500 to procure the drilling operations, in return for which he was to receive a fourth of the oil and gas produced. This court there said that Eberle was not shown to have been a party to any joint undertaking and that he could not be penalized on suspicion. In the Brooks case there was no evidence that McSpadden had transferred his farmout agreement to Eberle in return for the advance of funds by Eberle; that Eberle was the owner of an undivided interest to casing point; or that Eberle put up his money without obligating himself for anything other than the drilling of the -well. The inferences which can be drawn from Spangler’s statement with reference to his obligation on the first well are a significant factor in distinguishing his case from Brooks.

Appellants argue that there was no evidence of their right to direct and govern the movements of Morgan in respect to the joint venture. There is no evidence that any right of control or direction was exercised by any of the appellants. There is evidence, however, that each of the appellants admittedly had advanced substantial sums of money on the project, although they contend that they had no legal responsibility to do so. The progress reports made to Spangler are also of some significance. We cannot say that there is a lack of the requisite substantial evidence of the right to control.

We do not mean to say that parties cannot enter into an agreement such as the appellants claim was made here. We only hold that the trier of the facts could and obviously did believe those portions of the testimony of appellants and other witnesses consistent with a joint venture and disbelieve other portions. See Kansas City Southern Ry. Co. v. Dickerson, 112 Ark. 607, 165 S.W. 951.

The judgment is affirmed.

      -A farmout agreement is understood to be an arrangement under which the lessee in an oil and gas lease agrees to assign his lease, retaining an overriding royalty only, to one who successfully causes a well to be drilled to a desired depth upon the leased lands.


author: J. Fred Jones, Justice. John A. Fogleman, Justice.

text:
    National Distributors, Inc. v. Houston H. Simard, et ux
    5-4890
    440 S.W. 2d 31
    Opinion Delivered April 28, 1969
    ■ Warner, Warner, Rayon & Smith for appellant.

      Bethell, Stocks, Gcdlaivay & King for appellees.
   J. Fred Jones, Justice.

This is an appeal by Naiional Distributors, Inc. from an adverse summary judgment in favor of Houston II. Simard rendered by the Sebastian County Circuit Court. National was the plaintiff in the trial court and the suit was on a guaranty agreement.

On December 9, 1963, Jackson’s Furniture, Inc. of Fort Smith contracted to refinisli and sell antique furniture and serve as an outlet for antique furniture supplied by National Distributors, Inc. a Tennessee corporation. Jackson’s was to sell the furniture and remit to National 134% of the original cost price within eight hours after Jackson’s had collected for the furniture sold. Jackson’s became indebted to National and on April 5, 1965, it executed and delivered to National a promissory note payable on demand for $22,004.66. Jackson’s failed in business and was placed in receivership by chancery court decree. National filed claim for $24,453.64 in the receivership proceedings and was paid $1,934.29 as its pro rata portion of the assets. By chancery decree dated December 26, 1967, National was given judgment for $22,004.66 balance due on the note.

On February 9, 1968, National filed the present suit in the Sebastian County Circuit Court against Houston TT. Simard, president and general manager of Jackson’s, to recover on an undated guaranty agreement whereby Simard guaranteed the payment of any and all indebtedness owed by Jackson’s to National. By way of answer and counter-claim, Simard claimed that he was entitled to a declaratory judgment on the basis that the guaranty agreement was void and unenforcable since National was not qualified to do business in Arkansas. National filed a denial to the counter-claim and Simard responded with a motion for summary judgment. The court granted the motion for summary judgment and on appeal to this court National designated -the following points for reversal:

“The trial court erred in finding that appellant was ‘doing business’ in Arkansas; or, at tlie very least, an issue of fact exists on that point.
Tlie trial court erred in sustaining' tlie summary judgment because appellee failed to sustain the burden of demonstrating tliat there are no genuine issues of material fact.”

In granting the motion for summary judgment, the trial court found that the record presented no genuine issue of material fact, and the motion for summary judgment was granted under Ark. Stat. Ann. § 64-1202 (Repl. 1966) which states:

“Any foreign corporation which shall fail to comply with the provisions of this act and shall clo any business in this State, shall be subject to a fine . .. and as an additional penalty, any foreign corporation which shall fail or refuse to file its articles or incorporation or certificates as aforesaid, cannot malee any contract in the State which can be enforced by it cither in law or in equity ...” (Emphasis supplied.)

The guaranty agreement sued on by the appellant is as follows:

“The undersigned, for value received, hereby guarantee the payment of any and all indebtedness now or hereafter incurred by Jackson’s Furniture, Inc. to National Distributors, Inc., including specifically all presently due amounts in the approximate amount of $17,500.00 and future indebtedness which may be incurred from time to time, it being the intent of this agreement by the undersigned to perT sonally guarantee payment. of all indebtedness incurred by Jackson’s Furniture, Inc. to National Distributors, Inc. at any time during the life of this guaranty agreement. It is the intention of this guaranty to create the same liability on our part to and in favor of tire said National Distributors, Inc. or its order as though, we had actually executed sepuarate. guaranty agreements for each separate indebtedness incurred and to be incurred in the future by Jackson’s Furniture, Inc, to National Distributors, Inc.
lYe hereby severally waive presentment for payment, notice of non-payment, protest and notice of protest, and due diligence in enforcing payment of any or all of said indebtedness; and consent that an extension of time for payment may be granted or renewal taken on all or on any of said indebtedness without notice to us.
s/ Houston H. Simard
s/ .Dorothy J. Simard”

Appellant argues that there, is no . allegation that plaintiff came to Fort Smith for the execution of the guaranty agreement, and that it was actually mailed to the appellant in Tennessee. That appellant had no physical assets in Arkansas, no agent here, no office here, and that no services were performed here. Appellant argues that the record does not even suggest that any representative of plaintiff ever set f.oo.t in Arkansas, let alone conduct business here, and that the undisputed facts established that the .transaction entered into by the parties in 1963 was a Tennessee contract which involved the interstate shipment of goods to Fort Smith. The appellant also argues: "it is elementary that Houston II. Simard’s contract of guaranty was an enforceable promise on his part which was collateral to the primary obligation on the part of Jackson’s Furniture, Inc. * * * Simard thus promised to answer for the debt of Jackson’s Furniture, Inc., which was incurred in interstate commerce, and his guaranty cannot b.e severed or separated from his corporation’s primary obligation.”

While not so important to our decision in the case now before us, appellant was apparently doing business in Arkansas through Jackson’s Furniture, Inc. under the agreements entered into in 1963. A note was executed by Jackson’s for the indebtedness due under these agreements, appellant’s rights thereunder were litigated in chancery court and it obtained judgment against Jackson’s. ' The pertinent portions of the 1963 agreements, relied on by appellant, are as follows:

“It is agreed that NDI shall furnish adequate and continuing supply of antique furniture to Jackson’s Furniture, Inc. on the following basis:
National Distributors, Inc. shall pay all purchase and transportation expenses to Fort Smith and shall furnish Jackson’s with the original suppliers invoice on all purchases.
# * *
National Distributors, Inc. and Beno Friedman further agree for a period of five years after this association might be dissolved for any reason; not to contact personally and to prevent their servant? or acquaintances from contacting any customer or other business associate to whom they are introduced by Mr. Simard in the performance of this agreement.
A. The only exception to this shall be on antiques belonging to Jackson’s Furniture, Inc. and now in stock.
B. National Distributors, Inc. shall be paid on terms set forth above 134% of the cost price of every piece of antique furniture sold by Jackson’s Furniture, Inc. or by Houston H. Simard from this date forward.
O. This agreement shall continue for a period of 99 years unless 30 days cancellation notice is givon one of the parties by the other via registered mail.
It is further agreed that Jackson’s Furniture, Inc*, shall furnish adequate and continuing sales outlet on the following basis for antique furniture provided by National Distributors, Inc.
Jackson’s shall pay for all costs involved in selling, refinishing and delivering merchandi.se going to customers, and shall furnish National Distributors, Inc. with a carbon copy of every Jackson’s invoice for antiques of any kind which Jackson’s sells.
A. 34% shall be added to the National Distributors, Inc. cost price and the. total shall be paid to National Distributors, Inc. within eight (8) working hours of the time Jackson’s receives payment from its customer. On invoices, factoring and credit, the same terms and conditions apply here as in our agreement dated November 22, 1963, covering the Henean’s Wholesale antiques stock now in your possession.
# * ¡K
Further, Jackson’s Furniture, Inc.'and Houston H. Rimard agree for a period of five years after this association might be dissolved for any reason ; not to contact personally and to prevent their servants or acquaintances from contacting any supplier or other business associate to whom' they are introduced by Benno Friedman in the performance of this agreement.
A. By December 15, 1963, Jackson’s Furniture, Inc. agrees to furnish National Distributors, Inc. a complete list of all antiques now in stock not belonging to National Distributors, Inc. and as these pieces are sold they will be checked off the list. National Distributors, Inc. will receive no payment for antiques on this list.
B. As of start of business the first day of each month a complete inventory of pieces (numbers only) in stock and not sold will be furnished to National Distributors, Inc. by Jackson’s Furniture, Inc. This list will be placed in the mail at the latest by close of business the 5th of each month.”

An additional agreement dated December 9, 1963, is set out, in part, as follows:

“The following material belonging to NDI [National Distributors] is now in the possession of Houston Simard, President of Jackson’s Furniture, Inc., Fort Smith, Arkansas.
It is agreed that all material in this stock not paid for by Mr. Simard as of March 31, 1964, will be returned in good shape and at no expense to NDI. .. Excepted from this statement will be the pieces which have been refinished by Simard, and these pieces shall remain on consignment in Ft. Smith until sold by Simard.
As each piece is sold, a copy of the invoice will be furnished to NDI.
Most sales are to be factored, and within 8 working hours after money is received b3r Mr. Simard from the factor, the amount of the 'NDI price’ on the piece sold will be forwarded to NDI by Mail. ”

Of course, a contract for the sale of merchandise to be-shipped from a foreign corporation’s place of business in another state to an Arkansas purchaser does not alone constitute doing business in Arkansas even when the contract is executed in this state. In Robertson v. Southwestern Co., 136 Ark. 417, 206 S.W. 755, this court said:

“A contract for the sale of merchandise to be shipped from appellee’s place of business in Tennessee to the purchaser here do.es not constitute business in this State so as to bring the transaction under the ban of our statute, which prohibits a foreign corporation from doing business here without first filing copies of its articles of incorporation and obtaining permission to do business.”

The ownership of the property is a determining factor as to the interstate-intrastate character of a transaction. In the case of Hogan v. Intertype Corporation, 136 Ark. 52, 206 S.W. 58, the appellant agreed to purchase a typesetting machine if it were demonstrated on his premises and performed as represented. The machine -was shipped from out of state to Huntington, Arkansas, set up and demonstrated, whereupon appellant signed a note secured by a mortgage for the purchase price. In reversing the trial court’s finding 'that the appellee was not doing business in Arkansas, this court said:

“We think it conclusively established by the facts in this case that the International Typesetting Machine Company owned the machine in question after it arrived in Huntington, Arkansas, and thereafter sold it to appellant, accepting in part payment notes executed and payable in Arkansas and secured by a mortgage on the machine, which was also executed and filed for record in this state. One test laid down by the Arkansas cases differentiating an interstate transaction from an intrastate transaction is the ownership of the property after it arrives in the state.” (Emphasis supplied.)

In Eisenmayer Milling Company v. George E. Shelton Produce Company, 176 Ark. 620, 3 S.W. 2d 688, appellant shipped a carload of flour to brokers in Arkansas, and had the flour stored with appellee. The brokers were authorized to sell the flour at their own price, and pay appellant’s invoice price and appellant was to be furnished dray tickets so that it could check deliveries. After three or. four weeks the brokers dissolved (heir partnership and the appellant arranged with the appellee to sell the remainder of the flour paying, appellant. as it was sold less charges for storage and selling. In holding that appellant was doing business in Arkansas, this court said:

“... [T]he arrangement made with the brokers, and subsequent thereto, with appellee, was nothing more than an agency. contract with the brokers and appellee to sell appellant’s flour and to remit therefor as the same was sold. There was no outright sale of said flour either to the brokers ... or to appellee. Such flour was not the property of the brokers or appellee, could not have been levied upon by creditors as their property, but on the contrary, according to the undisputed testimony of appellant’s witnesses, said flour had at all times belonged to it, and was being sold for its account ...by the brokers and appellee.
# # #
... Suffice it to sa3^ that the undisputed facts here show; that the shipment of the flour into this State in the first instance was not a sale to ... [the brokers] and that the arrangement between appellant and appellee was not a sale thereof in continuation of the former arrangement between appellant and . .. [the brokers]. It amounted to no. more than the storage of the flour in this State as its own, and the employment of an agent to make sales thereof from time to time, as purchasers could be found thereof. Had it been a' sale in the first instance, with title retained and the flour retaken and a resale thereof; made to appellee, the facts would be wholly different, and the result would be a transaction in interstate, commerce, as held in the-case of L. D. Powell Co. v. Roundtree, supra.”

The intrastate character of the relationship between the parties in the case at bar is clearly evident from the written agreements they entered into, and it is apparent to ns from the plain wording of agreement, supra, that the appellant retained title to the goods in Jackson’s possession until the goods were sold by Jackson’s, and that the appellant was simply engaged in the antique furniture business through Jackson’s Furniture, Inc. in Fort Smith, Arkansas.

It is apparent from the record before us, that Jackson’s simply sold the furniture, paid for and furnished to it by the appellant, and instead of remitting 134% of the cost price to the appellant within eight hours aftei it was collected from the purchasers as Jackson’s agreed to do, Jackson’s either failed to collect or failed to remit until over a two year period it owed the appellant the sum of the chancery judgment, plus the amount appellant received from the liquidation.

The guaranty agreement actually sued on in this ease is a unilateral agreement separate and apart from the contracts entered into in 1963 between the appellant and Jackson’s Furniture, Inc. and is separate and apart from the promissory note given in 1965 on which judgment was entered and partially satisfied in 1967. The guaranty agreement was the only subject before the trial court in the case at bar and the appellee's affidavit in support of his motion for summary judgment states that this agreement was entered into and executed in Fort Smith, Arkansas, at the instance and upon the request of appellant's attorney in Fort Smith. Appellant’s affidavit does not controvert appellee’s affidavit on this point, but only states that the original promissory note, as -well as the guaranty agreement, wTas mailed to appellant in Tennessee from Foil Smith, Arkansas.

The appellant already has its judgment on the promissory note and the validity of that judgment is not before us. Tlie question before us is not where the appellant corporation was when it received its copy of the guaranty agreement signed by the appellee, and sued on in this case, the question on this point is where the contract was entered into. The appellee says it was in Fort Smith, Arkansas, and the appellant leaves this fact uncontroverted.

The judgment of the trial court is affirmed.

G-eoege Bose Smith, Brown and Fogleman, JJ., dissent.

John A. Fogleman, Justice.

I would reverse the summary judgment in this case as to Houston H. Simard. I do not believe that the trial court or the majority has required appellee to meet the heavy burden resting upon him to show entitlement to this extreme remedy. Our cases with reference to this burden are outlined in my dissenting opinion in Gordon v. Matson, 246 Ark. 533, 439 S.W. 2d 627. I submit that there is a genuine fact issue in this case. As I see it, both the triah court and the majority have overlooked the most material issue raised by appellant. Although I do not agree with the treatment given the guaranty agreement in the majority opinion as “a unilateral agreement separate and apart from the contracts entered into in 1963, ’ ’ the material fact in issue which determines whether appellant is to be allowed to maintain suit in this state is the place of making of the contract. Our statute closes the doors of our courts to a nondomesticated foreign corporation only on those actions involving contracts made in this state. U. P. I. v. Hernreich d/b/a Station KZNG, 241 Ark. 36, 406 S.W. 2d 317. Under the law of this state, a contract is deemed to have been entered into at the place where the last act necessary to the completion of the contract took place. Cooper v. Cherokee Village Development Co., 236 Ark. 37, 364 S.W. 2d 158; Leflar, Conflicts of Law, § 122, page 230; Leflar, American Conflicts Law, § 144, page 353. See also Hicks Body Co. v. Ward Body Works, 233 F. 2d 481 (1956). It is recognized that a written contract acquires no validity until delivery, either actual or constructive. Dem. Ptg. & Litho. Co. v. Parker, Auditor, 192 Ark. 989, 96 S.W. 2d 16. A mortgage prepared at the office of the •lender in Oklahoma, 'mailed to its representative within Arkansas for signature of the mortgagors and returned to the lender was held to constitute an Oklahoma contract. Smith v. Brokaw, 174 Ark. 609, 297 S.W. 1031.

There is no place of execution, or date, shown on the guaranty agreement exhibited with the amended complaint in this case. Appellee did not allege in his answer and counterclaim that the guaranty agreement was entered into, or made, in the State of Arkansas. Appellee’s only allegation having to do with the status of the appellant as a foreign corporation, and relating to the guaranty agreement, was that appellant has engaged in business in Arkansas without qualifying to do business in the state. Appellee’s motion for summary judgment asked that the trial court adjudicate that the guaranty agreement and promissory note alleged as the basis of appellant’s claim were void and unenforceable. In appellee’s affidavit supporting his motion, he merely stated that the guaranty agreement was presented to him and his wife by an attorney acting for appellant in Fort. Smith, Arkansas, and that it was executed at his place of residence there.

Appellant’s response was supported by the affidavit of Jay Fred Friedman. Friedman stated that he was one of the attorneys for appellant and that he had personal knowledge of the facts set. forth in the affidavit. He stated that the promissory note and guaranty agreement sued on were both sent to the appellant by United States mail in interstate commerce and across state lines, as substantiated by the date receiving stamp placed on all incoming mail by appellant.

1 do not see how it could be more clearly made to appear that appellant was contending that the contract was made in Tennessee and not in Arkansas. Under this state of the record, there is certainly a material fact issue as to the place where the contract was made. At least, appellee failed to show that there was not an issue of fact on this point by simply showing the isolated fact as to the place of signing.

While the trial court found that there was no genuine issue of fact relevant to issues raised by the motion for summary judgment and dismissed the complaint holding the note and guaranty agreement null, void and unenforceable, the court made specific findings of fact, none of which has any bearing at all upon the place where the contract was made. The court’s specific finding in that respect was simply that the appellant engaged in business in Arkansas, and, in the course of such business, obtained from appellee the guaranty agreement sued on. This point is argued by appellant under both points relied upon in his brief.

Brown, J., joins in this dissent.

      Appellant does not seek reversal of the summary judgment against Dorothy J. Simard, so Houston H. Simard is referred to herein as appellee.


author: Conley Byrd, Justice.

text:
    Clifford Scholem, et al v. Fletcher Long, Executor
    5-4886
    439 S.W. 2d 929
    Opinion Delivered April 28, 1969

      Spitzberg, Mitchell & Hays for appellants.

      Harold Sharpe for appellee.
   Conley Byrd, Justice.

Tlie trial court held that appellants Clifford Scholem and Edwin J. Scholem took under Grace Overholt’s will as individuals rather than as members of a class and that consequently a devise to their brother, Percy L. Scholem, who predeceased the testatrix, lapsed.

The record shows that Grace Overholt died without issue. Pier will contains fifteen clauses but only Article III. thereof is for the benefit of living kinsmen. Article III provides:

“I hereby give, devise and bequeath to Percy L. Clifford and Edwin J. Scholem of .Little Bock, Arkansas, the property located at 115-117 Cypress Street, Brinkley, Arkansas,.. . This property contains two store buildings; that these legatees be not permitted to sell or mortgage this land for a period of. twenty (20) years following my death.”

The will was submitted to the trial court for interpretation together with the following stipulation of facts:

“Percy Scholem, Clifford Scholem and Edwin J. Scholem, the beneficiaries of said Article III, are natural brothers to each other, and Percy Scholem, one of the said beneficiaries, predeceased the testatrix, his death having occurred On May 21, 1960. Jake Samuel was the natural father of the testatrix; Bachael Samuel Scholem, sister of the said Jake Samuel was the natural mother of the beneficiaries of said Article III. After the death of Jake Samuel, father of the testatrix, the testatrix’s mother married I. Scholem. Following said marriage I. Scholem adopted Grace Samuel, later Grace Overholt. Joseph Scholem, brother to I. Scholem, was the father of the beneficiaries of said Article ITT. I. Scholem and Joseph Scholem at one time owned the realty described in Article III, and they together, as partners, operated a business thereon. At the time the will in this case was executed by the testatrix, there were no other living children of Joseph Scholem and Rachael Samuel Scholem than Percy Scholem, Clifford Scholem and Edwin J. Scholem. There are at present no other living brothers or sisters of the said beneficiaries of Article III of the will. The testatrix was survived by other living cousins, both in the Scholem line and in the Samuel line. The testatrix knew of the death of Percy Scholem.
“During the lifetime of Percy Scholem both he and Clifford Scholem maintained telephone contact with the testatrix each time they were in the city of her residence, and these contacts continued by Clifford Scholem after the death of Percy Scholem and until the death of the testatrix. The testatrix and Perc3T Scholem and Clifford Scholem corresponded with each other.
“No other beneficiary designated in the will of the testatrix is related to her by blood or marriage. Percy L. Scholem, Clifford Scholem and Edwin J. Scholem were the intended beneficiaries of Article III of the Will.”

Under our law a legacy or devise lapses when the legatee or devisee dies before the testator except where the legacy or devise is to a child or other descendant of the testator. See Ark. Stat. Ann. § 60-410 (Supp. 1967) and Christy v. Smith, 226 Ark. 289, 289 S.W. 2d 885 (1956). A further exception to the lapsing rule occurs where there is a gift to a class. See Johnson v. Dunnings, Executor, 227 Ark. 640, 301 S.W. 2d 457 (1957) and Rand v. Thweatt, Administrator, 222 Ark. 556, 261 S.W. 2d 778 (1953).

In the Band case we found the general rule to be that where a bequest or devise is made to beneficiaries designated by name, they take as individuals rather than as a class, in the absence of a contrary intention appearing elsewhere in the will, or in the surrounding circumstances. In discussing the general rule, we there quoted from Page on Wills, § 1049, as follows:

“Where there is a gift to a number of persons who are indicated by name, and who are also further described by reference to the class to which they belong, the gift is held prima facie to be a distributive gift and not a gift to a class.
“The context, however, may show, that the names of the beneficiaries were added to the description of them as members of a class for the purpose of greater certainty, and that the paramount intention of testator was to make the gift to a class. Tn such case the gift will be treated as one to a class even if the names of the beneficiaries are given in the will...”

Appellants argue that since the decedent was meticulous in declaring that only the article III beneficiaries could own the land involved fox 20 years, the conclusion that she was satisfied that no lapse would occur if anyone of them should predecease her is inescapable. Their argument is as follows:

“In writing the clause ‘that these legatees be not permitted to sell or mortgage this land for a period of twenty years following my death’, the clecedent manifested her intention that the beneficiaries were to take as a class. She meant for the Scholems to hold the realty unto themselves for not less than two decades. How could she more clearly have declared that no person, including her residuary legatee, should acquire any interest in the land? She even guarded against the possibility that any other person acquire an interest through mortgage foreclosure. The testatrix adopted all measures within her perception, as expressed in Article III to declare that the realty must belong to the Scholems, and to none other than the Scholems. By precise language, she enjoined the beneficiaries from selling or encumbering to any stranger, not excluding other beneficiaries of the will, or to any relative by blood or marriage.”

We are unable to agree with appellants’ argument. The devise named the individuals whom the testatrix intended to be the recipients of her bounty. As we read the Johnson and Rand cases, above, this constituted a gift to them as individuals rather than as a class unless there was a contrary or paramount intention of the testator to make the gift to a class. We are unable to find any such paramount intent expressed in the will here. Bather it appears to us, that the testatrix did not consider the possibility of a lapse.

Since the testatrix could easily have made manifest an intent to devise to appellants as a class by adding “or survivor” immediately following their names, it does not seem reasonable that she would deliberately choose a hard and doubtful means of accomplishing an end when an easier and more certain means was available. For these reasons we agree with the trial court that appellants took as individuals rather than as members of a class.

Affirmed.


author: Frank IIolt, Justice. John A. Fogleman.

text:
    James H. Woodward v. Mary J. Blythe, Adm’x., estate of Kermit A. Blythe, deceased
    5-4750
    439 S.W. 2d 919
    Opinion Delivered April 28, 1969
    [Rehearing denied May 26, 1969.]

      Wrigid, Liiulseg & Jennings for appellant.

      Guy H. Jones and Phil Stratton for appellee.
   Frank IIolt, Justice.

This case results from a multiple car collision. Upon a jury trial, the issues of negligence and damages were found against the appellant and a codefendant, Leonard Johnson, who does not appeal. The jury awarded $137,000.00 to appellee. For reversal the appellant first contends that there was no substantial evidence to support a finding that appellant was guilty of negligence which was a proximate cause of any accident or collision involving his vehicle.

It is a well settled rule that if there is any substantial evidence of negligence by a defendant, when viewed in the light most favorable to a plaintiff and given its highest probative value, the question must be submitted to the jury. Gookin v. Locke, 240 Ark. 1005, 405 S.W. 2d 256 (1966)

This accident occurred about 6:15 a.m. on February 34, 1966, on Highway 70 about five miles west of Brinkley, Arkansas. The highway was 24 feet 5 inches wide, with each shoulder being 9 feet 5 inches in width. It was dark, the road was straight and level, and weather conditions presented no hazards. Appellee’s decedent, Kermit Blythe, was driving a red Corvair in an easterly direction. Following him was the appellant who was driving a light blue Lodge. The decedent suddenly veered to his left to avoid striking a stalled and unlighted Cadillac which was headed in the same direction, positioned on the right shoulder of the highway and partially on the pavement. This car was being operated by the codefendant, Johnson. When the decedent pulled to •his left to pass the stalled vehicle, he crossed the center line about 18 inches whereupon the left front portion of his car collided with an oncoming Pontiac automobile. This collision caused the Blythe Corvair’s direction to be reversed and its left front portion to be positioned in the path of appellant’s eastbound automobile. Appellant’s vehicle skidded 8B^/a feet before striking the left front portion of decedent’s vehicle. Following this impact the appellant’s ear deflected slightly to the right and after traveling about 25 to 30 feet, came to rest at the rear of the stalled Cadillac after striking it and doing slight damage. The decedent’s car, after being struck by appellant’s vehicle, traveled eastward, or in its original direction and traffic lane, on past the stalled Cadillac and came to rest on the right side of the road approximately 50 feet from the point of impact with appellant’s car. The collision between the Corvair and the Pontiac, and then the Dodge and Corvair, occurred within an area of approximately 20 feet. The appellant said he first applied his brakes when he saw flames resulting from the Pontiac-Corvair collision when he was 125 to 150 feet distant. He testified that he was traveling about 60 miles per hour. This would be approximately 88 feet per second. He had been following the Corvair at a distance of 250 to 275 feet for about four or five miles. There was a burned mark or trail on the pavement extending eastward from the 20-foot area, or the point of impact between the Dodge and Corvair, to about 8 or 10 feet from where the Corvair came to rest. There were fresh scratch marks on the pavement about the center of the eastbound traffic lane and near the end of appellant’s skid marks. According to appellant, he never saw the stalled vehicle nor the oncoming Pontiac before the first collision. He. do.es not remember whether his vehicle was damaged by the collision with decedent’s vehicle or the stalled Johnson vehicle and recalls only one impact. There was red paint from the decedent’s Corvair on the left front of appellant’s ear which shows extensive damage.

We have held many times “that a well connected train of circumstances is as cogent of the existence of a fact as an array of direct evidence, and frequently outweighs opposing direct testimony, and that any issue of fact in controversy can be established by circumstantial evidence when the circumstances adduced are such that reasonable minds might draw different conclusions.” Myers v. Hobbs, 195 Ark. 1026, 15 S.W. 2d 880 (1938); Ford Motor Co. v. Fish, 233 Ark. 635, 346 S.W. 2d 469 (1961). See, also, MFA Ins. Co. v. Pearrow, 245 Ark. 795, 434 S.W. 2d 269 (1968); St. Louis, I.M.&S. Ry. Co. v. Owens, 103 Ark. 61, 145 S.W. 879 (1912). Further, in determining the legal sufficiency of evidence, the testimony of a party to an action who is interested in the result will not be regarded as undisputed. Bridges v. Shapleigh Hardware Co., 186 Ark. 993, 57 S.W. 2d 405 (1933). When we view the evidence in this case according to these well established rules and in the light most favorable to the appellee, as we must do, we cannot say as a matter of law that the evidence is insubstantial that the appellant was following too closely or failed to keep a proper lookout, or failed to keep his vehicle under control. Thus, we find no merit in appellant’s first contention.

Appellant next asserts there was no substantial evidence to support a finding that appellee’s decedent was alive following the collision between his Oorvair and the Pontiac and, therefore, there was no substantial evidence that any negligence on the part of appellant caused or contributed to the cause of death of appellee’s decedent. We must agree with appellant on this contention. The appellee’s decedent was found dead in his Oorvair within a few minutes following the second collision. The first collision occurred when appellee’s decedent collided with the oncoming Pontiac. From the physical - evidence, the entire left side of the Pontiac was damaged with a shearing or ripping effect. The left rear door was torn from the car and one of the seven passengers in this vehicle was killed. After this impact the Pontiac continued westward in its proper lane, veering to the right, for 18 feet and then along the shoulder for another 36 feet where it stopped on the edge of the shoulder embankment. The force of this impact, however, reversed the direction of the Oorvair and positioned it in the path of the oncoming vehicle driven by appellant. According to appellant, he-was following the Oorvair at 60 miles por liour, or 88 fool per second, when lie observed flames from the first collision. He applied his brakes and skidded 83Vk feet before colliding with the left front portion of the red Corvair. After this collision, as previously stated, appellant’s vehicle veered to the right and traveled approximately 25 to 30 feet before striking the rear of the stalled Johnson Cadillac, doing slight damage to it. The Corvair, following the second collision, continued in its original or eastward direction and came to rest approximately 50 feet from the Dodge-Corvair point of impact and about 30 feet in front of the stalled Cadillac. The left front portion and door of the Corvair were crushed inward. The driver’s seat was pushed to the right and partially torn loose. The steering shaft and wheel were pushed upward and to the right. The body of appellee’s decedent was found strapped in his seat and lying to the right. He had head injuries, a crushed chest, broken legs and other bodily injuries. The death certificate shows that death was caused by “Brain injury and Internal injuries” as a result of “Head on collision of automobiles.” This is the extent of the medical evidence. There was no damage to the rear or right front or right side of decedent’s vehicle. According to the physical evidence, there was r.ed paint on the bumper and left front portion of appellant’s vehicle. The damage was limited to this area of appellant’s car. Appellant suffered head injuries.

Even though we find substantial evidence of negligence on the part of appellant, there was still the burden of proof upon the appellee to establish that such negligence was a proximate or contributing cause of the death of appellee’s decedent. Superior Forwarding Co. v. Garner, 236 Ark. 340, 366 S.W. 2d 290 (1963); Kapp v. Sullivan Chev. Co., 234 Ark. 415, 353 S.W. 2d 5 (1962).

In Kapp we said:

“To submit to a jury a choice of possibilities is but to permit the jury to conjecture or guess, and where the evidence presents no more than such choice it is not substantial, and where proven facts give equal support to each of two inconsistent inferences, neither of them can be said to be established by substantial evidence and judgment must go against the party upon whom rests the burden of sustaining one of the inferences as against the other. ’ ’

See Superior Forwarding Co. v. Garner, supra; Glidewell v. Arkhola Sand & Gravel Co., 212 Ark. 838, 208 S.W. 2d 4 (1948); 22 Am. Jur. 2d, Death §§ 222 and 243.

In the recent case of Ellsworth Bros. Truck Lines, Inc. v. Canady, 245 1055, 437 S.W. 2d 243 (1969), we said:

“It is not sufficient to show that the injuries suffered might have been caused when appellant’s vehicle hit the rear of the Iieaggan automobile. This causal connection between a plaintiff’s damages and the defendant’s negligence must be established by direct or circumstantial evidence, and it cannot be proved by conjecture or speculation. (citing cases) ”

See, also, Prosser on Torts, (3d Ed. p. 245).

In the case at bar there is no contention that appellant in anj^ manner contributed to the first collision. From the evidence in this case, we are forced to the view that only by conjecture and speculation could it be said that appellee’s decedent was or was not alive when this second impact occurred and that negligence on the part of appellant was a proximate or contributing cause of the death. Therefore, we must reverse this judgment.

However, we do not think that reversal of this judgment requires its dismissal. In St. Louis Southwestern Railway Co. v. Clemons, 242 Ark. 707, 415 S.W. 2d 332 (1967), it was aptly said:

“We come now to tlie question of whether this case should be dismissed or remanded. This court has long adhered to the rule so well reiterated in Fidelity Mutual Life Insurance Co. v. Beck, 84 Ark. 57, 104 S.W. 533 and 1102 (1907). The general rule is to remand common law cases for new trial. Only exceptional reasons justify a dismissal. One of the exceptions is an affirmative showing that there can be no recovery. Pennington v. Underwood, 56 Ark. 53, 19 S.W. 108 (1892). There it was said that when a trial record discloses ‘a simple failure of proof, justice would demand that we remand the cause and allow plaintiff an opportunity to supplv the defect.’ To the same effect, see Hinton v. Bryant, 232 Ark. 688, 339 S.W. 2d 621 (1961).”

In the case at bar there is a deficiency of proof as to whether appellant’s negligence was a proximate cause of decedent’s death. It is not impossible that such a deficiency of proof could be supplied upon a retrial.

The appellant next contends, in the alternative, that the trial court erred in modifying, amending, and changing the verdict as returned by the jury. We agree that this also constituted reversible error. However, we do not deem it necessary to discuss this point since this error is not likely to occur again upon a retrial.

Reversed and remanded.

Fogleman, J., concurs.

John A. Fogleman.

I concur in the disposition of this case. I would remand for new trial upon the basis that the lack of substantial evidence is due to the failure of the ajopellee to show' causation where expert testimony might have supplied the deficiency in accordance with the views stated in my concurring opinion in Continental Geophysical Co. v. Adair, 243 Ark. 589, 594, 420 S.W. 2d 836. See Reynolds Metal Co. v. Ball, 217 Ark. 579, 232 S.W. 2d 441.