author: CarletoN PIarris, Chief Justice.

text:
    Walthour-Flake Co., Inc. v. Brown. Wilkins v. Carpenter, Temporary Guardian.
    5-1331
    5-1332
    307 S. W. 2d 215
    Opinion delivered December 2, 1957.
    Opinion delivered December 2, 1957.

      H. B. Stubblefield, for appellant.

      Langston & Walker and Wayne Foster, for appellee.

      J. Fred Jones and II. B. Stubblefield, for appellant.

      Langston & Walker and Wayne Foster, for appellee.
   CarletoN PIarris, Chief Justice.

On February 5, 1955, Bill 0. Brown and wife, Ruby M. Brown, appellees herein, purchased from Mary L. Wilkins, property located at 520 Brown Street in Little Rock. Walthour-Flake Company, Inc., real estate dealers, had advertised the property, and had shown same to the Browns. The Browns made a cash down payment, and Mrs. Wilkins retained a vendor’s lien for the balance of the purchase price; also, the Browns assumed an already existing indebtedness payable to tbe Pulaski Federal Savings and Loan Company. On February 21, 1956, tbe Browns filed an action in tbe Pulaski Circuit Court seeking damages against Mary L. Wilkins, and tbe Waltbour-Flake Company, Inc., (hereinafter called Waltbour); alleging that they bad been induced to purchase tbe property through false and fraudulent representations on tbe part of tbe defendants. Mary Wilkins filed a counterclaim in excess of $4,000, tbe balance of tbe purchase price of said property, and moved to transfer tbe cause to Chancery Court. Tbe motion was denied. In filing tbe suit, ap-pellees elected to affirm tbe sale of tbe property and seek to recover their damages at law. On October 18, 1956, after the case had been submitted to tbe jury, prior to tbe returning of a verdict, appellees took a non-suit. Thereafter, tbe unusual events which occasioned this litigation occurred as follows. On October 19,1956, tbe day following tbe taking of tbe non-suit, Mrs. Wilkins gave Waltbour an assignment of $360 of the debt due her from tbe Browns, and on tbe same date, both filed their suit. in tbe Pulaski Chancery Court, First Division, against tbe Browns, seeking to foreclose the lien which bad been retained. Tbe cross complaint in tbe Circuit Court was dismissed shortly after tbe Chancery suit was filed. On October 26, the Pulaski Probate Court, Second Division, appointed one Charles L. Carpenter, an attorney of North Little Rock, as temporary guardian of tbe estate of Mrs. Wilkins, and directed that such temporary guardian intervene in the action, previously referred to, which had been filed in tbe Pulaski Chancery Court. This order was granted on tbe basis of tbe affidavit of Dr. Anderson NettlesMp, which stated that the doctor had viewed Mrs. Wilkins at the Meadowlane Nursing Home; after setting out the results of his examination, he concluded by finding her to be mentally incompetent. The petition seeking the appointment of Carpenter as temporary guardian was signed by Ruby M. Brown, defendant in the Chancery suit, and one of the appellees herein, averring that petitioner

* * has funds in his hands payable to said Mary L. Wilkins upon said notes, the same being accrued past due payments since February 13, 1956, and that said amount is sufficient to cover the unratified and voidable assignment made by the said Mary L. Wilkins, incompetent, to a third person, but that said Mary L. Wilkins and the Walthour-Flake Company, the latter being the aforementioned assignee, have filed an action in the Chancery Court of Pulaski County, in case No. 106201, to foreclose the vendor’s lien securing said notes, that a Temporary Guardian should be appointed by this court for the purpose of intervening in said action, disaffirming said assignment, and tendering any consideration actually received by said Mary L. Wilkins from Walthour-Flake Company, Inc., without prejudice to the said Temporary Guardian or his ward from proceeding in said foreclosure action.

Petitioner states that otherwise he might be subjected to double liability by reason of the possibility of subsequent avoidance or disaffirmance of said assignment lay said incompetent. * * *”

The petition reflected that Mrs. Wilkins had two daughters living in Little Rock, listed them by name, and alleged that said daughters had been handling the affairs of the incompetent “* * * as if they were their own, having attempted to sell or assign interests in the note, hereinabove referred to, to third parties, knowing full well that said attempted sales or assignments were unauthorized and subject to repudiation by the said incompetent, and, for this reason, should not be permitted to serve as Guardian herein. * * *” The order was granted by the court without notice to either of these daughters, and without notice to Mrs. Wilkins’ attorney, who had filed the suit for her in the Chancery Court. On November 23, notice of appeal to the Supreme Court was given by Mrs. Wilkins and her daughters, and a petition was filed to set aside such appointment. On January 9, 1957, this petition was denied, but no appeal was taken therefrom. Accordingly, the only action of the Probate Court under question is the propriety of the original order.

Appellees obtained three extensions of time for filing an answer in the Chancery case, but the litigation terminated before any such answer was filed. The temporary guardian, on October 29, filed an intervention in the case, in which, as such temporary guardian of Mary Wilkins, he disaffirmed the assignment and transfer of the $360 of the indebtedness which she had made to Walthour, and further, tendered said amount of money into the registry of the court to be paid to Walthour. The guardian obtained such amount from the defendants, appellees herein. On January 24, 1957, the following pleadings were filed: the Browns filed motion praying that Walthour be dismissed as party plaintiff, as per the prayer of the temporary guardian; Mrs. Wilkins, through her attorney, filed motion setting up that the Browns had agreed to pay the delinquent installments on the note and mortgage and to resume future payments, and accordingly, asked that she be permitted to dismiss her complaint; Walthour filed an amendment setting forth the entire background of the case, and asked that the court require the Browns and Mrs. Wilkins to make a full disclosure of “* * * any and all agreements and considerations in connection with the announced intention of said Mary L. Wilkins to dismiss, as to her, the cause of action set forth in her complaint; that the rights, status and liabilities of the parties to this action in connection with the matters set forth here-inbefore be ascertained, adjudged and declared by this Court; * * V’ The court entered its decree finding “ * * * that all parties hereto except the plaintiff, Walthour-Flake Co., Inc., are in agreement in desiring a dismissal of this cause; that there has been deposited in the Registry of this Court sufficient funds to reimburse said Walthour-Flake Company, Inc., for all claims made by it in this cause; that if this cause were prosecuted to final judgment herein the relief sought by said Walthour-Flake Company, Inc., would be no greater than that already available to it; and that the interests of said Walthour-Flake Company, Inc., are not prejudiced by a dismissal of their complaint herein. * * * ”, and dismissed same as to all parties, further directing the clerk of the court to pay to Walthour the sum of $379.60 (including costs) as full satisfaction of its claims.

From such decree, Walthour brings this appeal. Both Mary Wilkins, her daughters, and Walthour appeal from the order of the Probate Court appointing the temporary guardian.

We will first dispose of the appeal from the Probate Court, though in doing so, it may be necessary to discuss some of the evidence adduced at the Chancery hearing. Section 57-620, Ark. Stats. (1947) Anno., provides for the appointment of temporary guardians as follows:

“If the court finds that the welfare of an incompetent requires the immediate appointment of a guardian of his person or of his estate, or of both, it may, with or without notice, appoint a temporary guardian for the incompetent for a specified period, which period including all extensions thereof, shall not exceed ninety (90) days, and remove or discharge him or terminate his guardianship. * * * The appointment may be to perform duties respecting specific property or to perform particular acts, as stated in the order of appointment. * * *”

This provision is mainly designed to take care of emergency appointments. Under the code, a minimum of three days notice must be given before a regular guardian can be appointed, and instances may well arise where such a delay would cause irreparable damage to the estate of an incompetent. Here, no such emergency seems' to have existed. According’ to the petition:

“* * * a Temporary Guardian should be appointed by this court for the purpose of intervening in said action, disaffirming said assignment, and tendering any consideration actually received by said Mary L. Wilkins from Walthour-Flake Company, Inc., without prejudice to the said Temporary Guardian or his ward from proceeding in said foreclosure action. # * * ”

The Chancery action was instituted on October 19th, and accordingly, there remained thirteen days before appel-lees were required to answer; the temporary guardian did not file his intervention until October 29th (three days after his appointment), so we fail to see the urgent necessity for immediate appointment of a guardian. To have sought the appointment of a permanent guardian would not have prejudiced the rights of any individual. In such event, it would have been necessary that at least one of the daughters be notified of such petition. Under the circumstances, we are of the opinion that such notice should have been given. To declare one incompetent and appoint a guardian, is a step that should only be taken after considered thought, and, except for an emergency, only after giving relatives or others closely connected with the alleged incompetent an opportunity to be heard. As stated, this was not done in the instant cause, nor was the attorney, who had instituted the foreclosure action for Mrs. Wilkins, notified. Here, the temporary guardian (who had never seen the incompetent), admittedly agreed to serve at the suggestion of appellees or their counsel, who were adversaries of Mrs. Wilkins in the Chancery suit, and had also been adversaries in the damage suit before the Circuit Court. Appellees call attention to Section 57-628 as authorizing their request for temporary guardian. That section has no application to the facts of this litigation. The purpose of that section is to authorize a guardian for an incompetent to perform contracts that the incompetent has entered into, and would be required to perform, except for the incompetency. In this cause, Mrs. Wilkins liad not refused to perform any contract; in fact, her action ivas brought because of the alleged failure of appellees to perform the contract, i. e., their failure to make the payments as required.

One might ask the question, “Why are guardians appointed?” The answer is given in the first sentence of Section 57-620, heretofore quoted. “If the court finds that the welfare of an incompetent requires the immediate appointment of a guardian * * The instant appointment does not meet the test of that definition. The order was obtained primarily for the benefit of the Browns, appellees herein. According to the testimony of the temporary guardian in the Chancery hearing, he had not seen Mrs. Wilkins before being designated, had not talked with either of the daughters, nor with her attorney prior to being appointed; had made no effort to ascertain whether her hills at the rest home had been paid, nor to ascertain her needs as to clothing and medicine. In fact, the only act performed by the temporary guardian, was to file the intervention in the Chancery case (which was prepared by appellees’ attorneys) disaffirming the assignment from Walthour, and tendering the $360 furnished by appellees. Actually, we cannot see that Mrs. Wilkins’ estate or interest had suffered by the assignment to Walthour. The claim (through the note) for $360 that she held against the Browns, was exchanged for that amount of cash money. She suffered no loss; rather, she received money to apply on current expenses, which she would not have otherwise received, since the Browns were making no payments, and the testimony reflects the Brown indebtedness to he her sole asset. From her point of view, we see no reason why a disaffirmance of the assignment would he of any benefit. For the reasons herein set out, the action of the Probate Court in appointing the temporary guardian is reversed, and the cause is remanded with directions to cancel and set aside such order.

Perhaps it might he well to say here that we do not consider there is any reflection of wrong doing, or taint, upon the actions of any of the parties hereto on either side . .. . litigants, counsel, or guardian. Counsel for the Browns and the temporary guardian were apparently very careful not to take any action that might prejudice the right of Mrs. Wilkins to proceed with the collection of the indebtedness due by the Browns. Seemingly, .this whole complicated situation arose because of the desire of appellees to bring a further suit for damages against Walthour in Circuit Court, where same could be heard by a jury, and a contrary desire, equally strong, by Walthour, to have the matter of damages heard in the Chancery Court. This “jockeying for position” on the part of the litigants is occasioned, of course, by our law relative to counterclaims, found in paragraph 4, Section 27-1121, and Section 27-1123, Ark. Stats. (1947) Annotated. Appellants state that the interest in the Brown indebtedness was purchased because Mrs. Wilkins needed money to pay her bills; however, the determined effort made to keep the litigation “alive” in Chancery Court, as well as the other circumstances in the cause, convinces us that the assignment was obtained in order to force appellees, while defending against the foreclosure, to assert any claim that they might have against either plaintiff in that court. On the other hand, appellees did not want to file an answer in Chancery Court to the foreclosure action, because they were fearful that their claim against Walthour would have to be asserted in that forum, thus depriving them of a trial by jury. The reasons of both are valid. Walthour’s attainment of the assignment was entirely legal, while most people with damage suits probably prefer a trial before a jury. Having thus stated the reasoning behind the actions of the parties, we proceed to a discussion of the Chancery ease.

Here, it will be remembered that Mrs. Wilkins dismissed the foreclosure complaint, as to her interest, because of the agreement of appellees to catch up their delinquencies, and make the future payments. The temporary guardian tendered the $360, together with costs, to Walthour, and the court dismissed the action, finding that “# # * if this cause were prosecuted to final judgment herein the relief sought by said Walthour-Flake Co., Inc., would he no greater than that available to it. * * *”

We have already held that the appointment of the temporary guardian was invalid. Mr. Carpenter, not being an agent of, or representing Mrs. Wilkins, was therefore a stranger to the transaction, and was without authority to make such a tender. In Corpus Juris Secundum, Vol. 86, page 576, we find:

“ While it is not necessary that the tender be made in person by the debtor, a tender to be valid must be made by him or someone representing him. As a general rule a tender by a mere stranger is invalid, although it has been held that a person who has an interest in the consequences of a tender may make an effectual tender. * * *”

Mr. Carpenter, of course, as an individual, had no interest in the consequences of the tender. Likewise, in American Jurisprudence, Yol. 52, page 224:

“The courts generally take the position that a mere stranger to the obligation cannot make an effectual tender of payment of such obligation. * * * ”

We accordingly conclude that the court erred in dismissing Walthour’s cause, and directing the clerk to pay over to Walthour the sum of $379.60 in full satisfaction of its claims. We make no finding as to the propriety, relevance, or validity of the amended complaint, since the Chancellor made no specific findings with regard thereto.

The decree of the Chancery Court is reversed and the cause remanded, with directions to proceed in a manner not inconsistent with this Opinion.

       The complaint alleged that representations had been made that the house was in good condition, was wind and water tight, was solid and habitable, and fit for occupancy, and that the house was purchased because of reliance upon these material representations; that on April 16, 1956, the entire north wall of the house, constructed of rock, fell out into the yard, taking with it all the kitchen wall cabinets and sink, thus leaving the entire house exposed to the out of doors.

       Pulaski Federal Savings & Loan Association was also made a party since it had a lien on the property securing a debt of approximately $1,036.56 in order that it might “assert, protect, and have adjudicated in this action such claims and rights as it may have.”

       The letters of temporary guardianship were to expire January 26. 1957.

       Order entered October 29,1956, extended time to January 1, 1957. Order entered December 19, 1956, extended time to January 15, 1957. Order entered January 11, 1957, extended time to January 30, 1957.

       Section 57-611, Subsection B (5).

       Emphasis supplied.


source: Caselaw Access Project

author: Ed. P. McFaddin, Associate Justice.

license: Public Domain

text:
    Hixson v. Parker.
    5-1362
    307 S. W. 2d 210
    Opinion delivered December 2, 1957.

      Bay Blair and Bobert J. White., for appellant.

      J. H. Evans, for appellee.
   Ed. P. McFaddin, Associate Justice.

The question to be decided is whether the appellants established that they were prevented from mining coal in the year 1954 because of a strike or boycott.

In March 1948 appellee, A. C. Parker, leased 351 acres to the appellants, Hixson, et al., for coal mining. We refer to the mine on this land as the Parker mine. The lease provided that the Lessees (Hixson, et al.) would pay Lessor (Parker) a royalty on each ton of coal mined; and the lease guaranteed Parker a minimum royalty of $2,400 per year. The Hixsons failed to pay Parker any royalty in 3954, and he filed this suit for $2,400 for minimum royalty. The Hixsons admitted the execution of the lease and the failure to pay the $2,400 minimum royalty for 1954; but they claimed they were prevented from operating the mine because of a strike by the coal miners; and the Hixsons relied .on the following language in the lease to excuse them from paying the royalty, to-wit:

“It is further agreed that in the' event of strikes, boycotts, acts of God or causes beyond the reasonable control of Second Parties, preventing the said Second Parties, their successors or assigns, from operating said mine for as much as three-fourths (3/4) or more of any year, the minimum royalty payment due under the terms hereof for the year in which such delay occurs, shall be reduced in the same proportion as such period of delay shall bear to the annual period.”

Since the mine was not worked in any part of 1954, the Hixsons claim no minimum royalty was due. Having admitted the contract and pleaded an exclusion as the defense, the burden was, of course, on the Hixsons to bring their defense within the purview of the exclusion. U. S. Fire Ins. Co. v. Universal Broadcasting Corp., 205 Ark. 115, 168 S. W. 2d 191; and Gorman v. Lusk, 270 Ky. 350, 109 S. W. 2d 625. The testimony shows four factors that affected the failure to continue operation:

1. The Parker mine was operating at a considerable loss for some time prior to December 17, 1953, when the Hixsons ceased operations which were not resumed in 1954.

2. The Hixsons attempted to induce eighteen of the coal miners to operate the Parker mine on a co-operative basis: that is, the Hixsons would receive a percentage of the receipts and the eighteen miners would receive their wages from the remaining receipts. The eighteen coal miners belonged to the United Mine "Workers of America (hereinafter called “Union”); and the officers of the Union advised the eighteen coal miners that if they operated the mine on the co-operative basis, then such miners so operating would have to surrender their union membership because they would be classed as operators rather than as members of the labor union. When the eighteen coal miners received this information they abandoned the idea of operating the Parker mine on a co-operative basis.

3. Another factor militating against resumption of mining operations was the fact that the Hixsons had signed a contract with the Union, agreeing to pay a certain amount to the Welfare and Pension Fund of the Union. When the Hixsons shut down the Parker mine in December 1953, there was an arrearage of $1,463 in these payments. The Union officials were insisting that the arrearage be paid; and the Hixsons were either unable or unwilling to make the payments; and negotiations about this continued without solution.

4. A further factor militating against the resumption of operations at the Parker mine was the fact that the Union contract, governing the working by the coal miners, required that they be paid a vacation bonus; and in 1954 the coal miners filed action against the Hix-sons for the vacation bonus. That case was never brought to trial and was still pending at the time of the trial of the suit from which comes this appeal.

Because of the .-¡matters mentioned in paragraphs numbered 2, 3, and 4 above, the Hixsons claim that they were prevented by a strike or boycott from operating the Parker mine in all of 1954. The language in the exclusion clause refers to “strikes, boycotts, acts of God or causes beyond the reasonable control” of the Hixsons. The- Hixsons relied solely on the strike and boycott language. There is no claim that there was any act of God or other act beyond the control of the Hixsons so as to claim the benefit- of the exclusion clause; so the issue was whether operations at the Parker mine were prevented solely because of a strike or boycott.

After hearing the evidence the learned Chancellor entered a decree for the plaintiff, Parker, and against the Hixsons; and in his written opinion the Chancellor said:

.“The burden of proof is on the Hixsons to prove that they bring themselves within the language of the exclusion. The Coiirt finds that the evidence fails to sustain that burden' of proof — and on the contrary, that the labor dispute was ever a matter within the reasonable control of the Hixsons; and that they, in the exercise of their good business judgment, determined to cease operation of the lease since operation was resulting in a loss. Even if the dispute with the Union Mine Workers was such a matter as required litigation to establish the legal rights and liabilities of the Hixsons, yet it was within their reasonable power to operate the lease insofar as it concerns their agreement with A. C. Parker, the lessor.”

We affirm the Chancery decree. There are numerous cases from other jurisdictions involving exclusion clauses similar, but not identical, to the one here involved. To list all such cases would unduly prolong this opinion; but the cases are collected in four annotations, being: “Construction and effect of provision in mining lease excusing payment of minimum royalty, ” in L. R. A. 1917E 1078; “Construction and effect of ‘strike clause’ of contract,” in 35 A. L. R. 721; “Construction and effect of ‘strike clause’ of contract,” in 125 A. L. R. 1304; and “Construction and effect of provision in mineral lease excusing payment of minimum rent or royalty,” in 28 A. L. R. 2d 1013. See also 36 Am. Jur. “Mines and Minerals,” § 51, particularly the additional statements in the Cumulative Supplement. According to the majority and well reasoned holdings in the cases listed in the foregoing annotations, the rule is that a party seeking to be absolved from paying minimum royalty because of a strike or boycott has the burden of proving: (a) that the strike or boycott was the proximate cause of the failure of the party to perform the contract; and also (b) that the party seeking to be absolved was free of any wrong-doing that brought about the strike or boycott.

When we weigh the evidence in the case at bar by these two tests, it is clear that the Hixsons failed to sustain the burden of proof. Each of the four factors set out in the four numbered paragraphs above had a definite effect on the ITixsons’ failure to resume operations at the Parker mine in 1954. Factor No. 1 (i. e. previous unprofitable operation) was certainly in no way connected with any strike or boycott; yet that factor was of considerable importance and was the motive for the cooperative proposal to the eighteen miners. Factor No. 2 (the refusal of the eighteen miners to operate the mine on a co-operative basis) was not a strike or boycott: it was a determination by the eighteen miners that they would not undertake the co-operative plan. Neither Factor No. 3 (the effort to collect the $1,463 due by the Hix-sons to the Union Fund) nor Factor No. 4 (the action by the miners for vacation bonus) can avail the Hixsons as a sufficient defense. There was no strike called by the Union. The Hixsons never notified the miners to return to work after the shut-down of December 1953; so there is no definite evidence of any refusal to work until factors 3 and 4 had been solved. Furthermore, it was the Hixsons’ failure to pay the $1,463, admitted to be due, that caused the Union to attempt to collect the money.

In short, the Chancery Court was correct in holding that the Hixsons did not prove any strike or boycott to have been the proximate cause of the failure to operate the mine in 1954; and also the Chancery Court was correct in holding that the Hixsons did not prove themselves free of wrongdoing, because they admittedly failed to make the arrearage payments of $1,463 to the Union and then made no effort to get the vacation bonus pay action brought to trial.

Affirmed.

       The complaint also sought equitable relief and no objection is raised on this appeal as to the chancery jurisdiction.


author: Mixon W. Millwee, Associate Justice.

text:
    Martin v. Sullivan.
    5-1391
    307 S. W. 2d 212
    Opinion delivered December 2, 1957.

      Paul K. Roberts, for appellant.

      Randall L. Williams, for appellee.
   Mixon W. Millwee, Associate Justice.

This is a belated attempt by the appellant, Elgin Martin, to set aside three execution sales of his interests in certain lands in satisfaction of judgments for arrearages in alimony and support payments to his former wife and their seven minor children.

• ■ .D. G. .Martin died testate in 1932 survived by his widow, Hattie Martin, and two sons, Alex Martin and the appellant. In his will he gave Alex $1.00 and devised the balance of his property, including 606 acres of land, to the appellant, subject to the dower and homestead rights of the widow who is incompetent and has been confined in the State Hospital since 1933.

Appellant married Jewell Brewster in 1933 and they had made conveyances of about 200 acres of the land in December, 1947, when she obtained a divorce and was awarded $60.00 per month as alimony and support money for their seven children whose custody was awarded to the mother. On June 13, 1950, a decree was entered against appellant in the sum of $898.69 for arrearages in the support payments. Appellee, John L. Sullivan, purchased appellant’s interest in 53 1/3 acres of land at an execution sale held September 16, 1950, pursuant to the June decree and subsequently sold the land to appellees, W. C. Hargis and wife. Further proceedings growing ont of appellant’s continued failure to make the alimony and support payments resulted in a second execution sale of 98' acres of land on October 27, 1951, and a third such sale, of 128 acres on December 20, 1952. Appellee, C. H, Stafford, was the purchaser at the second sale and acquired the interest of the purchaser at the third sale.

Appellant contested all proceedings had in connection with the three execution sales. Although he duly excepted and was granted appeals from the decrees under which the sales were conducted, no appeal was ever perfected, nor did he avail himself of any of the remedies provided for correcting or vacating said decrees under Ark. Stats., Secs. 29-501, et seq. On July 10, 1956, he filed the instant suit alleging the invalidity of the three execution sales on numerous grounds. The abbreviated record filed by appellant fails to disclose the precise nature of the proceedings below. However, it seems that, after the issues were joined, the cause was submitted on the pleadings in the instant case and copies of certain of the pleadings, orders and decrees filed and made in connection Avith the divorce suit and the three execution sales. The chancellor made exhaustive findings touching each step of the former proceedings as the basis for a decree holding that the execution sales were regularly held pursuant to valid decrees. The relief sought by appellant was denied and appellees’ title confirmed subject to the widow’s rights.

Appellant’s primary contention is that the three execution sales were void because each was based upon and held pursuant to a “nonexistent” decree of May 21,1951. On this point the record supports the trial court’s finding that on May 21, 1951, the former chancellor made a docket entry of an order rendered orally on that date which was not then reduced to writing nor recorded. At the same term of court on June 4, 1951, this order Avas vacated on the court’s own motion and jurisdiction of the cause retained, and all matters held in abeyance, for further action and decision. At the next session of court on July 16, 1951, the decree in question was filed and entered of record. It refers to the continuation of the cause from May 21, 1951, and is marked: ‘ ‘ This May 21, 1951. Bendered for entry on this July 16, 1951.” Subsequent orders made and deeds issued in connection with the execution sales refer to a decree granted May 21, 1951, and “rendered for record on the 16th day of July, 1951.” While the former chancellor was perhaps under the misapprehension that a written decree had actually been entered May 21, 1951, when he set it aside, this did not destroy the effectiveness of the decree actually rendered and placed of record July 16, 1951. The record fully supports the trial court’s finding that the execution sales in question were based on a valid decree rendered and recorded on July 16, 1951.

None of the evidence upon which the chancellor predicated the various orders and decrees issued in connection with the execution sales is before us. It is true that on this collateral attack we can review the decree for errors manifest upon its face. Strode v. Holland, 150 Ark. 122, 233 S. W. 1073. But it is also elementary that when an abbreviated record is free from apparent error we cannot assume that some omitted matter would require a reversal of the decree. Kimery v. Shockley, 226 Ark. 437, 290 S. W. 2d 442. In his findings the chancellor carefully demonstrated that there was no error in the prior proceedings regarding alleged discrepancies in the judgments and executions issued thereon, and other claimed irregularities asserted for the first time in the instant suit. It would unduly prolong this opinion and serve no useful purpose to review these matters. It is sufficient to say that appellant has failed to show error apparent from the face of the record sufficient to invalidate the three execution sales on this collateral attack.

Affirmed.


author: George Rose Smith, J.

text:
    Zini v. First Natl. Bank in Little Rock.
    5-1398
    307 S. W. 2d 874
    Opinion delivered December 2, 1957.
    [Amended on motion of attorney December 23, 1957.]

      Terral & Rawlings, for appellant.

      Mehaffy, Smith & Williams, for appellee.
   George Rose Smith, J.

TMs is a suit brought by the appellee, as guardian of the estate of James A. Counts, incompetent, to set aside a deed by which Counts conveyed a house and lot in Little Rock to the appellant, Angelo Zini. The chancellor, finding that Counts was mentally incompetent when the deed was executed, entered a decree canceling the conveyance. Zini contends that the finding of incompetency is against the weight of the evidence and, alternatively, that the court erred in fixing the amount owed to Zini upon cancellation of the deed.

On January 30, 1947, Zini conveyed the property in question to U. C. Butler and his wife, the deed reserving a vendor’s lien for the unpaid purchase price. On November 4, 1948, the Butlers sold the property to Counts for $3,500. In this transaction Counts paid $500 in cash, assumed the obligation to Zini in the sum of $1,926.44, and executed a note for the balance of $1,073.56, for which the Butlers retained a vendor’s lien. Counts was adjudicated an incompetent by the Pulaski probate court on November 23, 1949, and was committed to a Veterans Administration hospital for treatment. His condition improved, and he was permitted to leave the hospital three weeks later. After his release from the hospital Counts became delinquent in his payments upon the property (which was not his home). On March 11, 1950, Counts conveyed the land to Zini in satisfaction of the latter’s claim, which then amounted to $1,894.64. Zini later obtained a release of the Butlers’ lien by paying them $300. The appellee bank was appointed guardian in June, 1951, and filed this suit in August, 1956.

The evidence bearing upon Counts’s mental condition on March 11, 1950, presents a difficult question of fact. Counts was born about 1913 and seems to have been mentally normal until he broke down in combat during World War II. He was then treated for a nervous disorder and eventually received an honorable discharge from the Army. Upon his return to civilian life in 1945 he obtained work in the office of the Veterans Administration. His nervousness- increased, however, and he spent six weeks in a mental institution in the summer of 1946, leaving against medical advice.

According to Mrs. Counts, her husband’s conduct before and after the execution of the deed in question was often that of a deranged man. She says that he shot several dogs that were chasing his hogs and threatened to shoot the dogs’ owner, that he tried to break into the postoffice to get his mail, that he ordered a hundred lizards with which to start a lizard farm under the house, that he built fires in the corners of the house and sawed up the furniture for firewood, that he slept in the yard about half the time, and that he carried ice picks, butcher knives, and other weapons, because he thought everyone hated him.

The only medical testimony in the record confirms the view that Counts was insane. His family physician testified that he had never seen Counts when he was mentally competent. A qualified psychiatrist, Dr. Kolb, who was employed by the Veterans Administration, observed Counts from time to time over a period of nine years beginning in 1947. Dr. Kolb concedes that Counts is not mentally defective in the sense of being an idiot or a moron. It is, however, his opinion that Counts is suffering from paranoiac schizophrenia, which so affects his judgment that he is incapable of considering the consequences of a transaction such as the execution of a deed or a will. Less than four months before the conveyance to Zini Dr. Kolb believed that Counts was potentially dangerous and recommended that he be adjudged incompetent and be confined.

On the other hand, the appellant shows that during the years we have-mentioned Counts engaged in many activities with at least the appearance of rationality. It is shown that Counts bought and sold property, executed notes and mortgages, obtained an appointment as a notary public and acted in that capacity, employed an attorney and discussed a proposed lawsuit with apparent understanding, and made brief, unsuccessful attempts to earn a living by mowing lawns and by selling vegetables at a roadside stand. A number of lay witnesses who knew Counts at the time express the opinion that he was sane.

The decisive question is whether Counts was able to comprehend the nature and effect of his deed to Zini. Powers v. Chisman, 217 Ark. 508, 231 S. W. 2d 598. We are unable to say that the chancellor’s answer to this question is contrary to the weight of the evidence. That Counts was afflicted with a serious mental disorder is convincingly established by the testimony of his wife, by the medical evidence, and by the fact that he was judicially declared incompetent a few months before the deed was signed. In a case not unlike this one we held that a man was incompetent even though he appeared to be sane and had succeeded in obtaining substantial loans from banks. First Natl. Bk. of Rogers v. Tribble, 155 Ark. 264, 244 S. W. 33. In the case at bar it is possible to reconcile the testimony, for, as we understand Dr. Kolb’s diagnosis, Counts was able to engage in the various transactions proved by the appellant without comprehending their consequences. This was the view taken by the chancellor, and the record does not warrant our saying that he was wrong.

The other issues are comparatively simple. Zini insists that the appellee was guilty of laches in failing to bring the suit until 1956. Here the statutory period of limitations cannot be used as a yardstick, the rule being that the appointment of a guardian does not set the statute in motion when there is in effect a saving clause, such as Ark. Stats. 1947, § 37-226, permitting the action to be brought within a certain time after the removal of the disability. Funk v. Wingert, 134 Md. 523, 107 A. 345, 6 A. L. R. 1686. Zini did not record his deed from Counts until 1955, and there is nothing to suggest that the guardian had notice of the conveyance until about eighteen months before the suit was filed. During this period there was no change in circumstances that would make the granting of relief inequitable.

The chancellor adjusted the accounts by charging the guardian with the amount of the principal debt to Zini, with Zini’s expenditures for taxes and maintenance, and with, the $300 that Zini paid for the satisfaction of the Butlers’ lien. Zini in tnrn was charged with the sums that he was shown to have collected as rent and as consideration for the granting of options. This statement of the account is essentially correct, for Zini must he regarded as a mortgagee in possession. Mo. Pac. R. Co. v. Frost, 146 Ark. 472, 225 S. W. 645; Holcomb v. Bowe, 154 Ark. 543, 243 S. W. 803; Hughes, Arkansas Mortgages, § 525. It is true that Zini might have been charged with the fair rental value of the land instead of with the sums actually collected, but the trial court’s procedure is not questioned by cross appeal.

We find no merit in Zini’s contention that he is entitled to recover the face amount of the Butler incum-brance rather than the lesser sum that he paid for its discharge, for that holding would result in Zini’s being unjustly enriched. See Rest., Restitution, § 43, Comment cl.

The appellant is right, however, in his assertion that the chancellor erred in refusing to allow interest upon the principal debt and upon the other items of debit and credit that make up the account. Mo. Pac. R. Co. v. Frost, supra. Interest on the principal debt should be awarded at the contractual rate of six per cent, for it does not appear that Zini ever exercised his option to declare the entire debt due, in which event alone the note provided for interest at ten per cent per annum. Interest on the other items in the account should be awarded at the legal rate of six per cent.

With respect to the allowance of interest the decree is reversed and the cause remanded.


author: Paul "Ward, Associate Justice.

text:
    Robinson v. Hammons.
    5-1346
    307 S. W. 2d 857
    Opinion delivered December 2, 1957.
    [Rehearing denied January 13, 1958.]

      Paul K. Roberts, for appellant.

      Clifton Bond, for appellee. Amici curiae; J. H. Bowen, Maurice Cathey, Edward B. Meriwether, Edward L. Wright and Adrian Williamson, Members, Probate Code Committee.
   Paul "Ward, Associate Justice.

Bobbie Jean Robinson, Appellant, came into possession of $1,325 left by her grandfather in 1950 when she was 15 years of age. On November 7, 1950 George W. Hammons, Appellee, who was an undertaker, was appointed guardian of the person and estate of appellant.

On June 24, 1952 appellee, as guardian, filed his verified account in which he charged himself with $1,325 and took credit for various amounts, including $338.00 paid to himself for the burial of appellant’s grandfather and a total of $876.08 paid out in cash and checks to appellant on several different occasions.

On October 18, 1952 appellant by her next friend, filed exceptions to the above mentioned account, claiming, among other things, that a certain receipt for $50.00 was a forgery, and that the book of receipts presented by the gnardian and purportedly signed by appellant was incorrect for various reasons.

The trial court disallowed the $50.00 credit claimed by appellee, but allowed all the other claimed credits.

Appellant’s contention for a reversal may conveniently be grouped under two headings: (a) The trial court was without authority to allow the credits, and; (b) The testimony did not justify the trial court in allowing the same.

(a) Did the trial court have authority to allow the credits'? Appellant says the Court did not have such authority because all the expenditures were made from the corpus of the estate (as opposed to the income from the estate) and that no order of the Probate Court authorized the expenditures before they were made. It is pointed out by appellant (and we agree) that under the old Probate Code, Arkansas Stats. § 57-307, the credits herein allowed would have been unauthorized. This section reads:

“EXPENDITURES. — The probate court may direct a guardian to expend for the maintenance and education of his ward a specified sum, although such sum may exceed the income of the ward’s estate; but, without such direction, the guardian shall not be allowed, in any case, for the maintenance and education of the ward, more than the clear income of the estate. ’ ’

It is admitted that all the allowances herein made by the court and all of the expenditures made by the guardian were made from the corpus of the estate, and it is further admitted that such expenditures had not been authorized by a previous order of the Probate Court.

The very interesting question presented here is this: Does the new Probate Code (Act 140 of 1949) dispense with, the necessity of procuring a directory order (as was the case under said § 57-307) before a guardian can be allowed credits for advances to his ward out of the corpus of the estate for the ward’s maintenance and education?

After a careful examination of the pertinent provisions of the 1949 Probate Code, we have concluded that the above question must be answered in the affirmative. We find that said § 57-307 was repealed by section 235 (a) of the new Probate Code. The section in the new code which appears to be an outgrowth and expansion of said section 57-307, is Ark. Stats. § 57-632, which reads, in all parts material here, as follows:

§ 57-632 . . . “The guardian of the estate . . . may apply to the court for an order directing the guardian ... to apply a designated amount periodically as the court may direct, to be expended in the care, maintenance and education of the ward . . . In proper cases the court may order payments of amounts directly to the ward for his maintenance or incidental expenses. The amounts authorized under this section may be decreased or increased from time to time by direction of the court.”

It will be noted that the strong prohibitory language contained in the former section is not brought forward in the latter section. We believe this omission is significant, and can only be interpreted as an intent by the authors of the new code not to carry the said restrictive provisions forward. The intention on the part of the authors apparently is reflected in the “Committee Comment” following said section 57-632. It reads: “The foregoing is an expansion of the somewhat limited authority provided in . . . § 57-307 . . .”

We note moreover that in § 57-633(b) “Income” and “Principal” are treated equally available to the guardian for maintenance and education. The argument is advanced that § 57-633 (c) contains substantially the same restrictions found in § 57-307 above mentioned. This argument is predicated on the following language found in the last sentence of § 57-633 (c) which reads: “If the income is not snfficient to care for, maintain and educate the ward and his dependents, the court may order the expenditure of such portion of the principal as it from time to time finds necessary for such purposes.” However a careful reading of sub-section (c) shows plainly the absence of the prohibitory language contained in that part of § 57-307 copied above.

Our research reveals some early cases which may seem to hold that, in the absence of any statutory regulation one way or the other, the guardian must receive a prior order before making expenditures from the corpus of his ward’s estate. See Villard v. Robert (1838), 21 So. Car. Eq. 40, 49 Am. Dec. 654; and Patton v. Thompson (1856), 55 N. C. 411, 67 Am. Dec. 222. However a careful reading of these cases reveal that they do not deal with the power or jurisdiction of the Probate Court as we are here. In the Villard case, supra, the court said: “An expenditure made upon an emergency, suddenly arising and acted on by the guardian, might afterwards be sanctioned by the court, where it is proved to have been for the benefit of the ward.” (Emphasis supplied.)

In the Patton case, supra, it is also doubtful if the court was dealing with the same question we are concerned with here, judging from this language: “When a guardian finds that the income of the ward’s estate is not sufficient for his maintenance, it is his duty to submit the whole matter to the consideration of the court, and to act under its directions; if he proceeds otherwise, he acts upon his own responsibility.”

There is also an additional reason why we refuse to follow the above cases as authority for holding that the Probate Court has no power or jurisdiction to approve an expenditure out of the corpus of a ward’s estate without a previous order. In this state, as heretofore stated, we once had a statute which required a previous order but it was deliberately and expressly repealed. Such was not the situation facing the courts in the cases cited above.

Since the decisions in the cited- cases were rendered, the courts of many states have held that a previous order is not necessary (in the absence of a statute like § 57-307 first copied above) to invest the Probate Court with power and jurisdiction to allow a guardian credit for expenditures out of the corpus of his ward’s estate. See: Kelly v. Kelly (1931) 89 Mont. 229, 297 P. 470; Re Clanton, (1915) 171 Calif. 381, 153 P. 459; May v. Skinner, 149 Mass. 375, 21 N. E. 870; and Re Ewing Estate, (1941) 242 Cal. App. 2d 629, 109 P. 2d 748. For other cases, see 130 A. L. R. 117.

By way of dictum our own court has already indicated the conclusion we now reach in the case of Campbell v. Clark, 63 Ark. 450, 39 S. W. 262. In referring to Sand. & H. Dig. § 3604 (which is the same as § 57-307 above quoted), and after holding the statute required a previous order, said: . . . “the court (referring to the probate court), before the passage of this act, could approve such use by the guardian (referring to expenditures out of the corpus of the ward’s estate) without previous application for leave, where the court would have authorized it if application has been made.”

From the foregoing it must be concluded that the trial court did have jurisdiction to allow appellee, as guardian, credit for the several amounts expended. This is not to say that we approve the practice of a guardian making expenditures from the corpus of his ward’s estate without first obtaining an order to do so. If such practice is followed by a guardian he should realize that he does so at his own risk.

Prom what we have said above it must be concluded that the trial court did have the power and jurisdiction to give credit to appellee, as guardian, for the amounts expended. The only remaining question is the one discussed below.

(b) Did the testimony in this case justify the trial court in allowing the credits?

The guardian paid himself $338 out of his ward’s estate for the funeral expenses of appellant’s grandfather. We do not condone the way this transaction was handled as standard procedure for a guardian, hut the trial court was, we hold, justified in allowing credit solely because the appellant ratified it after she became of age.

As to the other expenditures, it was error for the trial court to allow the guardian credit on the showing made in this record. The only evidence in the record to justify the expenditure is the following: (1) The guardian introduced a receipt book containing 30 separate receipts (not counting one for $50 disallowed by the trial court) signed by appellant ranging in amounts from $10 to over $60; (2) Bystanders’ “affidavits” to the effect that appellant testified she went by her guardian’s office on her way to school each morning, and would get. small amounts in cash — usually 50 cents or a dollar, that appellant signed some of the receipts in blank, that she did not receive the amounts shown in the several receipts, and that she lived with friends and paid $10 per month board, and further that she asked the court to require the guardian to make an accounting. The record shows that practically all of appellant’s estate was disposed of by the guardian from November 25, 1950 to June 16, 1951, or a period of a little more than six months.

Under the above state of the record we think the trial court erred in allowing all the credits in controversy. The guardian did not meet the burden imposed on him by Merritt v. Wallace, 76 Ark. 217, 88 S. W. 876 or by Ark. Stats. § 57-624(b) which imposes upon a guardian a duty “to exercise due care to protect and preserve” the estate of his ward, and which says that, to the extent applicable, “the law of trusts shall apply to the duties and liabilities of a guardian . . .”

The cause is therefore reversed and remanded with directions to proceed further not inconsistent with the views herein set forth.

Robinson, J. dissents.


author: Paul Wakd, Associate Justice.

text:
    Westlake v. Duncan, Dieckman, and Duncan Mining Co., Inc.
    5-1389
    307 S. W. 2d 220
    Opinion delivered December 2, 1957.

      Collins, Edwards, Core & Collins, for appellant.

      Nabors Shaw, for appellee.
   Paul Wakd, Associate Justice.

The principal issue involved on this appeal may be stated as follows: Where a public road way has been established by prescription over which wagons and automobiles have passed for several years, does the use of such road by heavy trucks hauling manganese ore constitute such an extra burden that it should be prohibited? Further issues involved will also be considered.

Appellant, N. C. Westlake, owns and resides upon land in Polk County near state highway No. 8, which land he purchased in 1950. A road leaves highway No. 8 and runs across appellant’s property and thence in an easterly direction passing near where appellee is carrying on certain mining operations. In 1956 appellant placed a wire gap gate on the road and attempted to close tlie same, or to reduce and restrict the use thereof. Appellee sought and received injunctive relief as a member of the public entitled to the benefits of the prescriptive right to the road.

The record contains a great deal of testimony regarding the usage made of said road over the past 50 years. Appellee introduced the testimony of several witnesses tending to show that the public had used the road adversely for more than 7 years, and that consequently the public had acquired the right to use the same as a public highway. It is not necessary to set out this testimony or the testimony introduced to refute the same, because, on this appeal, appellant apparently concedes the establishment of such a public highway. We make the above statement for these reasons: Appellee, at the beginning of its argument, makes the statement that “Appellant in his brief concedes that the public has acquired a prescriptive right to use the road way in question;” and appellant does not refute this statement in his reply brief. Also, none of the points relied on by appellant for a reversal question the court’s finding that a public highway had been acquired by prescription.

Appellant sets out five distinct and different grounds for a reversal, but because of the view which we take of the matter, it will be necessary for us to discuss only three of these points, which are: 1. Appel-lee had no right to subject the highway to any use other than that type of use which gave rise to the prescriptive right in the first instance; 2. Appellee failed to prove the existence of an obstruction of the highway; 3. Appel-lee failed to prove the course and boundaries of the highway over appellant’s land. We shall now discuss these points mentioned in the order above.

One. Appellant raises the very interesting question that, although it be conceded that the public had acquired a right of way over the appellant’s land, appellee had no right to impose a greater burden on the prescriptive right of way than the usage which created the right of way. The testimony shows that the road in question liad been used by people traveling on foot, on horseback, in wagons and in automobiles, but that appellee was running heavy trucks over the road in order to haul manganese ore from its mine to highway No. 8. Without setting forth the testimony in order to determine whether or not appellee’s usage of the roadway created a greater burden than the former usage, it may be conceded for the purposes of this opinion that appellee’s usage of the road did amount to an increased burden. The interesting question is whether or not this fact justified appellant in closing the roadway.

Appellant relies upon several early authorities to substantiate his contention, but an examination of these authorities seems to reveal that the prohibition against an increased burden relates only to a private easement. One of the cases cited by appellant (Ballard v. Dyson, 127 Eng. Sep. 841) dealt with a building which had formerly been used as a stable and the question was whether it could be used as a slaughter house. In another ease (Lynch v. White, 85 Conn. 545, 84 Atl. 326) the court was dealing with a walk-way in connection with a public garage. We find from our search of these and other authorities that our courts do recognize the well established principle that, in case of a private easement, as contrasted with a public highway, it is not permissible to impose a burden which is greater than the use which brought the private easement into existence. We do not find, however, that the same rule has been applied to a public highway acquired by prescription. Although our own court has not heretofore made the clear cut distinction we have indicated, we think it logically exists and should now be recognized. Once highways have been acquired by prescription for public use, they should be open for all uses reasonably foreseeable. This thought is expressed by Elliott on Roads and Streets, 4th Edition, Vol. 1, page 14, where it is stated that roads generally used by the citizens of a locality, but open to the general public, are public roads, although they may afford facilities for travel to only such persons as reside in the neighborhood and may not be useful to the general public. It is, however, essential that such a road should be one open to the public, and free and common to all citizens. Following the above the author recognizes that there should be a limit to the burden which can be placed even on a public highway. This limit, he says, should be that the burden does not destroy the purpose for which such road is normally and generally used. We think this limitation is both logical and reasonable.

Two. We cannot agree with appellant that there was a failure to prove the existence of an obstruction to the roadway. The Chancellor found, and we agree, that appellant placed barbed wire gates across the road. in 1956, and that he refused to remove them. This constituted an interference with the right of the general public and with the right of the appellee in particular to travel over the said road.

Appellant, however, points to the ease of Wynn v. Hale, 227 Ark. 765, 301 S. W. 2d 466. In that case the Chancellor had ordered Wynn to remove a gate from across the highway, but this court reversed the holding saying “We have concluded that the court erred in holding that the gates and cattle guards were obstructions and should be removed.” We agree that the holding in that case appears to be in point and is in support of appellant’s contention here. However, there is this distinct difference which does not plainly appear from a casual reading of the opinion. In the cited case the gates were not across the main highway. The record shows there were cattle guards on the main highway, but there was a side road going around the cattle guard, and that this was the road which was closed by the gate. Of course that is not the situation in the case under consideration.

Three. Appellant states that “The burden was upon the plaintiff (appellee) to prove that a prescriptive right to use the road existed in the public at the time suit was filed and failed to do so.” Apparently appellant meant that appellee did not accurately describe the location of the road. If that is what is meant then we cannot agree with him. In fact this was not made an issue at the trial. At any rate all of the testimony shows without doubt that there was only one road which all the witnesses were talking about and that is the one involved here. Under this same heading however appellant makes the statement that the burden was upon the appellee to prove that a prescriptive right to use the road still existed, and that they failed to do so. This question is fully answered by the findings of the Chancellor which are, we think, amply sustained by the testimony in this ease. There is no convincing proof that the road had been abandoned for a period of seven years.

In view of what we have heretofore said, it follows that the decree of the trial court must be, and is hereby, affirmed.

Affirmed.


author: Oarleton Harris, Chief Justice.

text:
    Holland v. C. T. Doan Buick Co.
    5-1404
    307 S. W. 2d 538
    Opinion delivered December 9, 1957.

      Douglas Bradley, for appellant.
    No brief filed by appellee.
   Oarleton Harris, Chief Justice.

This appeal relates to whether a contract for the sale of an automobile was usurious. On September 11, 1955, Ode Holland, appellant herein, purchased from appellee a used Buick for the sum of $400. As down payment, he traded in a Hudson automobile for which he was allowed $100. Fire, theft, and other car insurance amounted to $46.10; interest on the $346.10 was figured as $19.78. This totaled $365.88, which was to be paid in forty-eight weekly payments . . . forty-seven at $7.62, and the final payment at $7.74, with the first weekly payment due September 17, 1955. After making sixteen weekly payments, appellant defaulted; Doan instituted suit on July 20, 1956, for the balance due ($243.96), and attached the Buick in aid of judgment. Appellant defended the suit by alleging, among other defenses, that the original contract provided for more than 10 per cent interest, was accordingly usurious, and cross complained, seeking cancellation of the contract and judgment for payments already made. This defense was raised on September 1, 1956. The cause was tried by the court on February 21, 1957. Both sides rested, but during closing argument, appellee, with permission of the court, and over the objection of appellant, reopened his case for the purpose of pleading a mistake in calculation of interest, and offered to remit any excess charged. On April 16,1957, the court entered its judgment for $236.73 in favor of appellee, and further found that “* * * any interest charge in the original contract which was in excess of ten per centum per annum resulted from an unintentional error of plaintiff in calculating the interest and that plaintiff had no intention of charging, exacting or collecting interest in excess of ten per centum per annum. * * *” Fom such judgment comes this appeal.

The contract is usurious; the question therefore is whether, under the circumstances, from both a legal and factual standpoint, it can he said that there was substantial evidence to support the finding by the court. The evidence introduced (on the question of usury) by appellee consisted solely of his own testimony to the effect that the excess charges were the result of an unintentional mathematical error in calculating the interest, and the introduction of a chart (which will be subsequently referred to) which he stated he used in making his computations. In the cases of Cox v. Darragh Co., 227 Ark. 399, 299 S. W. 2d 193; Whiddon v. Universal CIT Credit Corporation, 227 Ark. 824, 301 S. W. 2d 567; and Griffin v. Murdock Acceptance Corporation, 227 Ark. 1018, 303 S. W. 2d 242, we held that though usurious charges had been exacted, they were the result of a mistake, and there had been no intention to charge interest in excess of 10 per cent. However, there was one notable difference between those cases and the one at Bar ; namely, the lender in the cited cases notified the borrower that a mistake had been made, and credited, or offered to credit, the borrower’s account with such excess charge. Here, no such offer was made until after both sides had rested, and the case had been reopened; this despite the fact that the defense of usury had been pleaded by appellant on September 1. On September 18, appellee filed a reply to the amended answer and cross complaint of appellant, wherein Doan denied each and every material allegation of the cross complaint, and reiterated the prayer of his original complaint. Accordingly, though the contention was very clearly brought to his attention, no offer of remittance was made, nor defense interposed that said charges were the result of an unintentional error. This, to us, is a most significant fact in the litigation.

Nor can we say that this was a matter of mathematical miscalculation. Appellee never did state positively how he arrived at the amount of interest; he had a blue hook (chart)'^furnished by GMAC, which supposedly set out the proper amount of interest for various principal sums. This chart, or table, was compiled on a monthly basis, and appellee, apparently in trying to reduce the amount of interest to a weekly basis, considered four weeks as a month, and accordingly charged interest on the basis of one year (52 weeks) instead of 48 weeks, as per the contract. The amount arrived at, figured on that basis, would seem to be correct, and Doan intended to receive that amount of interest. As early as 1883, in the case of German Bank v. DeShon, 41 Ark. 331, this Court, in an opinion by one of its most learned jurists, Judge Battle, said:

“* * * To constitute the corrupt agreement said to be necessary to constitute usury, it is not necessary that there be an actual intent to violate the statute or constitution. Where parties to a contract for a loan knowingly agree to pay and receive more than ten per centum per annum for the use of the money borrowed, this, in the sense of the law is a corrupt agreement. If it be the real intention of the parties to receive or reserve a given rate of interest, and that rate proves to be usurious, the contract will be void for usury, whether the parties knew the interest to be usurious -or not * * * ”

In Corpus Juris Secundum, Volume 91, page 585, Section 14, Subsection C, we find:

“The intent which enters into, and is essential to constitute usury is simply the intent to take and reserve more than permitted by law for the loan. While there are statements to the effect that to constitute usury the taking must be willfully and knowingly corrupt, and that, where the statute requires that the interest be knowingly taken or charged, there can be no usury unless the excessive interest is charged or received with the knowledge that it is prohibited by law, by the weight' of authority usurious intent is implied if excessive interest is intentionally taken or reserved.”

Our statute, of course, does not provide that the taking must be “willfully and knowingly corrupt.

In other words, in this case, it was not a mistake made by erroneous figuring; it was not a matter of declaring one sum due when actually another amount was intended. The amount was arrived at because the wrong formula was used, though appellee, of course, knew there wore 52 weeks in a year. As a hypothetical case, let us say that one loaned money honestly thinking that the legal interest rate was 12 per cent, and figuring interest on that basis. Upon suit being instituted to declare the contract void for usury, he might well plead that he made an honest mistake, that he had no desire to exact more than the legal rate of interest, but that he simply thought 12 per cent was the legal rate. It would hardly be argued that such a reason was valid, or that it would excuse a usurious charge. Of course, one is charged with knowledge of the law; we think it just as reasonable that an intelligent man be charged with the knowledge of the number of weeks in a year. In the case of Brooks v. Burgess, 228 Ark. 150, 306 S. W. 2d 104, decided by this Court on October 28, 1957, Burgess had made a usurious charge. Quoting from the opinion:

* * In attempting to excuse his practice the witness stated that he had no training in accounting, that he was under the impression that he was charging the interest rate prescribed by the mortgages, and that he offered to correct the account when he learned that his charges were unlawful. It is now argued that the lender merely made a mistake of fact in the calculation of interest. Since suit was not actually brought on the usurious account it is contended that the mortgages should be enforced according to their terms.

Wo do not find this reasoning impressive. * * * ” It was pointed out that, at the most, Burgess made a mistake of law, that of thinking his method of charging interest was lawful.

One of two conclusions must be reached; either ap-pellee did not know how to figure the interest, or else he carelessly figured same. In neither instance could the excessive charge he legally justified or excused. If the former were true, he should have had his calculations checked by one who was familiar with figuring interest. If the latter, appellee should have been even more careful in this instance, for he was dealing with a man who could neither read nor write.

It is concluded that the contract entered into by Doan and Holland was usurious, and should therefore be cancelled.

The judgment of the Circuit Court is accordingly reversed, and the cause remanded with directions to cancel the contract sued on, and to enter judgment for appellant in a manner not inconsistent with this opinion.

Justices George Rose Smith and Ward dissent.

       GMAC would' not handle the contract and Doan sold it to the Peoples National Bank; upon default, Doan paid the bank and took up the contract.

       Judgment was also sought on an additional indebtedness of $13.72 which was confessed by Holland.

       Such other defenses have now been abandoned and it is unnecessary to set out same.

       Judgment was also entered for the $13.72 mentioned in Footnote 2, and interest thereon.

       Interest figures 11.95%.

       Article 19, Section 13, Arkansas Constitution of 1874. Section 68-602, Arkansas Statutes Annotated, 1947.


author: J. SeaborN Holt, Associate Justice.

text:
    Moore v. Long-Bell Lumber Co.
    5-1388
    307 S. W. 2d 533
    Opinion delivered December 9, 1957.

      Nabors Shaw, for appellant.

      Shaw, Jones & Shaw, for appellee.
   J. SeaborN Holt, Associate Justice.

Appellant, John D. Moore, filed a claim with the Arkansas Workmen’s Compensation Commission, against appellee, Long-Bell Lumber Company, Inc., for compensation benefits under our Workmen’s Compensation Law,— § 81-1301 — 81-1349, Ark. Stats. 1947, — for an injury received on December 7, 1953 while skidding logs. Long-Bell controverted the claim on the ground that Moore was not in its employ at the time of his injury.

On a hearing before a single commissioner, the claim was denied on a finding by the commissioner that Moore was not an employee of Long-Bell at the time of the injury. The full commission upheld the action of the single commissioner and on an appeal to the Polk Circuit Court that court affirmed the decision of the commission. Prom the judgment is this appeal.

For reversal appellant says: “It is Moore’s contention that he was an employee of Long-Bell when he was injured. It is Long-Bell’s contention that Moore was an employee of Harry Yaught, who it is contended was an independent contractor. If Harry Yaught is an independent contractor, then Moore cannot recover from Long-Bell, ... . ” The question presented, says appellant, then “is whether Vaught was an independent contractor, at the time of the injury.”

There appears to be little, if any, dispute as to material facts. The commission in its “Statement of the Case” said: “Claimant bases his contention upon the following: That on or about the 2nd day of October, 1953, Mr. Leon Hall, representative of the Long-Bell Lumber Company in the Mena, Arkansas, area, purchased a tract of timber from Mr. Logan Simpson and others; that a timber deed was given by Logan Simpson and others to the Long-Bell Lumber Company; that two checks were given by the Long-Bell Lumber Company, in the amount of $300.00 each, for the payment of said timber; that said timber deed was never recorded. Claimant further contends that Mr. Harry Yaught, who cut and removed the timber, did not have and was not an independent contractor during the removal of the timber, that Harry Yaught was an employee of the Long-Bell Company and that claimant was also an employee.

‘‘Respondent contends that Mr. Harry Vaught was an independent contractor; that it was his business to purchase tracts of timber, cut them, and deliver to various companies in the area; that'it is the general practice in the timber industry for a lumber company to finance the man who is cutting and delivering the logs. That in this particular case the tract of timber on the Simpson land was discovered respectively by Mr. Hall and Mr. Vaught. That Mr. Hall arranged with Mr. Vaught to purchase this tract of timber for $600.00. That the timber deed was issued to Long Bell Company merely as a security transaction, to secure the investment that they were making. That the records of the Company show that the $600.00 was charged to Harry Vaught. That as the timber was cut and brought into the yard of the Long-Bell Lumber Company, Vaught was given credit against the indebtedness for each load. That Mr. Vaught hired or contracted with Mr. Columbus Campbell to help in cutting and skidding the logs. That Mr. Campbell in turn hired claimant, John D. Moore, to help him.”

Following this statement is what appears to us to be a fair summation of the facts. “Mr. Logan Simpson testified that he made the timber deed out to Long-Bell Lumber Company; that Mr. Hall told him that Mr. Vaught was to get the timber. Mr. Simpson further testified that he supposed he would have held Long-Bell Lumber Company responsible for carrying out the terms of the timber deed.

“Mr. Harry Vaught testified that Mr. Leon Hall, representative of Long-Bell, told him about the Simpson tract of timber; that they went and looked at it together and that he took the deal with the understanding that he would make a profit if and after he had paid back the $600.00 to Long-Bell. That after he had paid back the $600.00 to .Long-Bell, he sold some of the timber to another lumber company. That at the time claimant was hurt he had paid back about $300.00 of the $600.00 purchase price, to Long-Bell. That he contracted with Mr. Campbell to.give him fifteen per cent of the value of the logs when sold for skidding the logs. That Mr. Campbell hired Mr. Moore, the claimant, to help him and that claimant was paid on a percentage by Mr. Campbell. That when the logs were bought by Mr. Delmer Fair, who testified that he was an independent buyer on the Long-Bell yards, they would deduct one-third or 35 per cent, which would be applied on the $600.00 debt. Mr. Vaught further testified that on one occasion Mr. Hall told him to go back and cut timber on a certain part of the tract, but that at all times he figured he was in charge of the whole operation.
“Mr. G-us Pollard testified that he hauled the timber on this particular job; that he was paid twenty or twenty-five per cent for this hauling. That he was paid most of the time by Mr. Delmer Fair when he delivered the logs; that he was not hired for any particular length of time and could have quit at any time. That he finally did quit the job when he could not make expenses out of it.
“Mr. Columbus Campbell testified that he went to work on the Simpson tract of timber after Mr. Harry Vaught came out to make the arrangements; that he was to get fifteen per cent for skidding the logs and posts; that he needed help to do the job and that he got John D. Moore, claimant, to help him; that he furnished the mules and feed and gave claimant Moore one-fourth of the fifteen per cent that he received. That he could have quit anytime he wanted to and that Mr. Vaught was the foreman of the woods. That he saw claimant get his leg broken on the job while working in the woods on the 7th day of December, 1953. That he quit work before the job was completed.
“Claimant, John D. Moore, testified that Columbus Campbell and Harry Vaught came and asked him to help with the skidding of the timber; that he was to get one-fourth of the fifteen per cent that Mr. Campbell received; that he averaged $25.00 per week working on this particular job. That while pulling a log with a mule the log flew back and hit his leg breaking it; that Mr. Vaught arranged to get him to the hospital in Mena, Arkansas, that he was treated there and was taken to the Veterans Administration Hospital in Little Rock, Arkansas, for treatment, when Mr. Harry Vanght came hack and told him there was no insurance. That he has been receiving treatment since the date of his accident and is still under the care of the Veterans Hospital. Said medical reports having been introduced as evidence into the record.
“Mr. L. 0. Moon, Manager of the Three States Lumber Company, at Mena, Arkansas, testified that he bought timber from Harry Vaught during the time that he was working on the Simpson tract of timber. That Mr. Vaught told him that Long-Bell did have an interest in the timber but that he had paid them off. That his company had advanced or put up money for Harry Vaught to work off a timber tract. That this is the normal practice in the lumber industry.
“Mr. Delmer Fair testified that he buys posts and poles; that he operates his business on the Long - Bell Lumber Company yard; that he buys poles and pays for them by his individual check and then when the pole is peeled he sells them to Long-Bell. That when he pays for timber or poles, he gives his personal check and he usually asks how they want the check made out; that he vrill make out the check to the different ones for the percentages they have in the work. That if he does not get a good grade on the poles ho would lose money; that if the poles burned they would be his responsibility until they are sold to Long-Boll. That he deducted the money owed to Long-Bell on the $600.00 debt and paid this over to the Company and then would pay Mr. Vaught for the timber. That on a number of occasions Mr. Vaught would ask him to make out the checks for the different percentages for skidding and hauling and that he would do this to accommodate Mr. Vaught. That he sells poles and posts to other companies other than Long-Bell; that he is not on the payroll of Long-Bell; that he uses his own money to buy poles.
“Mr. Leon Hall testified that he was the manager of the Long-Bell Lumber Company in Mena, Arkansas. That Mr. Harry Vaught is not an employee of the Company; that Columbus Campbell and claimant, John D. Moore, are not employees of the Company. That he heard that Mr. Simpson had a tract of timber for sale and that he knew Mr. Vaught was not employed and that he had loaned him money in past transactions. That he took Mr. Vaught out to see the tract of timber and told him he could cut this and pay back the $600.00 purchase price and make a profit. That he issued the drafts made payable to Logan Simpson for the tract of land, but on the face of the checks was noted, ‘Advanced to H. H. Vaught on timber.’ That it was necessary to show an advance to Mr. Vaught so that the home office could set up a charge to Vaught. That he had dealt with Mr. Vaught- before and that there was no written agreement on the loan. That the timber deed was taken for security reasons in view of the fact that no written agreement was made. That the Company considered the timber belonged to Mr. Vaught; that they would have held him responsible to pay back the $600.00, and that they have had this happen on other occasions. That he did not have anything to do with the way the timber was cut nor in a supervisory capacity. A ledger sheet was introduced in evidence showing the payments credited to Harry Vaught on the payment of the $600.00 advanced on the Simpson tract. That no social security, unemployment, insurance nor tax deductions were made on claimant or any other men working on the Simpson tract; that they were never paid by any checks drawn on the Long-Bell Lumber Company. That Long-Bell did not furnish any tools, equipment, trucks or any kind of equipment on the Simpson tract. That he did not specifically tell Harry Vaught what sizes to cut from the Simpson tract other than to furnish him with the type of material that the Company was buying at that time, and that this is the common practice to tell a producer. ’ ’

As indicated, on the above facts, the commission found that Moore was not an employee of Long-Bell at the time of his injury, but was an employee of. Vaught, an ind,ep'endent'contractor; '.Under our well established rule, since the enactment of our Workmen’s Compensation Law, we have consistently held that the findings of the commission are entitled to the same verity as would attach to a jury’s verdict and that the circuit court on appeal to it, and this court, must affirm if there is any substantial evidence to support the commission’s finding, and we think there was such substantial evidence shown here. See J. L. Williams & Sons v. Smith, 205 Ark. 604, 170 S. W. 2d 82; Baker v. Silaz, 205 Ark. 1069, 172 S. W. 2d 419; Hughes v. Tapley, 206 Ark. 739, 177 S. W. 2d 429; Fordyce Lumber Company v. Shelton, 206 Ark. 1134, 179 S. W. 2d 464.

In Wren v. D. F. Jones Const. Co., 210 Ark. 40, 194 S. W. 2d 896, we used this language: “Under our Workmen’s Compensation Law the Commission acts as a trier of the facts — i. e., a jury — in drawing the inferences and reaching the conclusions from the facts. We have repeatedly held that the finding of the Commission is entitled to the same force and effect as a jury verdict. In Ozan Lumber Co. v. Garner, 208 Ark. 645, 187 S. W. 2d 181, in affirming the finding of the Commission to the effect that the worker was an independent' contractor and not an employee, we said: ‘We are not concerned here with the preponderance of the testimony. After a careful review of the entire record,- we have reached the conclusion that there is substantial evidence presented to support the Commission’s finding that ap-pellee, at the time of his injury, was an independent contractor.’ ” See also Springdale Monument Co. v. Allen, 216 Ark. 426, 226 S. W. 2d 42.

It appears that no hard and fast rule may be laid down to determine whether a -workman is an employee or' an independent contractor. Each case must be determined on the' facts presented. “The most important test in determining whether a person employed to do certain work is an independent contractor or a mere servant is the control over the work which is reserved by the employer. Whether one is an independent contractor depends upon the extent to which he is, in fact, independent in performing the work. Broadly stated, if the contractor is under the control of the employer, he is a servant; if not nnder such control, he is an independent contractor.” 27 Am. Jur. 486.

The comparatively recent case of Lockeby v. Ozan Lumber Co., 219 Ark. 154, 242 S. W. 2d 115, appears to he directly in point. In this Lockeby Case, which presented a fact situation even stronger in favor of the appellant in that case, we held that the injured employee there, Lockeby, was not an employee of the Ozan Lumber Company when injured, but was employed by an independent contractor. We there said: “Under our decisions, such as Ozan Lumber Co. v. Garner, 208 Ark. 645, 187 S. W. 2d 181, the facts that we have narrated are sufficient to support the Commission’s conclusion that Lockeby was not an employee at the time of his accident. The distinction between an employee and an independent contractor has been well established by our decisions. With knowledge of those decisions the Legislature has not seen fit to broaden the coverage of the Act; instead the statutory definition of an employee has remained unchanged. When the original Act was repealed and a new statute adopted in 1948 the definition of an employee was reenacted verbatim. Ark. Stats. 1947, § 81-1302.

. “It is argued, however, that the lumber company’s method of operation after 1945 was merely a colorable arrangement to avoid liability for torts and workmen’s compensation. No doubt the company was motivated by a desire to reduce its liability in those respects, but that fact is not decisive of the issue. The real question is whether, under the new arrangement, the company actually retained that supervision and control that marks the contract as one of employment, regardless of its form. There is substantial testimony to sustain the Commission’s conclusion that such supervision and control were not retained by the company.”

We conclude, therefore, that there was substantial evidence to support the commission’s finding that Moore was not an employee of appellee when injured. Affirmed.

Justice Millwee and Justice RobiNsoN dissent.


author: J. Seabork Holt, Associate Justice.

text:
    Sellers v. Brown.
    5-1431
    307 S. W. 2d 543
    Opinion delivered December 9, 1957.

      Langston & Walker and Wayne Foster, for appellant.

      S. L. White, for appellee.
   J. Seabork Holt, Associate Justice.

This is the second appearance of this case here. On the former appeal there was involved the title to the Assembly of God Chnreh at 20th and Broadway, Little Rock, Arkansas, Sellers v. Brown, 225 Ark. 989, 287 S. W. 2d 471. In that case we held in effect that the Reverend Sellers, appellant, was a trustee for the church and that title to said property was in the church. We further held on a cross-appeal that the church had no interest in property acquired by Sellers located at 5010 Midland Road, Little Rock, Arkansas, on which property, appellees are here seeking receivership and lien. Our former opinion recites: “Sellers purchased this site at 20th and Broadway for a total sum of $40,000, of which $23,000 was paid in cash and a mortgage assumed for the balance, and began construction on the new church. Sellers made a contract with one Graham Harp to furnish the material and supervise the building of a church structure. This contract was approved by a meeting of the church until the funds became exhausted. At the time of the trial, there were outstanding liens, including the mortgage, in excess of $21,000. Unsecured debts amounted to more than $35,000. Sellers has resigned as pastor of the church and the appellees, as the official board of the Central Assembly of God Church of Little Rock, brought this suit against Sellers and his wife to divest them from title to the (church) property.”

It appears that while the former appeal was pending, two lien holders for materials furnished secured judgments against Reverend Sellers and the church. The church, in an effort to complete the building of the church, borrowed money from its parent organization, The General Council of Springfield, Missouri, to be used in discharging labor and material-men’s liens and for completion of the church. As a condition for the loan The General Council required that all discharged liens be assigned to H. E. Shaw as its trustee. At this stage appellees Brown, and Shaw as trustee, filed “Affidavit for General Attachment ’ ’ in which they alleged: ‘ ‘ Plaintiffs Durwood Brown et al., as trustees for the Central Assembly of God Church, allege judgments against the defendants, Robert C. Sellers and Virginia Sellers, his wife, in the total amount of $108.06 on an Order on a mandate of the Supreme Court of Arkansas entered April 32th, 1956, and that defendants are non-residents of the State of Arkansas and the owners of valuable property and assets in Pulaski County. Plaintiff H. E. Shaw, Trustee, alleges the assignment to him of judgments against the defendants in the sums of $1,805.03 and $1,269.89, recovered by Katterjohn Concrete Products Company, Inc., and Gregg Hamilton, Trustee in Bankruptcy, respectively, on July 18th, 1955 and July 19th, 1955, respectively, a total of $3,074; the same being just claims which he is entitled to recover, and by virtue of which he claims a lien upon valuable property and assets of defendants in Pulaski County.” They prayed for an Order of Attachment against Sellers and the appointment of a receiver.

On a hearing the trial court declined to rule on whether the judgments against (the Sellers) appellants were enforceable but found that the appellees were entitled to relief and granted appellees’ prayer for the appointment of a receiver and master. Tlie finding contained this language: ‘ ‘ Though the plaintiffs, and Shaw, Trustee, originally filed an Affidavit for an Attachment, and are entitled to relief, the Court deems it best and proper to try and protect the equities of all parties herein interested in said property, and after due consideration is of the opinion that the appointment of a Receiver and Master will better serve the ends of justice. ’ ’

It appears to be undisputed that the lien-holders had. acquired valid liens against the property of the church for materials and labor furnished in the construction of the church. The judgments were entered against Sellers and the church jointly and of course would ordinarily have been enforceable against Sellers’ individual property. But Sellers contends that the church in effect paid the judgments, through the agency of its parent organization, and that in the circumstances the church is not entitled to assert what is in substance a claim for comtribution against Sellers, since the church received the full benefit of the labor and materials that the judgments represent.

We think that the trial court erred in refusing to rule upon the material and vital issue presented, .which, as indicated, was whether the judgment liens involved were enforceable against the property of the Sellers (appellants), and that the appointment of a receiver was, in the circumstances, premature. Accordingly, the decree is reversed and the cause remanded with directions to proceed in a manner consistent with this opinion.