author: Osuo Cobb, Justice.

text:
    Gross v. State
    5201
    403 S. W. 2d 75
    Opinion delivered May 23, 1966

      H. Allan Dishongh, for appellant.

      Bruce Bennett, Atorney General; Fletcher Jacltson, Asst. Attorney General, for appellee.
   Osuo Cobb, Justice.

On November 4, 1958, appellant was convicted in the Pulaski Circuit Court of the offense of burglary and grand larceny and was given a five-year sentence which was suspended by the court for the term of said sentence in accordance with the provisions of Ark. Stat. Ann. § 43-2324 (Repl. 1964)., which reads as follows:

“Postponing pronouncement of sentence.—‘Whenever, in criminal trials in all courts of record, a plea of guilty shall have been accepted or a verdict of guilty shall have been rendered, the Judge trying the case shall have authority, if he shall deem it best for the defendant and not harmful to society, to postpone the pronouncement of final sentence and judgment upon such conditions as he shall deem proper and reasonable as to probation of the person convicted, the restitution of the property involved, and the payment of the costs of the case. Such postponement shall be in the form of a suspended sentence for a definite number of years, running from the date of the plea or verdict of guilty and shall expire in like manner as if sentence had been pronounced; provided, however, the Court having jurisdiction may at any time during the period of suspension revoke the same and order execution of the full sentence(Italics ours.)

Oil September 29, 1963, appellant was present at a drinking party and fight in 'Conway County resulting in the killing of one of the participants. Appellant was thereafter charged with beating the deceased to death with malice aforethought, premeditation and intent to murder, i.e., murder in the first degree.

On October 16,1963, the Pulaski Circuit Court, after hearing, entered an order revoking appellant’s suspended sentence of November 4, 1958, and sentencing appellant to the penitentiary for a term of five years from October 16, 1963.

The record before us also reflects that appellant was subsequently brought to trial on the murder charge in Conway County and was found guilty by the jury on March 5,1964, a sentence of life imprisonment being imposed.

On November 5, 1965, appellant, while confined in the penitentiary, filed his petition with the Pulaski Circuit Court for a writ of habeas corpus expressly invoking procedures provided by Criminal Procedure Rule No. 1, set forth in our per curiam order of October 18, 1965, and appearing at 239 Ark. 850a and 850b.

Appellant’s petition for writ of habeas corpus states that it is based upon the contention that the Pulaski Circuit Court had erroneously revoked appellant’s suspended sentence by taking such action before appellant had been actually convicted of a new offense. Appellant’s petition was reached for hearing on January 13, 1966, when appellant was brought before the court by prison authorities and was represented by counsel, H. Allan Dishongh. All evidence offered on behalf of appellant was duly received and made a part of the record. This included some 22 letters received by appellant from various parties, including his attorney, court officials and judges. The evidence reflected that appellant was convicted of the charge of first degree murder in the Conway Circuit Court.

The Pulaski Circuit Court dismissed appellant’s petition for a writ of habeas corpus and appellant is here on appeal from that dismissal.

Appellant’s contention that a subsequent conviction is a condition precedent to revocation of a suspended sentence.

We have examined this contention and find that it is untenable for many reasons, including the following:

1. Ark. Stat. Ann. § 43-2324 (Kepi. 1964), which is the statutory authority for revocation of suspended sentences, contains no language so limiting the power and discretion of the trial court in such matters.

2. Appellant has not cited to this court a single case of any jurisdiction holding that an actual conviction for a subsequent offense is necessary before a suspended sentence may be revoked.

3. Trial courts are authorized under the statute quoted to suspend sentences when they deem it best for the defendant and not harmful to society. Likewise, when the trial court is persuaded that it is for the best interests of the defendant and of society to revoke a suspended sentence, he has and may exercise such discretion following a hearing.

4. While conviction for a subsequent offense is evidence of great weight in support of a petition for revocation of a suspended sentence, such evidence is by no means decisive in such a proceeding. For example, a subsequent conviction for negligent homicide in a traffic accident, absent evidence of deliberate misconduct by the accused, might very well be given little or no weight by the trial court in such a proceeding.

5. A person convicted of a criminal offense, who is released npon probation or a suspended sentence, knows that the leniency extended is conditioned upon his good behavior. When such an individual embarks upon a course of misbehavior, he forfeits the leniency extended him.

6. It is obvious that to leave a person convicted of a crime at large on a suspended sentence while known to be engaging in flagrant misconduct involving criminal and homicidal tendencies is against the best interests of the accused and the public; and for us to adopt the rule that under such threatening circumstances the accused should be left at large to pursue his course of misconduct, to the jeopardy of the general public, until such time as actually tried and convicted for a subsequent crime, would effectively abort all of the desired benefits and protection contemplated by the statute authorizing suspended sentences.

7. It is clearly in the public interest that our trial courts have and exercise the statutory discretion reposed in them with reference to the suspension of sentences in appropriate cases; and it likewise follows that trial courts should have and exercise their sound discretion in the revocation of such suspended sentences in appropriate cases. Any unreasonable limitations placed upon the trial courts in the exercise of their discretion in revoking suspended sentences could well serve to deny to some defendants suspension of sentences in the first instance. We have many times affirmed the actions of the trial courts in revoking suspended sentences because of the subsequent misconduct of the accused during the terms of the suspended sentences. Spears v. State, 194 Ark. 836, 109 S. W. 2d 926 (1937); Galloway v. State, 201 Ark. 542, 145 S. W. 2d 353 (1940); Bodner v. State, 221 Ark. 545, 254 S. W. 2d 463 (1953).

We conclude that the contention of appellant that his trial and conviction for a subsequent offense was a condition precedent to the revocation of his suspended sentence is without merit.

Did the trial court grossly abuse its discretion in revoking suspended sentence of appellant¶

We have previously laid down the rule that the action of a circuit court in revoking a suspended sentence will not be disturbed except upon a showing of gross abuse of the discretion of the court in such a proceeding. Calloway v. State, supra.

We have concluded from this record and many case authorities reviewed that the trial court did not abuse its discretion in revoking appellant’s suspended sentence. We set forth some of our reasons for this conclusion.

Of course, one charged with acts or a course of behavior which could result in a revocation of his suspended sentence is entitled to put on his defense to such charges at the hearing. Furthermore, since the action of the court upon such proceedings is reviewable here, such -hearings should be conducted with a court reporter present so that a full record may be available as to-such proceedings. Gerard v. State, 235 Ark. 1015, 363 S. W. 2d 916 (1963). In this case, appellant was given the fullest opportunity to present his defense. In Spears v. State, supra, cited with approval in Bodner v. State, supra, we stated with reference to the sufficiency of evidence to sustain an order of revocation of suspended sentence as follows:

“This is a matter coming within the sound discretion of the trial court. . . Of course, such discretion could not be arbitrarily exercised without any basis of fact, but the statute itself confers the authority to revoke the suspension of sentence ‘whenever the course shall be deemed for the best interest of society and such convicted person.’ ”

In this case it was shown to the trial court that accused had engaged in a course of conduct and behavior which had resulted in his being charged with the offense of murder in the first degree in Conway County. Furthermore, the record reflects that local authorities in Conway County were apprehensive as to the confinement of the accused in the local jail, in view of appellant’s known acts of violence and homicidal tendencies. At the hearing for revocation of the suspended sentence, the details of the alleged murder, for which appellant was subsequently convicted, were brought to the attention of the trial court.

Since the principal test in revocation proceedings is the interests of society generally along with the interests of the accused, the action of the trial court in revoking appellant’s suspended sentence upon the information before the court was not inconsistent with the best interests of society or of appellant. We conclude, therefore, that the trial court did not abuse its discretion in dismissing appellant’s petition for a writ of habeas corpus.

Finding no merit in any of the contentions of appellant, the judgment of the trial court is affirmed.


source: Caselaw Access Project

author: Osro Cobb, Justice.

license: Public Domain

text:
    Douglas v. Williams
    5-3915
    405 S. W. 2d 259
    Opinion delivered May 23, 1966

      Sexton & Robinson, for appellant.

      Shaw, Jones & Shatv, for appellee.
   Osro Cobb, Justice.

On September 28, 1965, a school election was held in the Hartford School District No. 94, Sebastian County, wherein a bond issue involving a 5-mill tax increase was approved, covering the cost of construction of a new elementary school in said district. The measure carried by a vote of 242 to 214. On October 5, 1965, the county court of Sebastian County made and caused to be entered its order finding and declaring the regularity of said election and the passage of the additional millage tax for retirement of the bond issue. This action of the county court was taken in accordance with Ark. Stat. Ann. § 80-318 (Repl. 1960), which provides in part as follows:

“Within ten [10] days after the election the county court shall canvass the returns and declare the result of the election by an order entered of record.”

Said act further significantly provides as follows:

“This order (of the county court) shall be final unless an appeal is taken from it to the circuit court within fifteen [15] days after it has been entered.” (Emphasis ours.)

Appellants, as citizens and taxpayers of said school district, brought a class action in chancery, seeking an order enjoining* the issuance or sale of bonds purportedly authorized by said election. Appellees responded by filing a motion for summary judgment to which was attached a certified copy of the order of the county court referred to above. We quote one paragraph from said motion for summary judgment:

‘ ‘ That the complaint and the entire file herein show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. ’ ’

Appellant’s original complaint alleged:

(a) That the resolution placing the millage question on the ballot was not properly adopted by the school board, in that proper notice, of the meeting of said board was not given and said resolution was not properly passed by a majority of the directors of the school district.

(b) That information furnished the State Board of Education by the appellees to obtain approval for said bond election was false.

(c) That the district did not have sufficient students to constitute a district.

(d) That the County Election Commission did not properly meet and set out precinct lines, that the judges at the voting precincts were not properly appointed, and that the results were not properly certified.

(e) That the vote count certified by the Election Commission was incorrect and that at least 30 improper ballots were cast.

(f) That the ballot used in said bond election was improperly worded as to the millage issue.

Appellants were permitted by the court to amend their complaint, making the following additional allegations :

1. That the school bonds authorized by said election had been issued and sold to T. J. Raney Investment Company.

2. That due to the pendency of this action T. J. Raney Investment Company was the only bidder for the bonds.

3. That the advertised conditions and terms for the sale of said bonds were amended by the school board to make the sale conditional upon the board prevailing in this law suit.

4. That the conditional sale of the bonds was illegal because of material variance from the stated provisions as to the sale, and because the T. J. Raney Investment Company was afforded a special term in the sale not advertised nor made available to other potential bidders.

Appellants in their original complaint sought injunctive relief against the sale of the bonds authorized by said election, and by amendment to the complaint sought cancellation of the sale made of said bonds.

Appellants, in responding to the motion of appellees for summary judgment, conceded that much of the allegations contained in their pleadings related to the holding of the school election, but insisted that said pleadings presented triable issues of fact and that said action, if not entertained for lack of jurisdiction in equity, should be transferred to the circuit court under the provisions of Ark. Stat. Ann. § 22-405 (Repl. 1962).

On November 18,1965, the chancellor filed his opinion finding that appellants’ complaint and amended complaint should be dismissed for want of jurisdiction in equity. The opinion, consisting of several pages of detailed discussion of the case, is limited to the jurisdictional question and does not refer to the existence or non-existence of triable issues of fact presented in the pleadings.

On November 22, 1965, however, the chancellor entered the following order:

“Now on this 22nd day of November, 1965, this cause comes on to be heard upon the Motion for Summary Judgment heretofore filed herein, and the Court, upon considering the pleadings and the written briefs submitted by counsel, filed his written opinion and finds that there is no genuine issue of fact in this case and that the Motion for Summary Judgment should be sustained.
“IT IS, THEREFORE, BY THE COURT CONSIDERED, ORDERED AND ADJUDGED that the Complaint filed herein and the Amendment thereto be and the same is hereby dismissed.”

The case is now before us, appellants urging two points for reversal as follows:

1. That the^ trial court erred in granting summary judgment of dismissal in this case.

2. That the trial court erred in dismissing appellants complaint as amended for lacle of equity jurisdic tion and in failing and refusing to transfer the action to the circuit court.

Point 1.

We have concluded, after examining appellants’ allegations in their original complaint and amended complaint, that same are directed to a challenge of the school election of September 28, 1965, and matters collateral to said election. The circuit court has exclusive jurisdiction of cases involving contests of elections. Ark. Stat. Ann. §§ 80-318 and 80-321 (Repl. I960). Under the circumstances the chancery court committed no error in finding that it was without jurisdiction in this case.

Point 2.

Appellants insist that the chancery court had a statutory obligation to transfer the cause to the circuit court upon finding that it had no equity jurisdiction under the provisions of Ark. Stat. Ann. § 22-405 (Repl. 1962). This court has never held that such a transfer from one jurisdiction to another is mandatory where the complaint involved is insufficient on its face to state a cause of action either at law or in equity, a transfer under such a situation being nothing more than an unwarranted exercise in judicial futility. Rowe v. Allison, 87 Ark. 206, 112 S. W. 395 (1908). In a case very similar on the facts to the instant case, Rich v. Walker, 237 Ark. 586, 374 S. W. 2d 476 (1964), the chancery court found that it was without jurisdiction and refused to transfer the case to the circuit court because the allegations of the complaint set forth merely conclusions of law and failed to state a valid cause of action. We quote from said case as follows:

“Appellants also contend that if the allegations of the complaint amount to an election contest and state a cause of action at law, the cause should have been transferred to circuit court on authority of Ark. Stat. Ann. § 22-405 (Repl. 1962). It is true that ordinarily when the chancery court sustains a demurrer to the jurisdiction of the court the cause should be transferred to circuit court if the complaint states an action at law. But here, the chancery court, upon sustaining the demurrer, gave the appellants 15 days to plead further; no additional plea was filed, nor did appellants move for a transfer to the circuit court; and further, a demurrer would have been good in circuit court on account of the allegations of the complaint being merely conclusions of law.”

The striking similarity of the facts in the Rich, case and the case at bar is further illustrated by an additional quotation from the Rich case:

"Moreover, appellants made no contention prior to the election that the ballot title was insufficient or that the election judges had been illegally selected. The complaint also alleges that people, not naming such people, were allowed to vote who were not qualified electors; that the ballots were miscounted, but did not state in what manner they were miscounted; and that the defendants intimidated the voting* public and misrepresented the facts to the people of the city, and deliberately destroyed the integrity of the ballots and the election. These allegations are in the nature of an election contest, although not specific enough to amount to more than conclusions of law. Other allegations, such as the defendants ‘did other things to destroy the integrity of the ballot’ are also merely conclusions of law and are not good against a demurrer.”

We further review the pleadings of appellants as to their sufficiency in stating* a cause of action.

1. The allegation that the resolution placing the ,millage question on the ballot ivas not properly adopted.

This alleges a bare conclusion.

2. The allegation that information furnished the State Board of Education to obtain approval of the bond election was false.

Here again we are confronted with an alleged conclusion.

3. The allegation that in 1948 the Hartford School District No. 94 had fewer than 350 students.

This is a reference to Initiated Act No. 1 of 1948 (now Ark. Stat. Ann. § 80-426 [Repl. I960]), which adopted for the purpose of consolidating districts having fewer than 350 students with other districts.- As to this allegation, appellees have asked this court to take judicial notice of the fact that the records of the State Department of Education reflect that for the year 1948 •The Hartford School District No. 94 had in fact 737 students, and we take such notice under authority of Seubold v. Fort Smith Special School District, 218 Ark. 560, 237 S. W. 2d 884 (1951).

4. The allegations that the County Election Commission did not properly meet, judges were not properly appointed, and results were not properly certified.

These are obviously allegations of conclusions without stating any facts upon which such conclusions could be reached.

5. The allegations that the Election Commission certified incorrect results and that some 30 improper ballots were cast.

Appellants made no allegations of fact in support of their contention that improper ballots were cast, nor did they suggest whether the alleged improper ballots were cast for or against the bond issue; and finally, we note that no allegation is made that the alleged improper ballots, if eliminated from the results of the election, would have rendered the results of said election doubtful in any way, nor is such contention or allegation made under any section of appellants’ complaint as amended. In order to destroy the result of an election it must be shown that wrongs against the freedom of election have prevailed, not slight and in individual cases, but generally and to the extent of rendering the results doubtful. Lewelling v. Mansfield School Dist. No. 76, 240 Ark. 217, 398 S. W. 2d 665 (1966).

6. The allegation that the ballot was improperly worded on the millage issue.

Here again is a stated conclusion without any facts alleged in support of the conclusion.

7. The original complaint further charged that the ballots were improper because either they were not signed, they were not signed by the proper person, or they were not dated.

The ballot thus challenged was not even made an exhibit to the pleadings and here we are presented with the statement of nothing more than conclusions. Furthermore, voters are not required to sign their ballots, and whether or not the ballot was dated when printed would be determined by a true copy of the ballot itself.

Appellants in their amended complaint alleged the sale of the bonds; that there was only one bidder on the bond issue because of the advertised pendency of this action; that the conditions and terms for the sale of the bonds were specifically amended by the school board to make the sale of said bonds conditional upon the board prevailing in this law suit; and that the said conditional sale of said bonds was illegal because it varied considerably from the stated provisions for the sale of school bonds; and further, that the purchaser of same had been afforded a special term in the sale not advertised nor made available to other potential bidders.

The school board had a duty to the general public, in attempting to sell the bonds while this action was pending, to pnt the public on notice as to the pendency of this action, and the offer of sale of the bonds conditioned upon affirmance of this case here was not improper but quite necessary to all concerned. While appellants allege that some special term was afforded to the purchaser of the bonds in some manner not advertised or made available to other potential bidders, the pleading states no allegations of fact upon which such conclusion rests.

Appellants have cited and relied upon the following case authorities as to this Point 2:

Phillips v. Rothrock, 194 Ark. 945, 110 S. W. 2d 26 (1931). This was a case involving the passing of an initiated act concerned with the payment of salaries to county officials. It was not brought to contest the returns of the election, or the certification of the vote upon the proposed measure. It was conceded that a large majority was cast in favor of the measure and that the returns of this vote were properly certified. The objection made was that the submission of the question at the election was unauthorized under amendment No. 7 (the initiative and referendum amendment) and that the act in question, therefore, did not become a law notwithstanding the favorable vote thereon. We find nothing in this case which sustains appellants’ position in the case at bar.

Arkansas-Missouri Power Corp. v. City of Rector, 214 Ark. 649, 217 S. W. 2d 335 (1949). This was a ease involving the wording of a ballot title in an election called by ordinance of a municipality to determine whether a bond issue should be approved to provide revenue for building a light plant and power distributing-system. It had nothing to do with school elections, and provides no support for appellants’ position.

We have concluded that, had the chancellor transferred this cause to the circuit court on the pleadings before him as suggested by appellants, same could then have-been reached by demurrer because of the failure of the pleadings to state a valid cause of action, and consequently the chancellor committed no error in refusing to transfer the case to the circuit court. See Rich v. Walker, supra. Of course, a dismissal of a complaint on the ground of failure to state a cause of action is without prejudice to the filing of a new complaint which states a valid cause of action. See Barrentine v. The Henry Wrape Co., 113 Ark. 196, 167 S. W. 1115 (1914); Thompson v. Semmes, 219 Ark. 67, 239 S. W. 2d 589 (1951).

We therefore conclude that the chancellor properly held that equity was without jurisdiction in this case and that no obligation rested upon the chancellor to transfer the case to the circuit court because the complaint as amended was insufficient to state a cause of action.

The judgment of the trial court in dismissing the case is affirmed.

Bland, J., not participating.


author: Guy Amsler, Justice.

text:
    Ramsay, Ex’x v. Roberts
    5-3916
    403 S. W. 2d 57
    Opinion delivered May 23, 1966

      John Harris Jones, for appellant.

      Dickey & Dickey, for appellee.
   Guy Amsler, Justice.

In 1949, Tom I. Steed owned real estate located at 100 Rhinehart Road in Pine Bluff, Arkansas. He leased the property to IT. L. McHone under a five-year lease with a five year renewal option. During the life of this lease McHone constructed a one story frame building, 16' x 36'., on the premises. McHone engaged in the manufacture and sale of ice cream from this outlet. The lease agreement entered into by Steed and McHone is not in the record. However, Steed testified, without objection, that McHone constructed the frame building on the property and that title thereto should pass to Steed unless McHone exercised his renewal option.

In November of 1953, McHone surrendered -his leasehold and sold his business, which carried the trade name “Old Fashion,” to Fred J. Ramsay for $12,735.00 —part cash and the balance represented by 36 monthly installment notes. McHone executed a duly acknowledged bill of sale (containing a warranty of title) conveying the personal property listed therein located at 100 Rhinehart Road to Ramsay and included therein was “1 one story frame building 16' x 36', with concrete floor.”

On November 30, 1953, Steed and his wife entered into a five year lease agreement with Ramsay covering “a plot of ground and building forty (40) feet front by fifty (50) feet deep—at the intersection of Rhinehart Road and Pullen Street—belonging to the lessors—.” Actually the property was located at 100 Rhinehart Road. There were provisions for a five year renewal and rental adjustments. The agreement also provided that the lessee would make necessary repairs and that title to all improvements placed on the realty by lessee should belong to lessors on termination of the lease.

In July of 1960, Fred J. Ramsay sold the business to appellee Roberts for a consideration of $10,086.50— $1,000.00 cash and the balance in monthly installments of $100.00 with 6% interest. This transaction was consummated through the execution of a sales agreement, chattel mortgage, promissory note and bill of sale. The agreement provided that Ramsay should transfer his lease on the premises at 100 Rhinehart Road and sell to Roberts “all leasehold improvements” thereon together with all merchandise, supplies, machinery and equipment—also good will and the registered trade name.

The chattel mortgage from Roberts to Ramsay and the bill of sale from Ramsay to Roberts covered the l®' x 36' frame building that was described in the bill of sale from McHone to Ramsay. A standard warranty of title clause was written into the bill of sale.

Ramsay died on August 17, 1964, and Roberts defaulted on the installments due on the note after November 1, 1964. In August of 1964, a thunderstorm damaged the frame building and sometime thereafter Roberts learned that he and Tom I. Steed both had insurance covering the damage and that Steed claimed to own the building. These two events (Ramsay’s death and the fire) transpired about the same time and appellee Roberts testified that he never discussed the breach of warranty question with Ramsay. He did discuss the matter with Ramsay’s son-in-law on one occasion but that conversation has no bearing on the issues in this case.

Appellee Roberts continued to carry on business at Rhinehart Road but, being dissatisifed with the status of his purchase from Ramsay, refused to make further payments on the installment note previously executed to Ramsay. On April 1, 1965, appellant filed suit in the Jefferson Chancery Court. She alleged an original indebtedness of $9,086.50 and an unpaid balance of $5,-884.42. She prayed judgment for said amount, interest, attorney’s fee, a foreclosure of the purchase money chattel mortgage, sale of the property and for judgment over if any deficiency existed after said sale.

In answer and counterclaim filed by appellee, execution of the documents evidencing the sale and purchase was admitted. Breach of warranty of title was urged as ground for voiding the entire transaction and requiring plaintiff (appellant here) to make restitution of all sums paid by appellee Roberts. An alternative prayer was that the indebtedness still due plaintiff be reduced by the amount of the value of the frame building.

Tom I. Steed was permitted to intervene in the case for the purpose of establishing his title to the building. All parties now seem to concede that Steed did in fact own the building and the Chancellor so found.

On trial the defendant introduced three witnesses and a number of exhibits, representing the instruments signed when the trade was consummated between Roberts and Ramsay and the original lease between Steed and Ramsay. Appellant offered no oral proof but elected to stand on the written documents signed by Ramsay and Roberts.

The trial court found that Ramsay sold the building to appellee Roberts and warranted the title thereto; that Ramsay had no title to the building, which was of the value of $3,000; that since title failed Roberts’ debt to the Ramsay Estate should be reduced in an amount equal to the value of the building- and that Roberts should resume monthly payments of $100.00 beginning January 1, 1966. This appeal followed.

Appellant asserts that the four documents (agreement, note, mortgage, bill of sale) must be construed together and that when this is done Roberts “received all that he bargained for.” In support of this theory the following eases, and others, are cited: Gowen v. Sullins, 212 Ark. 824, 208 S. W. 2d 450; Henslee v. Boyd, 235 Ark. 369, 360 S. W. 2d 505.

No one can gainsay that such is the law. However, a casual examination of the four instruments will readily illustrate that its application offers appellant no consolation or relief. The note and the agreement refer to “leasehold improvements, machinery and equipment.” The inventory attached to the agreement lists “1 one story frame building 16' x 36', with concrete floor, located on leased ground at 100 Rhinehart Road.” The mortgage and the bill of sale list “1 one story frame building 16' x 36', with concrete floor, located on leased ground at 100 Rhinehart Road.” The chattel mortgage executed to Ramsay bound Roberts “to procure and maintain policies of fire and tornado insurance on the mortgaged property to the amount of the insurable value thereof with loss, if any, payable to second party as his interest may appear; and first party also agrees to pay all the taxes and assessments levied upon the mortgaged property as the same becomes due and payable. ’ ’

We think that the language used is so plain and clear as to preclude any doubt that Ramsay undertook to convey the frame building to Roberts and that Roberts thought he was getting title to it. We have many times said that words in a contract must be given their obvious meaning and interpreted accordingly. Nakdimen v. Brazil, 131 Ark. 144, 198 S. W. 524; Connelly v. Beauchamp, 178 Ark. 1036, 13 S. W. 2d 28; Roth v. Prewitt, 225 Ark. 466, 283 S. W. 2d 155.

It is also a well established rule in this jurisdiction that a contract is construed most strongly against the party drawing it (Ramsay in this case) and most favorably for the other party. Leslie v. Bell, 73 Ark. 338, 84 S. W. 491; Marley v. Hackler, 176 Ark. 238, 3 S. W. 2d 20; General American Life Ins. Co. v. Frauenthal & Schwarz, 193 Ark. 663, 101 S. W. 2d 953.

But, says appellant, even if there was a breach of warranty appellee was not damaged, that he is still using the building1 and had no intention of moving it off of Steed’s land. To assert that Roberts was not damaged because he had formulated no plans for moving the property he contracted for and didn’t get is simply begging the question. The trial court found that appellee had been damaged to the extent of $3,000 because title to the building failed and we think such finding is supported by a preponderance of the evidence.

Finally, appellant contends that “want of title in the seller is not a defense to an action for the purchase price where the buyer has remained in possession.” This court has consistently held that a purchaser may rescind the contract on breach of warranty or may keep the property and set up such breach by way of recoupment when sued for the purchase price. The Chancellor correctly held that appellee was entitled to do this. Johnson v. Madison Paint Co., 170 Ark. 1193, 281 S. W. 358; Siegel, King & Co. v. Penny & Baldwin, 176 Ark. 336, 2 S. W. 2d 1082.

Affirmed.


author: Hugh M. Bland, Justice.

text:
    Ark. La. Gas Company v. Wood
    5-3888
    403 S. W. 2d 54
    Opinion delivered May 23, 1966

      Warner, Warner, Rag on & Smith, Jeta Taylor, for appellant.

      Jaclt Tates, for appellee.
   Hugh M. Bland, Justice.

This is an appeal from a judgment in the sum of $1,500.00 in favor of appellee, Robert C. Wood, for damages to his land and use of water from an artificial stock pond. Appellee owns a 160-aere stock farm near Cecil, Arkansas. On June 11, 1955 appellee executed an oil and gas lease on this tract of land to W. R. Stephens, d/b/a Stephens Production Company and Arkansas Louisiana Gas Company, for a term of 10 years. This lease provided in part: “Lessee shall have free use of oil, gas and water from said land, except water from Lessor’s wells, for all operations hereunder.” The lease further provided for reasonable use of the land in drilling operations. Appellee used the land as a stock farm, running about 50 head of cattle. Appellant began drilling operations in February 1963. According to appellee’s testimony, appellant used about 4 acres of his land for a roadway and about 2 acres for the drill site. The road was built by the use of bulldozers and was about 40 feet wide. The timber was pushed back and piled up along the west side of the right-of-way. About the time operations started, representatives of the appellant asked and obtained permission of the appellee to use water from his stock pond provided such use did not destroy his use of the pond for watering his stock. The pond was pumped so low by appellant that it went dry about the 25th of May, 1963 and did not again contain stock water until about the 20th day of September, 1963. During this time appellee was forced to pump water from his well to water his cattle. Appellant dug another pond in 1963 at a location agreed upon by the parties, but it did not have water in it until late September 1963.

There was very little conflict in the testimony except appellant’s testimony disputed the acreage used claiming the drill site to be 200 feet by 200 feet and the roadway about 15 to 20 feet wide. Appellant admitted use of storage site about 75 feet by 75 feet near the drill site but denied any unreasonable use of the land.

Both at the close of appellee’s testimony and at the close of all testimony appellant moved for a directed verdict which motions were denied and exceptions saved.

For reversal appellant contends that the trial court erred in failing to direct a verdict for defendant because appellee wholly failed to establish that appellant used more of the property than was reasonably necessary and that the court erred in submitting Instruction No. 9 to the jury.

We cannot agree with these contentions. It is true that an oil and gas lease gives with it the right to possession of the surface to the extent reasonably necessary to enable a lessee to perform the obligations imposed upon him by the lease. This includes the right to enter upon the premises and use so much of it, and in-such manner, as may be reasonably necessary to carry out the terms of the lease and effectuate its purpose. 4 Summers Oil and Gas (1962), § 652, p. 2; 1 Williams, Oil and Gas (1959), § 7, p. 220; Mid-Texas Petroleum Co. v Colcord, 235 S. W. 710 (Tex. 1921); Pulaski Oil Co. v. Conner, 62 Okla. 211 (1916); Union Producing Company & Cook Drilling Co. v. Pittman, 146 So. 2d 553 (Miss. 1962).

In the case at bar the appellee produced substantial testimony as to the damage to his land and to use of the stock pond. His own estimate of the damage was $1,500.00 for unreasonable use of his land and $1,000.00 for the use of the water. Two of his neighbors thoroughly familiar with his land and cattle operation testified as to the damage, one of them fixing it at $1,000.00 damages for the unreasonable use of the land in the building of the road and $500.00 for the unreasonable use of land in the drill site. The other witness based his estimate of damages on what it would take to hire a bulldozer and operator to repair the damage and fixed the damage to the land at from $1,000.00 to $1,200.00 but did not fix any damages for loss of use of the water. Other substantial evidence was also introduced to show that more land was used than was reasonably necessary giving the appellee a cause of action for damages. See Livingston v. Indian Territory Illuminating Oil Co., 91 F.2d 833 (10th Cir. 1937).

In Denver Producing & Refining Co. v. Meeker, 188 P. 2d 858, (Okla. 1948), action was brought by the surface owner to recover damages from the lessee for the unreasonable use of the surface land. The lessor and other witnesses gave testimony which supported the claim but the defendant objected that none of the witnesses were in the business of producing oil and gas. In holding the evidence sufficient to support the verdict and judgment for the plaintiff, the court said:

“We have heretofore held that in cases involving questions coming within the observation and experience of laymen, and upon which they were qualified to testify, they would be permitted to testify, and the weight and effect of their testimony be determined by the jury. * * * We think the witnesses produced by plaintiffs showed themselves sufficiently familiar with the use of the surface of the land for oil operations in the vicinity of the farm of plaintiffs to testify as to an unnecessary use thereof for roads, and for the hauling of equipment to and from the wells thereon.”

On the question of whether the lessee had a right to usé free of cost water on the land impounded in an artificial pond by the lessor for his use as stock water there is a division of authority. We do not find an Arkansas ease directly in point but the Supreme Court of Oklahoma and the Supreme Court of Kansas have passed on oil and gas leases containing a similar clause. In the case of Arnold v. Adams, 147 Okla. 57, 294 P. 142, a clause in an oil and gas mining lease read as follows :

“Lessee shall have the right to use, free of cost, gas, oil and water produced on said land for its operation thereon, except water from wells of lessor.”

Commenting on this provision the Oklahoma court stated:

‘ ‘ Clearly this does not mean that lessee was entitled to use water from the private pond or tank of the lessor, hut means water produced hy lessee hy drilling wells, building tanks, or ponds, or from running streams, etc. Otherwise, under such clause, an oil and gas lessee could enter upon the premises of the lessor and use all the water impounded by lessor for private use and thus deprive the lessor of water for his stock.”

In the case of Wyckoff v. Brown, 135 Kan. 467, 11 P. 2d 720, an oil and gas lease provided that the lessee should have the right to use free of cost, gas, oil, and water produced on said land for its operations thereon except water from wells of lessor. The defendant lessor argued that he only intended to permit the use of any water flowing in a natural water course on the land to be used in drilling operations and that he did not intend to permit the use of water produced or conserved for watering his cattle either in ponds or wells. Commenting on the lessor’s argument the court said:

“But the written contract did not say so. It only withheld the water in wells; and while an oil and gas lease should perhaps be strongly construed against the lessee, he being the author of its printed terms, the utmost liberality of construction would not permit a reservation of the ‘water in the,wells of the lessor’ to include the water produced in an artificial pond on the leased premises.”

In the Kansas case above the court did not have before it a complete record of the proceedings, a part of it being based on the remembrance of defendant’s attorney. Under these circumstances the conclusion reached by the court does not appear to be logical.

This court agrees with the holding of the Oklahoma Supreme Court in Arnold v. Adams, supra, for to hold otherwise would permit the lessee in an oil and gas lease to drain the stock ponds of the lessor without being responsible for damage to the watering ponds for his stock.

The last contention of the appellant is that the court erred in giving Instruction No. 9 which reads as follows:

“You are instructed that the rights of the parties hereto are governed and are to be determined by the provisions of the lease introduced in evidence. You are instructed that the lease provides, in part, that the Lessee shall have free use of oil, gas, and water from said lands, except water from the Lessor’s wells, for all operations hereunder; and it is for the Jury to determine what is a reasonable use and if the defendant had a right to take and to use the water.”

An examination of this instruction leads us to believe that even if it were erroneous it was not prejudicial to appellant. St. Louis & San Francisco Ry. Co. v. Crabtree, 69 Ark. 134, 62 S. W. 64.

This court has held on many occasions that on appeal the supreme court views the evidence in the light most favorable to the appellee and affirms if there is any substantial evidence to support the jury’s verdict. Oliver v. Miller, 239 Ark. 1043, 396 S. W. 2d 288. In that case the court cited with approval the holding in Menser v. Danner, 219 Ark. 130, 240 S. W. 2d 652 and Jarrett v. Matheney, 236 Ark. 892, 370 S. W. 2d 440.

There is no contention that the jury’s verdict was excessive.

We are of the opinion that the judgment should be affirmed.


author: Carlbton Harris, Chief Justice.

text:
    Smith v. Nelson
    5-3910
    403 S. W. 2d 99
    Opinion delivered May 30, 1966

      George Howard, Jr., for appellant.

      Thomas T). Wynne, Jr. and Frank W. Wynne, for appellee.
   Carlbton Harris, Chief Justice.

Appellants, Edgar Smith, Louis Smith, Joe Smith, Elijah Smith, and Lillie Taylor, along with Ardellar Smith Nelson, one of the appellees herein, are heirs at law of Ella Smith, deceased, who died intestate in Dallas County, Arkansas, the owner of 160 acres of land. This land has never been partitioned.

In July, 1961, these appellants, and Ardellar Smith Nelson, entered into an agreement to partition this tract of land, it being agreed that appellants would convey all of their interest in a particular 16 acres (of the tract) to Ardellar Smith Nelson, and she, in turn, would convey her interest in the remaining 144 acres to appellants. An attorney was engaged to prepare proper deeds to carry the agreement into effect. However, some of the heirs withdrew their consent to the agreement, and it was called off. The attorney then returned the deed (wherein appellants would deed their interest to Ardellar Smith Nelson) to Edgar Smith, and instructed him to destroy the instrument. However, Smith did not destroy it, but, several weeks later, turned it over to Roscoe Utter, who, together with his wife is the other appellee herein. This deed, dated July 22, 1961, was recorded by Utter on November 6, 1962. In the meantime, on October 24, 1962, Utter and wife had acquired a deed from Ardellar Smith Nelson, in which she conveyed all of her right, title and undivided interest in and to the 160-acre tract of land, and this deed was recorded on October 30, 1962. On January 12, 1963, Utter recorded a deed from Ardellar Smith Nelson, executed on January 11,1962, wherein the latter conveyed all of her title and undivided interest in and to the specific 16 acres heretofore mentioned. Thereafter, Utter and wife proceeded to place various improvements on the 16 acres mentioned in the unexecuted deed, signed by appellants .(or some of them), and set out in the January deed from Ardellar Smith Nelson. Appellants, upon discovering that the instrument turned over to Edgar Smith had been recorded by Utter, instituted suit to cancel the deeds of July 22, 1961, and January 11, 1962, alleging that Utter had fraudulently caused the July deed to be placed of record, and that the January deed referred to the July deed, and thus improperly designated the interest of appellants in the land. On trial, the court can-celled the deed of July 22,1961 (wherein appellants purportedly conveyed their interest in the 16 acres to Ardellar Smith Nelson), and also cancelled the deed of January 11,1962, from Ardellar Smith Nelson to the Utters. The court held that Utter and wife acquired an undivided 1/10 interest in the 160-acre tract of land, by virtue of the deed executed by Ardellar Smith Nelson to them on October 22, 1962, and that accordingly, the Utters likewise held a 1/10 interest in the 16-acre tract, heretofore mentioned. The court found that the Utters had expended the sum of $2,485.36 in improvements on the 16 acres, and held that they were entitled to that amount less $248.53, which represented their own 1/10 interest. Judgment was rendered against each appellant for $248.53 as their pro rata part of the amount expended for improvements, based on the 1/10 interest of each. Appellants appeal from that portion of the decree, which finds that no fraud was perpetrated by the Utters, and that portion which awards the Utters $2,236.83 for improvements.

The only issues to be decided are whether appellees were entitled to be reimbursed for improvements, and, if so, whether the proper amount was awarded; all other relief sought by appellants was granted in the trial court, and there is no cross-appeal. It is appellants’ contention that Utter practiced fraud on the appellants, and was not entitled to invoke the aid of a court of equity. The testimony of how Utter acquired the deed (signed by appellants) is in conflict, and no point would be served by setting out all of the testimony. Admittedly, he paid $1,800.00 to Ardellar Smith Nelson for her interest, and there is no suggestion that this amount was inadequate; there is evidence that he thought he was purchasing the exact 16 acres adjoining his property, and, unquestionably, that was Utter’s intention. At any rate there was sufficient testimony to support the finding of the Chancellor that no fraud was committed. It is admitted by appellant Edgar Smith that Utter “was supposed to have got 16 acres” from Ardellar Smith Nelson; likewise, Elijah Smith testified that he understood that Utter had purchased 16 acres from Ardellar Smith Nelson, and both witnesses admittedly observed Utter making improvements on the property. When asked why he did not try to stop Utter at that time, Elijah Smith replied, “Here is what I thought. Roscoe bought her part and he had a right to put improvements on it.” Edgar Smith also observed the improvements being made by Utter, and, in fact, Smith testified, “I went down there and showed him the corners.” Appellants clearly were originally of the view that Utter was within his rights in placing improvements on this particular 16 acres, and all appellants were aware of the fact that Ardellar Smith Nelson had conveyed her interest in the land to this appellee and his wife. No objection was made to the improvements being placed on the property at the time the work was being done, though the work was performed openly, and, as previously mentioned, at least two of the appellants, Edgar and Elijah Smith, were well aware of the fact that the improvements were being made. Under these facts, we think the Chancellor was correct in concluding that Utter was entitled to be reimbursed for the improvements made. However, the court erred in determining the amount that Utter should receive, basing its finding on the amount that Utter had spent in making the improvements; this was not the proper method to be used in establishing the value. As we stated in Wallis v. McGuire, 234 Ark. 491, 352 S. W. 2d 940:

“* * * The proper criterion is not the cost—nor present value—of the improvements, but rather, the amount by which such improvements have enhanced the value of the land. This is the rule under what is generally known as the Betterment Act, § 34-1423. Ark. Stats., 1947. See Hutchinson v. Sheppard, 226 Ark. 509, 290 S. W. 2d 843; McDonald v. Rankin 92 Ark. 173, 122 S. W. 88. In the latter case we said:

“ ‘The value thereof is based upon the enhanced value which these improvements at the time of the recovery impart to the land. * * * The difference between the value of the land without the improvements and the value of the land with the improvements in their then condition would be a just sum to allow therefor. ’

“The Betterment Act applies to tenants in common. Greer v. Fontaine, 71 Ark. 605, 77 S. W. 56; Baxter v. Young, 229 Ark. 1035, 320 S. W. 2d 640. Practically all of appellants’ testimony deals with the costs of the improvements, * * *. The cost of an improvement is only an element to consider in the overall picture.”

Because of the court’s error in determining the amount to be allowed for improvements, that portion of the decree is reversed, and the cause remanded with directions to proceed in a manner not inconsistent with this opinion. In all other respects, the decree is affirmed.

McPaddin, J., not participating.

      It is not entirely clear whether some of the heirs refused to sign the deed, or whether they changed their minds after signing.

      This particular acreage adjoined land owned by Utter.

      There are other heirs who are not participants in this litigation.

      It was stipulated that Joe Smith and Louis Smith, if called to testify, would testify to substantially the same facts as testified to by Edgar and Elijah Smith.


author: Ed. P. McPaddin, Justice.

text:
    Albert Pike Hotel v. Tratner
    5-3878
    403 S. W. 2d 73
    Opinion delivered May 30, 1966

      Gockrill, Laser, McGehee & Sharp, for appellant.

      Pope, Pratt & Shamburger, By: M. Jack Sims, for appellee.
   Ed. P. McPaddin, Justice.

This is a workmen’s compensation case. Appellee, Mrs. Tratner, received injuries when she sustained a fall at the City Health Office on Markham Street in Little Rock, Arkansas, on October 15, 1964. She claimed that at the time and place when she received her injuries she was an employee of the Albert Pike Hotel, and that such injuries arose out of and in the course of her employment; and she filed her claim before the Workmen’s Compensation Commission. The Hotel denied that Mrs. Tratner had ever been employed by it, and also denied that any injuries she might have sustained arose out of and in the course of employment. The Referee of the Commission who heard the case (Hon. J. R. Calhoun), in disallowing the claim of Mrs. Tratner, rendered a clear and logical opinion. The Pull Commission reviewed the record, with no additional evidence offered, and likewise disallowed the claim. The Circuit Court reversed the Commission and directed the claim to be allowed; and the Albert Pike Hotel brings this appeal, urging only one point, to-wit:

“The Circuit Court erred in reversing the opinion and order of the Arkansas Workmen’s Compensation Commission for the reason that there was substantial competent evidence to support findings of fact made by the Arkansas Workmen’s Compensation Commission and upon which the opinion and order was based.”

At the outset we reiterate the long established rule of this Court that the findings of fact of the Workmen’s Compensation Commission have the force and effect of a jury verdict. J. L. Williams and Sons v. Smith, 205 Ark. 604, 170 S. W. 2d 82; and Arkansas Coal Co. v. Steele, 237 Ark. 727, 375 S. W. 2d 673. Tims, on disputed factual issues, the Circuit Court cannot reverse the Commission, but must accept that view of the facts which is most favorable to the Commission’s findings.

With the foregoing rule understood, we examine the evidence. There were only two witnesses, Mrs. Tratner and Mr. Jordan, who was the chef at the Albert Pike Hotel. Both witnesses agreed that on or about October 14th Mrs. Tratner applied to Mr. Jordan for a job as cook at the Hotel. The vacancy for which she was applying was due to occur on Octobei 16, 1964, and Mr. Jordan testified that in the interview he told Mrs. Tratner that if she wanted to work she should obtain a health card and bring it, together with her social security number, to the Hotel by six A.M. October 16, 1964, prepared to go to work, if the hours, wages, and working conditions were satisfactory to her. In short, Mr. Jordan testified that she was not employed, but merely given the option to decide on employment. The evidence reflects that Mrs. Tratner did not have a current health card, and the Hotel would not employ her until she had one. Mr. Jordan testified that Mrs. Tratner did not return to the Hotel by six A.M. on October 16th, so he employed another person.

Mrs. Tratner testified that on October 14th she applied to the Albert Pike Hotel for employment as a cook; that Mr. Jordan was the Hotel representative to whom she talked; that Mr. Jordan employed her to commence work at six A.M. on October 16th; and directed her to obtain a health card, and bring same, and her social security number, with her when she reported for work at six A.M. on October 16th; that on October 15, 1964, about eleven A.M. she went to the 'City Health Department on Markham Street in Little Rock, Arkansas, to obtain the required health card, and while she was in the process of leaving the building of the City Health Department, she fell and sustained the injury which gave rise to this claim.

On this state of the testimony the Commission found:

“The relationship of employer-employee did not exist. Claimant’s injury did not arise out of and during the course of her employment with the Albert Pike Hotel. The injury must arise out of and during the course of the employment. Both elements must exist. Such is not the case here.”

According to the evidence of Mr. Jordan, Mrs. Tratner was never employed. If she had reported for work at the Albert Pike Hotel at six A.M. on October 16,1964, ivith health card and social security number, she would have been put to work; hut she did not appear. The Avitness Jordan testified that she Aims never employed: she merely had the option to return, if she desired the work. He did not knorv whether she would ever return. It is instantly apparent that the Commission accepted the testimony of the witness Jordan; and on this state of the record we must reverse the Circuit Court and affirm the Commission. Lewellen v. William T. Collins Shows, 239 Ark. 132, 371 S. W. 2d 833.

In the brief filed by Mrs. Tratner in this Court, reliance is made on three cases, being Alewine v. Tobin Quarries (S. C.), 33 S. E. 2d 81; Warren’s Case (Mass.), 97 N. E. 2d 184; and Grube v. Associated Indemnity Co., 187 F. 2d 129. But these cases, when carefully studied, agree with what Ave have just said. In each case the Court held that it Avas for the trier of the facts (Commission or jury) to decide whether the injured person was an employee at the time of receiving the injury. In the case at bar, the Commission has found from the evidence that Mrs. Trainer’s injuries did not arise “out of and in the course” of any claimed employment. Such finding is supported by substantial evidence; and the Circuit Court was in error in reversing the Commission on such factual finding.

Therefore the Circuit Court judgment is reversed and the cause remanded with directions to enter a judgment affirming the order of the ‘Workmen’s Compensation Commission.


author: Ed. F. McFaddin, Justice.

text:
    Ark. State Highway Comm. v. Hughes
    5-3906
    403 S. W. 2d 80
    Opinion delivered May 30, 1966

      George 0. Green and Thomas B. Keys, for appellant.

      Loohacloo, Gooch & Loohadoo, for appellee.
   Ed. F. McFaddin, Justice.

This is an eminent domain action brought by the appellant, Arkansas State Highway Commission, to acquire 13.03 acres for a right of way for U. S. Interstate No. 30. The landowners are the appellees, James H. Hughes and wife. The Highway Commission considered the total damages which the landowners were entitled to receive, both for the taking and the severance damages, to be $5,700.00. The jury awarded the landowners $11,000.00; and the Highway Commission appeals, listing two points:

“I. The trial court committed reversible error in permitting Mr. P. M. Brown to give testimony with reference to the highest and best use being urban homesites, a use that the lands were not being put to at the time of the taking, without showing that this would be the highest and best use in the immediate future.
“II. There was no substantial evidence in the record to support the verdict.”

Mr. and Mrs. Hughes owned 59 acres. In addition to their home, Mrs. Hughes also had a beaut}^ shop on the land; and Mr. Hughes testified that the land was valuable as commercial property. He also raised horses and cattle on the land. The right of way taken by the Highway Commission leaves 14.44 acres on one side of the non-access highway, and 31.53 acres on the other side. Two witnesses testified for appellees as to the damages sustained by the landowners.

One of the witnesses was P.M. Brown, whose experience as a real estate appraiser was quite extensive. Mr. Brown testified that the value of the Hughes property before the taking was $35,200.00 and the value after the taking was $24,650.00, or a difference of $10,550.00 as the Hughes damage. Mr. Brown showed great familiarity with land values, sales, and uses for land in the affected area. On cross examination it was shown that Mr. Brown, in fixing the value of the Hughes property, had considered the most valuable use to be the location for homesites; and the attorney for the appellant then moved to exclude the value testimony of Mr. Brown, saying:

“If the Court please, we move to strike the testimony based on the fact that he is basing it on the highest and best use, and there is no information to show the Court that there is any reasonable possibility that this could be urban homesite property rather than the use that it was being used for.”

The Trial Court overruled the motion; and that ruling is the first point urged for reversal. We find no error in the Court’s ruling. Mr. Hughes had testified:

“Q. What use were you making of it at that time?
“A. Homesite and commercial property.
“Q. At the time that this portion was taken you were actually using it as a homesite, where you and your family lived?
“A. Yes, sir.
“Q. And commercial as your wife’s beauty shop?
“A. Yes, sir.”

Thus, at the time of the taking, the property was being used for homesite and also for commercial use. The witness Brown testified as to other tracts nearby being used for homesites, so there was no error in the ruling made by the Court.

The appellant insists that the “highest use of the property” must be a reasonably probable use, citing Ark. Hwy. Comm. v. Watkins, 229 Ark. 27, 313 S. W. 2d 86:

To warrant the admission of testimony as to value for purposes other than that for which it is actually used, however, regard must be had for existing* conditions and wants of the community, or such as may reasonably be expected in the immediate future. The uses considered in fixing value must be so reasonably probable as to have an effect upon the present market value of the land, and a speculative value cannot be considered.”

We agree with the quoted language. In fact, the Trial Court so instructed the jury in Instruction No. 5A, concerning which the appellant made no objection. In Burford v. Upton, 232 Ark. 456, 338 S. W. 2d 929, we said:

‘ ‘ The market value is the value to which the property can best be put, or value for the best use of the property, and not necessarily the use to which the property is presently being put. See Little Rock & Ft. Smith Railway Co. v. McGehee, 41 Ark. 202; Orgel, Valuation Under Eminent Domain, Sec. 30; Yonts v. Public Service Company of Ark., 179 Ark. 695, 17 S. W. 2d 886.”

Likewise, we find no merit in appellant’s second point. The other witness for the landowners was Mr. Ben. F. Bledsoe, who had many years experience in appraising land. He testified that the value of the Hughes property was $47,500.00 before the taking, and 32,500.00 after the taking, or a difference of $15,000.00. His testimony was stoutly challenged on cross examination, but the weight to be given it was a matter for the jury. The witnesses for the appellant claimed that the Hughes property was only damaged a total of $5,700.00 The jury verdict was $11,000.00 and, under the evidence as heretofore stated, such verdict is not excessive.

Again the appellant asks us to overrule our recent case of Arkansas State Highway Comm. v. Russell, 240 Ark. 21, 398 S. W. 2d 201; and again we refuse. The opinion in that case was delivered after most careful consideration. Affirmed.

      The said instruction reads: “Now, there has been considerable testimony concerning present use and highest and best use of the involved property. In this connection you are told that regard must be had for existing conditions and wants of the community, or such as may reasonably be expected in the immediate future. The uses considered in fixing value must be so reasonably probable as to have an effect upon the present market value of the land, and a speculative value should not be considered in determining ‘fair market value.’ ”


author: George Eosb Smith, Justice.

text:
    Dierks Forests v. Shell, Assessor
    5-3907
    403 S. W. 2d 83
    Opinion delivered May 30, 1966

      Watson, Ess, Marshall & Eng gas, Kansas City, Mo., Wootton, Land & Matthews, Tom Walbert and Elbert Gook, for appellant.

      Robert N. Hardin and Fred E. Briner, for appellee.
   George Eosb Smith, Justice.

This is a suit by the appellant, Dierks Forests, Inc., to enjoin the Saline County assessor, clerk,, and collector from assessing, levying, and collecting Dierks’s 1965 real estate taxes upon the basis of an assessed value higher than that fixed by Dierks itself when it filed its 1965 assessment of its land in the county. The question is whether Dierks’s own assessment was lawfully raised in time for the increased values to be used in the extension and collection of the 1965 taxes, payable in 1966. The chancellor, without reaching that substantive question, found that Dierks had neglected to pursue its remedy at law and that the increased assessment had therefore become final.

The controlling facts are not in dispute. On January 4,1965, the county assessor and several local taxing-units filed a request that the county court appoint professional appraisers to reappraise all taxable property in the county, pursuant to Act 351 of 1949. Ark. Stat. Ann. §§ 84-468 through 84-474 (Eepl. 1960). The county court approved the proposal. On February 9 the Universal Land & Appraisal Company was employed to make the reappraisement. Universal agreed to complete its reappraisement by September 1 (subject to a daily penalty of $100 for delay) and to defend its work against complaints made within three years. In appraising the various tracts Universal was to use cards to be supplied by the county.

Dierks owned more than 700 parcels in Saline county, comprising 82,692.77 acres. On April 7 Dierks voluntarily assessed its lands at a total value of $496,180.00.

Universal had not finished its work on July 1—the date on which the county assessor must complete his assessments of real property. Ark. Stat. Ann. § 84-415. On July 30 the Assessment Coordination Department, an agency of the Public Service Commission, notified the assessor of Saline county that the county’s ratio of assessed value to market value was below the state-wide standard fixed by the Department. Needless to say, the Department’s comments were directed to the assessments already on the books and not to Universal’s reappraisement, which was still in progress.

On August 5 the county assessor informed Dierks by telephone that the professional appraisers had completed their work as far as Dierks was concerned. At the assessor’s suggestion Dierks sent a work party to Saline county to examine Universal’s cards and to talk with its appraiser. It was eventually determined—apparently sometime in September—that the total Dierks assessment had been raised from $496,180.00 to $800,-730.00, an increase of $304,550.00. No written notice of an increase was ever given by the assessor, nor did Dierks file a petition for review with the county equalization board. On September 10 Dierks’s president met with the equalization board to make what he refers to as an informal protest against the increase. The board refused to consider a reduction, stating that its members would stand upon Universal’s reappraisal. It is evident that the board did not then have detailed information about Universal’s evaluation of the 700-odd tracts owned by Dierks.

Meanwhile the county assessor was making up his assessment books by copying the valuations from Universal’s cards. That work was not entirely complete by October 22, when the assessor filed his uncertified book of rural real property assessments with the county clerk. By then the present suit had already been filed, on October 2.

Broadly speaking, the parties’ opposing contentions are simple. Dierks insists that the attempt to raise its assessment came too late and would, if upheld, involve a denial of due process of law in that Dierks would have lost its right to a judicial review of the assessment. The county officials contend that even though the letter of the law was not obeyed there was such a substantial compliance that Dierks could and should have exhausted its remedy at law by appealing to the equalization hoard and then to the county court.

In our opinion the governing statutes provide an unmistakable answer to the question presented. To explain our conclusion, however, we must describe in some detail the two statutory methods by which assessed values may he raised. For convenience we may call the two methods (a) the tract-by-tract procedure and (5) the across-the-board procedure.

First, the tract-hy-tract procedure. For many years this has been the usual method by which assessed values have been determined. Under this procedure the landowner may, though he is not required to, voluntarily assess his property between the first Monday in January and April 10. Section 84-414. Dierks followed that course, filing its assessment on April 7.

Whether or not a landowner assesses his property the county assessor must assess all real estate between the first Monday in January and July 1. Section 84-415. If the assessor raises the landowner’s own assessment he must give written notice to the landowner and inform him that he may appeal to the equalization hoard not later than the third Monday in August. Section 84-437. Here the assessor neither assessed Dierks’s property by July 1 nor gave Dierks written notice that its assessment had been increased.

Not later than the third Monday in August the landowner may petition the equalization hoard for a review of the assessment. Section 84-708. The board’s regular session begins on August 1 and runs to September 1, hut to finish its work the board may remain in session until October 1. Section 84-706. An aggrieved landowner may file his appeal to the county court not later than the second Monday in October. Section 84-708.

The opportunity to appeal to the equalization board and thence to the courts is an essential part of the tract- • by-tract procedure. Under the federal constitution the property owner is entitled at some point to notice and an opportunity to be heard on the fairness of his assessment, as compared with the assessment of other property. McGregor v. Hogan, 263 U. S. 234 (1923); Londoner v. Denver, 210 U. S. 373 (1908). Our law complies with the constitution by affording the landowner the necessary opportunity for a judicial review.

Second, the across-the-board procedure. This is not an annual routine method of assessing property. It is an exceptional step authorized by Act 153 of 1955. (Several sections of Act 153 were temporary and are published in the compiler’s note to Ark. Stat. Ann. § 84-477).

Act 153 established a uniform state-wide system for the assessment of real and personal property. The system was intended to achieve an equal distribution of the tax burden, so that property in some counties would not be discriminated against by being assessed at a higher percentage of market value than property in other counties. Under Act 153 the Public Service Commission was directed to prepare manuals setting out a uniform system for. the assessment of property. County assessors were required to obey the directions issued by the Public Service Commission. .

Act 153 took effect on March 7, 1955. It was plainly essential to a uniform state-wide assessment procedure that the plan be put into effect in all the counties. To that end the act required every county assessor to make a complete reassessment, in conformity with the manuals, as of January 1,1957. That reassessment was to be completed, if possible, by the first Monday in June of 1957. If an assessor conld not complete Ms reassessment by then he was given an additional year, the new assessment then being effective as of January 1, 1958. When the task had been finished the assessors were required to keep their .assessments up to date by entering changes occasioned by the construction of improvements, the subdivision of acreage property, and the like. Section 84-475.

Section 12 of Act 153 put teeth into the new system. (That section is now a permanent law, compiled as Sec-, tion 84-477 of the statutes.) It requires the Assessment Coordination Department to determine annually whether each county’s ratio of total assessed value to .total market value equals the minimum (originally 18%) fixed by the Department. If not, the Department must notify the county of its delinquency not later than August 1. If the county is to receive its full share of state turnback funds it must bring its assessments up to the state level.

It is at this point that the across-the-board procedure for raising assessments comes into play. Ordinarily, as we have seen, the equalization board completes its part of the tract-by-tract assessment- procedure not later than October 1. If, however, the county is notified that its assessment ratio is too low the equalization board is given until the third Monday in November to effect an across-the-board increase. Sections 84-477 (C) and 84-706. That process is a simple one. All that needs to be done is for the board to raise all assessments alike by whatever percentage is needed to bring the county level up to the state-wide level.

The statute, for reasons that are obvious, does not give a landowner the right to appeal from an across-the-board increase in assessed values. Since the increase is not to be made by the assessor there is no occasion for an appeal from any decision of his to the equalization board. Nor is there any reason for the law to provide an appeal from the board’s blanket increase in all assessments. Such an increase cannot involve a discrimination against a particular landowner, for everyone is treated alike. If discrimination already exists the landowner had his remedy by appeal to the equalization board in the tract-by-tract assessment procedure.

We may end our discussion of the statutes by pointing out that the county’s employment of professional appraisers has no direct bearing upon either assessment procedure. The expert appraisers may be employed at any time during the year. No date is fixed by statute for the completion of their work. The appraisers ’ report is not itself an assessment. It is merely an aid to the county assessor, who considers it in making his own final assessments. Section 84-468; Strawn v. Campbell, 226 Ark. 449, 291 S. W. 2d 508 (1956). Hence there is no need for the professional appraisers’ report to fit into the statutory timetables governing assessment procedures.

We return to the particular issue presented by the case at bar. The source of the difficulty that arose in Saline county in August of 1965 becomes perfectly clear. The county assessor erroneously tried to work the professional appraisal into the 1965 tract-by-tract assessment procedure even though the appraisal became available much too late to be of use in that year. Doubtless the Assessment Coordination Department’s letter of July 30, notifying the county that its assessment ratio was too low, contributed to the confusion. As we have shown, the board of equalization should have acted upon that letter by putting into effect an across-the-board increase in all assessments. Instead, the assessor attempted, without success, to meet the situation by fitting the professional appraisers ’ valuations into the tract-by-tract procedure. Under that procedure, however, the 1965 assessments of individual parcels had already become final.

There remains for discussion only the possibility that what happened amounted to a substantial compliance with the statutes governing tract-by-tract assessments. It is at once apparent that the procedure actually followed was deficient in many material respects:

First: The assessor should have completed his assessment by July 1. As far as the increased valuations are concerned the assessment was not final until sometime after October 22, when the uncertified assessment books were filed.

Second: Dierks Avas entitled to written notice that its voluntary assessment had been raised. That notice Avas lacking.

Third: Dierks was entitled to an opportunity to appeal to the equalization board not later than the third Monday in August. It was denied that opportunity, because the assessor did not make the final assessments until months later.

Fourth: The equalization board’s declared intention to accept the professional appraisal did not amount to a judicial revieAV. The board could not have been acting as an appellate tribunal under the tract-by-tract procedure, for as yet there Avas no final assessment that could be revieAved. Nor could the board’s attempted approval of the appraisal be treated as an across-the-board increase in assessments, for such an increase must apply in the same percentage to all existing assessments. That result did not attend the work of the expert appraisers, Avho were bound by their contract to make an independent appraisal of every tract of land in the county.

Fifth: Dierks had the right to appeal from the equalization board to the county court not later than the second Monday in October (Section 84-708) and thence, if need be, to the circuit court and to this court. That right was circumvented, because neither the assessor nor the equalization board had made a final appealable decision by the second Monday in October.

A defective execution of a statutory scheme cannot amount to a substantial compliance with the law if the citizen’s essential constitutional rights are disregarded. We are convinced that the actions taken by the assessor and the equalization board in August and September were so tentative, so inconclusive, that Dierks would have had no tenable basis on which to pursue its supposed remedy at law. Not until late in the month of October did the assessor commit himself to a firm approval of the advisory valuations submitted by Universal. We could not fairly say that Dierks lost its right to judicial review long before its grievance even came into existence.

Reversed.


author: George Rose Smith, Justice.

text:
    Williams v. Brown
    5-3935
    403 S. W. 2d 89
    Opinion delivered May 30, 1966

      Gean, Gean & Gean, for appellant.

      Owen C. Pearce and Donald P. Callaivay, for appellee.
   George Rose Smith, Justice.

On March 31, 1964, the appellees, Willard and Mattie Brown, sold a chicken farm to the appellants, Ernest and Flora Williams, who assumed an existing mortgage and gave a second mortgage to secure the rest of the unpaid purchase price. In this suit to foreclose the second mortgage the purchasers sought rescission on the ground that Brown induced them to buy the property by falsely representing that his income from it had been about $10,000 a year. See Kotz v. Rush, 218 Ark. 692, 238 S. W. 2d 634 (1951). The only question here is whether the chancellor was right in finding that the purchasers failed to prove their defense by a preponderance of the evidence.

Williams, the buyer, was the principal defense witness. On direct examination he testified that Brown said that his income from raising chickens and livestock had been $10,000 a year, but on cross examination he admitted that perhaps Brown had merely said that it was a $10,000-income farm. It appears that the sellers’ real estate agent advertised the place as having an income of $9,500 a year. During the eighteen months between the sale and the trial of the case Williams raised chickens but very few cattle on the property. His income would have been about $5,200 a year if he had not been handicapped by suffering a broken leg.

Brown testified, and the chancellor was justified in finding, that he merely stated that the property would produce $10,000 annually if handled properly. Both Brown and the real estate agent testified in substance that the farm was capable of producing an income of from $10,000 to $12,000. We need not detail the calculations by which they arrived at these figures. Moreover, in. the course of the negotiations Brown introduced Williams to the secretary of the company for which both Brown and Williams contracted to raise chickens. This man explained the contracts, to Williams and doubtless would have supplied information, if it had been requested, about the amounts that his company had paid to Brown in the past.

Our study of the record convinces us that the weight of the evidence actually supports the decree instead of its being the other way around.

Affirmed.

Bland, J., disqualified.


author: Paul Ward, Justice.

text:
    Lehigh v. Wooley
    5-3918
    403 S. W. 2d 79
    Opinion delivered May 30, 1966

      Thomas A. Glaze, for appellant.
    No brief filed for appellee.
   Paul Ward, Justice.

This litigation concerns primarily the sufficiency of the application required of a qualified elector to vote by absentee ballot. More specifically we are here concerned with the “reason” which the elector must assign for his contemplated absence from his voting precinct on election day.

On September 28, 1965 a school election was held in the El Dorado School District No. 15. At that election Grady E. Wooley, Frances Duren, Herbert S. Woods, and Charles Van Ness (appellees herein) voted by absentee ballots, but their votes were not counted by Charles H. Lehigh and Eva Mae Combs (appellants herein) who were the election judges on the absentee box.

On October 7, 1965 appellees filed a petition for mandamus in the Circuit Court of Union County to compel appellants to count their ballots and certify same to the County Election Commissioners. The Commissioners were also made defendants and the court was asked to compel them to include appellees’ votes in the final results.

Before a trial was had on the issues raised the Commissioners agreed to accept appellees’ votes and to include them in the final results. They then asked the court to dismiss appellees’ petition. It appears the trial court recognized that the action of the Commissioners rendered all issues moot, but (a) it refused their réquest, and (b) it ordered appellants to count the ballots and certify them to the Commissioners.

We think the trial court was correct on both counts.

(a) Even though appellees had already achieved what they sought to accomplish—have their votes counted—yet the other issue raises a question which is of interest to the voting public and, for that reason, it should be resolved. The trial court was correct in so holding.

(b) Act 325 of 1949, § 6, being Ark. Stat. Ann. § 3-1128 (Repl. 1956) in substance and in all parts material here, provides: The county clerk shall deliver to the applicant a blank statement for him to fill out and sign. The statement is in essential form as follows:

“I, .........................................., do swear ... I will be unavoidably absent from my voting precinct because of .......................................... (state reason). I am a qualified elector .... ”
signature
Address”

It -was stipulated that appellees wrote the words “out of town” in the last blank space as the “reason” for being absent. It is appellants’ contention however that the assigned “reason” is insufficient and does not meet the requirements of the above mentioned statute. This objection was appellants’ sole ground for refusing to count appellees’ ballots. The burden of appellants’ argument appears to be that it was incumbent upon appellees to explain why it was necessary for them to be “out of town”. The trial court held that the “reason” given by appellees was a substantial compliance with the statute, and we agree with that holding.

We do not believe the legislature meant for an absentee voter to explain in detail the “reason” for being absent on election day. If a real and convincing “reason” should be required, then it follows that someone would have to judge the sufficiency of that reason. Such a procedure could easily result in an elector being compelled to divulge personal secrets in order to exercise his constitutional right of suffrage.

Appellants lay much stress on the words “unavoidably absent” as meaning the elector must give a good reason why he will be “absent from town”. We point out however that the elector is only required to give a good reason why he will be ‘ ‘ absent ’ ’ from the voting precinct. We then submit that if the elector is “out of town” on'election day he will “be unavoidably absent” from his voting precinct.

Affirmed.


author: Paul'Ward, Justice.

text:
    Republic Steel Corp. v. McCastlain, Comm’r
    5-3923
    403 S. W. 2d 90
    Opinion delivered May 30, 1966

      William II. Bowen, Jerry T. Light, Smith, Williams, Friday & Bowen, for appellant.

      Lyle Williams, Hugh Brown, Ben Rowland, Tom Tamer, for appellee.
   Paul'Ward, Justice.

This appeal tests the right of the Arkansas State Revenue Commissioner (appellee herein) to collect a certain compensation tax (or use tax) from the Republic Steel Corporation (appellant herein).

Litigation over the tax arose in the manner presently mentioned. In 1961 appellant, in performing a contract, installed reinforcing steel bars at certain missile-launching sites in this State. The bars were manufactured by appellant at its plant in Chicago out of raw materials taken from its stockpiles at the plant, and then shipped here for use. Appellant paid to appellee the sum of $20,718.29, being 3% of the cost of said raw materials. However appellee took the position appellant must pay, as a tax, 3% of the value of the finished product, which tax would amount to $58,059.40. The difference of $27,-341.20 was paid by appellant under protest, and it then brought this suit to recover same. All facts, stated above and stated hereafter, were stipulated and are not in dispute here.

At the trial below appellant contended: (a) the disputed tax is arbitrary and unauthorized by 4 and 5 of Act No. 487 of 1949; (b) the proposed tax is contrary to the Cozistitution of the State of Arkansas (Art. 2 § 3, Art. 16 § 5) and the Constitution of the United States, (Article 1, § 8 Cl. 1, and Amendment 14, § 1.)

The cause was submitted on stipulated facts, and the trial court held the additional tax was legal and should be paid by appellant. We have reached the conclusion that the trial court must be affirzned.

In 1949 the Legislature .passed Act No.. 487, being Ark. Stat. Ann. 84-3101 to 84-3128 (Repl. 1960) designated as “The Arkansas Compensation Tax Act of 1949”—hereafter referred to as the Act. We copy below pertinezit portions of the Act. § 84-3105, (a) in part, reads:

11 is hereby levied and there shall be collected from every person in this State a tax or excise for the pzivilege of storing, using or consuming, within the State, azzy article of tangible personal property, after the passage and approval of this Act . . . , purchased for storage, use or consumption in this State at the rate of three per centum (3%) of the sales price of such propez'ty.” (Emphasis ours.)

The emergency clause of the Act relative to the issues here raised, reads:

“Since the enactment of the Arkansas Retail Sales Act, Arkansas has been placed in the peculiar category of discriminating against its home merchants. This Act attempts to rectify the evil by placing domestic merchants upon an equal plane with foreign merchants.”

In urging a reversal appellant emphasizes four separate points, but we think the decisive issue will be simplified by setting out certain pertinent facts and circumstances.

(a) Appellee concedes this State cannot impose a tax on the sale of the raw materials to appellant because that transaction (standing alone) took place outside the jurisdiction of this State, (b) It is appellee’s theory and contention that the tax is on each completed unit (steel bar) and not on its component parts, (c) It is undisputed that appellant (acting as a contractor—not a manufacturer) brought the completed units from Illinois to this State for the purpose of “using” them in the missile sites'inthis State.

Therefore it appears from the above that (with the exception later noted) the transaction here involved falls squarely within the language of the statute. That is, appellant brought “tangible personal property” into this State and it exercised “the privilege of . . . using” it in this State. The “exception” noted above is the contention . of appellant that there was no sale of the steel bars to it, and that the Act requires such sale. We are not persuaded by appellant’s argument for the reasons hereafter discussed.

Assuming, for the purpose of this discussion, that the Act (to be effective here) requires a sale to appellant it must be conceded that there was no such sale according to the ordinary usage of that word. However, under our decisions and the facts here admitted, we hold that there was a sale to appellant (the contractor) in this instance. It must be remembered that appellant, in a manner, acted in two separate and distinct capacities— as a manufacturer it created or fabricated the steel bars, while as a contractor it used them to perform its contract in this State. As a manufacturer appellant transferred its title in the steel bars to itself or its agent in the capacity of a contractor. The case of Mann v. McCarroll, Commissioner of Revenues, 198 Ark. 628, 130 S. W. 2d 721, construed parts of section 4 of Act 154 of 1937, which reads:

‘ ‘ There is hereby levied upon and shall be collected from all retail sales ... a tax of 2% . ... ” (Emphasis ours.)

Among other things this Court there said :

“The suggestion that the retail dealer who takes from his stock articles held therein for retail sale by him, upon which tax should be collected, is subject to the tax is not inconsistent with the language used and must admittedly be an interpretation under which the language so interpreted must be regarded as legal and enforceable.”

This Court construed Act 386 of 1941—“The Arkansas Gross Receipts Act”, in the case of Cook, Commissioner of Revenues v. Southwest Hotels, Inc., 213 Ark. 140, 209 S. W. 2d 469. Part of section 3 of the Act reads :

“There is hereby levied an excise tax of (2%) per annum upon the gross proceeds or gross receipts derived from all sales .... ” (Emphasis ours)

This Court said:

“It cannot be doubted . . . that one who withdraws merchandise or commodities from his commercial establishment or stockpile, or who reserves it for personal use, is chargeable with the two percent tax. ’ ’

The above language is most persuasive when applied to the situation before us here. In the Coolc case the tax was based on the sales of property while in the case before us the tax is based on “the privilege of storing, using or consuming”.

It is true that the Act uses the words ‘ ‘ sales price ’ ’ which certainly is normally some indication there must be a sale, but we do not read this Act to mean there must be an ordinary sale before the tax is payable. It must be realized that it was necessary for the Legislature to provide a method of determining the basis to which the 3% would apply. We can think of no better basis than the sales price of the article.

There has been much argument concerning the purpose of the Act—whether it was intended to cover the situation in this case. The purpose could not be made plainer than the wording of the emergency clause previously copied. One illustration will demonstrate that the theory advanced by appellant would thwart the intent of the Legislature as expressed in the emergency. In bidding on the contract here involved appellant would have a $58,059.49 advantage over a contractor from Arkansas or-from any of the other states who wished to enter a bid.

It is appellant’s view that this case should be reversed on the authority of Halliburton Oil Well Co. v. Reily, 373 U. S. 64 (1963), but we cannot agree. There the 'Court said the “sole issue before us is whether the Louisiana use tax as applied to appellant, discriminates against interstate commerce in violation of the Commerce Clause of the Constitution”. In holding that the tax did violate the Constitution the Court said:

“As noted by the Louisiana Supreme Court below and approved in Silas Mason, the purpose of such a sales-use tax scheme is to make all tangible property used or consumed in the State subject to a uniform tax burden irrespective of whether it is aequired within the State, making it subject to the sales tax, or from without the State, making it subject to a use tax at the same rate. The appellant admits the validity of sucb a scheme.” (Emphasis ours.)

The Court then proceeded to reverse the case on other grounds not present here. We can see no material difference between the tax plan copied above and the plan here, involved, and appellant has pointed out none.

In accord with what we have heretofore said the case' is affirmed.