author: George Rose Smith, Justice.

text:
    Cox v. State Farm Fire & Casualty Co.
    5-3729
    398 S. W. 2d 60
    Opinion delivered January 17, 1966

      E. Clay Robinson, for appellant.

      Dobbs, Pryor and Dobbs, for appellee.
   George Rose Smith, Justice.

This is an action by the appellants upon a fire insurance policy issued by the appellee. The policy provided coverage of $10,000 upon the appellants’ dwelling and $4,000 upon unscheduled personal property. The dwelling and its contents were damaged by fire in 1964. The insurer paid the full limit of its liability for unscheduled personal property and paid $5,220.14 for damage to the dwelling.

The only item now in dispute is damage of $335.01 to a wall-to-wall carpet. The homeowners contend that the carpet was a fixture, so that its loss falls within the coverage upon the dwelling. The trial court held, however, that the carpet was personal property, for the loss of which the insurance company had discharged its maximum possible liability of $4,000.

All the facts were stipulated. When the plaintiffs bought the house the downstairs floors were covered with wall-to-wall carpeting that had worn out. About a month before the fire the plaintiffs moved this carpeting upstairs and replaced it with new carpeting downstairs. The new carpet was specially cut to fit the house; its effect in enhancing the value of the house was greater than its resale value. It was attached to the floor with tacks around the edges and could have been removed without damage to the house.

The hardwood floor under the carpet had been patched with unfinished boards. It was stipulated that the plaintiffs (if permitted to do so) would have testified: (a) That if they had removed the carpet to use the bare floor they would have relaid and refinished parts of the floor; (b) that in laying the carpet they meant for it to become part of the house; and (c) that if they should sell the house it would be their intention to sell the carpeting along with the building.

The case was tried by the court sitting without a jury. Even though there was an agreed statement of facts the court’s judgment has the binding effect of a jury verdict if there were inferences and conclusions to be drawn from the stipulated proof. Robson v. Tomlinson, 54 Ark. 229, 15 S. W. 456 (1891). Thus the question is whether it must be said as a matter of law that the wall-to-wall carpeting was a fixture. In many cases we have held such an issue about an asserted fixture to be one for the jury. Thomas Cox & Sons Mach. Co. v. Blue Trap Rock Co., 159 Ark. 209, 251 S. W. 699 (1923); Bache v. Central Coal & Coke Co., 127 Ark. 397, 192 S. W. 225 (1917); British & Am. Mtg. Co. v. Scott, 70 Ark. 230, 65 S. W. 936 (1901).

Here the question was plainly one of fact. It is agreed that the carpeting could have been removed without any damage to the floors. Such ready removability supports the conclusion that the article is not a fixture. See Anderson v. Southern Realty Co., 176 Ark. 752, 4 S. W. 2d 27 (1928). On the other hand, the carpeting was cut to fit this particular house—a circumstance that led the plaintiffs to regard it as so much a part of the dwelling that they would only have sold the house and carpeting as a unit. This determination on their part is clearly not conclusive of the issue. Bookcases, tables, cabinets, and other pieces of stationary furniture are often constructed to fit a particular wall or corner in a particular room. Nevertheless, if they merely stand in place without being permanently attached to the house they are certainly not fixtures as a matter of law, no matter how sincere the owner may be in his determination not to sell the house apart from such custom-built furniture.

Whether wall-to-wall carpeting is a fixture has been considered in a number of other states. The decided majority of the cases have concluded that such carpeting is not a fixture. Plough v. Petersen, 140 Cal. App. 2d 595, 295 P. 2d 549, 55 A. L. R. 2d 1042 (1956); Maas Bros v. Guaranty Fed. Sav & Loan Assn., 157 So. 2d 528 (Fla. App., 1963); Hartford Fire Ins. Co. v. Balch, 350 P. 2d 514 (Okla., 1960); Ruby v. Cambridge Mut. Fire Ins. Co., 358 S. W. 2d 943 (Tex. Civ. App., 1962); Dusenberry v. Taylor’s, 7 Utah 2d 383, 325 P. 2d 910 (1958). Contra: Merchants & Mechanics Fed. Sav. & Loan Assn. v. Herald, 201 N. E. 2d 237 (Ohio App., 1964).

As an alternative argument the appellants contend that, regardless of its character as a fixture, the carpeting should be held to fall within this language in the insurance policy: “This policy covers: dwelling building described in the Declarations, including its additions and extensions, building equipment, fixtures and outdoor equipment pertaining to the service of the premises (if the property of the owner of the dwelling), while located on the premises of the described dwelling or temporarily elsewhere, and all materials and supplies on such premises or adjacent thereto incident to the construction, alteration or repair of such dwelling.”

The appellants stress this part of the quoted clause: . . dwelling building described in the Declarations, including its . . . fixtures . . . while located on the premises of the described dwelling or temporarily elsewhere.” It is argued that the reference to the “dwelling building” is in itself sufficient to encompass everything that is defined by the law as a fixture. Hence, the appellants insist, the further reference to “fixtures” indicates an intention on the part of the parties to refer to something in addition to what the law regards as a fixture. "VVe are cited to the case of Cosgrove v. Troescher, 62 App. Div. 123, 70 N. Y. S. 764 (1901), where the court said that “carpets, window shades, and gas fixtures are movables, and not fixtures.” (Emphasis supplied.)

This argument does not reach the situation presented here. It is true that one may refer, in everyday speech, to an electrical fixture or to a gas fixture without intending to employ the technical legal definition of a fixture. Hence if this case involved such a removable electrical or gas appliance the appellants’ argument might be persuasive. But we are not aware of any usage in everyday speech that refers to a “carpet fixture” or to a “wall-to-wall carpet fixture.” A carpet could at best be called a fixture only in the legal sense, and, as we have seen, the record does not compel us to reach that conclusion of fact.

Affirmed.

Cobb, J., not participating.


source: Caselaw Access Project

author: Paul Ward, Justice.

license: Public Domain

text:
    Hubbard v. Graves
    5-3711
    398 S. W. 2d 69
    Opinion delivered January 17, 1966

      Jeptha A. Evans, for appellant.
    No brief filed for appellee.
   Paul Ward, Justice.

This litigation grows out of a collision between two automobiles on November 23, 1961 in Conway County.

One car, driven by Charles Graves and owned by his wife Irene Graves (appellees herein), was traveling-south on a public highway when it collided with the other car, owned and driven by Burna Dean Hubbard (appellant herein), which was traveling- north when the collision occurred. As a result of the collision Mr. Graves and appellant allegedly suffered personal injuries and Mrs. Graves’ car was damaged.

Appellees filed suit asking $47,000 for personal injuries and $1,000 for car damage resulting- from appellant’s negligence. Appellant filed a general denial and also a counterclaim for $3,000.

A trial before the Circuit Judge, sitting as a jury, resulted in a judgment for $600 in favor of Mr. Graves and $200 in favor of Mrs. Graves, and a dismissal of appellant’s counterclaim. In arriving at the above results the trial court found: “that both, Plaintiff Charles Graves and Defendant Burna Dean Hubbard, were guilty of negligence in the operation of their respective vehicles and that such negligence was the proximate cause of the aforesaid collision. Under the doctrine of comparative negligence the court further finds that the negligence of the Defendant, Burna Dean Hubbard, exceeded that of Plaintiff, Charles Graves, and that the Cross-Complaint of the said Defendant, Burna Dean Hubbard, should be dismissed. ’ ’

On appeal appellant’s only contention is that the findings of the trial court are not supported by the evidence. We are unable to agree with that contention.

First we point out that appellant is in error in her contention the judgments must be supported by a preponderance of the evidence, relying on the case of Smith v. Magnet Cove Barium Corporation, 212 Ark. 491, 206 S. W. 2d 442. This case, being on appeal from Chancery Court, does not state the rule applicable in the case under consideration here where the issues were decided by the circuit judge sitting as a jury. That being true, the judge’s findings must be affirmed if supported only by substantial evidence. Norvell v. James, 217 Ark. 932, 234 S. W. 2d 378 and Salem School District No. 30 v. United Structures, Inc., 232 Ark. 939, 341 S. W. 2d 50. It is our conclusion there is such supporting evidence in the record.

There was testimony tending to show both cars skidded before they collided and that appellant’s car was on the wrong side of the road immediately before the collision. It is true all the witnesses did not agree on just what caused the collision, but the trial court saw and heard the witnesses and was, therefore, in a better position than we are to judge their credibility. There is no contention the amounts of the awards were not supported by substantial evidence.

Affirmed.

Cobb, J., not participating.


text:
    St. Paul Fire & Marine Insurance Co. v. Gray
    5-3733
    398 S. W. 2d 506
    Opinion delivered January 17, 1966
    [Rehearing denied February 21, 1966.]

      Wright, Lindsey So Jennings, for appellant.

      Hall, Purcell So Bosivell, for appellee.
   Paul Ward, Justice.

This litigation has to do with the liability of an insurance company for damage to a diesel tractor caused by fire.

Appellee, Charles C. Gray, sent his tractor to the Arkansas Diesel Service Company to be repaired and while in a building for that purpose a fire occurred, causing the alleged damage. It is agreed that the St. Paul Fire & Marine Insurance Company (appellant) is liable for the amount of damage which is finally adjudicated to be due appellee.

A jury trial resulted in a verdict in favor of appellee for $2,575.85, from which appellant prosecutes this appeal, assigning seven separate points for a reversal.

1. In appellant’s answer it admitted owing appellee $190.88 for damage to the tractor, and now contends that is the only amount supported by the evidence. This contention by appellant is based on the assertion that appellee did not offer in evidence the policy provisions relied on to “establish the amount of his loss.” There is no merit in this contention because appellant, in its answer, admitted issuing the insurance policy covering the tractor and admitted the tractor was damaged while the policy was in effect. Therefore, if there was any provision in the policy which limited the amount of coverage it was the duty of appellant to plead it affirmatively. Stucker v. Hartford Accident and Indemnity Company, 220 Ark. 475, 248 S. W. 2d 383 and Bankers Insurance Company v. Hemby, 217 Ark. 749, 233 S. W. 2d 637.

2. It is argued by appellant “the burden of proving. the policy provisions covering the manner of determination of the extent of the damages” is on appellee. This argument is refuted by what we have already pointed out above. Moreover, the jury arrived at the amount of damages based on the testimony permitted under instructions which we find (hereafter) to be correct.

3. It is here contended the trial court- erred in permitting Elmer Berry to testify relative to estimated cost of repairing the tank, and the cost of new tires and repainting. We find no error. All this kind of testimony, along with other testimony, was admissible for the jury to consider, under proper instructions, in arriving at the amount of damag’es due appellee. See: Home Insurance Company of New York v. Williams, 201 Ark. 460, 145 S. W. 2d 743.

4. It was not error for the court to give appellee’s requested instruction No. 1 (as modified). The issue here raised is the same as the one mentioned and decided under point “1” above.

5. Appellant objects to the giving of appellee’s instruction No. 5 on the ground that it allowed the jury to “determine the difference in the fair market value of the plaintiff’s vehicle immediately before the fire and the fair market value of plaintiff’s vehicle immediately after the fire.” This kind of instruction was approved in the Williams case, supra, and Slaughter v. Barrett (decided November 15, 1965), 239 Ark. 957, 395 S. W. 2d 552, and cases therein cited.

6. The trial court refused to give appellant’s requested instruction No. 1A, and this is alleged by appellant to be error. We do not agree. The requested instruction reads as follows:

“You are instructed to return a verdict for the plaintiff in such amount as you find from a preponderance of the evidence represents what it would have cost on July 25, 1964, to repair or replace such parts of the vehicle as were damaged by fire with others of like kind and quality, with deduction for depreciation. ’ ’

The proposed instruction is too restricted in that it limits recovery to the cost of repairs. This would be contrary to our holding in the Slaughter case, supra, where we approved the following statement:

“The effect of our holdings ... is that proof of repairs is sufficient if, when considered with the other evidence adduced, it is shown to fairly represent the difference in market value before and after the injury.”

7. The trial court refused to instruct the jury it could not “consider loss of or damage to the transmission of the vehicle,” and appellant says this constituted reversible error. Again, we are unable to agree with appellant. It is true that the testimony is conflicting and somewhat confusing as to what happened to the truck’s transmission. It does appear that the transmission was removed from the tractor before the fire, but it is not clear from the abstracted record what final disposition was made of it. The president of the Arkansas Diesel Service Company said it was worth only ninety cents. Appellee’s testimony was to the effect that the old transmission was not worthless, that he never got it back, and that he got another transmission which was damaged by the fire. Under the circumstances and the state of the record we think the trial court was correct in permitting the jury to consider this testimony for what it is worth and weigh it along with all the other testimony.

In view of all we have heretofore said the judgment of the trial court must be, and it is hereby, affirmed.

Cobb, J., not participating.

George Rose Smith, J., on petition for rehearing, voted to reverse the judgment.


author: Jim Johnson, Justice.

text:
    Murley v. Murley
    5-3713
    398 S. W. 2d 68
    Opinion delivered January 17, 1966

      Wright, Lindsey & Jennings, for appellant.

      Fred Newth, for appellee.
   Jim Johnson, Justice.

This is a child custody ease. Appellee Martha Ann Murley sued appellant Joe C. Murley for divorce in Pulaski Chancery Court. Appellant counterclaimed for divorce and after appropriate pleadings the case was tried before the chancellor on November 25, 1964. In its decree of March 1, 1965, the court found that appellee was entitled to a divorce and in addition to the divorce granted appellee custody of the parties’ seven-year old daughter. Appellant has appealed from that part of the decree awarding custody, urging that he should be given custody of his daughter.

Custody decisions are never easy, especially in a case such as this where each party has seriously impugned the character of the other. We are, as always in these cases, without direct precedent to lean on. One paragraph from Aucoin v. Aucoin, 211 Ark. 205, 200 S. W. 2d 316, is expressive here:

“In Oliphant v. Oliphant, 177 Ark. 613, 7 S. W. 2d 783, upon which appellant relies, this court indicated that it would have changed the custody of an eight-year-old daughter from, the mother to the father if the latter had proved the charge of adultery against his wife. However, different results have been reached in other cases where misconduct of the wife has been definitely established, but other circumstances in the case have been held to warrant the award of custody of a child of tender years to the mother. Longinotti v. Longinotti, 269 Ark. 1001, 277 S. W. 41; Blain v. Blain, 205 Ark. 346, 168 S. W. 2d 807; Thompson v. Thompson, 209 Ark. 734, 192 S. W. 2d 223. We agree with appellant that each case must be adjudged on its own peculiar facts and, since no two cases are alike, there is no direct precedent for or against custody in cases of this kind. The child’s best interest and welfare is always the primary and controlling consideration. Kirby v. Kirby, 189 Ark. 937, 75 S. W. 2d 817.”

There is no doubt from the testimony that appellee is intensely protective of her children, takes them to church, rises early to help her son fold newspapers for his route, and generally provides a suitable home. Appellant, who is in the air force, testified that his mother would make a home for his daughter until he retires from the air force in a few years. Appellee admitted that appellant’s mother is a fine woman, but testified that she is always sick. Appellant’s mother did not testify. It is conceded that a man in military service is not the ideal custodian of a child.

In the ease at bar there is evidence of misconduct by both parties and the trial court, after hearing the parties and their witnesses, resolved the controverted issues in favor of appellee. On the whole record, we are not convinced that the trial court erred in awarding custody of the minor child to appellee.

Affirmed.

Cobb, J., not participating.


author: Frank Holt, Justice.

text:
    Watts v. Minnesota Mutual Life Ins. Co.
    5-3708
    402 S. W. 2d 111
    [Rehearing denied May 24, 1966]
    Substituted opinion delivered April 11, 1966.
    (Original opinion delivered January 17, 1966)

      Donald Poe, for appellant.

      Daily & Woods, By: Ben Gore, for appellee.
   Frank Holt, Justice.

This case stems from the interpretation of a group life insurance policy carried with the appellee by the Waldron Furniture Manufacturing Corporation on its employees. The appellant’s husband was an employee of the corporation and insured by the terms of the policy. Payment of premiums was made by the corporation; however, contributions were deducted by the employer from the wages of each employee. Upon appellee’s refusal to pay the death benefits provided in the policy, the appellant as beneficiary sought judgment against the appellee for the face amount of the policy, $2,500.00, plus statutory penalty and attorney’s fee. Appellee’s motion for a summary judgment was granted, from which comes this appeal.

Appellant first contends for reversal that a genuine fact issue exists and, therefore, appellee’s motion for summary judgment should not have been granted. Appellee insists that no justiciable fact issue actually exists and that the proper disposition of this case is a summary judgment for the appellee.

On appeal the appellant also argues that the admitted facts result in policy coverage or a case of liability on the part of appellee. To that extent both parties seem to agree that only a question of law is presented and that the proper disposition of the issue of liability in this case would be by summary judgment.

According to the uncontroverted facts, the insured employee, Watts, who was under sixty years of age, became totally disabled from cancer on May 17,. 1963, requiring discontinuance of his employment. This total disability continued until he died on October 27, 1963. It appears that payments on his policy were discontinued on July 1,1963. The group policy was cancelled, effective August 31, 1963. There was compliance with the policy requirement concerning proof of disability and death. The policy was made an exhibit to the pleadings.

The appellant predicates her claim for recovery upon the first portion of the Extended Insurance provision found in the Master Policy and the Employee’s Certificate. This portion reads:

“If an employee, while less than sixty years of age and while insured under this policy, becomes totally disabled as a result of bodily injury or disease so as to be. wholly prevented from performing any work or engaging in any occupation for remuneration or profit, and if the employee dies within one year after discontinuance of premium payments for his insurance and while remaining continuously so disabled, then, upon due proof of such disability and death, the Company will pay under this section of the policy the amount of the employee’s insurance as determined by the section hereof entitled ‘Amount of Insurance,’ unless claim is otherwise established, based upon death of the employee within thirty-one days following termination of insurance.
If the employee has become totally • disabled under the conditions stated above and then, not later than one year after discontinuance of premium payments, furnishes written proof to the Company at its Home Office that the disability is permanent as herein defined, the employee’s insurance will be extended during the further continuance of total and permanent disability until one year from the date on which such proof was received.”

Other paragraphs relate to total disability which must exist for nine months, notices, recovery from disability and refusal to furnish requested proof. '

Appellant contends that under the quoted provisions of Extended Insurance coverage the appellee was liable for death benefits because the policy continued in effect from the time the insured became totally disabled until his death which was within one year following the disability.

The. appellee, however, contends that the last paragraph of the Extended Insurance provision precludes recovery. It reads:

"The benefits described in this section shall apply while the policy is maintained in full force and effect. In the event of termination of this policy, all benefits under this section shall automatically terminate, regardless of any provision herein to the contrary, except that the conversion privilege which is provided at termination of the policy shall be available. ’ ’

The appellee disavows any liability since the policy was terminated by the employer on August 31, 1963 and the death of the insured employee occurred following cancellation of the unconverted policy.

The appellant takes the position that the decedent’s rights to life insurance coverage became vested upon his becoming totally disabled which necessitated discontinuance of his employment and premium payments. This contention finds support in Appleman 1, Insurance Law and Practice, § 47, p. 74, where we find these general statements:

"If the policy provides for a waiver of premium payments upon the inception of permanent and total disability, those provisions are, of course, effective, and relieve the employee of any further duty in this regard.”
“* * * the better rule is to the effect that if the cessation of employment is caused by sickness, injury, or the like, and the insured is continuously and totally disabled until the time of his death, it is covered by the contract. The theory is that liability having attached during the life of the group policy, the fact that such person afterward ceased to be an employee could not destroy his right to benefits. Such termination can operate prospectively only, and not in derogation of acquired rights. * * * His leaving voluntarily after becoming disabled would not impair his rights, nor would his failure to apply for an individual policy thereafter as provided by the terms of the contract have such effect.”

See, also, Atlas Life Ins. Co. of Tulsa, Okla. v. Wells, 187 Ark. 979, 63 S. W. 2d 533; Home Life Ins. Co. v. Keys, 187 Ark. 796, 62 S. W. 2d 950, and Home Life Ins. Co. v. Ward, 189 Ark. 793, 75 S. W. 2d 379.

In the circumstances we are of the view that the insured’s life insurance coverage vested upon the occurrence of his inability to continue working. Thereafter, the discontinuance of his premium payments and cancellation of the policy by his employer could not and did not destroy his acquired rights. Upon the facts now in the record the appellant would be entitled to recover.

Further, another answer to the insurer’s disclaimer of policy coverage is a provision in a booklet distributed to the insured employees. The Life Insurance Benefits provision contains this paragraph:

‘‘PERMANENT TOTAL DISABILITY: If an insured employee terminates employment, while under age 60 because of total permanent disability the Group Life Insurance will remain in force without payment of premium for a period of 12 months and for such further period as he is continuously totally disabled subject to yearly proof of continuance of disability. ’ ’

This information in the booklet is further elaborated upon in the lengthy Master Policy and the Employee’s Certificate, both of which appellee invokes in denying coverage. The exclusion of benefits in the Master Policy and Employee’s Certificate, i.e., the provision that cancellation of the policy automatically terminates all benefits, is much broader than the explanation in the booklet. This booklet’ provision is inconsistent with the broader provisions of the Master Policy and Employee’s Certificate. These three instruments were drafted and furnished by the insurance company. In the circumstances we think the reasoning in our recent case of Lawrences. Providential Life Ins. Co., 238 Ark. 981, 385 S. W. 2d 936, is applicable.

It is well settled that when exceptions or words of limitation are used a strict construction is required favorable to the insured. Washington Fire & Marine Ins. Co. v. Ryburn, 228 Ark. 930, 311 S. W. 2d 302. Also, see Travelers’ Protective Association of America v. Stephens, 185 Ark. 660, 49 S. W. 2d 364.

The judgment is reversed and the cause remanded for further proceedings consistent with this opinion’

Reversed and remanded.


author: Cableton Harris, Chief Justice.

text:
    Sebastian Lake Development, Inc. v. United Tel. Co.
    5-3719
    398 S. W. 2d 208
    Opinion delivered January 24, 1966

      Garner & Garner, for appellant.

      Dale L. Bumpers, for appellee.
   Cableton Harris, Chief Justice.

The principal question on this appeal is whether a public service corporation can acquire an easement by prescription. Sebastian Lake Developments, Inc., appellant herein, is the owner of certain real estate lying in the Greenwood district of Sebastian County. United Telephone Company, appellee herein, which serves the communities of Bonanza and Hackett, Arkansas, instituted suit against appellant company, asserting that it (appellee), in furnishing service to the aforementioned communities, “has owned, operated and maintained a telephone line across the aforesaid lands for a period of over twenty years last past, and had maintained the said line for approximately twenty years before the acquisition of the aforesaid lands by the defendant.

VI

“That prior to the purchase of the said property aforesaid by the defendant, numerous surveys, studies and observations were made by the officers of the defendant corporation, its agents and employees, and the said defendant, by its officers, was fully aware of the existence of the aforesaid telephone lines belonging to the plaintiff and had due notice of their said existence prior to the acquisition of the said lands.

VII

‘ ‘ That the defendant, subsequent to its acquisition of the lands aforesaid, immediately commenced construction of a dam on a portion of the above described lands and that the said dam is presently under construction by the defendant.

VIII

“That the effect of the completion of the said dam will be to flood the lands described hereinabove, and specifically the poles and lines operated, owned and maintained by the plaintiff. ”

Appellee claimed an easement by prescription, and asked that the Sebastian Lake Company be enjoined from flooding the property where appellee had acquired the easement. Appellant answered, asserting that it had no notice of the existence of poles and lines prior to acquiring the lands, and denying that the telephone company had acquired any easement by prescription. The answer prayed that appellee be ordered and directed to remove the lines and poles from the lands belonging to appellant. The case proceeded to trial, and, after hearing evidence, the court entered its decree, finding that the telephone company had owned, operated, and maintained .telephone lines and poles across the lands involved for a period of more than twenty years; that the lines and poles are clearly visible from State Highway No. 45, and that the officers, agents, and employees of appellant company knew, or should have known, of the existence of the lines and poles prior to its purchase of the lands; that appellee had acquired an easement across these lands by prescription. The court further found that, appellant company should be enjoined from interfering with appellee’s operation and maintenance of the lines and poles, and also found that appellant company had built a dam and “admittedly may flood the poles belonging to the aforesaid plaintiff.” As to the flooding of the premises by appellant, the court required that Sebastian Lake Developments, Inc., should post a bond in the sum of $2,000.00 to compensate appellee if the flooding should interfere with or impair United Telephone Company’s right to use of the lines and poles. From the decree so entered, appellant brings this appeal. Appellant confines its arguments, first, to the question of whether a public service corporation can legally acquire an easement by prescription, and second, whether the proof in this case supports the finding by the Chancellor.

Ark. Stat. Ann. § 73-1801 through § 73-1805 (Eepl. 1957) deal with the right of certain utility companies (telephone and telegraph companies) to condemn rights of way and construction of lines. Appellant points out that although Section 73-1804 gives these companies the right to peacefully enter upon lands for the purpose of surveying, locating and laying out their lines, the companies are (quoting statute) “liable, however, for any damage that may result by reason of such acts.” Appellant also directs our attention to Ark. Stat. Ann. § 35-201 (Eepl. 1962), which provides:

“Any railroad, telegraph or telephone company, organized under the laws of this- State, after having surveyed and located its lines of railroad, telegraph or telephone, shall in all cases where such companies fail to obtain by agreement with the owner of the property through which said lines of railroad, telegraph, or telephone may be located, the right of way over the same, apply to the Circuit Court of the county in which said property is situated, by petition, to have the damages for such right of way assessed, * * * .”

Likewise, appellant contends that a prescriptive right by a corporation is violative of Article 12, Section 9, of the Arkansas Constitution. We disagree with appellant’s argument, holding that these provisions relate to peaceable entry and proceedings thereunder. Ark. Stat. Ann. § 35-101 (Repl. 1962), which is the first section under the title, “Eminent Domain,” provides:

“Whenever any corporation authorized by law to appropriate private property for its use shall have entered upon and appropriated any property, real or personal, the owner of such property shall have the right to bring an action against such corporation in the circuit court of the county in which said property is situated for damages for such appropriation at any time before an action at law or in equity for the recovery of the property so taken, or compensation therefor, would be barred by the statute of limitations and the measure of recovery in such action shall be the same as that governing proceedings by corporations for the condemnation of property. * * *”

This section negates appellant’s contention that a public service corporation cannot acquire an easement by prescription. Certainly, the section includes a telephone company, for a telephone company holds the power of eminent domain, and furthermore, the language definitely includes any corporation possessing the authority to appropriate private property for its use. It will be noted that the section specifically sets out that the owner of property, whose land has been appropriated by a corporation for its use, shall bring his claim against the corporation at any time before such claim would be barred by the statute of limitations. This last provision would be useless and superfluous if appellant’s contention is correct.

In Mo. & No. Ark. Railroad Co. v. Chapman, 150 Ark. 334, 234 S. W. 171, a situation with some similarity was presented. Appellees instituted suit against the appellant railroad for compensation allegedly due because the railroad had appropriated one hundred feet of land for a right of way. The company constructed its railroad across this strip of land in 1908, and had operated across this strip from that time until 1919, when appellees filed their suit for compensation. The statute of limitations was pleaded by the company. This defense was not allowed by the trial court, and appellees recovered a judgment. On appeal, this court reversed the trial court, stating:

"Sec. 3930 of Crawford & Moses’ Digest provides that whenever any corporation, authorized by law to appropriate private property for its use, shall have entered upon and appropriated any property, the owner of the property shall have the right to bring an action against such corporation for damages for such appropriation at any time before an action at law or in equity for the recovery of the property so taken, or compensation therefor, would be barred by the statute of limitations.

"In construing this statute, the court has held that it supersedes the commonlaw remedies afforded the owner, and that the statutory remedy for damages is exclusive. McKennon v. St. L. I. M. & So. Ry. Co., 69 Ark. 104. The statute fixes the time for bringing the action at any time before the action at law or in equity for recovery of the property so taken, or compensation therefor, would be barred by the statute of limitations.

“At common law the owner would have had the right to have brought his suit at any time before the company had acquired the right to the property taken by adverse possession for the statutory period of seven years. Organ v. Memphis & Little Rock Rd. Co., 51 Ark. 235. Thus it will be seen that under the statute the owners of the land had a right to bring suit for compensation for the land taken by the railroad company for its right-of-way at any time within the period of seven years after the land was taken.

# # #

“It follows that the court erred in holding that Charles and William Chapman were not barred of recovery under the seven-year statute of limitations, and for that error the judgment in their favor will be reversed; and, inasmuch as the testimony with regard to the statute of limitations rimning against them is undisputed, their cause of action will be dismissed. ’ ’

We think it apparent that appellant’s argument is erroneous.

For its second contention, appellant asserts that the proof is not sufficient to support the Chancellor’s finding that appellee had acquired an easement by prescription. Appellant argues that the land is wild and unimproved, and that appellee has not met the burden of showing that its use was adverse. The record reflects that the land is partly fenced, and has been used for many years for the grazing of cattle. The president of United Telephone Company testified that, of his personal knowledge, the lines had been up since 1950. His testimony reflected that these lines had been serviced, and he stated that the land had been mainly used (by a previous owner, Mrs. Chambliss) as pasture; that he had observed cattle grazing on it from time to time. Paul McCulloch testified that he had worked on the lines, off and on, since 1948, and that no one had ever questioned his right to go on the land or to service the poles. He likewise stated that he had been across the lands approximately four or five times a year since 1948; had frequently observed cattle grazing, and that the biggest portion of the land was under fence. For that matter, Douglas Parker, Secretary-Treasurer of' Sebastian Lake Developments, Inc., testified that he had been familiar with the land for thirteen years, and was aware of the fact that the telephone lines ran across this land prior to the time it was purchased by appellant. He likewise stated that he had observed the cattle at various times, and that part of the land was fenced.

Appellant takes the view that appellee’s use of the land was permissive, arguing that this court has held that mere use does not ripen into a prescriptive right unless the circumstances are such as to put the owner of the property on notice that the right of way is being used adversely under a claim of right. We agree with this statement of the law, but we think the record supports the Chancellor’s finding that appellee had met the burden of showing that the land ivas being used adversely under a claim of right. The lines and poles were visible; the company’s employees entered when necessary to repair and service the poles. Appellee’s acts, over a long period of years, were entirely consistent with the acts of one who claims an easement—and these acts had been observed by company representatives, and certainly could have been seen by prior OAvners of the property. In Fullenwider v. Kitchens, 223 Ark. 442, 266 S. W. 2d 281, this court said:

“A consideration of the many opinions of this court regarding the acquisition of a right-of-way over lands makes it clear, in our opinion, that no real conflict exists. All our opinions are in harmony on one point, viz.: Where there is usage of a passageway over land, whether it began by permission or otherwise, if that usage continues openly for seven years after the landowner has actual knowledge that the usage is adverse to his interest or where the usage continues for seven years after the facts and circumstances of the prior usage are such that the landowner would be presumed to know the usage was adverse, then such usage ripens into an absolute right.

“In our opinion, in the case under consideration, the weight of the testimony supports the finding of the chancellor that appellee and her predecessors in title used road ‘B’ for more than seven years after appellants and their predecessors in title knew or should have known that the road was being used adversely. * * *

“* * * Thus the weight of the testimony supports the chancellor’s finding that the road has been used by appellee and the public openly and adversely for more than 7 years and that the constant usage of said road for some 40 years under the circumstances of this case overcomes the presumption that said usage was permissive. ’ ’

In the case before us, the evidence does not reflect a use by the telephone company for as much as forty years, but certainly there was a constant use for between thirteen and fifteen years. Here, there is no evidence that any owner gave permission to appellee to put up its poles, though the record reflects that appellee’s use of the strip of land was exercised during periods in which a. Mrs. Chambliss, and subsequently, Jim Burgess and H. B. Dubois, Jr., owned the land. According to the transcript, Mrs. Chambliss is still alive, and living in the county, but she was not called upon to testify. The record reveals that the telephone' company simply went on to the premises, laid its lines, and continued to service same as needed over a long period of years.

From what has been said, it is apparent that we do not agree with appellant’s contentions, and we hold that United Telephone Company acquired an easement by prescription over the strip of land (where the poles and lines were situated) owned by Sebastian Lake Developments, Inc. It might be added that this is the only question presented to us on this appeal, and the only question that we pass upon. We render no holdings or findings with regard to correlative rights of the parties as dominant and servient owners of the right of way.

Affirmed.

Cobb, J., not participating.

      ‘It is therefore by this court ordered, adjudged and decreed that plaintiff has a valid easement across the lands of the defendant, and the defendant, its agents, servants and employees should be, and they are hereby, enjoined from interfering with the plaintiff’s use, occupancy and maintenance of its poles, lines and easement across the said lands.
      “It is further ordered, adjudged and decreed that the defendant post a bond in the penal sum of $2,000.00 within ten days from and after the entry of this decree, to protect the plaintiff against any and all damages plaintiff may sustain from the flooding of its poles or lines, or both, or such other damages which plaintiff may sustain by the interruption of plaintiff’s usage, occupancy or maintenance of the plaintiff’s lines and poles caused by the defendant, its agents, servants or employees.”

      Emphasis supplied.

      For instance, Section 73-1804 relates only to damages that occur in laying out lines on the right of way after acquiring same, i.e., damage to the land beyond the right acquired by the company.

      Emphasis supplied.

      This section is identical to our present Section 35-101, except that the latter adds the phrase, “and the measure of recovery in such action shall be the same as that governing proceedings by corporations for the condemnation of property.”

      Sebastian- Lake Developments, Ine., purchased the property from Burgess and Dubois.


author: Ed. F. MoFaddin, Justice.

text:
    Lacy v. State
    5154
    398 S. W. 2d 508
    Opinion delivered January 24, 1966
    [Rehearing denied February 21, 1966.]

      George Howard, Jr. for appellant.

      Bruce Bennett, Attorney General; Bichará B. Adkisson, Chief Asst. Atty. General and Fletcher Jackson, Asst. Atty. Gen.
   Ed. F. MoFaddin, Justice.

Ervin Lacy was charged, tried, and convicted of the crime of rape (Ark. Stat. Ann. § 41-3401 [Repl. 1964]), and sentenced to life imprisonment. His motion for new trial contains eight assignments, which his counsel has grouped into four points.

I.

Point No. 1 is: “The trial court erred in overruling appellant’s motion to quash the petit jury panel because of racial discrimination in the selection of the jury panel in Phillips County, Arkansas.” The appellant is a Negro and he claims that Negroes were discriminated against in the selection of the petit jury panel. He showed that the list of petit jurors for the term of the court at which he was tried contained 34 names, and that five of those on the list had the letter “C” after his name, and that such letter indicated that such person was a Negro. On this showing appellant claims that racial discrimination existed in the selection of the jury panel; and he cites these cases: Avery v. Georgia, 345 U. S. 559, 97 L. ed. 1244, 73 S. Ct. 891 (1953); Bailey v. Henslee, 287 F. 2d 936; Cassell v. Texas, 339 U. S. 282, 94 L. ed. 839, 70 S. Ct. 629; and Anderson v. Martin, 375 U. S. 559, 11 L. ed. 2d 430, 84 S. Ct. 454. We had a similar contention before us in the recent case of Sheppard v. State, 239 Ark. (Adv. Sh.) 785, 394 S. W. 2d 624, and we there said: “The single point in counsel’s argument that finds support in the proof is the fact that the electors were designated by race in the list of qualified voters. Our attention is directed to Avery v. Georgia, 345 U. S. 559, 97 L. ed. 1244, 73 S. Ct. 891 (1953); but the Court did not hold that such a practice is, in itself, sufficient to establish discrimination in the selection of the jury.”

We find no merit in this point urged by the appellant. Any argument of racial discrimination in the selection of the jury panel in this case was clearly dispelled by the testimony of the Jury Commissioners, each of whom was called by the appellant. Commissioner Howe testified :

“ Q. Taking that into consideration did you all seek to include any Negroes?
“A. I don’t know whether we included them— whether we sought to include them—we left race out of it, we were picking people, not color.”

Commissioner Horner testified:

“Q. How is it you came up with five Negroes and the rest of them white?
“A. I can’t tell you that. There were instructions that we were given; we were not told to pick all Negroes or all whites, we were told to pick a qualified jury panel and that is what we attempted to do. . . .
‘ ‘ Q. In the selection of the jury, in consideration of the Court’s instructions, did you include or exclude any person because of his race, color or creed?
“A. No, sir.
”Q. Then explain to this Court why it is that you come with five Negroes and the rest of the twenty-four regular and the alternate twelve are white?
“A. I was not obligated to put anybody on the jury panel. I can’t tell you why there was one Negro, three Negroes or five selected; we had no obligation to pick a certain number of any race or group of people.”

Commissioner Kemmer testified:

“A. I didn’t have any instructions to put—to pick —any particular person on this jury. My only instruction was to select somebody that I would be willing to have try a case of mine. If it was left up to me individually there are óolored people that I would not object to trying my case.”

This quoted evidence—and it is practically undisputed—clearly shows that the Jury Commissioners entirely disregarded the matter of race in selecting the jury panel.

II.

Appellant’s second point is that there should have been an instructed verdict for the appellant; and appellant’s fourth point is that the verdict is not supported by such evidence. We consider these two points together. The prosecuting witness was a widow, who, with her 6-year-old boy lived in an apartment. When the prosecutrix returned home from work about 9:00 P.M. the maid was with the little boy. She let the maid leave; and she and her son retired shortly after 10:00 P.M. Then some time in the night an intruder threw an apron over her face. She testified:

“I struggled with him and he choked me until I couldn’t hardly move. He told me to turn over on my stomach and I did and he tied my hands behind me and then he turned me over and started demanding money and I told him I didn’t have any money and he said I was lying. He told me if I didn’t do what he wanted me to he was going to kill me and my child. I got up. I had my purse in the kitchen, I told him; and on the way I asked him for a drink of water and he took me into the kitchen and he got me a drink of water.
“Q. Let me stop you there. Were there any lights on the house at that time?
“A. Yes, sir, the big kitchen light was on, . . .
“Q. What happened when you got in there?
"A. I saw this boy and then I got scared because he had nothing over his face and he gave me a glass of water and I took him to my purse and he got the money out of my purse.
‘ ‘ Q. You say that was located on a chair in the hallway?
“A. Yes, sir.
“Q. All right?
“A. He got the money and he said I had more than that and I told him that was all I had. He then threw me down on the cot and took off my pajamas.
“Q. Is that the cot in the living room?
“A. Yes, sir, and he threw me down and raped me.
“Q. Did he actually have intercourse with you there ?
‘ ‘A. Yes, sir, he had the apron around my throat...
‘ ‘ Q. Then what happened ?
“A. He took me in—He took me back and threw me on the cot and he raped me again and my son woke up, and he got very angry, he told my son to shut up or he would kill his mother. He got me up and during that time he took me back over on the bed; and he had put his own pants on, and he got to the bed and he threw the cover on me, over me and my son’s head and he said, ‘If you call the police,’ that he would come back and kill us both, then he left. . . .
“Q. Do you remember how the defendant was dressed?
“A. He had on a cream colored knit sweater and tight type pair of pants.
“Q. Could you tell whether they were blue denim or serge?
“A. No, sir, but I remember the yellow sweater.
“Q. You say he took off his pants?
“A. Yes, sir.
“ Q. Do you remember giving any description to the police later?
“A. I remember later, I remember telling them he was a very-very young boy. . . .
“Q. You have testified to us what happened there that night on two occasions that particular night. Actually, was there penetration?
“A. Only a slight one, more or less the pounding of his body and the way he treated me.
“Q. But you say there was slight penetration?
“A. Yes, sir.”

After the rapist left, the prosecutrix and her son immediately called the police, who took her to the hospital where she remained a week because of her nervous condition. She definitely identified Ervin Lacy as the rapist. It was shown that entrance to her apartment had been gained by removing a screen from the kitchen window. The police officer who received the call the night of the rape testified:

“I received the call on the police radio at 11:25 P.M. and I went to 905 Perry Street and there I found [the prosecutrix] sitting in a chair in the front yard of 905 Perry. She had an apron around her neck and her hands were bound very tightly behind her with a piece of clothes line, plastic covered. I tried to untie the knots and it was tied so tight I couldn’t, and I took my knife and cut it. ’ ’

The doctor who examined the prosecutrix at the hospital testified-:

“Q. What was her condition?
“A. She was bruised around her neck and was somewhat swollen and there was some redness about the vagina.
“Q. From your examination of these bruises, were they of recent origin?
“A. They were recent, yes, sir.
“Q. They were in the area of the neck?
“A. Yes, sii', on both sides.
“Q. Were they of the type that could have been caused by choking with the hands?
“A. Yes, sir.
“Q. You said there was some redness or irritation in the vagina?
“A. Yes, sir. . .”

Officer Smith, who arrested the appellant that night, testified as to the clothing which the appellant had on at the time of the arrest. The appellant testified in his own behalf. He denied that he was the person who had committed the alleged crime and claimed that he was elsewhere. He named three persons who were with him from 6:00 P.M. to 11:00 P.M. at a carnival; but only one of them testified in support of his alibi.

We have sketched enough of the testimony to show that the Court was correct in denying the motion for an instructed verdict and also in ruling that the verdict was supported by the evidence. The questions of identification and alibi were for the jury. The evidence was sufficient as regards penetration. McDonald v. State, 225 Ark. 38, 279 S. W. 2d 44. The prosecuting witness testified as to the rape; and we have repeatedly held that her testimony does not have to be corroborated. Bradshaw v. State, 211 Ark. 189, 199 S. W. 2d 747; and Bailey v. State, 227 Ark. 889, 302 S. W. 2d 796. Even so, she was in fact corroborated on many matters.

III.

Appellant’s final point relates to the ruling of the Trial Court in permitting the prosecuting witness to testify, on rebuttal, relative to a jacket allegedly worn by the appellant. The appellant says:

“ . . . the alleged victim, testified that her attacker had on a cream colored sweater and tight pants; she made no reference whatsoever about a coat or jacket. After the appellant and his witnesses had taken the stand and testified that on the night of November 12th, that appellant had worn a blue jacket, the trial court, over the objections and exception of appellant, permitted the prosecuting witness to testify on rebuttal to the effect that appellant was wearing a coat or a jacket.”

Our statute (Ark. Stat. Ann. § 43-2114 [1947]) says:

‘ ‘ The parties may then respectively offer rebutting evidence only, unless the court for good reason, in furtherance of justice, permit them to offer evidence upon their original case.”

This statute permits the Court, “for good reason, in furtherance of justice,” to allow the State to reopen its case and offer new evidence. Even if the recalling of the prosecutrix to testify about the jacket which the defendant wore could be considered as new evidence, still the Court had a right to allow such to be offered; and the Court did not abuse judicial discretion in such ruling. Walker v. State, 100 Ark. 180, 139 S. W. 1139; Bobo v. State, 179 Ark. 207, 14 S. W. 2d 1115.

Finding no error, the judgment is affirmed.

Cobb, J., not participating.

      The matter of racial discrimination in selection of the jury-panel was considered by us in these cases: Dorsey v. State, 219 Ark. 101, 240 S. W. 2d 30 (certiorari denied 345 U. S. 956); Lillard v. State, 236 Ark. 74, 365 S. W. 2d 144; and Trotter and Harris v. State, 237 Ark. 820, 377 S. W. 2d 14. There are annotations on this matter in 2 L. ed. 2d 2041; and 97 L. ed. 1249. We have also studied Swain v. Alabama (1965), 380 U. S. 202, 13 L. ed. 2d 759, 85 S. Ct. 824.


author: Ed. F. McFaddin, Justice.

text:
    Furr v. Harding Glass Co.
    5-3728
    398 S. W. 2d 215
    Opinion delivered January 24, 1966

      Harold C. Rains, Jr., for appellant.

      Shaw, Jones & Shaw, for appellee.
   Ed. F. McFaddin, Justice.

This is a workmen’s compensation case. On June 22, 1964 appellant Furr filed the present claim with the Commission against appellee, Harding Glass Company. The Referee and the Full Commission disallowed the claim as barred by Limitations; the Circuit Court affirmed the Commission; and appellant Furr prosecutes the present appeal. The sole question is that of limitations.

On October 8, 1956 appellant sustained an injury while working for the appellee, when a brick wall fell on the lower part of his leg. He was promptly examined by Dr. Glenn of the Holt-Kroch Clinic in Fort Smith. The report of October 8,1956 shows ‘ ‘ contusion and moderate swelling left leg immediately above ankle, medial aspect.” On October 22, 1956 appellant returned to work for appellee and received $21.43 as compensation for his said injury and resulting loss of time. Appellant continued to work for appellee for some time. Just when he changed employers is not clear from the record. At all events, it was not until June 22, 1964 that the present claim was filed, which was seven years and eight months after the appellant had returned to work. The Opinion of the Workmen’s Compensation Commission gives a clear and succinct statement of the case, and we copy it in toto :

“In an Opinion filed October 26, 1964, by a Referee he found that the claim of Ed G. Furr is barred by the Statute of Limitations as provided by Section 18 (b) of the Arkansas Workmen’s Compensation Act.
“By reason of claimant’s timely appeal this case is now before the Full Commission for review.
“Upon review no additional evidence was presented but counsel submitted briefs.
“The only issue now before the Commission for decision is whether or not claimant’s claim for an accidental injury that occurred on October 8, 1956, is barred by the Statute of Limitations.
“The evidence establishes that on October 8, 1956, claimant went to Dr. Clarence L. Glenn and gave Dr. Glenn a history that a brick wall fell on his left lower leg at about 1:00 P.M. that same day. Dr. Glenn’s objective findings were ‘Contusion and moderate swelling left leg immediately above ankle, medial aspect. ’ X-rays were made that same day and there Avas no fracture. Dr. Glenn indicated that claimant would be able to resume regular work in four to six days. The treatment given was tetanus antitoxin, ice packs, elevation, and heat after 24 hours. Claimant returned to work for the respondent employer on October 22, 1956, and he Avas paid compensation in the amount of $21.43 for six days of temporary total disability. Claimant continued to work and there is no evidence that claimant consulted doctors until 1964 Avhen claimant went to Dr. Jim Thompson who referred claimant to Dr. Alfred B. Hathcock who first saAv claimant on May 16,1964. On June 16, 1964, Dr. Hathcock and Dr. W. E. Knight operated on claimant’s right leg beloAv the knee. On June 22, 1964, claimant filed a claim with the Commission alleging that as a result of his October 1956 injury he recently had an operation from which he was still recuperating. At the first hearing of this claim objection was made by respondents to claimant’s failure to timely file a claim.
“Based upon all of the evidence of record and in affirming the Referee’s Opinion, the Full Commission makes the following
“FINDINGS OF FACT
“1. That on October 8, 1956, claimant sustained a compensable accidental injury which resulted in six days of compensable loss of time and for which claimant was paid compensation in the amount of $21.43, the last compensation being paid on October 31, 1956;
“2. That, on June 22, 1964, claimant filed a claim for additional benefits allegedly due as a result of his October 8, 1956, accidental injury;
‘ ‘ 3. That at the first hearing of this claim respondents made proper objection to claimant’s failure to timely file a claim;
“4. That claimant’s claim for additional compensation as the result of an accidental injury on October 8, 1956, was not timely filed and is, therefore, barred by the Statute of Limitations.
“CONCLUSIONS
‘‘ The only issue presented for decision and the only decision being made herein is whether or not claimant’s claim for additional benefits is barred by the Statute of Limitations.
“The applicable section of the Arkansas Workmen’s Compensation Law is Section 18 (b) which is Section 81-1318 (b) Ark. Stats., which provides:
“ ‘In cases where compensation for Disability has been paid on account of injury, a claim for additional compensation shall be barred unless filed with the Commission within one year from the date of the last payment of compensation, or two years from the date of the accident, whichever is greater.’ ‘ ‘ This Section of the Act became effective December 3, 1943. Prior to that date the Act provided that a claim had to be filed within one year from the time of the injury or within one year after the date of the last payment of compensation. In view of the fact that since December 1943 the xkct has required that elaim be filed within two years from the date of the accident or one year from the date of the last payment of compensation, it is not believed that the case cited by the claimant in his brief has any application to the case at hand. The evidence in instant case clearly establishes that claimant did not file a claim until about iy% years after the accident (October 8,1956) and about 7% years after payment of the last payment of compensation (October 31, 1956). As stated in the case of Sanderson & Porter v. Crow our Compensation Law is to be liberally construed but the plain wording of the law cannot be evaded. Claimant’s claim was not timely filed and it is, therefore, barred by the Statute of Limitations and is herewith dismissed.”

There is little that needs to be added to the Commission’s Opinion. The cases on latent injuries cannot apply to the situation here because of the wording of Ark. Stat. Ann. § 81-1318 (b) [Repl. 1960], which reads:

“In cases where compensation for disability has been paid on account of injury, a claim for additional compensation shall be barred unless filed with the Commission within one year from the date of last payment of compensation, or two years from the date of the accident, whichever is greater.” (Italics our own.)

Here, compensation was paid in 1956 for a ‘ ‘ disability” on account of the 1956 “injury.” Appellant was found completely recovered and returned to full duty. His last payment was October 1956: the one year expired October 1957. The date of the “accident” was October 1956: the two years expired October 1958. Our statute limits the two year period “from the date of the accident, ’ ’ and not from the date the injury was discovered.

The Circuit Court was correct in affirming the Commission.

Cobb, J., not participating.

      That case is Burrow Const. Co. v. Langley, 238 Ark. 992, 386 S. W. 2d 484.

       214 Ark. 416, 216 S. W. 2d 796.


author: George Bose Smith, Justice.

text:
    Russell v. State
    5161
    398 S. W. 2d 213
    Opinion delivered January 24, 1966

      Harold Sharpe, for appellant.

      Bruce Bennett, Attorney General, Fletcher Jacwson, Asst. Atty. Gen., for appellee.
   George Bose Smith, Justice.

The three appellants were convicted of burglary and grand larceny and were sentenced to ten years imprisonment upon each count. For reversal they question the admissibility of certain evidence and the correctness of the trial court’s instructions.

Gene Harris’s home was broken into and burglarized at some time during the day on April 8, 1965, while Harris and his wife were away at work. When Harris returned shortly before seven o’clock he discovered the burglary and reported it to the county sheriff and the Forrest City police. By then, as we shall see, the officers were already conducting a vigorous search for the three men who were ultimately convicted in the court below.

Earlier that same evening, between 5:30 and 6:00 o’clock, the three appellants bought vodka at a liquor store near Forrest City. The clerk in the liquor store became suspicious when the men paid for the vodka with Kennedy half dollars (coins struck in memory of President Kennedy), exchanged ten more Kennedy half dollars for a five dollar bill, and offered to exchange even more of the half dollars for paper money. The clerk obtained the license number of the appellants’ car and reported it to the Forrest City police.

Officer Bassett, who received the report, set out in search of the three men and soon spotted their car on the highway near Forrest City. The officer gave chase, but the fugitives sped away, turned down a side road, abandoned their car, and fled into the woods. City and county police set up road blocks in an effort to apprehend the criminals. During the same evening, while the manhunt continued, the officers learned of the burglary at the Harris home and of the theft of a quantity of Kennedy half dollars in a nearby county. Finally, at about 1:30 the next afternoon, the officers tracked down the fugitives and arrested them.

It is first contended that the trial court erred in permitting the State to prove, in its case in chief, that the defendants were habitual offenders with prior criminal records. The Attorney General now concedes, as he must, that the court’s procedure was reversible error in view of an opinion handed down after the present case was tried: Miller v. State, 239 Ark. 836, 394 S. W. 2d 601 (1965). Inasmuch as there must be a new trial we consider those asserted errors that are likely to arise again.

The State was allowed to prove, over the defendants’ objections, that a shotgun and other articles stolen from the Harris home were found in the car abandoned by the fugitives. Counsel for the appellants is in error in contending that the record discloses an unlawful search of the vehicle. What is prohibited is an unreasonable search and seizure. Preston v. United States, 376 U. S. 364, 11 L. Ed. 2d 777, 84 S. Ct. 881 (1964). It was certainly reasonable for the officers to search the car for firearms and even to remove the car, to prevent the felons from coming back and using it in their flight. Moreover, Sheriff Montgomery testified that the stolen property was piled on the rear seat of the vehicle, so that he could recognize it from the outside. In this situation, where the articles are identified without a trespass on the part of the officer, there is no “search” within the constitutional prohibition. United States v. Lee, 274 U. S. 559, 71 L. Ed. 1202, 47 S. Ct. 746 (1927); Petteway v. United States, 261 F. 2d 53 (4th Cir. 1958).

The appellants also complain that they were arrested without a warrant. The arrest was proper, however, if the officers had reasonable grounds for believing that the three men had committed a felony. Lane v. State, 217 Ark. 114, 229 S. W. 2d 43 (1950). At the time of the arrest the officers knew that a quantity of Kennedy half dollars had been stolen and that the fugitives had an unusual supply of those coins in their possession. Nineteen more of the half dollars were found while the officers were trailing the men. The hunted men had eluded the officers for many hours. In the circumstances the officers would unquestionably have failed in their duty if they had not arrested the suspects, with or without a warrant.

Lastly, the instructions. None of the three accused took the witness stand. The court, despite the objections of defense counsel, told the jury that the accused had the right to testify or not to testify and that their failure to do so was not evidence of guilt and was not to be considered by the jury. This is a familiar instruction. When the accused asks that such a charge be given it is reversible error for the court to deny the request. Cox v. State, 173 Ark. 1115, 295 S. W. 29 (1927). When, however, the accused objects to such an instruction, a different situation is presented. Our decisions on the point have not been entirely harmonious. We held in Watson v. State, 159 Ark. 628, 252 S. W. 582 (1923), that the giving of the instruction was prejudicial error, but we took the opposite view in Thompson v. State, 205 Ark. 1040, 172 S. W. 2d 234 (1943). Upon reconsidering the question we have concluded that the instruction ought not to be given against the wishes of the defendant. If the accused is to have the unfettered right to testify or not to testify he should have a correlative right to say whether or not his silence should be singled out for the jury’s attention.

We find no merit in the appellants’ objections to commonplace instructions concerning the inference of guilt that may be drawn from the defendants’ flight or from their possession of recently stolen goods.

Reversed.


text:
    Catlett v. Jones
    5-3870
    398 S.W.2d 229
    Opinion delivered January 24, 1966

      Bruce Bennett, Attorney General, By: Dick Aclkisson, Chief Asst. Atty. Gen. and Fletcher Jackson, Asst. Atty. Gen.

      William J. Smith and George Pike, Jr., for appellee.
   George Bose Smith, Justice.

The plaintiff-appellees are nine State Senators who were elected in 1964 to four-year terms of office. In January of 1965 the United States District Court for the Eastern District of Arkansas, pursuant to the decision in Baker v. Carr, 369 U. S. 186, 7 L. Ed. 2d 663, 82 S. Ct. 691 (1962), directed a reapportionment of both houses of the General Assembly. Yancey v. Faubus, 238 P. Supp. 290. The State Board of Apportionment duly filed a plan of reapportionment, which the federal court approved. In approving the plan the court directed that not later than the general election to be held in November of 1966 “members of both Houses of the 66th General Assembly of the State of Arkansas must be elected in conformity with the Board’s plan.”

Under the reapportionment plan the senatorial districts represented by the nine appellees were left unchanged. They accordingly brought this suit, naming appropriate party and state officers as defendants, for a judgment declaring that they were entitled to serve the rest of their four-year terms without standing for reelection in 1966. The chancellor upheld their contention and entered a declaratory decree to that effect.

The trial court was right. The federal court, without passing upon the issue now before us, directed that the members of the legislature be elected “in conformity with the Board’s plan” of reapportionment. As far as these nine appellees are concerned, that directive has already been complied with. They have been elected in conformity with the Board’s plan. Their districts are fairly represented, in harmony with the Supreme Court’s decision in Baker v. Carr, supra. The federal district court ordered new elections to correct inequalities in legislative representation. There can be no sound justification for corrective action when no inequality exists; there is nothing to correct.

Two recent federal cases have announced the same conclusion that we are reaching. In Reynolds v. State Election Board, 233 F. Supp. 323 (W. D. Okla. 1964), a plan of reapportionment was approved after members of the legislature had been nominated in a primary held in May. In ordering new elections the court made the same exception that we are mating, saying: “It will, of course, be unnecessary to proclaim or conduct special elections for nominations to the legislative offices in those reapportioned districts which coincide with the nominations in the May primary.” In Toombs v. Fortson, 241 F. Supp. 65 (N. D. Ga. 1965), upon facts substantially similar to those in the case at bar, the court held that legislators representing districts that were unchanged by the reapportionment plan were entitled to serve the remainder of their terms without standing for re-election in the special election that the court ordered.

We express no opinion upon the question whether, under Article 8, Section 6, of the State Constitution, as amended, the 26 other State Senators to be elected in November of 1966 must draw lots for 17 terms of four years and 9 terms of two years. That issue does not directly concern these appellees and is not involved in this litigation.

Affirmed.


text:
    Nielsen v. Ozark Realty Co.
    5-3738
    398 S. W. 2d 227
    Opinion delivered January 24, 1966

      Cien Wing, for appellant.

      Little & Enfield, for appellee.
   Paul Ward, Justice.

Involved on this appeal is the interpretation of a commission provision in a written contract effecting the exchange of certain real and personal property. There is no dispute about the facts involved, and only the one point, suggested above, is urged on appeal for a reversal.

Parties and Properties. John Nielsen (appellant) and R. I. Blair were the owners of a motel in Texas. For reasons not pertinent to the issue here Blair is not a party to this appeal, and, for the purpose of this opinion, Nielsen may be treated as the sole owner of the Texas property. Haskell F. Wright and other parties (whom we may hereafter refer to as “Wright”) were the owners of certain real and personal property located in Arkansas and Oklahoma. A portion of this property consisted of 25,000 railroad ties located in Oklahoma against which there was a lien for $9,000. The Ozark Realty Company, located at Siloam Springs, Arkansas is a partnership composed of Ben Nelson and J. J. Kriewitz who are real estate brokers licensed in this State. The company will hereafter be referred to as appellee.

Property Exchange. Appellee, as broker, was instrumental in bringing about an agreement whereby Wright and appellant would exchange the properties mentioned above. On February 11, 1964 Wright, as first party, and appellant, as second party, entered into a written “Exchange Contract” wherein the terms of exchange and descriptions of the properties were set out in detail. In the contract appellant (as second party) agreed to pay appellee, as agent, “a commission of $6,000.” This Exchange Contract was signed by Wright and appellant, and witnessed by appellee.

On the day the Exchange Contract was signed, the same contracting parties signed an “Agreement as to payment of commission,” which reads:

“Roy I. Blair and John Nielsen agree to pay a total of Four Thousand and No/100 commission ($4,000.00) to Ozark Realty Co. and Ozark Realty Co. agrees to accept $4,000.00 as total commission with payment to be in the following’ manner as full commission as set out in an exchange contract of even date between Haskell F. Wright, Geraldine R. Wright and Maud R. Wood and Roy I. Blair and John Nielson, which contract calls for a $6,000.00 commission:
It is mutually understood that there is a loan of $9,000 on the 25,000 railroad ties and first monies received from the sale of said ties shall be applied to this loan balance with the next monies received to be applied to the above agreed $4,000.00 commission until paid in full. It shall be the option of Ozark Realty to accept 5,000 railroad ties in full payment of the above amount or a lesser amount at the same pro rata price per tie of 80c per tie to be credited against the commission. If any other disposition of the railroad ties is made the entire unpaid balance of the commission will be immediately due and payable.” (Emphasis added.)

(It is agreed that the commission fee was reduced from $6,000 to $4,000 because appellant was a licensed real estate agent in Texas.)

The last sentence in the above agreement is the basis of this litigation, as will hereafter appear.

On February 11, 1964 appellee filed suit against appellant based on the “Exchange Contract” and the “Agreement as to payment of commission.” It was alleged that the exchange of property was consummated, and that appellant had refused to pay the agreed commission. The prayer was for judgment in the amount of $4,000. To the above, appellant filed a general denial and also a cross-complaint. Upon trial the jury returned a verdict for appellee as prayed, and this appeal follows.

Urging a reversal, appellant states: “The only issue was the meaning of the phrase in the contract, boiled down to the meaning of the words ‘other disposition’ The contract referred to by appellant is the one heretofore copied in full.

It is admitted that the railroad ties were not sold at private sales and the proceeds applied to payment of the $9,000 and the $4,000 as provided in the contract, but; that the holder of the $9,000 lien brought suit to foreclose the same.

For the purpose of this opinion we agree with appellant’s contention that the questioned language is ambiguous. However, we do not agree with appellant’s contention that the meaning of the language presented a question of law for the trial court to decide. On the contrary, the trial court was correct in presenting the matter to the jury. In the early case of Massey v. Dixon, 81 Ark. 337 (p. 342), 99 S. W. 383, we said:

“If the written contract unequivocally manifests the intention of the parties, the court should declare its effect. But where, as in this case, it is not clear from the instrument, taken as a whole, as to whether the parties intended a present or future sale, the court properly submitted the question to the jury for determination.”

Practically the same statement was repeated in Wisconsin & Arkansas Lumber Company v. Fitzhugh, 151 Ark. 81 (P. 85), 235 S. W. 1001. In Agey v. Pederson, 191 Ark. 497 (p. 499), 86 S. W. 2d 930, we said:

“The rule of law is that where a written contract is ambiguous in whole or in part, the meaning thereof should be left to the jury.”

See also: Fort Smith Appliance and Service Co. v. Smith, 218 Ark. 411 (p. 414), 236 S. W. 2d 583; Swift v. Lovegrove, 237 Ark. 43 (p. 45), 371 S. W. 2d 129, and, Manhattan Factoring Corp v. Osburn, 238 Ark. 947 (p. 950), 385 S. W. 2d 785.

The judgment of the trial court is affirmed.

Affirmed.

Cobb, J., not participating.


text:
    Beam v. The John Deere Co. of St. Louis
    5-3748
    398 S. W. 2d 218
    Opinion delivered January 24, 1966

      Batchelor & Batchelor, for appellant.

      James M. McHaney, Owens, McHaney & McHaney, for appellee.
   Paul Ward, Justice.

On July 21, 1964 The John Deere Company of St. Louis (appellee herein) filed a complaint in circuit court against Neal Beam, d/b/a Beam Construction Company (appellant herein), containing in substance the following allegations material on this appeal: (a) On February 9, 1962 appellant executed a title retaining note in the sum of $9,284.44 in part payment of a used John Deere Tractor purchased from the Pulaski Implement Company, hereafter referred to as “Pulaski”; (b) said note was negotiated, before maturity, to appellee who is the bona fide holder thereof ; (c) appellant has failed and refused to pay sáid note according to its terms, and there is a balance due of $3,-271.39; (d) appellant is now in possession of said tractor and refuses to surrender same to appellee; (e) the tractor is of the value of $6,500; (f) appellee is entitled to the immediate possession of said tractor; (g) The prayer was for the recovery of the tractor, and all other proper relief. (Similar allegations were also made regarding’ another tractor which raises no new issue and need not he considered on appeal). Filed in connection with the complaint was an affidavit and bond to obtain delivery, and also a Writ of Replevin.

To the above complaint appellant filed an answer, set off, and Cross-Complaint. Answer: Admits buying the tractor from Pulaski, which was represented to be a 1962 model, as used equipment, and purported to have a cash value of $11,750; (b) admits to paying $4,500, leaving a balance of $8,225; (c) Pulaski did not know the tractor was a 1962 model—it being in fact a 1958 model—having a market value of only $5,600; (d) appellee knew the tractor was sold to Pulaski for twice its worth, and Pulaski was an agent of appellee—therefore appellee was not a bona fide purchaser of the conditional sales contract; (e) admits he is in possession of said tractor and refuses to surrender possession to appellee; (f) denies all other allegations in the complaint, and; (g) claims his right under Ark. Stat. Ann. § 51-1102 (1947), i. e. the right to pay any judgment against him and keep the tractor.

Set-Off and Cross-Complaint: (a) Pulaski was an agent of appellee in making the sale and therefore a necessary party to this action; (b) Pulaski knew the tractor was older and less valuable than was represented; (c) he is entitled to judgment against Pulaski and appellee for $........................, and appellee is entitled to nothing.

Order and Judgment: The cause was submitted to the trial court on appellee’s Motion for Summary Judgment, the pleadings, and interrogatories. The court found that “there is no genuine issue as to any material fact,” and entered judgment in favor of appellee as prayed, including possession of the tractor, with appellant having the right to redeem the equipment.

For a reversal, appellant relies on the three separate points discussed hereafter.

One. After both sides had rested, and the matter had been submitted to the court on appellee’s motion for a summary judgment, appellant moved the court to reopen the case to allow him to show the tractor was sold by appellee to Pulaski for $500. This motion was denied by the court, and, Ave think, correctly so. In the first place there was offered no substantial proof of the allegation. In the second place it appears that appellant had not used due diligence to discover the asserted fact sooner. Also, there was undisputed proof that the tractor had been extensively repaired or rebuilt by Pulaski before it Avas sold to appellant. This fact having been established, the price Pulaski paid for the tractor was no proof of its value Avhen sold to appellant.

Two. It is next contended by appellant that the trial court weighed certain testimony which it had no right to do in passing on a motion for summary judgment, but no specific testimony is pointed out. We agree Avith the principle of laAV relied on by appellant, but for reasons pointed out under the last point, Ave deny his contention.

Three. It is finally contended by appellant that the trial court erred in holding the pleadings, affidavits, interrogatories, and exhibits, failed to present a genuine issue of fact. Again Ave are unable to agree Avith appellant.

It would serve no useful purpose to attempt to set forth the dozens of letters, exhibits, pleadings and interrogatories found in the voluminous record in this case. It appears that appellant’s principal contention, to show a fact issue is involved, may be fairly summarized in his OAvn statement that there is a material issue of fact ‘ ‘ as to the actual value of the equipment when sold, Beam claiming it was Avorth less than half what Deere claimed it was.” It may be conceded that there is much testimony in the record to indicate that perhaps appellant has a right of action against Pulaski, but when he signed the conditional sales contract upon purchasing the tractor from Pulaski lie waived all claims against appellee to whom the contract was assigned. In part the contract reads:

“I (we) will settle all claims of any kind against seller directly with seller and if seller assigns this note, I (we) will not nse any sneh claim as a defense, set-off or counter-claim against any effort by the holder of this note to collect the amount due on this note or to repossess the goods . . . .” (Emphasis ours.)

The above language clearly falls within the purview of the Uniform Commercial Code (§ 85-9-206) which reads in part:

‘ ‘ Subject to any statute or decision which establishes a different rule for buyers of consumer goods, an agreement by a buyer that he will not assert against an assignee any claim or defense which he may have against the seller is enforceable by an assignee who takes an assignment for value, in good faith . . . .”

There is not, and could not be, any connection or valid claim that the machinery here involved constitutes consumer goods. The recent case of John William Morgan v. John Deere Company of Indianapolis, Inc., (Ky.), 394, S. W. 2d 453, is very much in point here to sustain the action of the trial court in this case. In that case the Court said :

£ ‘ The contract of sale contained a waiver of defenses in the following language:
£I will settle all claims of any kind against Seller directly with Seller and if Seller assigns this note, I will not use any such claim as a defense, setoff or counterclaim against any effort by the holder of this note or to repossess the Goods.’ ”
‘1 Morgan contends that the case was not a proper one for summary judgment. However, on the key point in the case, namely, the waiver clause, there was no genuine issue of a material fact, so we think summary judgment was proper.
The judgment is affirmed.”

Likewise, there is no contention here that appellant did not sign the waiver clause.

The judgment of the trial court is, therefore, affirmed.

Affirmed.

Cobb, J., not participating.


text:
    Agee v. Wildman
    5-3740
    398 S. W. 2d 542
    Opinion delivered January 24, 1966
    [Rehearing denied February 21, 1966.]

      E. Clay Robinson, for appellant.

      Thorp Thomas, for appellee.
   Jim Johnson, Justice.

This appeal arises from denial of a motion to set aside a judgment.

On November 22, 1963, an automobile driven by appellant William J. Agee collided with one driven by appellee Charlie G. Wildman. Suit for damages was filed in Pulaski Circuit Court by appellee against appellant on September 3,1964. Summons was issued and returned unserved with the notation that the sheriff was unable to find appellant in Pulaski County. Summons was again issued on November 24, 1964, and was served by the sheriff on the Secretary of State as agent for service of process [under Ark. Stat. Ann. § 27-342.1 (Supp. 1965)]. When the case came up for trial, appellant failed to appear, appellee proved his damages and a default judgment was rendered against appellant. Thereafter appellant moved to set aside the judgment, under the provisions of Ark. Stat. Ann. § 29-506 (ftepl. 1962), grounds for vacating a judgment after term. In an affidavit in support of his motion, appellant alleged that he had a meritorious defense. No proof was offered at the hearing on the motion to set aside the judgment. From the order entered March 22, 1965, denying appellant’s motion, comes this appeal.

The first two points urged for reversal are: (1) the judgment by default against appellant was improperly rendered on constructive service because no attorney ad litem was appointed to represent him; and (2) appellant, as a constructively summoned defendant, had the right to have the action retried within two years after judgment.

Appellant was served under the provisions of Ark. Stat. Ann. § 27-342.1 (Supp. 1965), which by its terms is a special service statute. Therefore, appellant’s points relative to constructive service have no merit.

Appellant’s third point for reversal is that appellant is entitled to have the default judgment vacated because his failure to appear within the time provided was unavoidable in that he had no notice of the pendency of the action before the default was entered. Appellant urges that the judgment should be set aside on the ground of unavoidable casualty, Ark. Stat. Ann. § 29-506.

In proceedings for vacation of judgment other statutes in that chapter must be considered in conjunction with § 29-506, including § 29-509, “A judgment shall not be vacated on motion or complaint until it is adjudged that there is a valid defense to the action in which the judgment is rendered, . . .’’As was said in Nichols v. Arkansas Trust Company, 207 Ark. 174, 179 S. W. 2d 857:

“In a long line of cases beginning with State v. Hill, 50 Ark. 458, 8 S. W. 401, and extending to O’Neal v. Goodrich Rubber Co., 204 Ark. 371, 162 S. W. 2d 52, and Davis v. Bank of Atkins, 205 Ark. 144, 167 S. W. 2d 876, this statute [§ 29-509] has been construed as imposing the requirement that a prima facie showing of a valid defense be made before the judgment will be vacated, although it is shown that it was rendered without notice. ’ ’

A meritorious defense not having been properly alleged and proved, the trial court correctly denied appellant’s motion to vacate the default judgment.

Affirmed.

Cobb, J., not participating.


author: Jim Johnson, Justice. Ed. F. McFaddin, Justice,

text:
    Pacific National Bank v. Hernreich
    5-3793
    398 S. W. 2d 221
    Opinion delivered January 24, 1966

      Warner, Warner, Pag on & Smith, for appellant.

      Harper, Harper, Young & Durden, for appellee.
   Jim Johnson, Justice.

This appeal involves two apparently conflicting Arkansas statutes.

Appellee George Hernreich, operator of a jewelry store in Fort Smith, executed three promissory notes payable to W. F. Sebel Co., Inc., a foreign corporation. Sebel Company, a wholesaler of diamond jewelry, was not qualified to do business in Arkansas. Hernreich had been doing business with Sebel Company for two decades prior to this litigation. The testimony reflects that this was their manner of doing business: Sebel Company’s salesman, Sam Leibson, with his entire stock of diamond jewelry, would call on Hernreich at his Fort Smith store. Hernreich would select and receive diamond jewelry from Leibson’s stock. Hernreich would sign one or more promissory notes representing the purchase price of the jewelry, which notes Leibson would then forward to Sebel Company’s home office in Los Angeles. (Unknown to Hernreich, Sebel Company would then discount the notes with appellant, Pacific National Bank.) As Hernreich sold the diamond jewelry, he apparently put the money aside toward payment of the promissory note on that jewelry, and if he sold less than the amount of the note, shortly before the note was due Sebel Company sent him their check for the difference (i.e., if Hernreich had given a note for $5,000 and sold only $4,000, Sebel Company would send Hernreich its check for $1,-000.). When each note was due and sent to a Fort Smith bank for payment, Hernreich would pay the note with the proceeds of what he had sold and Sebel Company’s check.

On February 20 and March 14, 1963, appellee executed three notes totaling $10,611.70, due in three to five months. These notes were sent to Sebel Company by Leibson and negotiated to appellant bank a few days later. Shortly thereafter Sebel, the principal owner of Sebel Company, died and the corporation was dissolved. When the notes became due and were presented for payment at a Fort Smith bank, appellee refused to pay them.

Appellant filed suit against appellee in Sebastian Circuit Court on January 9, 1964, for the principal sum plus interest and costs, alleging that appellant was the holder in due course of the notes and entitled to judgment. Appellee answered, admitting execution of the notes, denying that appellant was a holder in due course, and alleged that Sebel Company was a California corporation not qualified to do business in Arkansas and was, therefore, without power to enter into an enforceable contract in Arkansas, and asked for summary judgment dismissing the complaint. After depositions and the affidavit of appellant’s vice president were taken, appellant filed a motion for summary judgment alleging that there was no genuine issue of fact and that appellant was entitled to judgment as a matter of law. The trial court granted appellee’s motion for summary judgment, from which comes this appeal.

Appellant contends that a holder in due course is entitled to summary judgment against the maker of negotiable notes under the undisputed facts, even though the payee was a non-qualified foreign corporation, and the trial court erred in granting appellee’s motion for summary judgment and overruling appellant’s.

For reversal, appellant cites Ark. Stat. Ann. § 85-3-305 (Add. 1961) which says:

“To the extent that a holder is a holder in due course he takes the instrument free from
(1) all claims to it on the part of any person; and
(2) all defenses of any party to the instrument with whom the holder has not dealt except
(a) infancy, to the extent that it is a defense to a simple contract; and
(b) such other incapacity, or duress, or illegality of the transaction as renders the obligation of the party a nullity; and
(c) such misrepresentation as has induced the party to sign the instrument with neither knowledge nor reasonable opportunity to obtain knowledge of its character or its essential terms; and
(d) discharge in insolvency proceedings; and
(e) any other discharge of which the holder has notice when he takes the instrument.”

For affirmance of the trial court, appellee cites Ark. Stat. Ann. § 64-1202 (Repl. 1957) :

“Any foreign corporation which shall fail to comply with the provisions of this act, and shall do business in this State, shall be subject to a fine of not less than $1,000, to be recovered before any court of competent jurisdiction, and all such fines so recovered shall be paid into the general revenue fund of the county in which the cause of action shall accrue, and it is hereby made the duty of the prosecuting attorneys to institute said suits in the name of the State, for the use and benefit of the county in which the suit is brought, and such prosecuting attorney shall receive as his compensation one-fourth of the amount recovered, and as an additional penalty, any foreign corporation which shall fail or refuse to file its articles of incorporation or certificate as aforesaid, cannot make any contract in the State which can be enforced by it either in law or in equity, and the complying with the provisions of this act after the date of any such contract, or after any suit is instituted thereon, shall in no way validate said contract.”

The legislature has in the past encouraged free negotiability of commercial paper and early passed the Uniform Negotiable Instrument Law. This was fairly recently replaced with the Uniform Commercial Code, of which § 85-3-305, supra, is a part. On the other hand, the legislature passed the highly penal statute, § 64-1202, supra, on foreign corporations to protect our citizenry.

In Dean J. S. Waterman’s fine article, “Notes Payable to an Unlicensed Foreign Corporation,” (5 Law School Bull. 12), he concluded: “. . . , Arkansas is perhaps the sole jurisdiction which denies to holders in due course the right to recover from the maker under a statute on unlicensed foreign corporations, such as ours, which does not declare the instrument void.”

The cases cited by appellee deal with attempted enforcement of assigned contracts of unlicensed foreign corporation, even Hogan v. Intertype Corporation, 136 Ark. 52, 206 S. W. 58, on which Dean Waterman relied for his conclusion. It is settled law that assignees can receive no better rights than their assignors had. The strong language in the Hogan case is excellent—but it is dicta. Thus it is apparent that this is really the first time this court has had occasion to rule directly on the question presented.

To reverse this case and permit enforcement of the notes here sued on would in effect repeal our penal statute prohibiting unlicensed foreign corporations from doing business in this state. Weighing the possible hampering of negotiability of commercial paper made in Arkansas against permitting fly-by-night foreign corporations to prey unimpededly on our citizens, we conclude that the better rule is that expressed in the Hogan case dicta:

“It was necessarily the intention of the Legislature to render any paper growing out of a transaction of this character defective so that it could not fall into the hands of an innocent purchaser and be enforced in this State. . . . [T]he notes evidenced a contract made by the corporation in violation of the statute laws of this State. The defect was inherent in the notes. . . , and therefore a subsequent purchaser must take notice of the defect.”

The effect of this adoption is to render a transaction of this kind not merely unenforceable but void ab initio. Accordingly, there can be no holder in due course here of a negotiable instrument arising out of this illegal transaction.

Affirmed.

McFaddin, J., dissents.

Cobb, J., not participating.

Ed. F. McFaddin, Justice,

dissenting. I vote to reverse the 'Circuit Court judgment because I am of the opinion that the appellant should prevail; and here are the reasons for my vote.

W. F. Sebel, Inc. was a nondomesticated foreign corporation. Under Ark. Stat. Ann. § 64-1202 (Repl. 1957) the notes that Hernreich executed to Sebel were not void. Bather, Sebel, as a nondomesticated foreign corporation, was denied the right to use the Arkansas State Courts to collect the notes. Sebel could have enforced the notes in the United States District Court in Arkansas if the jurisdictional amounts had been great enough. Citizens Bank v. Shaw, 293 F. 63; and Pellerin v. Hogue, 219 F. Supp. 629. In Waxahachie Medicine Co. v. Daly, 122 Ark. 451, 183 S. W. 741, we said:

“Our court has held that the failure of a foreign corporation to comply with the requirements of the statutes prescribing conditions upon which foreign corporations may enter and do business within the State did not render its contracts void, ...”

All our statute (§ 64-1202) does is to deny to the nondomestieated foreign corporation the right to use the Arkansas State Courts. If the Legislature had wanted to make the notes void it could have done so in appropriate language, just as usurious notes are void, even in the hands of a bona fide holder.

Since the notes were not void, then, under Ark. Stat. Ann. § 85-3-305 (Add. 1961), the appellant, as the conceded bona fide holder (for value before maturity and without notice), took the notes free of the claim of void-ability that Hernreich could have made against Sebel Co. The statute just cited says that the holder in due course “. . . takes the instrument free from ... (2) all defenses of any party to the instrument with whom the holder has not dealt except ... (b) ... illegality of the transaction as renders the obligation of the party a nullity.” That the notes were not a nullity is shown by Citizens Bank v. Shaw, supra; so, under the plain wording of our statute (a part of the Uniform Commercial Code adopted in 1961), these notes are enforceable in the hands of the appellant. This point is made crystal clear in the comment following' Ark. Stat. Ann. § 85-3-305 (Add. 1961) wherein, in speaking of paragraph (b) of subsection (2), as above quoted, the comment says:

“5. Paragraph (b) of subsection (2) is new. It covers mental incompetence, guardianship, ultra vires acts or lack of corporate capacity to do business, any remaining incapacity of married women, or any other incapacity apart from infancy. Such incapacity is largely statutory. Its existence and effect is left to the law of each state. If under the local law the effect is to render the obligation of the instrument entirely null and void, the defense may be asserted against a holder in due course. If the effect is merely to render the obligation voidable at the election of the obligor, the defense is cut off.” (Emphasis supplied.)

When the Legislature adopted the Uniform Commercial 'Code with this comment before it, the law had been settled at that time that notes such as these were not null and void, but merely voidable; and the comment says that, under such circumstances, “the defense is cut off.”

The Majority Opinion quotes from Dean Waterman’s article which appeared in Yolume 5 of the Law School Bulletin in December 1936. Dean Waterman there says:

“As pointed out, Arkansas is perhaps the sole jurisdiction which denies to holders in due course the righ to recover from the maker under a statute on unlicensed foreign corporations, such as ours, which does not declare the instrument void.”

Since 1936 the Arkansas Legislature has adopted the Uniform Commercial Code; and the logical effect of that adoption is to remove Arkansas from “the sole jurisdiction,” and put Arkansas with the great weight of authority in other jurisdictions. This is particularly important in matters of commercial paper.

The Majority Opinion concedes that the Hogan case was the ease of an assignee, and admits that we have no ease in Arkansas directly in point. Here is the language in the Majority Opinion:

“Thus it is apparent that this is really the first time this court has had occasion to rule directly on the question presented.”

In view of the adoption of the Uniform Commercial Code, as above quoted, and in the light of the cases in all other jurisdictions, I am thoroughly of the opinion that the appellant had the right to maintain this suit in the State courts. The Majority Opinion is reading something into the law that is not there, because it is in effect saying that the notes are absolutely void; and that is not what Ark. Stat. Ann. § 64-1202 (Repl. 1957) says.

For the reasons herein stated, I respectfully dissent.

      This case thoroughly establishes that notes like those in question are not void. The case has been cited in Ockenfels v. Boyd, 297 F. 614 (8th Cir.); Shaw v. Citizens Bank, 10 F. 2d 315 (8th Cir.); and in annotations in 132 A.L.R. 473 and 133 A.L.R. 1179.