author: Ed. F. McFaddin, Associate Justice.

text:
    Traders & General Ins. Co. v. Williams.
    5-1721
    319 S. W. 2d 847
    Opinion, delivered January 12, 1959.
    [Rehearing denied February 9, 1959]

      Shaw, Jones & Shaw, for appellant.

      Roy Dunn, for appellee.
   Ed. F. McFaddin, Associate Justice.

This appeal is in an action filed by appellee, Williams, against the appellant, Traders & General Insurance Company (hereinafter called “Insurance Company”), for recovery under a policy.

On March 28, 1957, the Insurance Company issued to Williams a policy insuring him against collision damage, in excess of $50.00, to his new 1957 Chrysler New Yorker automobile, which had a list price of $5,700.00. On December 3, 1957 the automobile was damaged in a collision. Williams claimed the damage to be $2,050.00. The Insurance Company refused to do anything about paying the damage or repairing the car unless and until Williams would sign a release, and then the Insurance Company would undertake to have the car repaired at an expense of approximately $300.00. When Williams refused to sign such a release, the Insurance Company cancelled his policy as of February 1, 1958 and owed him $47.11 return premium, which was never paid.

Williams filed action against the Insurance Company on March 3,1958 and claimed damages of $2,000.00, plus penalty and attorney’s fee, and plus the $47.11 return premium due him. He attached a copy of the insurance policy as an exhibit to the complaint and alleged the facts substantially as above stated. After the Insurance Company’s demurrer was overruled, answer was filed containing a general denial and pleading a limit of liability. There was a jury trial, with judgment for appellee for $2,000.00, plus $47.11 refund on premium, plus 12% penalty, and plus $750.00 attorney’s fee. On appeal appellant urges the three points herein listed and discussed.

I. Overruling Demurrer. The Insurance Company demurred to the complaint, saying, (a) that it did not state facts sufficient to constitute a cause of action; and (b) that the measure of recovery alleged in the complaint (the difference in value before and after the collision) was not the correct measure of damage. The Court was correct in overruling the demurrer. The complaint alleged that the Insurance Company had can-celled a policy of insurance and refused to return the unearned premium, and the complaint prayed for such return. The complaint also alleged that the Insurance Company had issued a policy insuring against collision; that there had been a collision; that the Insurance Company had admitted liability but had failed and refused to pay the loss; and that the plaintiffs were entitled to recover $2,000.00 under the policy. Whether the damage to the car was more or less than the limit of liability, was a matter that could not be established until the evidence was offered. The complaint stated a cause of action for recovery.

II. The appellant says: “The court erred in permitting evidence to be introduced as to the difference in the fair market value of the plaintiff’s vehicle immediately before and immediately after the. accident.” This brings us to the most vigorously contested point on the appeal. The policy issued to Williams contained this language as to the liability of the Insurance Company for collision damage:

“Limit of Liability. The limit of the company’s liability for loss shall not exceed the actual cash value of the property, or if the loss is of a part thereof the actual cash value of such part, at time of loss, nor what it would then cost to repair or replace the property or such part thereof with other of like kind and quality, nor the applicable limit of liability stated in the declarations; . . .”

Appellant insists that the appellee sought to prove damages by the “value method” ■ — ■ that is, the difference in the fair market value of the car before and after the collision — rather than by the “cost of repair method”; and appellant says that the Court erred in allowing all such evidence as to the value method. Appellant points out that witnesses for Williams stated that the value of the car before the collision was $3,900.00 and that the value after the collision was somewhere between $1,200.00 and $1,800.00. Appellee counters with the arguments: (a) that he not only introduced evidence of “value”, but also introduced evidence of “cost of repair”; and that (b) the Court instructed the jury that the Insurance Company’s limit of liability was the cost of repair, and the case was submitted to the jury on that basis.

The record sustains the appellee on both of his answers. The witness, Grady Starling, was the Chrysler dealer at Booneville who had sold the car to Williams. Starling also operated a repair department and was familiar with the cost of repairs; and after the collision he checked the car as to the cost of labor and parts to make the necessary repairs. He itemized the parts and the cost of each. The total cost of the parts was $1,312.94; and the cost of the labor to repair the car was $740.00; making a total cost of repair of $2,-052.94. Starling testified that even this expenditure would not make the car as good as it was before the collision, but that the expenditure of $2,052.94 was necessary to repair the car.

The Trial Court instructed the jury in Instruction No. 5, requested by the Insurance Company:

“You are instructed that the policy or contract between the plaintiff and defendant, Traders & General Insurance Company, provides that in the event of a collision involving the plaintiff’s vehicle, the defendant is, under the terms of said policy or contract, liable only for the reasonable cost of repair of said vehicle or for the cost of replacing any parts of said vehicle which may have been damaged as a result of the said collision, with other parts of like kind and quality.”

Thus, there was evidence offered by the plaintiff not only as to the damage to the car but also as to the cost of repairs and the instruction told the jury that the defendant’s limit of liability was the cost of repair, provided the repair would “replace the property”.

The appellant insists that all the evidence of value before and after the collision was inadmissible and prejudicial ; but we do not agree with such contention. The Insurance Company delivered to Williams a policy which stated in the coverage section as regards collision, “. . . to pay for loss caused by collision to the owned automobile . . . but only for the amount of each such loss in excess of the deductible amount stated in the declarations as applicable hereto”. (The deductible amount was stated at $50.00.) So, in the light of the above quoted section, the Insurance Company was liable for all collision loss in excess of $50.00. What was the loss? Unless otherwise limited, it was the difference in value before and after the collision. But in another section of the policy the Insurance Company had limited its liability as regards collision loss to, “. . . what it would then cost to repair or replace the property or such part thereof with other of like kind and quality . . .”

When we consider together these two sections of the policy, it is clear that Williams was entitled to show (a) his loss by the “before and after” value rule; and then (b) to completely establish that his loss ’was within the limit of liability he could show, the cost of repairs. There was certainly no error in allowing the evidence offered, and the instruction given by the Trial Court at the request of the defendant made the point clear.

III. Attorney’s Fee. The judgment reflects that the Trial Court heard evidence as to what would be a reasonable attorney’s fee and then fixed the fee at $750.00. We cannot find such evidence in the record regarding the fixing of attorney’s fee; but, even so, we hold that the fee fixed is not excessive. The statute regarding the liability of an insurance company for penalty and attorney’s fee for failure to promptly pay a reasonable loss is § 66-514 Ark. Stats. It is hard to conceive of a more arbitrary position than the Insurance Company took in its dealings with Williams. When the insured refused to agree to the Insurance Company’s demands, the Company cancelled the policy; and to make matters worse, refused to return the unearned premium. When the insured brought action, the Insurance Company contested every step, but without success.

The Court fixed the attorney’s fee at $750.00, which was evidently intended to take care of the fee on appeal as well as in the Trial Court, because we find this language in the appellee’s brief:

“Some of the obvious matters, which the trial court considers in fixing the fee, are the amount of work involved, the amount in dispute, the skill required, and whether an appeal is taken and if so, what is involved on appeal. . . . the maneuvers of the company representatives indicated that the company had no intention of paying its coverage until compelled to do so by this appellate court.”

The fee fixed is not excessive for trial of a case like this before a jury and then the briefing and handling of the case on appeal.

The judgment is in all things affirmed.

       The complaint also contained these allegations: “On December 3rd, 1957, at a time when said insurance was in full force and effect plaintiff’s car herein described was damaged by collision. The value of said car immediately before the collision was $3,850.00, and the value of said car immediately after the said collision was $1,800.00. The loss to plaintiff by reason of said collision was $2,050.00 . . . “Plaintiff has made demand for payment on the Insurance Company and repeatedly requested the Traders & General Insurance Company to comply with its contract with plaintiff, but said defendant has failed and refused to do so and on January 22nd, 1958, C. A. Phillips, Special Agent for Traders & General Insurance Company, and while acting within the scope of his authority, called on plaintiff in Booneville, Arkansas and stated that defendant, Traders & General Insurance Company, did not intend to comply with its contract and it was plaintiff’s next move. That the Agent, Phillips, on the date he called on plaintiff in Booneville signed and executed a ‘Notice of Cancellation of the aforesaid policy’ and caused it to be delivered to plaintiff, said notice being to the effect that the Policy of insurance herein sued on was cancelled by the defendant, Insurance Company, as of February 1st, 1958, making no offer or tender of return of any portion of the paid premium.”

       In Instruction No. 7 the Court further reduced the plaintiff’s recovery by the amount of $50.00, which was the deductible amount under the policy.

       In 43 A.L.R. 2d 327 et seq. there is an annotation entitled, “Measure of recovery by insured under automobile collision insurance policy”, in which cases with various policy provisions are listed and discussed. Three of our cases somewhat similar to the one at bar are National Ins. Co. v. Dalton, 214 Ark. 120, 214 S. W. 2d 507; Motors Ins. Corp. v. Lopez, 217 Ark. 203, 229 S. W. 2d 228; and Resolute Ins. Co. v. Bailey, 221 Ark. 419, 253 S. W. 2d 771.

         The Court also further explained to the attorneys for the Insurance Company the purport of his holding when he declared to them in the course of the instructions: “The Court has permitted the introduction of evidence as to what the fair market value of the plaintiff’s car was immediately before the collision and as to what the fair market value was immediately after the collision. The Court permitted the introduction of that evidence only for the jury’s consideration in determining the company’s liability under the provisions of the policy, as you have been instructed by other instructions herein. Such is not the measure of the defendant’s liability.”

       In 10 Ark. Law Review 439, there is an article entitled, “One State’s Experience with the Statutory Remedy for Insurer’s Delays: A Problem in Payment.” This article contains a splendid study of our cases in reasonable attorney’s fees.


source: Caselaw Access Project

author: George Rose Smith, J.

license: Public Domain

text:
    King v. Cardin.
    5-1683
    319 S. W. 2d 214
    Opinion delivered January 12, 1959.

      Wright, Harrison, Lindsey & TJpton, for appellant.

      James C. Cole, for appellee.
   George Rose Smith, J.

This is an action for the wrongful death of Grover O. Dyer, who was struck and killed by a dump truck being driven by the appellant, Dyer’s fellow employee. The jury returned a verdict for the appellee, Dyer’s administratrix, fixed the damages at $5,000 for the' estate and $45,000 for the decedent’s widow and children, and attributed 5 per cent of the total negligence to Dyer.

A principal contention for the reversal of the judgment is that there is no proof of negligence on the part of the appellant. Our study of the record convinces us that the testimony presented a question for the jury on this point.

Dyer and King were employed by a contracting company, which was repaving with asphalt a highway south of Malvern. The hot asphalt is spread by what is called a Barber Green machine, which is a wide self-propelled vehicle that lays the asphalt along one entire traffic lane. As this machine moves slowly forward dump trucks carrying asphalt back up one at a time to a hopper at the front end of the machine, and the machine continues in motion and pushes each truck while the asphalt is being dumped into the hopper. The asphalt passes through the Barber Green machine and is distributed at the rear end of the machine in an even layer upon the highway. The operation requires a crew of ten or twelve men, some of whom work ahead of the machine, preparing the roadway, while others work behind the machine, smoothing the freshly laid asphalt.

On the day of the accident the west half of the highway was being repaved, in a northerly direction, with the east lane open to one-way traffic. King, who had arrived with a load of hot asphalt and had turned his truck around, started backing southward toward the front end of the Barber Green machine. King’s backward movement was directed by another employee, Carl Williams, who stood on the west shoulder of the highway near the front of the Barber Green machine. It was Williams’ duty to align the dump truck so that its rear wheels would make proper contact with the rollers by which the moving Barber Green machine pushes the truck along while the hopper is being filled. At this time, however, the Barber Green machine was stationary, its operator having shut off the motor a short time earlier.

While King was backing toward the machine the decedent, Dyer, was walking in the same direction down the center of the highway. An unidentified car, traveling north in the east lane, came so close to Dyer that he stepped into the west lane, in the path of King’s truck. Despite the shouts of Williams and others the truck hit Dyer and knocked him to the pavement. Dyer got up to his hands and knees, but the bed of the truck struck him and knocked him down again. He then tried to roll away, but his head was crushed by one of the wheels.

King’s insistence upon his freedom from fault is based largely upon the assumption that Dyer was walking faster than the truck was traveling and had just passed the truck when he stepped into its path and was struck in practically the same instant. The testimony of the witness Cloud supports this view, but there is other substantial evidence indicating that Dyer had been ahead of the truck for an appreciable time before he stepped into the west lane. Two witnesses thought the truck was backing too fast; they estimated its speed at about eight miles an hour, which exceeds a man’s walk. The witness Isaac Bell testified that Dyer was standing still with his back to the truck when he was hit.

On the issue of negligence there was also testimony that after Dyer was hit the second time the truck rocked as if the brakes had been applied, but then the truck continued to back and struck Dyer again. It was also shown that it was understood by all the crew that dump trucks were not to be backed up to the Barber Green machine while its motor was shut off. The operator of the machine testified that when he turned off the motor King’s truck had not begun to back and was standing still about a hundred feet away.

The appellant objected to the testimony about the practice just mentioned, but we think it was a proper matter for the jury to consider. The Barber Green machine was the hub around which the activities of the whole crew revolved. When the machine was stopped the trucks were not to come up to it, for the newly laid asphalt might be damaged if a vehicle backed against the machine while it was stationary. Even though the practice was not adopted as a safety measure, the jury could take it into account as a factor bearing upon the negligence of King and the contributory negligence of Dyer.

We find no error in the court’s refusal to give an instruction telling the jury in substance that if King as a prudent person was backing his truck under the direction of Williams, and if Williams was in a position to observe the roadway behind the truck, then King had a right to rely upon Williams and a right to assume the roadway was clear and would not be negligent merely, by reason of backing his truck under those circumstances. This instruction disregarded King’s possible negligence in starting to back while the Barber Green machine was idle and might have erroneously precluded the jury from considering that fact.

Nineteen days before the trial the defendant, by interrogatories, asked for the names of the witnesses that the plaintiff expected to call to prove certain specified allegations of the complaint. Ark. Stats. 1947, § 28-355. Two days after the service of the interrogatories the plaintiff answered that her attorney informed her that he expected to present three named persons as witnesses to the facts mentioned. At the trial, however, the plaintiff called three additional witnesses not named in her answer to the interrogatories. In reply to the defendant’s objection to the testimony of these witnesses plaintiff’s counsel explained that he did not discover or interview these witnesses until after the interrogatories had been answered. The court then overruled the objection and allowed the witnesses to testify.

The appellant insists that the plaintiff was under a duty to amend her response when additional witnesses were found. Otherwise, it is pointed out, a party can never obtain the names of witnesses discovered by his adversary within fifteen days before trial, as the statute allows that much time for answering interrogatories. We agree with this reasoning and hold that the additional names should have been supplied by amendment. It does not appear, however, that the omission was prejudicial in this case. The three additional witnesses were all members of the paving crew and would normally be interviewed in a routine investigation by the defendant. They were in no sense surprise witnesses; indeed, the defendant did not assert surprise as a basis for his objection to their testimony. In the absence of prejudice there is no reversible error. Phoenix Cement Sidewalk Co. v. Russellville Water & Light Co., 101 Ark. 22, 140 S. W. 996.

We are not impressed by the argument that the Workmen’s Compensation Act prevents an employee, or his personal representative, from maintaining an action for the negligence of a fellow employee. Our statute merely provides that the remedies under the act are exclusive of other remedies against the employer. Ark. Stats., § 81-1304. The making of a claim for compensation does not affect the right of the employee or his dependents to maintain an action against a third person. § 81-1340. Under a statute like ours a negligent coemployee is regarded as a third person. Botthof v. Fenske, 280 Ill. App. 362; Kimbro v. Holladay, La. App., 154 So. 369; Churchill v. Stephens, 91 N. J. L. 195, 102 Atl. 657.

The only other point that need be discussed is the size of the verdicts. The award of $45,000 for the widow and children is not excessive. Dyer, a man of forty-nine with, an expectancy of more than twenty-one years, had been earning from fifty to sixty-five dollars a week. He was survived by his widow and nine children, the youngest of the four minor children being only four years old. In view of the pecuniary loss to his dependents and the mental anguish shown by the proof we do not regard the award as excessive.

On the other hand, the evidence does not support the $5,000 verdict in favor of the estate. The funeral expenses, including a monument, totaled only $1,263.30; so the rest of the award must represent compensation for pain and suffering. There is no indication that Dyer was conscious after his head was struck by the wheel of the truck. Nor is there any proof that he actually experienced pain during the two or three seconds that elapsed after he was first felled by the slowly moving vehicle. In the absence of proof the record does not sustain an award of more than $50 as essentially nominal damages for the striking.

The judgment is affirmed on condition that a remittitur of $3,752.33, which is the excess when Dyer’s contributory negligence is taken into account, be filed within seventeen calendar days; otherwise the judgment will be reversed and the cause remanded.

Johnson, J., not participating.


author: Paul Ward, Associate Justice. Ed. F. McFaddin, Associate Justice,

text:
    Central Ark. Milk Prod. Assoc. v. Consumer’s Warehouse Market, Inc. et al.
    5-1723
    319 S. W. 2d 511
    Opinion delivered January 12, 1959.

      Bryan d Fitshugh, for appellant.

      Hardin, Barton, Hardin d Garner, Bethel d Pearce d Lawson Gloninger, Heilbron d Bhaw, Owens, McHaney, Lofton d McHaney, for appellee.
   Paul Ward, Associate Justice.

This litigation questions the application of Act 380 of the 1955 General Assembly (Ark. Stats. § 70-701-707) which deals with the price to be charged for milk. Appellant is- the Central Arkansas Milk Producers Association, Incorporated, hereafter referred to as CAMPA, which was created by Act 153 of 1939 (Ark. Stats. § 77-1001-1025). Members of CAMPA are dairy farmers who sell raw milk to processors who, in turn, sell the processed milk to retail grocery stores at wholesale for resale, at retail prices, to ultimate consumers. Appellees are some 6 or 8 retail grocery stores located in Fort Smith.

CAMPA petitioned the Sebastian Chancery Court to enjoin each of the appellees from selling milk at retail at any price below what the milk cost it plus- 4%, thereby seeking to invoke the provisions of said Act 380.

In response to said petition appellees entered demurrers which were sustained by the Chancellor on the ground (a) that said Act 380 does not apply to the sale of milk by retail grocery stores, and (b) that said Act was unconstitutional.

Plaintiff, electing not to plead further, prosecutes this appeal.

The prohibition is directed against persons engaged in processing and distributing milk. The decisive question is: Is a retail grocery store engaged in distributing milk within the meaning of the Act?

(a) A careful analysis of the language used in said Act 380 impels us to agree with the Chancellor’s holding that it does not apply to retail grocery stores. There are several provisions in the Act that cannot be reconciled with any other view. First. Section 1 of the Act contains this language: “However, it is the intention of this Act to prevent any person, firm or corporation engaged in the business of processing and/or distributing milk from lowering its selling price below cost, as herein defined, plus four (4%) per centum, except as hereinafter stated.” It is obvious that the retail grocery stores do not process milk and we do not think they distribute milk in the sense that the word is used in the Act, as we will attempt to show later. Second. Section 2 defines the term “Equivalent competitive prices” as “any legal wholesale or retail price, not less than the minimum prices provided herein, at which fresh fluid milk is sold, advertised, or offered for sale by a competitor who sells not less than five (5%) per centum of the total fresh fluid milk sales in that county” (our emphasis). This clause makes sense only when applying it to the relatively few processors or distributors which would ordinarily be found in any county, but it makes no sense if applied to grocery stores in many counties, such as Sebastian County. It seems unlikely that any one grocery store would ever sell more than 5% of all the milk sold in the county. Third. The Act purports to prohibit the sale of milk for less than cost plus 4%. Section 3 defines the word cost to “include the price the processor or distributor pays the producer . . .” We believe it is common knowledge that in most instances the producer does not sell directly to the grocery store, but to some “middle man” such as a processor or distributor. By this we are persuaded to believe that the framers of Act 380 did not mean for the word distributor to include a grocery store. Fourth. In addition to the above, Section 3 sets out the method of arriving at what constitutes cost. It seems clear to us that this method might reasonably apply to a processor and also to a distributor if the latter refers to a wholesaler of milk as we think it does, but we fail to see how it could reasonably apply to a distributor if that word was meant to include a retail grocery store. Here are some of the items of cost that are included: Labor, rent, interest, depreciation, selling costs, maintenance of equipment (and we know of no special equipment needed by a grocery store in order to sell milk), salaries of officers and executives, transportation, credit losses, all types of permit and license fees, all taxes, insurance, advertising, and all overhead expenses of doing business. Bearing in mind that a retail grocery store sells several hundred different items in addition to milk, we cannot believe the legislature meant for the owner of a retail grocery store to allocate the right proportion of the various expense items to the sale of milk. Fifth. In addition to the foregoing, Section é contains many provisions relating to a determination of cost that could not reasonably be meant to apply to a retail grocery store. Some of these are the allowance of rebates, commissions, discounts, extending certain privileges to certain customers, furnishing free equipment, etc.

Beading Act 380 as a whole and particularly because of many of its provisions as set forth above, we are driven to the conclusion that it was not meant to apply to the sale of milk by retail grocery stores, and consequently does not mean for the word distributor to include such stores.

It is generally recognized in the milk industry as it is now developed that distributors often buy milk from processors and then sell it at wholesale to the grocery stores or deliver it in trucks to the consumer. Thus, a distributor is engaged in a separate and distinct business from that of a retail grocery store.

Appellant attaches much significance to language in section 2 where the Act is made applicable to anyone engaged in the “business of processing and/or distributing fresh milk, either at retail or wholesale.” (our emphasis) However we can see no inconsistency between that language and the view which we have taken. In fact, even under our interpretation, it still could be the purpose of the Act to keep a processor from selling below cost plus 4% to the consuming public, hence the use of the necessary language.

(b) The question of the constitutionality of Act 380 has been raised and discussed by both sides, but the conclusion which we have heretofore announced makes it unnecessary for us to render any opinion on it.

We have consistently refrained from deciding constitutional questions unless it was necessary to do so. See: Porter v. Waterman, 77 Ark. 383, 91 S. W. 754 and Com. of Labor, C. R. Thornbrough v. Danco Construction Co., 226 Ark. 797, 294 S. W. 2d 336.

The decree of the trial court is therefore affirmed.

Justice Johnson not participating.

Justices McFaddin and Robinson concur.

Ed. F. McFaddin, Associate Justice,

concurring. I agree with the result reached by the majority; but I think it would have been much simpler to have declared the Act No. 380 of 1955 to be unconstitutional, and that such result would have saved all the wording about “producers,” “processors,” or “distributors.”

In my concurring opinion in Union Carbide v. White River Distributors, 224 Ark. 558, 275 S. W. 2d 455,1 said I considered the entire Act No. 92 of 1937 (the “Arkansas Fair Trade Act”) to be unconstitutional under the authority of our own case of Noble v. Davis, 204 Ark. 156, 161 S. W. 2d 189. By the same token, I consider the entire Act No. 380 of 1955 to be unconstitutional; and to me it seems easier to so state, and save all persons any thought that by getting the Legislature to revamp price-fixing acts, the Court may ultimately hold them constitutional. Noble v. Davis, supra, settles that point.


author: Sam Robinson, Associate Justice.

text:
    Nevil C. Withrow Co., Inc. v. Heber Springs Sch. Dist.
    5-1718
    320 S. W. 2d 95
    Opinion delivered January 12, 1959.
    [Rehearing denied February 16, 1959]

      H. B. Stubblefield, for appellant.

      Leon Reed, for appellee.
   Sam Robinson, Associate Justice.

This is an appeal from a judgment of the Pulaski Circuit Court, Second Division, made and entered on the 28th day of May, 1958, setting aside a judgment entered on the 29th day of February, 1952. The complaint asking that the 1952 judgment be set aside was filed January 21, 1958. As a ground to set aside the 1952 judgment the complaint alleges that it was fraudulently obtained within the meaning of Ark. Stat. § 29-506. That statute provides that the trial court has authority to set aside a judgment after the expiration of the term “for fraud practiced by the successful party in the obtaining of the judgment or order”.

In 1951 the appellant, Nevil C. Withrow Co., Inc., filed suit in the Pulaski Circuit Court naming Maryland Casualty Company, a resident of Pulaski County, and Heber Springs School District, a resident of Cleburne County, as defendants. Others, including Joe P. Melton, trustee in bankruptcy for Baxter Miles, also were named as defendants, but only tbe defendant Maryland Casualty Company was a resident of Pulaski County. The Heber Springs School District was served with summons in Cleburne County on August 14, 1951. The school district filed no answer, nor did it enter its appearance in any manner. On February 29, 1952, Withrow took a default judgment against the school district. No judgment was taken against the Maryland Casualty Company. Withrow made no effort to collect the judgment until 1958. It was then that the school district filed this suit to set aside the 1952 judgment. After a hearing, the circuit court ordered that the 1952 judgment be set aside. Withrow has appealed.

There is only one issue: Did Withrow’s action in procuring a judgment in Pulaski Circuit Court amount to a fraud within the meaning of Ark. Stat. § 29-506, subdivision (4) ? If so, the 1958 judgment setting aside the 1952 judgment must be affirmed; otherwise reversed. In the circumstances of no judgment being obtained against Maryland Casualty Company, the local resident, if the school district had been present and objected to a judgment being rendered against it, the court would have sustained the objection. Ark. Stat. § 27-615; Ark. La. Gas Co. v. Tuggle, 201 Ark. 416, 146 S. W. 2d 154. But, regardless of Withrow’s right to a judgment against the school district in the first instance, it cannot be set aside in the present action unless Withrow practiced a fraud in obtaining the judgment. There is no issue in the case at bar of whether the school district waived the question of venue.

We fail to see how anything resembling fraud, actual or implied, occurred in this case. Withrow’s 1951 complaint alleges that the school district was organized and operating in Cleburne County. There is no allegation in the complaint to lead anyone to believe that service could be had on the school district in Pulaski County. In fact, the 1952 judgment against the school district recites that the summons was served in Cleburne County. Moreover, it appears that on September 24,1951, the school district was notified by registered mail that Withrow would insist on a judgment. To sustain its position appellee relies heavily upon Terry v. Plunkett-Jarrell Grocer Co., et al., 220 Ark. 3, 246 S. W. 2d 415, 29 A. L. R. 2d 1264, but the issue there was whether service should be quashed in the original suit, and it was held that certain parties in Saline County were not tona fide defendants, and for that reason the service obtained on Plunkett-Jarrell and others in Pulaski County should be quashed. Here, there was no motion to quash service or any objection to the judgment in the first instance. The case at bar is a separate suit to set aside a judgment on account of alleged fraud in obtaining it. Ark. Stat. § 29-508; Clark v. Bowen, 186 Ark. 931, 56 S. W. 2d 1032. In Alexander v. Alexander, 217 Ark. 230, 229 S. W. 2d 234, this Court said: “The law is settled that the fraud which entitles a party to impeach a judgment must be fraud extrinsic of the matter tried in the cause, ... It must be a fraud practiced upon the court in the procurement of the judgment itself.”

Here it cannot be said that any fraud was practiced upon the court in obtaining the judgment. Everything was open and aboveboard. All the facts concerning the service of summons appeared on the face of the record.

Beversed and dismissed.


text:
    Hot Spring Co. Ark. v. Prickett.
    5-1739
    319 S. W. 2d 213
    Opinion delivered January 12, 1959.

      W. B. Thrasher & Bill Demmer, for appellant.

      James C. Cole, for appellee.
   Sam Robinson, Associate Justice.

Appellee owns a house and lot in Hot Spring County, just north of the city limits of Malvern. The ground is 308 feet in width at the front, where it joins the right of way of Highway 67, and it is 210 feet in depth. Fifteen feet across the entire front was taken for the purpose of improving Highway 67. Appellee filed a claim in the sum of $15,-000 for loss of the ground taken, plus damages to the remainder. Upon a trial in circuit court, a jury returned a verdict for $8,000. Appellant, Hot Spring County, has appealed, and contends that the verdict is excessive; that there is no substantial evidence to support the amount of the verdict. Appellant produced three expert witnesses, one of whom said the damages amount to $900, and the other gave a figure of $1,500 as damages.

To prove his damages, appellee introduced in evidence several pictures of the property before the highway was widened and the grade lowered, and also several pictures of the condition of the property after the new work on the highway was completed. Appellee contends that these pictures, without additional evidence, support the verdict, but we fail to see anything in the pictures indicating that appellee has been damaged to the extent of $8,000. In addition to the pictures, appellee produced two witnesses who gave testimony of the amount of damages. Appellee, Prickett, testified that there has been a depreciation in value of $25,000 because of the taking. It is not shown that he has had any experience in the real estate business, and there is. no showing whatever as to how he arrived at the $25,000 damages. He gave no facts to sustain his conclusion. True, he testified that the place cost $60,000, including the cost of improving the land and building the house, but he is an interested party, and his testimony on that point is not corroborated.

In addition to himself, appellee produced only one witness, Judy Carlisle, to prove damages. She testified that she has been a real estate agent since 1954; that the property before the taking was worth $58,000 and since the tailing it is worth $40,000 — damages of $18,-000. She had been in Malvern only about six months at the time she gave her testimony, although she had been in and out of the city for about three years. Apparently the only sale of real estate that she has made in or around Malvern is a 160 acre farm which sold for $20,000. Her business is primarily dealing in farms and ranches, and she has not bought or sold any residential property in Malvern. She testified that the value of the Prickett lot in itself was $9,000 before the taking and $6,000 thereafter. She also said that if the property were used for business purposes it would not be as accessible as it was before the taking, but its best and most valuable use is for residential purposes, and she sees no prospect of its being used for any other purpose. She also testified that the only other lots in that community that she knows of for sale are priced at $3,000, but no one has bought at that price. It cannot be said that the testimony of this witness standing alone, excepting the testimony given by appellee himself, is substantial evidence. See Ark. State Highway Comm. v. Byars, 221 Ark. 845, 256 S. W. 2d 738, and cases cited therein, and Texas Illinois.Natural Gas Pipeline Co. v. Lawhon, 220 Ark. 932, 251 S. W. 2d 477.

Reversed and remanded.


author: Carleton Harris, Chief Justice.

text:
    Brinton v. City of Jonesboro.
    4931
    320 S. W. 2d 272
    Opinion delivered January 19, 1959.
    [Rehearing denied February 23, 1959.]

      McCourtney, Brinton, Segars <& Ellis, for appellant.

      Gerald E. Pearson, for appellee.
   Carleton Harris, Chief Justice.

This appeal involves the construction of ordinance No. 757 of the city of Jonesboro, Arkansas, which provides for payment of an annual occupation tax by persons, firms, and corporations engaged in certain occupations, vocations, professions, etc. Appellant was charged on March 8, 1957, with “engaging in or carrying on the profession of an attorney without first procuring an occupation license for year 1956 * * * , and did fail, neglect or refuse to pay said occupation tax for year 1956 * * * ,” was convicted of said offense in Municipal court on April 1, 1957, and fined $37.50 and costs. On appeal to the Circuit court, this judgment was affirmed. Appellant is a member of the bar, duly licensed to practice, resides in Jonesboro, and is associated with other attorneys under the firm name of McConrtney, Brinton, Gibbons and Segars. The case was submitted upon an agreed statement of facts, such stipulation providing inter alia that

‘ ‘ McConrtney is the head of the firm in general, controls all litigation, makes the business arrangements with clients, makes the decisions in general and in the conduct of each litigation, determines the retainers and fees, maintains the office space, owns and maintains the library, buys the books and stationery, is responsible for the payment of all contractual obligations of the firm, the fees are paid to him and he pays the costs and expenses of the litigations, the profit or loss is his on each case and upon the general business. (5) Brinton, Gibbons and Segars do not share in the profits and receive no division of the fees; each receive a salary for services; the head of the firm pays social security on each of them. (6) That there are four stenographers, one bookkeeper and accountant, two investigators or collectors and one janitor connected with the firm and Mr. McCourtney pays salary or other remuneration to each of them. (7) It is conceded that the defendant did not pay the occupation tax for 1956.”

It is also stipulated that during the year 1956, Brinton appeared in the Municipal, Circuit, Chancery and Federal courts for litigants.

The constitutionality of the ordinance is not questioned. Appellant simply contends that he is not liable for the payment of the tax under the stipulation, ordinance, or the statute authorizing the ordinance. It is also contended that even if appellant is liable for the tax under the provisions of the law, this particular prosecution is barred by the Statute of Limitations. There are, accordingly, two issues before the Court on this appeal'. 1. Is appellant liable for the occupation tax? 2. If liable, does the Statute of Limitations bar this prosecution?

The ordinance, authorized by Section 19-4601, Arkansas Statutes (1947) Annotated, provides that it shall be unlawful for any person, firm or corporation, in the city of Jonesboro, to engage in or carry on certain businesses, occupations, vocations, professions, trades, or callings without first having obtained and paid a license, the amount of such license being fixed by the ordinance. The license, or tax, for lawyers is fixed at $25. Subsequent sections provide that each day of delinquency shall constitute a separate violation, provide a penalty of 20% of the amount of the tax, and subject the violator to a fine. Appellant asserts that under the stipulation, he is not engaged in the practice of law for himself, is only an agent for Mr. McCourtney, and is therefore not liable for the tax. In other words, he is simply McCourtney’s employee, receiving a salary, and accordingly occupies the same status as the stenographers and other employees. Cases involving other occupations are cited, but we do not consider such cases pertinent to the issue at hand. Appellant is certainly engaged in the practice of law, as evidenced by his appearance in the various courts mentioned in the stipulation; the representation of litigants in court is practicing law, whether done as an individual, or under a firm name. One can only engage in the practice of this profession by being licensed to practice in his own right. He receives no license as an employee of another attorney. Individually, he stands as an officer of the court. In Blanchard v. the State of Florida, ex rel., 30 Fla. 223, 11 So. 785, 18 L. R. A. 409, the question was whether two lawyers, associated as partners, were entitled to a license as a firm or partnership upon paying the license tax prescribed for one lawyer, or whether each was required to pay the prescribed tax. The Court, in its opinion, stated:

“The assertion that a firm or copartnership is in law one person is mistaken; it, on the contrary, is an association of several persons, and their firm name is but a short way of designating the several persons for the purposes of their association. Their separate personality is not lost, * * * .”

We consider appellant’s contention to be without merit, and hold that he is subject to, and liable for the tax.

Section 10 of the ordinance provides as follows:

“All persons, firms or corporations failing or neglecting or refusing to pay their license or occupation tax between the first day of January and the 20th day of January of each year or within 20 days after the license or occupation tax becomes due, shall be subject to a penalty of twenty per cent (20%) of the amount of the license fee or occupation tax, as well as subject to a fine for having violated the Ordinance. ’ ’

Appellant contends that the misdemeanor was completed on the day that Brinton became subject to the penalty, i. e., January 21,1956. The Information was filed March 8, 1957, more than one year after the aforementioned date, and he accordingly asserts that the offense is barred by the Statute of Limitations, citing Section 43-1603. We do not agree. The Information charged that the offense was committed on December 31, 1956. While it is true that Brinton violated the provisions of the ordinance on January 21,1956, it is equally true that he also violated the ordinance on December 31, 1956, and, for that matter, each day in between. The pertinent fact is that he did not pay a tax for the year 1956 — that is the offense with which he is charged. The offense having been committed prior to the filing of the information, and on a day within the Statute of Limitations, appellant’s contention must fail.

Judgment affirmed.

       Section 43-1603: “No person shall he tried, prosecuted and punished, for any offense less than felony, or any fine or forfeiture, unless the indictment be found or a prosecution instituted within one (I) year after the commission of the offense, or incurring the fine or forfeiture.”


author: J. Seaborn Holt, Associate Justice.

text:
    Jeter v. Windle.
    5-1730
    319 S. W. 2d 825
    Opinion delivered January 19, 1959.
    [Rehearing denied February 23, 1959.]

      Sloan & Sloan, for appellant.

      Douglas Bradley, for appellee.
   J. Seaborn Holt, Associate Justice.

Appellants, (Jeters) owners, constructed six adjoining business houses, or units, in a new shopping area (called Jeter Park) in the city of Jonesboro and on August 8, 1957 they leased one of these buildings to appellants, Mounce and Pinehback, for a term of five years. An adjoining building, or unit, was leased by them to appellees, Windles. The lease to Mounce and Pinehhack contained this provision: “. . . It is understood between the parties that the property is rented by the Lessee for the purpose of carrying on or conducting drug store business, and such business is to be conducted in full compliance with all city ordinances and laws applicable thereto, and the Lessee agrees not to use said building for any other purpose without first obtaining the written consent of the Lessors so to do.”

The lease from the Jeters to the Windles contained a similar provision: “. . . the property is rented by the Lessees for the purpose of carrying on or conducting Cafe business, . . . and the Lessees agree not to use said building for any other purpose without first obtaining the written consent of the Lessors so to do . . .”

Some time after Mounce and Pinchback had occupied their leased building, they began operating, along with their drug business, a soda fountain and in addition, a grill dispensing food. At this point the Windles brought the present suit seeking to enjoin the Jeters, as owners and lessors, from permitting Mounce and Pinchback to operate a soda fountain and grill in conjunction with their drug store, and to enjoin Mounce and Pinchback from operating the soda fountain and grill, and in addition, sought substantial damages against appellants. The trial court held that the Jeters were bound by an oral covenant and agreement alleged to have been made prior to the leases not to permit competition by the drug store, and further held that Mounce and Pinchback had leased the drug store premises with notice of such equity and were likewise bound, and entered a decree enjoining appellants from permitting or conducting a grill or soda fountain in connection with the drug store and allowing the Windles damages in amount of $1,321.88 from the Jeters. This appeal followed.

At the trial it appears that the Windles were permitted to testify relative to certain preliminary negotiations leading up to the written leases. Paul Windle testified that in May 1957, prior to the execution of the leases, he made a verbal agreement with Winston Jeter to lease the building adjoining the drug store for cafe purposes, on condition and assurance, that no food or drink service would be allowed in any other of the six units of the shopping center in competition with Windle. Gladys Windle testified that in July 1957 (prior to the date of the lease) she learned from W. E. Mounce that the drug store planned to install and operate a fountain and grill. She then complained to Winston Jeter and requested him to inform Mounce that no grill or soda fountain would be permitted. Thereafter, on July 15, 1957, Winston Jeter wrote a letter to Mounce containing these recitals: “. . . we have talked it over with all parties concerned, and we wish you to know we cannot lease the drug store building to anyone who wishes to operate a grill or soda fountain in connection, as per our understanding at start.

“We do not wish any conflict between the two stores, and wish to protect the investment of each . . .”

Following receipt of this letter Mounce (one of the owners and operators of Central Drug Store) informed the Jeters that they would not lease the building which they desired unless they were permitted to operate a fountain and grill in connection with their drug store. The Jeters then informed Gladys Windle, one of the appellees, that they had changed their minds and would not “police” the businesses. Thereafter, on July 23rd, the Jeters forwarded a draft of the lease contract with the Windles to them for their signature, along with a copy of the proposed drug store lease for their information. When the Windles discovered that the drug store lease above did not contain a clause prohibiting competition in food and drink, Gladys Windle consulted her attorney who prepared an additional clause to be embodied in the drug store lease above as follows: “. . . Lessors shall prohibit the use of any other part of the property described above for sale or dispensing of food or drinks to be consumed on the premises.” The Windles admitted that the Jeters refused to accept the suggested clause.

For reversal of the decree appellants say that, “The cafe and drug store leases are completely integrated written agreements, and cannot he varied by parol evidence of a covenant not to permit competition by the operation of a fountain and grill, since the leases deal with the use to be made of the premises.” After a careful review, we have concluded that appellant’s contention should be sustained.

No rule of law appears to be better settled than that where a written contract is plain, unambiguous and complete in its terms, parol evidence may not be permitted to contradict, vary or add to any of its provisions. In Cox v. Smith, 99 Ark. 218, 138 S. W. 978, this court used this language: “. . . the cause of action herein sued on is founded upon an instrument which is a written contract, . . . The rule of law that is applicable to all written instruments ... is, that parol testimony is inadmissible to contradict, vary or add to its terms. . . . where the written contract is plain, unambiguous and complete in its terms, it has been uniformly held by this court that parol evidence is not admissible to contradict or to vary or to add to any of its terms. (Citing many cases) Where the written contract is complete in its terms, it is incompetent to engraft thereon any condition by parol testimony . . . Antecedent propositions, correspondence, prior writings, as well as oral statements and representations, are deemed to be merged into the written contract which concerns the subject-matter of such antecedent negotiations when it is free of ambiguity and complete.” “. . . When a written instrument contains such terms as import a complete obligation, which is definite and unambiguous, it is conclusively presumed that the whole agreement of the parties, and the extent and manner of their undertaking, were reduced to writing. In such cases, the instrument is in the nature of a contract, and cannot be varied or contradicted by parol evidence in the absence of fraud and mistake, — ” Wilson v. Nugent, 174 Ark. 1115, 299 S. W. 18. We hold that all negotiations prior to the execution on August 8,1957 of the leases involved here were merged into the written leases. In the circumstances, under the plain terms of their lease with the Jeters, Mounce and Pinchback were permitted to carry on or conduct a “drug store business.” It is common knowledge that such business is not confined to operating an apothecary shop alone but that drug stores, as a general rule, furnish grill and fountain service and also sell various sundries such, as stationery, magazines, newspapers, etc. In a New Jersey case, Crest Drug Store v. Levine, 142 N. J. Eq. 652, 61 A. 2d 190, the court said that, “Modern drug stores are no longer apothecary shops. Where compounding of drugs is not altogether abandoned, the apothecary is but an incident, and it is common observation that the sale of drugs is negligible,” and that, “It is common knowledge that many drug stores are department stores to a greater or lesser degree.”

The decree is therefore reversed and the cause remanded with directions to dismiss the complaint and cross-complaint.


text:
    Burns v. First Nat’l Bank.
    5-1700
    319 S. W. 2d 827
    Opinion delivered January 19, 1959.

      J. Sam Wood, for appellant.

      Bryan & Fitshugh, for appellee.
   Ed. F. McFaddin, Associate Justice.

This litigation involves the will of John O’Kane, who died in 1927 survived by his wife, Mrs. Clara O’Kane. Mr. and Mrs. O’Kane, both residents of Sebastian County, had no children or descendants. The appellants are some of the legal heirs of Mr. John O’Kane; and the appellee is the executor of the estate of Mrs. Clara O’Kane, who died in 1957. The appellee filed this action against all the legal heirs of John O’Kane, seeking a construction of his said will; and from an adverse judgment the appellants prosecute this appeal. The portions of Mr. 0’Kane’s will germane to this litigation, are:

“THIRD: I give, devise, and bequeath unto my beloved wife, Clara O’Kane, absolutely, after payment of all of my funeral expenses and just debts and the legacies provided in section two of this will, the one-half part of all of the residue of my estate, real, personal, and mixed, of which I may die seized and possessed, to have and to hold the same unto her and unto her heirs and assigns forever.

“FOURTH: I give, devise and bequeath unto my beloved wife, Clara O’Kane, for and during her natural life, after the payment of my funeral expenses and just debts and the legacies provided for by article two of this will, the one-half part of all of my estate and property, real, personal and mixed of which I may die seized and possessed, to have and to hold the same unto her and to her assigns during her natural life, for her proper use, benefit, support and maintenance, and after her decease said property so devised and bequeathed or the remainder and residue thereof is to be divided among my legal heirs as provided by the laws of this State for the distribution of estates by descent. It being my express will and purpose by the above articles three and four, that after the payment of my debts and funeral expenses and the legacies hereinbefore set forth, that my wife should be invested with the whole of my said estate, one-half of which she shall hold for and during her natural life, and one-half she will hold absolutely in her own right in fee simple, in lieu of dower in my said estate.

“FIFTH: I do hereby authorize and empower my said wife, Clara O’Kane for the estate hereinbefore devised and bequeathed to her during her natural life by said article four of this will, to sell and dispose of the same for such prices and upon such terms as she may deem proper and for the best interests of my said estate, and to make, execute and deliver such deeds and other papers as may become necessary to carry the same into effect, and it will only be necessary for her to refer to this will as her authority for so doing.

‘ ‘ SIXTH: I hereby appoint and constitute my wife, Clara O’Kane, as executrix of this my last will and testament and request that she shall be permitted to qualify and act as such executrix without giving bond. I further desire and request that no probate reports or other annual reports be required from my said wife and executrix.

‘ ‘ SEVENTH: I further will and direct that my said wife shall not be held pecuniarily liable for any loss to or diminution in the said property and funds.”

The net estate of Mr. O’Kane, after satisfying all debts and specific legacies, was $36,804.57, consisting of both realty and personalty. When his estate was completely administered in Sebastian County in 1928, Mrs. O’Kane took charge of all of the said net of the estate. She did not keep her fee portion separate from her life portion; but when she died in 1957 she had remaining a teta] of $19,866.46, after paying all of her debts and specific legacies. There is no showing that Mrs. 0 ’Kane had any separate estate except what she received from Mr. 0 ’Kane.

In its action for construction of the will of Mr. O’Kane, the appellee insisted that the said net of Mrs. 0’Kane’s estate (that is, $19,866.46) should be divided, one-half to Mrs. 0’Kane’s heirs and one-half to Mr. 0’Kane’s heirs. This would mean that Mr. O’Kane’s heirs would now receive slightly less than $10,000.00. The appellants insist that under Mr. O’Kane’s will, his heirs at law are now entitled to receive one-half of the net amount of his estate when it was closed, — i.e., $18,402.28, which was the amount of the life estate which Mrs. O’Kane received under the provisions of Mr. O’Kane’s will, since more than that amount remained after Mrs. O’Kane’s estate had been completely administered. The Probate Court agreed with the contentions of the appellee, and this appeal ensued.

It is crystal clear that Mr. O’Kane provided that his estate should go one-half to his wife in fee and the other one-half to his wife for life only, with the remainder to his legal heirs. The portions of the will heretofore copied definitely so provide. Whether Mrs. O’Kane could have invaded the corpus of the life estate for her necessary self-support is a matter that need not be discussed, because, after paying all of her debts, she left more than the net value of the life estate. What she did with her fee interest is not before us. In short, Mrs. O’Kane received from Mr. 0’Kane’s estate a net of $18,402.28 for life, with power of disposal; and our cases recognize the legality and enforceability of life estates with power of disposition, whether the estate be realty or personalty or mixed. Galloway v. Sewell, 162 Ark. 627, 258 S. W. 655; United States of America v. Moore (and cases therein cited), 197 Ark. 664, 124 S. W. 2d 807; and Weeks v. Weeks, 211 Ark. 132, 199 S. W. 2d 955.

The Probate Court’s judgment in effect treated Mr. 0’Kane’s will as though he had left his entire estate to Mrs. O’Kane with power of disposition for her support, because the Probate Court divided the net remainder which she had at the time of her death into two equal parts. Such a result defeats Mr. 0’Kane’s expressed directions concerning the life estate. He did not give Mrs. O’Kane the entire estate to be divided into two equal parts at her death: he gave her one-half of the estate in fee, and one-half for life, with the remainder to his legal heirs. The fact that Mrs. O’Kane did not segregate the life estate from the fee estate is of no consequence, since there remained, after closing her estate, more than the value of the life estate. (See Chambers v. Williams, 199 Ark. 40, 132 S. W. 2d 654.) So we conclude that the appealing heirs of Mr. O’Kane are entitled to their share of the value of the life estate received by Mrs. O’Kane - — ■ that is, $18,402.28.

The foregoing holding makes it unnecessary to discuss the other matters urged in the briefs. The judgment of the Probate Court is reversed, and the cause remanded for proceedings not inconsistent with, this opinion.

Johnson, J., not participating.


text:
    Quinn v. Stuckey, Admr.
    5-1697
    319 S. W. 2d 839
    Opinion delivered January 19, 1959.

      Bruce Ivy & James E. Hyatt, Jr., for appellant.
    J. Q. WasTcom é John S. Mosby, for appellee.
   Ed. F. McFaddin, Associate Justice.

The Trial Court sustained a demurrer to the complaint and dismissed the case. The plaintiffs (appellants) have appealed; and the sole issue is whether the complaint stated a cause of action.

The plaintiffs, as the heirs at law of Esther Lidell Sisson Goodin, brought this suit against the defendants, who together constitute all those interested in the estate of Joe Dean Goodin. The complaint alleged that Joe Dean Goodin, the husband, and Esther Lidell Sisson Goodin, the wife, were married on December 18, 1930; that they each then had only a very small estate; that at or shortly after the marriage, the said husband and wife entered into an oral agreement to form a partnership, for the purpose of acquiring lands and other properties and operating the same under the name and style of J. D. Goodin; that by the terms of said agreement, each of the parties was to and did contribute to the said partnership all of his or her property, capital, labor, and services, and each was to share jointly in the profits of the partnership; that all of the property was to be held and used for their mutual benefit during their joint lives.

We now copy certain of the germane allegations of the complaint, against which the demurrer was sustained :

“. . . that at the time of their marriage the said Esther Lidell Sisson Goodin and Joe Goodin entered into an oral agreement to form a partnership or joint adventure for the purpose of acquiring lands and property and operating farms in Poinsett County, Arkansas, under the name and style of Joe Dean Goodin or J. D. Goodin. By the terms of said agreement, each of said parties was to and did contribute to said partnership or joint adventure all of his or her property, capital, labor, and service, and each was to share equally in the profits, income, increments, losses, and labor of said partnership or joint adventure; that all of the property, profits, income and increments acquired and held by said partnership or joint adventure was to be, and was, held and used for their mutual benefit during their life time; that upon the death of either partner or joint adventurer, the survivor would hold and have the full use and benefit of all of said partnership or joint adventure property until his or her death, and upon the death of the survivor, the partnership or joint adventure would terminate, and all of said property (be) divided equally, one-half to the heirs of the said Joe Dean Goodin and one-half to the heirs of the said Esther Lidell Sisson Goodin.”

The complaint further alleged that the partnership had assets of realty and personalty into the hundreds of thousands of dollars; that the wife, Esther Lidell Sis-son Goodin died on October 9, 1944; and that the husband, J. D. Goodin, remained in control of the partnership assets pursuant to the agreement; that he died on January 11, 1957; and that his death terminated the partnership agreement. The plaintiffs claimed that under the partnership agreement they were entitled to one-half of all the partnership assets. To the complaint the defendants filed general demurrers, which, as heretofore recited, were sustained, and the case was dismissed, when the plaintiffs elected to stand on the complaint.

At the outset it is well to state the rule for testing a case on demurrer. In Tyler v. Morgan, 214 Ark. 667, 217 S. W. 2d 606, we said:

“Appellees demurred to this complaint on the ground that it did not state facts sufficient to constitute a cause of action. The trial court sustained the demurrer and this appeal followed.

‘ ‘ The question presented is: Treating all allegations in the complaint, which are well pleaded, as true, and construing them liberally in favor of the pleader, as we must, was a cause of action stated? We hold that there was. ‘It is not necessary that the complaint should state a cause of action in every particular, for if it contains the substance of a cause of action imperfectly stated, the presumption would be that the defects in the complaint were cured by the proof at the trial.’ Clow v. Watson, 124 Ark. 388, 187 S. W. 175.”

After a careful study we reach the conclusion that the demurrer should have been overruled in the case at bar; and here are our conclusions as against the matters claimed to be defects in the complaint:

(1) The complaint alleged that the husband and wife formed a partnership. It is true that the case of Gilkerson-Sloss Com. Co. v. Sallinger, 56 Ark. 294, 19 S. W. 747, held that a husband and wife could not be partners in a commercial-venture; but that case was decided in 1892 and its effect was overcome by Act No. 159 of 1915 and by Act No. 66 of 1919, both as now found in § 55-401 Ark. Stats. We have recognized the partnership status between husband and wife in these cases: Williams v. Williams, 186 Ark. 160, 52. S. W. 2d 971; Price v. Price, 217 Ark. 6, 228 S. W. 2d 478; and Reed v. Reed, 223 Ark. 292, 265 S. W. 2d 531.

(2) The complaint alleged that the partnership agreement was oral, and that the partnership was to engage in acquiring and holding lands. But in Russell v. Williams, 197 Ark. 1086, 126 S. W. 2d 614, we held that the statute of frauds did not apply to an oral contract of partnership formed for the purpose of buying and selling land.

(3) The complaint alleged that the partnership would continue to be operated after the death of one of the partners. But we cannot say that the bare allegation was demurrable. In 40 Am. Jur. 327, “Partnership”, § 287, the holdings of many jurisdictions are summarized: “Where, as is often the case, the articles provide that the partnership shall not be dissolved by the death of a partner, such provision will be given effect by the courts”.

(4) The complaint alleged that the surviving partner would have a life estate in the interest of the deceased partner, the allegation to such effect being, “. . . that upon the death of either partner or joint adventurer, the survivor would hold and have the full use and benefit of all of said partnership or joint adventure property until his or her death . . .” This allegation did not make the complaint fatally defective on demurrer. The matter of one partner making disposition of his interest in the partnership upon his death is not a matter unknown to this Court. In Alexander v. Sims, Executor, 220 Ark. 643, 249 S. W. 2d 832, we had such an agreement before us, which was copied in full in the footnote to that opinion. We held that the agreement in that case was obtained by fraud and was, therefore, void; but in discussing the agreement we said:

“Absent any question of consideration, testamentary nature, or fraud on a partner or his creditors, spouse, heirs, etc., some courts have upheld a partnership agreement in which each partner agrees that the survivor will receive all of the assets of the partnership, but such an agreement is always subjected to the closest scrutiny to see if the utmost good faith was observed. ’ ’

(5) The complaint alleged that after the death of the surviving partner, . . the partnership or joint adventure would terminate, and all of said property (be) divided equally, one-half to the heirs of the said Joe Dean Goodin, and one-half to the heirs of the said Esther Lidell Sisson Goodin”.

This allegation has given us most serious concern, as it may be testamentary in character and not executed in the form and solemnities required of a will. In 40 Am. Jur. 347 the text reads: “A provision in a partnership agreement that on the death of one of the partners his interest in the partnership shall become the property of the other partners is not testamentary in nature, and the fact that the agreement is not executed according to the requirements of the statute of wills does not invalidate it”.

Among other cases that we have studied, there is the Alabama case of Gomez v. Higgins, 130 Ala. 493, 30 So. 417. In that case, Francisco Gomez (the father) made a partnership agreement with his son, Alexander Gomez, and it provided, inter alia:

“In the event of the death of F. Gomez, the entire business with all assets, profits, book accounts and money on hand shall become the property of Alexander Gomez during his lifetime, and at his death the said business, together with all assets, profits, book accounts, stock and money on hand shall be divided into three equal parts, as follows: One-third (1/3) to my daughter Florida Gomez, one-third (1/3) to my daughter Romanda Higgins, and one-third (1/3) to the heirs of the said Alexander Gomez.”

The Alabama Court said that the instrument was a partnership agreement, “. . . but this did not prevent it being testamentary in character also in some of its provisions, ... It has the earmarks of a testamentary disposition of the property, such as constrain us to hold, that it did not pass a present estate, but was a testamentary disposition as to the property in question.”

The fundamental and basic distinction between the holdings seems to be this: if the primary purpose of the contract is to merely make a disposition of the partnership assets, then it can be enforced as a contract. But, if the primary purpose of the partnership agreement is to dispose of property after the death of the partners, then the instrument is testamentary and to be valid must have been executed in accordance with the solemnity and requirements for the execution of wills. Even though we have discussed this “testamentary matter” in considerable detail, still we do not have to decide on this appeal whether the agreement here involved was testamentary because: (a) if it was testamentary and, therefore, not enforceable, the heirs of Esther Lidell Sis-son Goodin might still have a cause of action unless barred by limitations and laches; and (b) if the agreement was not testamentary, the said heirs would not have a cause of action until the death of the life tenant, Joe Dean Goodin. So, in either event, the issue would not be reached on demurrer unless the complaint showed limitations or laches on its face.

(6) The appellees stoutly insist that the demurrer was properly sustained on the basis that Esther Lidell Sisson- Goodin died in 1944 and the appellants, as her heirs, did not file this suit until July, 1957. Thus, the appellees claim that limitation and/or laches appear on the face of the complaint and thus can be pleaded by demurrer. (Mueller v. Light, 92 Ark. 522, 123 S. W. 646, 31 L. R. A. N. S. 1013; McGinnis v. Less, 147 Ark. 211, 227 S. W. 398.) But in making such claim we think the appellees have overlooked allegations in the complaint to the effect: (a) that Joe Dean Goodin held a life estate and did not die until 1957; and (b) “. . . that after the death of the said Esther Lidell Sisson Goodin on October 9, 1944, the said Joe Dean Goodin took control of said partnership or joint adventure property, pursuant to their said agreement; that from 1944 until his death on January 11, 1957, the said Joe Dean Goodin held said property as trustee for said partnership or joint adventure using the profits, income and increases therefrom to further expand and increase said holdings; and that he held the same as such trustee for said partnership or joint adventure from that time until his death, at which time said partnership or joint adventure was terminated.”

The foregoing allegation is sufficient to prevent limitation or laches from appearing on the face of the complaint, and to require the defendants to assert such defenses by answer, if they so desire.

(7) Finally, there are the claims of third parties which we have not heretofore mentioned. The complaint alleged, that some time before his death, Joe Dean Goodin transferred a portion of the real and personal property of the partnership to third persons. Because of such transfer, it is claimed that limitation and laches apply. These may be good defenses by answer, but not by demurrer: because it does not appear on the face of the complaint that said third persons were bona fide purchasers. Even should we hold that Joe Dean Good-in occupied some position equivalent to that of a trustee, defensive pleadings by answer and proof are needed.

In conclusion, we reiterate that we are considering the complaint only on demurrer. Matters of proof are not before us; but on the face of the complaint we conclude that the demurrer should have been overruled. Therefore, the decree is reversed and the cause is remanded, with, directions to overrule the demurrer and allow further proceedings.

Harris, C. J., dissents; Johnson, J., not participating.

       See the article by E. B. Meriwether: “The Partnership of Husband and Wife in a Mercantile Business in Arkansas”, in Arkansas Law School Bulletin of May, 1931, Volume 2, page 67. See also annotation in 157 A.L.R. 652, “Validity of partnership agreement between husband and wife.”

       In another footnote we cited the following: McKinnon v. McKinnon, 56 F. 409; Michaels v. Donato (N. J.), 67 Atl. 2d 911; and other cases cited in the annotations in 73 A.L.R. 983 and 1 A.L.R. 2d 1207. See also 40 Am. Jur. 347.

       In 73 A.L.R. 983 there is an annotation: “Validity, construction, and effect of agreement for disposition of interest in partnership in event of death of partner”; and on page 1000 to 1002 the annotation discusses agreements amounting to a gift of a partnership interest. Then, there is an annotation in 1 A.L.R. 2d 1178: “Provision for post-mortem payment or performance as affecting the instrument’s character and validity as a contract”; and on page 1216 et seq. the annotation discusses, “Features which, in conjunction with post-mortem provision, make instrument testamentary”.

       In Hershy v. Clark, 35 Ark. 17, there was an agreement between tenants in common as to the disposition of interest in the event of the demise of either co-tenant. We held that instrument was testamentary. In the case of In Re Gardner’s Will, 66 N.Y. Supp. 2d 256, a partnership agreement was held to be testamentary in disposition.


text:
    Southern Farm Bureau Casualty Insurance Co. v. Mitchell.
    5-1726
    319 S. W. 2d 830
    Opinion delivered January 19, 1959.

      E. J. Butler & Jado P. West, for appellant.

      Fletcher Long & Harold Sharpe, for appellee.
   George Rose Smith, J.

The appellee owned a truck and a trailer that were almost completely demolished in a collision in May of 1954. He contended that the appellant had insured the property, hut the appellant denied that a policy of insurance was in force upon either vehicle at the time of the collision. This action against the insurance company was filed in the latter part of 1954, but the case was not brought to trial until April, 1958. The jury’s verdict for the plaintiff was for slightly less than half of the sums sued for.

We are unable to agree with the appellant’s principal contention, that it was entitled to a directed verdict. The two vehicles were assertedly insured separately and must be discussed separately. The appellant had previously insured the truck, but Mitchell canceled that coverage in November, 1953. He says that about three days before the collision in the following May the appellant’s general agent, Gibbs, stopped at Mitchell’s place of business, mentioned a collision that Mitchell’s brother had been involved in, and asked if Mitchell was still insured by Gibbs’ company, the appellant. Mitchell testified: “I said, ‘Bill, I have canceled the fifty dollar deductible on my truck and I would like to put it back on there,’ and he said, ‘All right,’ and he got about fifty feet away and he said, ‘Bob, do you still want the same coverage you had before,’ and I said, ‘Yes,’ and he said, ‘O.K., I will see you in a few days.’ ” This testimony is corroborated by a man who was then working for Mitchell. Gibbs remembers the discussion about Mitchell’s brother, but he says that the renewal of Mitchell’s policy was not mentioned.

We think the issue was properly submitted to the jury. It is conceded that Gibbs was a general agent and had the power to bind his principal by an oral promise to insure the truck. An agreement to renew a prior policy upon the same terms is sufficiently definite to constitute a valid contract. King v. Cox, 63 Ark. 204, 37 S. W. 877; Aetna Ins. Co. v. Short, 124 Ark, 505, 187 S. W. 657. The jury were justified in interpreting Gibbs’ statement, “O.K., I will see you in a few days,” as an acceptance of Mitchell’s offer and as an indication that a written policy would be issued in due course. It was not essential for the plaintiff to introduce a copy of the earlier policy, so that the jury might know its terms; for the appellant does not contend that the collision loss would not have been covered by that policy.

The trailer was mortgaged to a bank, which required its borrowers to carry insurance. The trailer was undoubtedly insured by the appellant during the year ending January 19, 1954, but the appellant contends that the policy then lapsed for nonpayment of the renewal premium. Mitchell’s statement that he paid the premium is bolstered by the fact that the bank received no notice that the policy had lapsed and by the further fact that the appellant recognized its liability after the collision by paying the bank the amount of its loan. This phase of the case involved only a question of fact, to be decided by the jury.

Two days after the loss occurred the insurer took a written statement from Mitchell about his conversation with the general agent, Gibbs. It is now contended that the trial court erred in refusing to permit the appellant to introduce this statement: It does not appear, however, that the court actually refused to admit the statement. During Mitchell’s cross-examination the appellant’s counsel questioned him in detail about the contents of the statement and at one point asked Mitchell if he would agree to introduce the document with his testimony. Upon objection by Mitchell’s attorney the court ruled that the statement would not be introduced with Mitchell’s testimony unless Mitchell agreed to it, but the court added: “Of course, you understand the court is not holding that it is incompetent.” Despite the court’s apparent willingness to allow the written statement to be introduced later, counsel did not pursue the matter further and hence cannot now contend that an error was committed.

Complaint is also made of an instruction which stated in substance that if Mitchell and Gibbs both knew the description of the truck, its value, the risks to be covered, and the amount of the premium, and if upon that knowledge Gibbs unconditionally agreed that his principal would indemnify in return for Mitchell’s promise to pay the premium, then a contract of insurance was completed even though its terms were not reduced to writing. Only a general objection was made to this instruction, and we do not perceive that it is inherently erroneous in any respect.

Affirmed.

Johnson, J., not participating.


author: Paul Ward, Associate Justice.

text:
    Brigham v. Brigham.
    5-1741
    319 S. W. 2d 844
    Opinion delivered January 19, 1959.

      J. Harrod Berry, for appellant.

      Williams & Gardner, for appellee.
   Paul Ward, Associate Justice.

By this appeal Alma G-ood Brigham challenges a decree of divorce granted to her husband, Earl Jesse Brigham.

Since the parties were married in New Orleans, April 2, 1942, while Earl was in the Navy, they have apparently had marital difficulties on numerous occasions. For a large part of the intervening years they did not live together because appellee was serving in the Navy, having re-enlisted some 2 or 3 times. Appellee’s home had always (at least up to 1954) been in Pope County where his parents also resided.

After appellee’s first discharge from the Navy he returned to his home, with his wife, in Pope County and served two terms as Circuit Clerk of that County for the years 1947 to 1950 inclusive. Having been defeated for a third term in 1950 he soon thereafter re-enlisted in the Navy and served for about 18 months. After a few months he again re-enlisted and served until the early part of 1954. During all of these periods of service appellee served away from his home, traveling to various parts of the world. Shortly after appellee’s last discharge from the Navy he and his wife went to Benton in Saline County where they lived together and together they established a real estate agency. Although the agency appeared to be moderately successful financially, after some 7 or 8 months appellee once more re-enlisted in the Navy, about the first of January, 1955, and has remained in service up until the present time.

On January 13, 1956 appellee filed a complaint and later an amended complaint in which he alleged two grounds for a divorce. One: Indignities, in that appellant treated him with studied contempt amounting to severe mental cruelty, consisting of quarrelling, abuse, etc. Two: Desertion, in that appellant refused to live with him. Appellant denied all the above allegations and prayed for attorney fees, and costs. No children are involved and apparently there are no property rights to be settled.

The trial court found that appellee was entitled to a divorce on both alleged grounds, and gave appellant her costs and attorney fees.

Much of the testimony is conflicting and irrelevant, but a careful examination of the same forces us to the conclusion that it does not sustain the decree of divorce.

One. As to indignities. There is in the record some testimony by appellee, weakly supported, that appellant was disagreeable and quarrelsome while they lived together prior to 1954. However we deem it unnecessary to recount this testimony because we think any such alleged indignities were condoned by appellee by living with his wife for some 7 or 8 months at Benton. This court has held to this effect many times. In Buck v. Buck, 205 Ark. 918 (at pages 921 and 922), 171 S. W. 2d 939, we said:

“This court, in a long line of decisions, has consistently held that one spouse may condone the misconduct of the other and in the absence of acts of subsequent misconduct, all grounds for divorce prior to con-donation by the injured spouse are wiped out.”

Appellee attempts to avoid the application of the above rule by stating he agreed to live with his wife at Benton only on the condition she would “stop demanding that I move to Little Bock and that she make me a dutiful and loyal wife”. He must fail in this attempt, however, because there is no evidence she later violated that condition.

There is no evidence of personal indignities on the part of appellant after appellee last entered the Navy, nor could there well be, because they have not lived together since that time.

Two. Desertion. This ground is based solely on the contention by appellee that appellant refused to live with him. All acts supporting this contention must likewise rest on what occurred after the last enlistment in the Navy which, as stated before, was about the first of the year 1955. A careful search of the record fails to support appellee’s contention.

When appellee left for the Navy the last time, he did so, according to the nncontradicted testimony, without the knowledge of his wife and also without winding up his business affairs or making any arrangements with reference to his wife or household furniture. Upon appellee’s last enlistment he went or was sent to a station in California. He remained there about 10 months when he was transferred to Alaska. Appellee states that soon after he landed in California he requested his wife to join him and she refused. Appellant says that while she was willing and anxious to join him there, yet it was impractical if not impossible for her to do so at that time, for several reasons. She had the responsibility she says, of winding up their business affairs in Benton, she had the household goods to store or dispose of, and appellee had made no definite plans for her to travel to California or a place to live after she got there. She says she was very nervous and asked appellee to come back and drive through with her but he refused to do so. The uncontradicted testimony is that appellant did not even know when appellee left California for Alaska, and that she had to make several calls to find out. Appellee says he asked his wife to join him in Alaska, but the uncontradicted testimony is that he made no arrangement for her to make the trip. Appellant says she understood that it would have been necessary for travel arrangements to be made through the Navy or the Government, but none were ever made.

Since appellee’s suit for divorce was, in this connection, based on desertion and not on 3 years separation, the vital issue is not whether parties lived separate and apart for little over a year. Certainly it is not uncommon to find such extended separations where the husband is away on military service with no suspicion of desertion, especially on the part of the wife. The real issue here is whether appellant willfully and without good cause refused to live with her husband. It is on this issue that we find no convincing evidence. Moreover, viewing the evidence most favorably to appellee, his cause must fail on the vital issue because there is no corroborating evidence to support it. In Sutherland v. Sutherland, 188 Ark. 955, 68 S. W. 2d 1022, this court said: “It is the established doctrine of this State that a divorce decree will not be granted upon the uncorroborated testimony of one of the parties.” See also Highsmith v. Highsmith, 219 Ark. 123, 210 S. W. 2d 5.

Much of appellant’s testimony and argument challenges the trial court’s finding that appellee’s residence was in Pope County for the purpose of maintaining this suit. In view of our conclusions heretofore expressed we deem it unnecessary to go into this question at length. There is, we think, sufficient evidence to support the trial court on this issue. As this court has stated on previous occasions, every person is entitled to have a residence somewhere. It is undisputed in this case that appellee’s residence has been in Pope County all his life, except for the few months he lived at Benton. We do not think that one incident is decisive here. Residence, in a case of this kind, is largely a matter of intent, and a person has a right to • change it when he pleases. See McGill v. Miller, 183 Ark. 585, 37 S. W. 2d 689. Appellee’s testimony is to the effect that he went to Benton and lived with his wife conditionally, hence he may not have intended to abandon Pope County as his residence. The record also shows that while there he voted in Pope County. Therefore we cannot say that the Chancellor’s finding, under all the facts and circumstances of this case, is against the weight of the evidence.

Appellant, who is receiving an allotment from the Government, has asked only for an additional attorney fee incident to this appeal, to which we think she is entitled.

In accordance with the above the decree of the trial court is reversed, and the cause is remanded with directions to dismiss appellee’s petition and to allow appellant an additional attorney fee of $100 for this appeal.

Reversed with directions.