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

text:
    Miss Linda Ellen SNOW and Mrs. Dale Loyd SMITH v. Marjorie T. MARTENSEN
    74-300
    522 S.W. 2d 371
    Opinion delivered April 7, 1975
    [Rehearing denied May 12, 1975.]
    Crouch, Blair, Cyperl & Waters, for appellants.

      Jones & Segers, for appellee.
   J. Fred Jones, Justice.

This is an appeal by Miss Linda Ellen Snow and Mrs. Dale Loyd Smith from a Washington County Probate Court judgment holding the appellee, Marjorie T. Martensen, to be the surviving joint tenant, and therefore sole owner, of a savings account in the approximate amount of $70,000 deposited with the First Federal Savings and Loan Association of Fayetteville in the names of Blanche M. Box and Marjorie M. Martensen.

The facts appear as follows: Mrs. Blanche M. Box was 83 years of age when she died testate in Washington County, Arkansas, on October 17, 1971. She left as her sole surviving heirs, one daughter, the appellee Marjorie T. Martensen, and two granddaughters, the appellants Linda Ellen Snow and Joan Snow Smith.

Mrs. Box was living in California when she executed her last will and testament on March 10, 1969, and the pertinent provisions of the will read as follows:

“FIRST: I revoke all Wills and Codicils that I have previously made.
SECOND: I declare that I am married to JOHN V. BOX and all references in this Will to ‘my husband’ are to him. I have one child now living, my daughter, MARJORIE T. MARTENSEN.. I have one deceased child, my daughter, MARY J. SNOW, who was survived by her daughters, LINDA ELLEN SNOW and JOAN ELIZABETH SNOW. Both of my children are the children of my former marriage. I have no other children, living or deceased.
THIRD: I give and bequeath all my jewelry to my daughter, MARJORIE T. MARTENSEN. If she fails to survive me this bequest shall fail.
FOURTH: I give, devise and bequeath the residue of my estate, real and personal, wherever situated, including all failed and lapsed gifts, as follows:
(a) One-half (Vz) thereof to my daughter, MARJORIE T. MARTENSEN. If she fails to survive me, I give all such property to her lawful issue who survive me on the principle of representation.
(b) One-fourth (!4) thereof to my granddaughter,
LINDA ELLEN SNOW.
(c) One-fourth (!4) thereof to my granddaughter, JOAN ELIZABETH SNOW.
* * *
SEVENTH: I nominate and appoint my husband as Executor of this Will, to serve without bond. If my husband shall for any reason fail to qualify or cease to act as Executor, I nominate and appoint CARL J. SCHUCK as Executor of this Will, to serve without bond. The term ‘Executor’ as used in this Will shall include any personal representative of my estate. I authorize my Executor to sell or lease such property of my estate as may be necessary or advisable, subject to confirmation as may be required by law and to hold, manage and operate any business belonging to my estate at the risk of my estate. I authorize and empower my Executor to invest and reinvest my estate to the extent permitted by law in such investments as are authorized by the provisions of California Civil Code Section 2261 or any subsequent statute of similar import.”

Mrs. Martensen went to California and returned to her home in Fayetteville with her mother, Mrs. Box, about October 1, 1971. Mrs. Box’s husband, John V. Box, died after the will was executed. Following the death of Mrs. Box, Mr. Schuck renounced his right to appointment as executor under the will and Mrs. Martensen was appointed administratrix with will annexed. Mrs. Martensen filed her inventory on May 10, 1973, showing no real estate, and personal property totaling $786.00 itemized as follows:

“Miscellaneous personal effects $ 50.00
One (1) old style round cut diamond ring,
2.20 carats with four small
diamond melee 696.00
One (1) 14 kt. yellow gold bracelet 25.00
One(l)14kt. yellow gold bee pin 15.00”

The appellants filed objections to the inventory filed by the appellee. They contended that the savings account here involved constituted assets of the decedant’s estate to be administered under her will. Mrs. Martensen contended first that the amount in the savings account was a gift to her and, second, that the savings account belonged to her as the surviving joint tenant with right of survivorship. The probate judge agreed with Mrs. Martensen on her second contention and on appeal to this court the appellants have designated the following points for reversal:

“The probate court erred in holding that Arkansas law does not require a designation in writing to create a joint-tenancy with right of survivorship in a savings account held in a savings and loan.
The probate court erred in failing to hold that even if Ark. Stat. 67-1838 (1) does not on its face require a designation in writing, that that statute has been amended and/or repealed either directly or by implication by Act 78 of 1965 (Ark. Stat. 67-552).
The probate court erred in failing to hold that Section 1 of Ark. Stat. 67-1838 as far as it attempts to make the doing of an act conclusive evidence of another act or of an intention is invalid.
The probate court erred in failing to hold that an account with a savings and loan is a contract and since the signature card (appellants’ exhibit A) was never signed by Blanche Box (and in fact, there was no evidence that it was ever seen by her), Blanche Box is not bound by the language on the signature card nor is she an applicant for the opening of a joint account as stated on the signature card.”

We find no merit to the appellants’ first two points.

In Willey, Adm’r v. Murphy, 247 Ark. 839, 448 S.W.2d 341, we had under consideration a savings account in a savings and loan association under Ark. Stat. Ann. § 67-1838 (Repl. 1966) and also certificates of deposits in the Peoples Bank and Trust Company of Russellville under Ark. Stat. Ann. § 67-552 (Repl. 1966). The savings and loan certificate for $8,000 was issued to Pearl Bailey or V. A. Murphy. The evidence was to the effect that both Mrs. Bailey and Mr. Murphy went to the savings and loan association office and opened the account with Mrs. Bailey’s money. A deposit slip and signature card were in evidence in that case and the signature card designated Mrs. Bailey and Murphy as joint tenants with right of survivorship. Mrs. Bailey died and the trial court held, in a suit between Murphy and the administrator of Mrs. Bailey’s estate, that the savings account belonged to Murphy and we affirmed citing § 67-1838, as follows:

“ ‘If the person opening such savings account fails to designate in writing the type of account intended, or if he designates in writing to the association that the account is to be a ‘joint tenancy’ account or a ‘joint tenancy with right of survivorship’ account, or that the account shall be payable to the survivor or survivors of the persons named in such account, then such account and all additions thereto shall be the property of such persons as joint tenants with right of survivorship.’ ”

On the same date the account was opened with the savings and loan association, Mrs. Bailey and Mr. Murphy went to the Peoples Bank and Trust Company of Russellville and opened an account there through certificates of deposit. The certificates were stamped “as joint tenants with right of survivorship and not tenants in common.” An executive officer of the bank testified that Mrs. Bailey introduced Mr. Murphy to him and told him she wanted the certificates issued in both names, and that he assumed she wanted it in a normal wording of a joint account with right of survivorship. He said he misplaced Mr. Murphy’s name and upon so advising Mrs. Bailey, she again advised him to issue the certificates in her name and the name of Mr. Murphy. The trial court found that the two bank certificates were not issued in the form required by law to vest title in Murphy as survivor. We affirmed the trial court and in doing so quoted § 67-552, as follows:

“ ‘If the person opening such account, or purchasing such certificate of deposit, designates in writing to the banking institution that the account or the certificate of deposit is to be held in ‘joint tenancy’ or in ‘joint tenancy with right of survivorship,’ or that the account or certificates of deposit shall be payable to the survivor or survivors of the persons named in such account or certificate of deposit, then such account or certificate of deposit and all additions thereto shall be the property of such persons as joint tenants with right of sur-vivorship.’ ”

As to the bank certificates in Willey, supra, we relied on Cook v. Bevill, 246 Ark. 805, 440 S.W.2d 570, where we said that there must be a substantial compliance with the “designation in writing” requirement of the Act in order to effect sur-vivorship.

In Cook v. Bevill, supra, we traced the history of § 67-552 as relating to joint accounts in banks and stated that Act 260 of 1937 (§ 67-521 before amendment) had a two-fold purpose. “It protected the bank in making payments from deposits in the names of any two persons; and it declared ‘a definite and conclusive relation of the parties to such deposit on the death of either. ’ ” Citing Bye v. Higgason, 210 Ark. 347, 195 S.W.2d 632. We then pointed out in Bevill that Act 78 of 1965, Ark. Stat. Ann. § 67-552 (Repl. 1966), “was our first comprehensive enactment governing joint bank accounts.” In Bevill we then continued:

“Two years previously a very similar act was passed affecting joint deposits in savings and loan associations. See Ark. Stat. Ann. § 67-1838 (Repl. 1966). The principal virtue of Act 78 is the requirement of designation in writing: that is, when an account is opened or a certificate of deposit is issued in the name of two or more persons, a written designation is made as to the investiture of title.”

We are unable to read into Act 78 of 1965, § 67-552, an amendment of § 67-1838. Section 67-552 is under Chapter 5 of the statutes pertaining to “Powers of Banks” and only banking institutions are mentioned therein. This section simply reads in part as follows:

“Checking accounts and savings accounts may be opened and certificates of deposit may be issued by any banking institution with the names of two [2] or more persons, either minor or adult, or a combination of minor and adult, and such checking accounts, savings accounts and certificates of deposits may be held:
(a) If the person opening such account, or purchasing such certificate of deposit, designates in writing to the banking institution that the account or the certificate of deposit is to be held in ‘joint tenancy’ or in ‘joint tenancy with right of survivorship,’ or that the account or certificates of deposit shall be payable to the survivor or survivors of the persons named in such account or certificate of deposit, then such account or certificate of deposit and all additions thereto shall be the property of such persons as joint tenants with right of survivorship.”

Ark. Stat. Ann. § 67-1838 (Repl. 1966) is under an entirely different Chapter 18 of the statutes applying to “Savings and Loan Associations” and the pertinent portion of this statute simply reads as follows:

“Savings accounts may be opened in any association or a federal association 4n the names of two [2] or more persons, either minor or adult, or a combination of minor and adult, and such savings accounts may be held:
(1) If the person opening such savings account fails to designate in writing the type of account intended, or if he designates in writing to the association that the account is to be a ‘joint tenancy’ account or a ‘joint tenancy with right of survivorship’ account, or that the account shall be payable to the survivor or survivors of the persons named in such account, then such account and all additions thereto shall be the property of such persons as joint tenants with right of survivorship.”

It is not necessary to attempt to determine the intent of the Legislature in making such broad distinction in “accounts and certificates of deposits in two or more names” when dealing with a banking institution and “savings accounts in the names of two or more persons” when deposited with a savings and loan association. Regardless of the intent of the Legislature, the language is plain. The practical effect of § 67-1838 is that if an individual opens an account in a savings and loan association in the names of two or more persons and fails to designate in writing to the association that the account is to be a “tenant in common” account (§ 67-1838 [3]), then the account and all additions thereto shall be the property of such persons as joint tenants with right of sur-vivorship. In other words, as the law now stands, if the account is opened in a banking institution, a joint account with right of survivorship shall be designated in writing; whereas, if the account is opened in a savings and loan association, the account becomes a joint account with right of survivorship unless a contrary intent is so designated.

In support of appellants’ third point they rely on Cupp, Adm'r v. Pocahontas Fed. S. & L., 242 Ark. 566, 414 S.W.2d 596, but in that case we said:

“While we have recognized that the legislature can not declare one fact conclusive evidence of another material fact in controversy, such is not the situation involved here. It is perfectly permissible for the legislature to declare the legal effect of doing certain acts. The legislature declared only what the legal effect of executing and filing with the association such a designation would be — namely, to make Thucie Nolen the owner of the account as between heirs and devisees of the holder thereof.”

The appellants’ fourth point gives us considerable difficulty in light of the record in this case. We fully appreciate the difficulty confronting the probate judge in the trial of this case because by far the majority of the 294 page record consists of objections to exhibits and testimony, and the court’s rulings thereon. When the competent evidence is gleaned from the objections overruled, the facts, as they relate to the immediate question before us, appear as follows: Mrs. Box was living in California when she executed her will on March 10, 1969. Sometime between January, 1971, and October, 1971, Mrs. Box decided to move to Fayetteville, Arkansas to live with her daughter and son-in-law, Mr. and Mrs. Martensen. It is not clear from the record exactly when Mrs. Box came to Arkansas but according to Mr. Martensen’s testimony, it was apparently around October 2, 1971. Mrs. Box had $70,000 on deposit in three separate savings and loan associations in California which were transferred to the First Federal Savings and Loan Association of Fayetteville.

Mr. Martensen testified that he and Mrs. Martensen went to California (apparently in September, 1971) and upon his return to Fayetteville, he made arrangements with the First Federal Savings and Loan Association to obtain the proper documents to effect the transfer of Mrs. Box’s funds in California to the First Federal Savings and Loan Association of Fayetteville. He said he obtained several blank combination letter-draft forms from Mr. Eason, president of First Federal Savings and Loan Association, and took the blank forms to his home. He said that on October 2, 1971, after Mrs. Martensen arrived from California with Mrs. Box, that Mrs. Box signed the forms in his presence. In this connection Mr. Martensen testified as follows:

“Q. What did you do with these documents after you obtained them in blank from the Federal Savings and Loan Association, Mr. Martensen?
A. These blank documents here?
Q. Yes, sir.
A. These were taken to my home prior to my wife’s arrival with Mrs. Box, which I left California a week, four or five days before.
Q. So, you took them to your house?
A. Yes, sir.
Q. All right. What happened after that?
A. After Mrs. Box was there she went through a process of cleaning out, cleaning house, settling down in the home, sending out her laundry and that type of thing.”

Mr. Martensen then said that on Saturday morning, after the mail came, Mrs. Box signed the instruments in his presence. He then continued as follows:

“Q. What happened after that, Mr. Martensen?
A. The documents were signed. The books were handed to me by my wife who had them on the way from California. I took them to the office.
Q. These documents were signed by whom?
A. Mrs. Box.
Q. Who was present when she signed them?
A. My wife, myself and Mrs. Box.”

Mr. Martensen said that after Mrs. Box signed the instruments and handed them back to him, he took them to his office and put them in the safe together with the California passbooks which his wife had in her possession and gave to him. He said he was planning to return to California on Monday morning, October 4, in connection with the house in California, and on that morning he took the documents signed by Mrs. Box to Mr. Eason at the savings and loan association. He said that from then on it was in the hands of Mr. Eason. The instruments so referred to were simply printed form letters bearing sight draft form designed for use by savings and loan associations in obtaining transfer of funds. The letter portion was a request for transfer signed by Mr. Eason as president of First Federal and the sight draft was to be signed by the depositor or owner of the funds. Mr. Martensen testified that Mr. Eason sent the draft to California and when the money was received by First Federal Savings and Loan Association, Mr. Eason called him. He said all the blank forms he obtained from Mr. Eason bore an “x” mark where they were to be signed by Mrs. Box and that he, Martensen, did not make the small “x” marks on the instruments where Mrs. Box was supposed to sign.

Mr. A. P. Eason, Jr., testified that he was president of the First Federal Savings and Loan Association of Fayetteville and had been since it was formed in 1953. He testified by deposition that Mr. and Mrs. Martensen were customers of his association and he recalled Mr. and Mrs. Martensen coming in and discussing with him the transfer of the accounts from California to Fayetteville. He said he did not recall whether Mrs. Box was present or not. He said that Mr. and Mrs. Martensen did request a transfer of the funds. He said he did not remember the exact date of the request and would have to rely on the date of the correspondence with the California institutions in connection therewith. He said upon Mr. Martensen’s request he furnished him the regular draft forms used for such purposes and which the association prepares for withdrawals from another association. He said it was necessary for the holder of the account to sign the draft form and that signatures purporting to be those of Mrs. Box appeared on the forms when they were returned to him. He said after sending the instruments together with the passbooks to the savings and loan associations in California, he received drafts made payable to the First Federal Savings and Loan Association of Fayetteville. He said that upon receipt of the money from the California institutions, he called the Martensens or Mrs. Box, he did not remember which, and as a result of the conversation, he deposited the funds to the joint account. Mr. Eason then testified as follows:

“ ‘Exhibit D’ and that has previously been identified as the signature card and introduced in evidence by the petitioners, ‘ — contains only the signature of Mrs. Martensen, can you explain why that was?
Answer: When the money came in, I called and told them that it was here, and Marg came by, and signed the card, and said her mother would be by in a few days, that she was sick.’ ”

Mr. Eason testified that it was quite common for one person to come in and open a joint account and sign a signature card and the other party to the account not do so. In thté connection he said:

“ . . this again is quite common, we will have many times the parents and children open accounts; it works both ways; the children will say, ‘Mamma will come by, and sign the card next week, ’ and by the same token, the parents will come in and open an account, and say, ‘My son is in South America, or Florida, and he’s going to do this, and in two or three months he will be by and sign the account.’ ”

Mrs. Martensen’s testimony was primarily directed to the identification of her mother’s signature on the instruments involved, but the genuineness of Mrs. Box’s signature on the draft forms is not really questioned in this case. The so-called signature card which was placed in evidence as plaintiff’s exhibit 8 was more than a mere “signature card.” It was the only documentary evidence of instructions to First Federal Savings and Loan Association of Fayetteville in opening the savings account. This form, as filled out by First Federal and signed by Mrs. Martensen, appears as follows:

“ Account No. 2-520
A.
and B. Box Blanche M. and
and C. Martensen Marjorie M.
Type All Names: (Last Name) (First Name) (Middle Name)
as joint tenants with right of survivorship and not as tenants in common, and not as tenants by the entirety, the undersigned hereby apply for a savings account in
FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF FAYETTEVILLE
and for the issuance of evidence thereof in their joint names described as aforesaid. You are directed to act pursuant to any one or more of the joint tenants’ signatures, shown below, in any manner in connection with this account and, without limiting the generality of the foregoing, to pay, without any liability for such payment, to any one or the survivor or survivors at any time. This account may be pledged in whole or in part as security for any loan made by you to one or more of the undersigned. Any such pledge shall not operate to sever or terminate either in whole or in part the joint tenancy estate and relationship reflected in or established by this contract. It is agreed by the signatory parties with each other and by the parties with you that any funds placed in or added to the account by any one of the parties are and shall be conclusively intended to be a gift and delivery at that time of such funds to the other signatory party or parties to the extent of his or their pro rata interest in the account. You are authorized to accept checks and other instruments for credit to this account, whether payable to one or more of the parties, and to supply any needed endorsement. You are relieved of any liability in connection with collection of all items handled by you without negligence, and shall not be liable for acts of your agents, sub-agents or others or for any casualty. Withdrawals may not be made on account of such items until collected, and any amount not collected may be charged back to this account, including expense incurred, and any other outside expense incurred relative to this account may be charged to it. The official proxy committee of the institution is authorized in our absence to cast our vote or votes at any meeting of the members from year to year until this proxy is canceled in writing.
A
Signature (Type) Street City & State Phone
B /s/ Marjorie M. Martensen
Signature (Type) Street City & State Phone
C
Signature (Type) Street City & State Phone
Note: The correct way to establish a common law joint tenancy or its equivalent in any state is to use ‘and’ in joining tenants’ names on all evidence of the account. All tenants should sign this card. Rule out unused signature line.”

The probate judge did his usual thorough job of sifting the evidence and applying the law in this case but on appeal to this court probate cases are tried de novo as are chancery cases and we do not reach the same results that the probate judge did. In the first place there is no question but that the funds withdrawn from the California accounts were the personal funds of Mrs. Box, and there is no question that Mr. Eason knew the funds belonged to Mrs. Box when they were transferred to the First Federal Savings and Loan Association of Fayetteville. These funds were in the substantial amount of $70,000 and there is no evidence whatever that Mrs. Box ever directed Mr. Eason to deposit these funds in a joint account with Mrs. Martensen except, of course, the oral instructions he received from Mr. and Mrs. Martensen, and the written instructions he received from Mrs. Martensen on the so-called signature card. The withdrawal of the funds from the California institutions, and the method of doing so, are not really important to the case before us. The important point is not the withdrawal of the funds but the redepositing of the funds in the First Federal Savings and Loan Association of Fayetteville.

The trial court pointed out that the signature card itself bore the typewritten name of Blanche Box and Marjorie Martensen. The court then reasoned that the statute does not require affirmative handwritten designation but on the contrary used the term for designation “in writing” and provides only that if “the account stands in the name of two or more persons without any contrary indication, this is enough to make a joint survivorship operable.” The court then cites and discusses Cupp, Adm'r v. Pocahontas Fed. S. & L., 242 Ark. 566, 414 S.W.2d 596, and Harris, Adm'r v. Searcy Fed. S. & L. Assn., 241 Ark. 520, 408 S.W.2d 602, and also Willey, Adm’r v. Murphy, 247 Ark. 839, 448 S.W.2d 341. In each of the three cases cited by the trial court, the owner of the money actually open ed the account, but that is not the situation in the case at bar.

There is no question that the account as it stood on the books of the First Federal Savings and Loan Association when Mrs. Box died, was a joint account with right of sur-vivorship simply by operation of law under the statute because it was in two names. The trial court pointed out that there is no evidence in the record to show that Mrs. Box did not know that the joint account was opened in her name and Mrs. Martensen’s name; and, no evidence “that she wasn’t at liberty to do whatever she wanted to about it, if she didn’t like the savings certificates issued in that fashion.” We agree with the trial judge on this point but we think it more important that there was no evidence in the record to show that Mrs. Box did know about it, or that she was aware of it. There is really no evidence that Mrs. Box knew anything at all between October 2, when the Martensens say she signed the drafts for the transferral of her funds to First Federal Savings and Loan Association of Fayetteville, and October 17 when she died. The so-called “signature card” in which Mrs. Martensen directed First Federal Savings and Loan to open the joint account was not dated but the certificates issued in compliance with the request, were dated October 12, only five days before Mrs. Box’s death. Although Mrs. Box signed the drafts for the transfer of the funds at the Martensen home on October 2, she did not sign the undated signature card at all. It can reasonably be assumed that Mrs. Box and Mrs. Martensen’s names were typed on the signature card at the time it was signed by Mrs. Martensen. Certainly there is no evidence that Mrs. Box typed her and Mrs. Martensen’s names on the signature card.

Mrs. Martensen did not say whether Mrs. Box was too ill to sign the signature card at home as she had done in connection with the transfer drafts, but she did indicate to Mr. Eason that Mrs. Box was too ill to be with her and sign the card when the account was opened. According to Eason, she said Mrs. Box would by by a few days later and sign the signature card, but Mrs. Box died a few days later and there is no evidence that she ever appeared at First Federal Savings and Loan Association’s office, or ever saw or talked to Mr. Eason.

We simply are unable to interpret § 67-1838, supra, as closing and locking the door behind a joint account with right of survivorship when once the money is deposited in two names and a receipt or passbook is issued thereon, regardless of whose money is involved and who makes the deposit. Of course, there was no fraud alleged and none proven in this case, but to uphold the judgment of the probate court under the strict construction of the statute here involved would create a situation wide open to fraud in exactly such factual situation as we have in this case. An old and senile person could simply say to another, “go deposit my funds in a savings and loan association,” or “go transfer my funds from ‘x’ savings and loan association to ‘y’ savings and loan association,” and, if the person so directed should deposit or transfer such funds in two names, there would simply be no question as to who owned the funds if the original owner should die; or as for that matter, if he should become totally incompetent before learning that his instructions had not been carried out. We are unable to believe that the Legislature intended such result.

Mrs. Box died less than two years after she executed the will under probate in this case. Mrs. Box made no change in her will by codicil or otherwise and there is no evidence that she ever considered doing so. According to the inventory filed by Mrs. Martensen, Mrs. Box owned no property whatever except miscellaneous personal property of the value of $50.00 to be divided equally between the appellants and the appellee, and the jewelry she bequeathed to Mrs. Martensen.

We are of the opinion and so hold, that “the person opening such savings account,” as referred to in § 67-1838 (1), means the person who owns the money with which the account is being opened in the names of more than one person. The judgment is reversed and this cause is remanded to the trial court for further proceedings not inconsistent with this opinion.

Reversed and remanded.

Fogleman, J., dissents; Byrd, J., concurs.

John A. Fogleman, Justice,

dissenting. I disagree with the result reached and with some of the observations made by the majority. I certainly do not agree that savings and loan associations arp not protected by the present statutes. The real difference in legislation relating to banks, as construed by this court, and that relating to savings and loan associations is that no designation in writing is required for a “joint tenancy” account in a savings and loan association to fix ownership of the account as between the parties, but it is required for a bank account.

We should not reverse the probate court’s judgment unless it is clearly against the preponderance of the evidence. It seems to me that this is what causes the majority’s difficulty on appellant’s fourth point. It seems to me that the point was not well taken. Mrs. Box could open an account with the savings and loan association without ever signing a signature card, insofar as any legal requirement is concerned. The only requirement that she sign a card is that of the association, which has a perfect right to waive it. Furthermore, it is not necessary that she ever see a signature card. I think that there is a clear preponderance of the evidence that Mrs. Box was an applicant for the opening of a joint account.

I find ample evidence that Mrs. Box opened the account. John Martensen, son-in-law of Mrs. Box, testified that when she died she was living with him and his wife. Through him, an exhibit not mentioned in the majority opinion and excluded by the probate judge was introduced. It was a memorandum written on one of the printed form letters used by First Federal Savings & Loan Association for the purpose of accomplishing a transfer of funds, to which was attached a draft for signature by the depositor. This memorandum was dated “02 Oct. 71” and bears the heading “MARTY TO DO” with the following enumeration:

1. BOOKS AND HOUSE TO BE JOINT WITH MARGY
2. CHANGE WILL SO MARGY WILL BE EXECUTOR
3. POWER OF ATTORNEY FOR MARTY SO HOUSE CAN BE CLOSED, MAINTAINED, AND RENTED AS NECESSARY
4. FIND OUT ABOUT CAR TITLE

This list extends beyond a perforation which enables one to separate the letter and the draft, and actually ends where the printing on the draft form begins. A line was run through most of the printed matter on the draft. The same signature that appears on the drafts actually used to transfer the accounts also appears on the signature line provided on the draft form. Martensen testified that this document was signed by Blanche M. Box in the presence of her daughter and Martensen at the same time she signed the drafts. The “top part” or enumeration was done by him in the presence of Mrs. Box, according to Martensen. Martensen said he had several conversations with his mother-in-law about the transfer of these accounts, beginning in January 1971 in Santa Monica, where Mrs. Box was then living and continuing by means of telephone, letters and visits in Santa Monica in June of 1971 and September 1971. Pursuant to these conversations, Martensen continued, he made arrangements for the documents to accomplish the transfers. After Mrs. Box arrived in Fayetteville, she delivered the passbooks for her California accounts to Martensen. At the time all the documents were signed, Martensen was planning to go to California to close Mrs. Box’s house, put her furniture in storage and try to rent the house.

Martensen testified that after the memorandum was signed, Mrs. Box handed it to him along with the letters and drafts for the transfer of the accounts. He said he took them to his office along with passbooks which Mrs. Martensen had previously had in her possession and put them in his safe until Monday, October 4, when he took them to Eason at the office of the association. He stated that Eason called him when the necessary papers for the transfer were received by the association.

Eason specifically recalled having seen the memorandum. After receipt of it along with the letters and drafts, he mailed the drafts to the California institutions. He took the memorandum to constitute an instruction to open the account as a joint account of Mrs. Box and her daughter.

A proffer of testimony by Martensen was made when the court sustained an objection. Martensen would have testified that Mrs. Box stated in the conversations he had with her that she wanted these funds transferred into a joint account in the names of herself and her daughter. He also would have testified, if the court had not sustained an objection, that Mrs. Box always referred to the savings and loan accounts as “books”.

The trial court also sustained objections to the introduction of the exhibit, even though Eason stated that he saw it and acted upon it. An objection was also sustained to Eason’s testimony that he clearly understood the instructions on the memorandum and that it is quite common for people to refer to accounts in savings and loan associations as books.

The proffered testimony did not come within the purview of the dead man’s statute. The court sustained objections, not on the basis of this'rule, however, but as hearsay. I frankly do not understand the basis of the court’s holding that the exhibit was hearsay. It clearly established Martensen’s authority to act as the agent of Mrs. Box in the matter of the “books”. It was written and presented to the president of the savings and loan association by Martensen and this officer of the association acted upon it.

Insofar as this document and the conversations are concerned there was no effort to prove the truth of any facts stated by Mrs. Box. The proof was offered to show that the statements were made and if they were, they were certainly relevant. It was the veracity of Martensen that was in question, not that of Mrs. Box. Thus, this testimony is not hearsay. See Motor Insurance Corp. v. Lopez, 217 Ark. 203, 229 S.W. 2d 228. Flaherty & Whipple v. State, 255 Ark. 187, 500 S.W. 2d 87; Liberto & Mothershed v. State, 248 Ark. 350, 457 S.W. 2d 64; City of Springdale v. Weathers, 241 Ark. 772, 410 S.W. 2d 754.

Statements made by a principal tending to show the authority of an agent are not incompetent as hearsay. Missouri Pacific Railroad v. Clements, 225 Ark. 268, 281 S.W. 2d 936; Flournoy v. Hewgley, 234 F. 2d 213 (10th Cir. 1956); Webb v. Webb, 116 Utah 155, 209 Pac. 2d 201 (1949). Directions to an agent by his superior are not hearsay, but substantive evidence of the agent’s authority or lack of it. Powerine Co. v. Grimm Stamp & Badge Co., 127 Neb. 165, 254 N.W. 722 (1934).

Statements of the deceased to show her intentions were not inadmissible under the hearsay rule. Crawford v. Center, 193 Ark. 287, 100 S.W. 2d 83; Webb v. Webb, supra. Flournoy v. Hewgley, supra. See also John Hancock Mutual Life Ins. Co. v. Menson, 97 F. Supp. 320.

Where there is an ambiguity in language used or it is shown that words used by parties are commonly accorded a meaning different from their ordinary meaning, parol evidence is admissible to explain them, to show the way in which a particular term is understood commercially, or in a particular trade or business or in local popular and general use. Paepcke-Leicht Lumber Co. v. Talley, 106 Ark. 400, 153 S.W. 833; Wilkes v. Stacy, 113 Ark. 556, 169 S.W. 796; Ft. Smith Appliance & Service Co. v. Smith, 218 Ark. 411, 236 S.W. 2d 583; Ellege v. Henderson, 142 Ark. 421, 218 S.W. 831; Taylor v. Union Sawmill Co., 105 Ark. 518, 152 S.W. 150; McCarthy v. McArthur, 69 Ark. 313, 63 S.W. 56; Jackson County Gin Co. v. McQuiston, 177 Ark. 60, 5 S.W. 2d 729; Davis v. Martin Stave Co., 113 Ark. 325, 168 S.W. 553. Testimony of the parties to show the meaning of such terms is admissible. Ellege v. Henderson, supra. Parol evidence is also admissible in such circumstances to explain the situation and relation of the parties and the surrounding circumstances. Clear Creek Oil & Gas Co. v. Bushmaier, 165 Ark. 303, 264 S.W. 830.

I submit that all of the proffered testimony was admissible. When it is considered, it seems to me that the probate judge’s decree was correct, even though he did not consider it.

On appeal in a chancery case, we consider evidence improperly excluded in the trial court. Cox v. Smith, 99 Ark. 218, 138 S.W. 978. As the majority points out, this appeal is governed by rules governing appeals in equity cases.

I would affirm the decree.

Conley Byrd, Justice,

concurring. I cannot interpret Ark. Stat. Ann. § 67-1838 (Repl. 1966), as authorizing one not the owner of money to establish a joint account with right of survivorship until such time as the account has been acknowledged in writing by the owner. To do so would permit a legislative fiat which we said could not be done in Cupp, Adm’r. v. Pocahontas Fed. S. & L., 242 Ark. 566, 414 S.W. 2d 596 (1967). Since appellee’s contention would make the act void, it should be given a construction that would make it valid. Thus without Mrs. Box’s signature, the statute cannot pass title to property.

For the reasons stated I only concur in the result.

      Marjorie T. and Marjorie M. are one and the same person.

        State v. Snow, 230 Ark. 746, 324 S.W.2d 532; Mabry v. Corley, 236 Ark. 306, 365 S.W.2d 711.


source: Caselaw Access Project

author: J. Fred Jones, Justice.

license: Public Domain

text:
    JOHNSON CONSTRUCTION CO. and TRI-STATE INSURANCE CO. v. Mack NOBLE
    74-328
    521 S.W. 2d 63
    Opinion delivered April 7, 1975

      Shackleford, Shackleford & Phillips, for appellants.

      Switzer & Switzer, for appellee.
   J. Fred Jones, Justice.

This is a workmen’s compensation case in which Mack Noble, a 58 year old ironworker, sustained an injury to one leg below the knee while in the course of his employment by Johnson Construction Company. The injury resulted in a 30% loss of use of the leg below the knee and Mr. Noble was paid workmen’s compensation benefits based on that loss. He subsequently filed claim for additional compensation and the Commission awarded benefits for permanent total disability. The circuit court affirmed the Commission and the question before us on appeal, as relied on by the appellants, is whether there was any substantial evidence to sustain the award of permanent total disability.

The claimant testified that when he stands on his feet for more than an hour, the pain in his injured leg increases and his foot swells. He said it is then necessary for him to lie down and elevate his foot. He testified that he had been a journeyman ironworker since 1953 and prior to that he worked as a carpenter. He said he has no education; that he had nothing wrong with him prior to his accident, and that he knows of no remunerative employment he can now engage in because of his injured leg. He testified that he had not attempted to find work because he knows of nothing he would be able to do; that he is currently drawing $254.10 per month in Social Security benefit payments and has not applied for rehabilitation or retraining of any type.

Mr. Charles Trantham, an ironworker foreman, testified that he had been an ironworker for 22 years. He testified as to various physical requirements demanded of a journeyman ironworker and testified that as an ironworker foreman, he would not employ or approve Mr. Noble for employment because of his physican condition.

Dr. Dean C. Andrew testified that even though Mr. Noble could not return to his prior employment, he did have transferable skills and there were jobs available in south Arkansas which Mr. Noble could perform. Dr. Andrew said, however, that Mr. Noble’s educational limitations, together with his physical limitations, might functionally preclude him from obtaining employment. He mentioned such jobs available in Mr. Noble’s home county of Ashley as night watchman or guard.

Dr. E. R. Hartmann testified that Mr. Noble had a 30% disability to the leg below the knee based on joint stiffness of the right foot and ankle. He testified that the condition of the claimant’s foot was inconsistent with work requiring walking, squatting or walking on rough or uneven ground. He said Mr. Noble would have difficulty with eight hours of weight bearing on his foot. He said he felt that Mr. Noble could perform such jobs as working around a table on even or smooth surfaces and such jobs as night watchman in a building, or where his walking would be on smooth surfaces.

The appellants cite Ray v. Shelnutt Nursing Home, 246 Ark. 575, 439 S.W. 2d 41, in support of their contention that there is no substantial evidence to support the Commission’s finding of permanent total disability. We are of the opinion, however, that the evidence in the case at bar places it more in the category of Wilson & Co. v. Christman, 244 Ark. 132, 424 S.W. 2d 863, rather than the Shelnutt Nursing Home case.

The appellants cite McNeely v. Clem Mill & Gin Co., 241 Ark. 498, 409 S.W. 2d 502, where we first held that benefits for scheduled injuries under Ark. Stat. Ann. § 81-1313 (c) (Repl. 1960) are not limited to the schedule when the scheduled injury renders the claimant totally disabled. The appellants then cite Anchor Const. Co. v. Rice, 252 Ark. 460, 479 S.W. 2d 573, wherein we held that where the injury is to a scheduled member, the Commission cannot award disability benefits greater than the rating for permanent partial physical imparimnet provided in the schedule unless the disability is permanent and total. The appellants then state, in connection with the case at bar, as follows:

“As the only rating of permanent partial physical impairment is Dr. Hartmann’s evaluation of thirty percent to the leg below the knee, the Workmen’s Compensation Commission was put in the awkward position of either finding that the appellee had a disability of thirty percent to the leg below the knee or that he is permanently and totally disabled. The Commission, with Commissioner Cross dissenting, adopted the latter finding.”

The appellants then argue that:

“It is obvious that the appellee is not permanently and totally disabled and in so finding the majority of the Commission was simply attemtping to avoid the harsh results of the holding in the Anchor Construction Company case, supra. In this regard, the appellants respectfully suggest to this Court that perhaps the Anchor Construction Company case, supra, should be reexamined.”

The appellants then earnestly urge that we re-examine our holding in Anchor Const. Co. v. Rice, supra, but in presenting their argument that we do so, the appellants practically adopt the same reasoning and argument presented in the dissenting opinion to Anchor Const. Co. v. Rice. This court has already had an opportunity to re-examine the decision in Anchor Const. Co. v. Rice, supra, and has failed to reverse or modify the opinion in that case. We have reaffirmed our holding in Anchor in the cases of Meadowlake Nursing Home v. Sullivan, 253 Ark. 403, 486 S.W. 2d 82, and Cooper Ind Products v. Worth, 256 Ark. 394, 508 S.W. 2d 59 (1974). The Mc-Neely and Meadowlake cases may be distinguishable to some degree from Anchor in that in McNeely the award of total disability was not stated to be permanent; and in Meadowlake the injury was to the head of the femur requiring the installation of a prosthesis in the hip joint and thus, perhaps, distinguishable as affecting the body as a whole rather than being confined strictly to the scheduled injury to the leg. The Cooper case, however, was not thus distinguishable.

In Cooper Ind Products v. Worth, supra, the question was squarely presented as to whether an injury to the right knee rendered the claimant permanently and totally disabled. In that case by majority opinion we again reaffirmed our holding in the Achor Const. Co. case and citing Meadowlake Nursing Home v. Sullivan, we applied Ark. Stat. Ann. § 81-1313 (a) (Repl. 1960) notwithstanding the provisions of subsection (c) and affirmed the Commission’s award of permanent and total disability. The dissenting opinion in the Cooper case leaves no doubt that Anchor has been re-examined by this court and that Anchor still holds.

We, therefore, agree with the appellee that the Anchor Const. Co. case is current Arkansas law and we conclude that if it is to be changed in the foreseeable future, it must be done by legislative act rather than decision of this Court.

The judgment is affirmed.


author: Frank Holt, Justice.

text:
    Tom MILLER et ux v. James E. WILLEY d/b/a/ WILLEY REAL ESTATE
    74-349
    521 S.W. 2d 68
    Opinion delivered April 7, 1975

      Mooney & Boone, for appellants.

      Warren E. Dapwe, for appellee.
   Frank Holt, Justice.

Appellants gave appellee a written option to purchase their property for $10,000. The option was properly exercised and appellants refused to convey the property. The chancellor ordered specific performance by the appellants. On appeal they first contend that the chancellor erred in overruling appellants’ demurrer to the evidence and not voiding the contract because of the failure of a tender of consideration. We cannot agree.

The appellants accepted a $100 payment when they signed the contract which provided that the balance would be paid “at closing.” When appellee exercised the option to purchase, he notified appellants that the balance of the purchase price would be paid to them upon receipt of their deed and abstract. Appellants refused to deliver the deed and abstract. In appellee’s complaint for specific performance, he reiterated his willingness to pay the agreed balance. At trial the appellee tendered the balance of the purchase money. Since appellants repudiated their contract, the tender of payment was unnecessary until the date, as here, the issue was litigated. The law does not require a tender of payment where it would be a vain and useless effort. Gentry v. Holland, 243 Ark. 172, 419 S.W.2d 130 (1967); Hollowoa v. Buck, 174 Ark. 497, 296 S.W. 74 (1927); and Read's Drug Store v. Hessig-Ellis Drug Co., 93 Ark. 497, 125 S.W. 434 (1910). In the case at bar there was sufficient tender in view of the repudiation of the contract.

Neither can we agree that the trial court erred by not voiding the contract on the ground of the “Undisclosed Principal” doctrine. Appellant refused to deed the property to the City of Jonesboro as instructed by the appellee who was purchasing this and other property for the city. The appellants, it appears, had some animosity toward the city and were unwilling for it to acquire their property. However, the appellants cannot repudiate their contract on this basis since they agreed to “execute and deliver to [appellee], or to any person or persons as we [appellee] **** shall direct in writing, a good and sufficient Warranty Deed and an up to date Abstract of . . . .” their property. Also, appellee testified that he was unaware of any ill feeling of appellants toward the city and that he acquainted appellants with the fact that he was purchasing the property for a client. An agent, without disclosing his principal, can make a valid and enforceable contract in his own name. Shelby v. Burrow, 76 Ark. 558, 89 S.W. 464 (1905); and Restatement of Agency 2d, § 304 (1957), Comment c. In the circumstances we cannot say the chancellor’s findings are against the preponderance of the evidence.

Affirmed.


author:
Thomas Harper, Special Justice. Carleton Harris, Chief Justice,
      John A. Fogleman, Justice,

text:
    Dr. Grant COOPER, G. Robert ROSS et al v. Frank B. HENSLEE et al
    74-102
    522 S.W. 2d 391
    Opinion delivered April 7, 1975

      Morton Gilelman and Walker, Kaplan & Mays, P.A., by: Philip E. Kaplan and John M. Bilheimer, for Cooper; Ray Trammell, for Ross et al.

      Givens & Buzbee, for Henslee et al; Deputy Prosecuting Atty. Tom Tanner. for Lee Munson, Prosecuting Attorney.
   Thomas Harper, Special Justice.

This case is here on appeal from a decree of the Pulaski County Chancery Court. Appellees Frank B. Henslee and twenty-two other members of the Arkansas General Assembly filed their complaint in that Court against appellant Dr. Grant Cooper, Chancellor C. Robert Ross of the University of Arkansas at Little Rock (UALR) and the University’s Board of Trustees (collectively referred to as Ross), and Mrs. Nancy Hall, State Treasurer, seeking to enjoin Mrs. Hall and Ross from disbursing any state funds for the payment of any salary to appellant Cooper, an assistant professor of history at UALR, and seek-¡ng a mandatory injunction ordering Ross to terminate appellant Cooper’s employment in any capacity at UALR.

Appellees alleged that appellant Cooper had (1) violated the provisions of Section 1 of the Acts of Arkansas of 1941 (Ark. Stats. 41-4111) and (2) that because Cooper was an avowed member of the Progressive Labor Party (PLP), an affiliate of the Communist Party, he was ineligible for State employment because of the provisions of Section 3(c) of said Act [Ark. Stats. 41-4113(c)}.

After preliminary pleadings and procedure not particularly relevant here, during which appellees abandoned their prayer for the mandatory injunction to terminate Cooper’s employment, the issues were narrowed to (1) whether the trial court had jurisdiction to grant the relief sought and (2) whether these statutes are constitutionally valid.

Appellants Ross aligned themselves with appellant Cooper on the constitutional issues. The prosecuting attorney of Pulaski County, by an intervention, aligned himself with the appellees and further sought a declaratory judgment, asking the lower Court to declare that the involved statutes are constitutional.

After the issues were drawn the cause was heard by the trial court on oral evidence, following which a decree was entered finding both statutes to be constitutional, that appellant Cooper had violated Section 1 of Act 292 of 1941 (Ark. Stats. 41-4111) and was a member of PLP, “ a communistic organization”, which, as well as Cooper, believes in the necessity of the violent overthrow of the governments of Arkansas and the United States, that Cooper teaches from a communistic viewpoint, and that Cooper’s membership in PLP renders him ineligible for employment by the State of Arkansas. On these findings the lower Court dismissed the State Treasurer as a party to the action and enjoined the Chancellor of UALR and its trustees from paying appellant Cooper any salary from public funds in his capacity as an assistant professor at UALR. The decree, except to the extent of the findings noted above, did not enter the declaratory judgment sought by the intervening prosecuting attorney.

From that decree, appellants Cooper, Ross and the Trustees have appealed to this Court.

Appellant Cooper mainly contends (1) the Chancery Court lacked jurisdiction to grant the injunction and (2) that the statutes involved are unconstitutional because Ark. Stats. 41-4113(c) is a bill of attainder and violates the First and Fourteenth Amendments of the Constitution of the United States, and (3) that both statutes are unconstitutional on their face and unconstitutional as applied to appellant Cooper. The appellants Ross generally adopt these contentions except as to jurisdiction.

Ark. Stats. 41-4111 reads:

“Subversive activities defined and prohibited. — (a) It shall be unlawful for any person; (1) to knowingly or willfully advocate, abet, advise, or teach the duty, necessity, desirability, or propriety of overthrowing or destroying any government in the United States by force or violence, or by the assassination of any officer of any such government; (2) with the intent to cause the overthrow or destruction of any government in the United States, to print, publish, edit, issue, circulate, sell, distribute, or publicly display any written or printed matter advocating, advising, or teaching the duty, necessity, desirability, or propriety of overthrowing or destroying any government in the United States by force or violence; (3) to organize or help to organize any society, group, or assembly of persons who teach, advocate, or encourage the overthrow or destruction of any government in the United States by force or violence; or to be or become a member of, or affiliate with, any such society, group, or assembly of persons, knowing the purposes thereof, (b) For the purposes of this section, the term “government in the United States” means the government of the United States, or the government of this state. [Acts 1941, No. 292. §1, p. 754.]”

Ark. Stats. 41-4113 in its entirety reads:

“41-4113. Penalty for subversive activities — Ineligibility for employment. — (a) Any person who violates any of the provisions of this act shall be deemed guilty of a felony and, upon conviction thereof, be fined not more than ten thousand dollars [$10,000] or imprisoned for not more than ten [10] years, or both such fine and imprisonment, (b) No person convicted of violating any of the provisions of this act [§§41-4111 — 41-4113] shall, during the five years next following his conviction, be eligible for employment by the State of Arkansas, or by any department or agency thereof, (c) No person who is a member of a Nazi, Fascist or Communist society, or any organization affiliated with such societies, shall be eligible for employment by the State of Arkansas, or by any department, agency, institution, or municipality thereof.”

Subsection (c), supra, is that portion of this section under attack here.

The facts are not in dispute. At the time this action was commenced and tried below, appellant was employed by the State of Arkansas'as a member of the faculty of UALR. He admitted he was a member of the PLP, that he espoused its aims and principles, which included advocacy of revolutionary change of the government of the United States, by violence if necessary, which change is regarded as inevitable, although not within any specific time, except in the “future”. He admitted that he advocated these principles to his students, and that he taught from a communistic point of view.

We find it necessary to discuss only two of the issues raised by appellants.

Appellees’ complaint, as amended to eliminate the prayer for mandatory injunction, states a cause of action under the “illegal exaction” section of the Arkansas Constitution (Article 16, Section 13). It has long been held a court of equity has jurisdiction to enjoin payment of public funds in violation of law. Revis v. Harris, 217 Ark. 25, 228 S.W. 2d 624 (1950); Rose v. Brickhouse, 182 Ark. 1105, 34 S.W. 2d 472 (1931); Sitton v. Burnett, 216 Ark. 574, 226 S.W. 2d 544 (1950); Starnes v. Sadler, 237 Ark. 325, 372 S.W. 2d 585 (1963); Nelson v. Berry Petroleum Co., 242 Ark. 273, 413 S.W. 2d 46 (1967).

It should be kept in mind that while the trial court found Section 41-4111 was constitutional arid that appellant Cooper had violated its provisions, nevertheless there was no finding he had been convicted for such violation, and the record shows no conviction. The only relief granted appellees in the decree was to enjoin appellants Ross and the Trustees from paying any State funds to Cooper because of his party membership. Accordingly, we do not find it necessary to consider the question of the trial court’s jurisdiction to construe Section 41-4111, but only whether it had jurisdiction to grant this injunctive relief.

By applying the provisions of 41-4113(c) to the uncon-troverted proof in this case, payment of salary to the appellant Cooper would be an illegal exaction if 41-4113(c) can withstand constitutional scrutiny.

After a careful consideration of the decisions of the United States Supreme Court construing state statutes of similar, if not identical, purposes we conclude that Ark. Stats. Ann. 41-4113 Section (c) must be declared unconstitutional on its face as violative of the First Amendment to the United States Constitution.

In United States v. Robel, 389 U.S. 258, 88 S.Ct. 419, 19 L.Ed.2d 508 (1967), the U.S. Supreme Court held unconstitutional that portion of the Subversive Activities Control Act of 1950 which attempted to bar from any employment in any defense facility a person who was a member of a communist-action organization. The statute in that case was not dissimilar to 41-4113(c) in that it prevented membership and employment without regard to the relationship between the two. Chief Justice Warren, speaking for the Court, stated the problems caused by overbreadth at page 265-266 of Vol. 389 U. S.:

“[12-16] It has become axiomatic that ‘[precision of regulation must be the touchstone in an area so closely touching our most precious freedoms. ’ NAACP v. Button, 371 U.S. 415, 438, 83 S.Ct. 328, 340, 9 L.Ed.2d 405 (1963); see Aptheker v. Secretary of State, 378 U.S. 500, 512-513, 84 S.Ct. 1659, 1667, 12 L.Ed.2d 992; Shelton v. Tucker, 364 U.S. 479, 488, 81 S.Ct. 247, 252, 5 L.Ed.2d 231 (1960). Such precision is notably lacking in §5(a) (1) (D). That statute casts its net across a broad range of associational activities, indiscriminately trapping membership which can be constitutionally punished and membership which cannot be so proscribed. It is made irrelevant to the statute’s operation that an individual may be a passive or inactive member of a designated organization, that he may be unaware of the organization’s unlawful aims, or that he may disagree with those unlawful aims. It is also made irrelevant that an individual who is subject to the penalties of §5(a) (1) (D) may occupy a nonsensitive position in a defense facility. Thus §5 (a) (1) (D) contains the fatal defect of overbreadth because it seeks to bar employment both for association which may be proscribed and for association which may not be proscribed consistently with First Amendment rights. See Elfbrandt, v. Russell, 384 U. S. 11, 86 S.Ct. 1238, 16 L.Ed.2d 321; Aptheker v. Secretary of State, supra; . NAACP v. Alabama ex rel. Flowers, 377 U.S. 288, 84 S.Ct. 1302, 12 L.Ed. 2d 325 (1964); NAACPv. Button, supra. This the Constitution will not tolerate.”

41-4113(c), on the basis of Communist or similar party membership alone, bars an individual from employment by the State or any of its agencies, departments and institutions or by a municipality. The State no doubt has an interest in protecting certain areas of State government and sensitive positions of employment from those who might threaten the exercise of governmental functions, but 41-4113(c), as written, indiscriminately and without any precision whatsoever prevents, solely on the basis of association, any such party member from any employment by the State, its agencies, departments and institutions or by a municipality in the State.

Keyishian v. Board of Regents, 385 U.S. 589, 87 S.Ct. 675, 17 L.Ed.2d 629 (1967), reviewed provisions of administrative regulations and statutes pertaining specifically to teachers at State institutions in New York State which required as a condition of employment that these teachers certify in writing among other things that they had never been a member of the Communist party. Justice Brennan speaking for the majority stated at Page 606 of Vol. 385 U.S.:

“ [1] We proceed then to the question of the validity of the provisions of subdivision 1 of §105 and subdivision 2 of §3022, barring employment to members of listed organizations. Here again constitutional doctrine has developed since Adler. Mere knowing membership without a specific intent to further the unlawful aims of an organization is not a constitutionally adequate basis for exclusion from such positions as those held by appellants.
“[12] In Elfbrandt v. Russell, 384 U.S. 11, 86 S.Ct. 1238, 16 L.Ed.2d 321, we said, ‘Those who join an organization but do not share its unlawful purposes and who do not participate in its unlawful activities surely pose no threat, either as citizens or as public employees.’ Id., at 17, 86 S.Ct., at 1241. We there struck down a statutorily required oath binding the state employee not to become a member of the Communist Party with knowledge of its unlawful purpose, on threat of discharge and perjury prosecution if the oath were violated. We found that ‘[a]ny lingering doubt that proscription of mere knowing membership, without any showing of “specific intent,” would run afoul of the Constitution was set at rest by our decision in Aptheker v. Secretary of State, 378 U.S. 500, 84 S. Ct. 1659, 12 L.Ed.2d 992.' Elfbrandt v. Russell, supra, at 16, 86 S.Ct. at 1240. In Aptheker we held that Party membership, without knowledge of the Party’s unlawful purposes and specific, intent to further its unlawful aims, could not constitutionally warrant deprivation of the right to travel abroad. As we said in Schneiderman v. United States, 320 U.S. 118, 136, 63 S.Ct. 1333, 1342, 87 L.Ed. 1796, ‘[U]nder our traditions beliefs are personal and not a matter of mere association, and *** men in adhering to a political party or other organization *** do not subscribe unqualifiedly to all of its platforms or asserted principles.’ ‘A law which applies to membership without the “specific intent” to further the illegal aims of the organization infringes unnecessarily on protected freedoms. It rests on the doctrine of “guilt by association” which has no place here.’ Elfbrandt, supra, at 19, 86 S.Ct., at 1242. Thus mere Party membership, even with knowledge of the Party’s unlawful goals, cannot suffice to justify criminal punishment, see Scales v. United States, 367 U.S. 203, 81 S.Ct. 1469, 6 L.Ed.2d 782; Noto v. United States, 367 U.S. 290, 81 S.Ct. 1517, 6 L.Ed.2d 836; Yates v. United States, 354 U.S. 298, 77 S.Ct. 1064, 1 L.Ed.2d 1356; nor may it warrant a finding of moral unfitness justifying disbarment. Schware v. Board of Bar Examiners, 353 U.S. 232, 77 S. Ct. 752, 1 L.Ed.2d 796.”

In Cole v. Richardson, 405 U. S. 676, 92 S.Ct. 1332, 31 L.Ed.2d 593 (1972), Chief Justice Burger, speaking for the Court at page 680 of 405 U.S. stated the following principle with reference to loyalty oaths:

“We have made it clear that neither federal nor state government may condition employment on taking oaths that impinge on rights guaranteed by the First and Fourteenth Amendments respectively, as for example those relating to political beliefs. ***
“Employment may not be conditioned on an oath denying past, or abjuring future, associational activities within constitutional protection; such protected activities include membership in organizations having illegal purposes unless one knows of the purpose and shares a specific intent to promote the illegal purpose.”

It might be argued that appellant Cooper’s admitted knowledge of the aims and purposes of PLP and his belief in and advocacy of these aims and purposes would justify upholding Section 41-4113(c) in its prohibition of State employment of a member of PLP who knew, believed in and advocated its aims and principles. But, the statute does not go that far. It proscribes such employment because of mere party membership, and nothing more. This lack of precision and the narrow restriction to party membership only would bar from State employment not only any such party members who knew and advocated the aims and principles of the party, but also any such member of the party who was a member, and nothing more. The validity of the statute in the light of First Amendment rights must be viewed in the light of the effect of the statute on all persons, and not just the appellant Cooper.

Obviously, the philosophy of the Court has not changed during the last few years. See Sugarman v. Dougall, 413 U. S. 634, 93 S.Ct. 2842, 37 L.Ed.2d 853 (1973), a case involving aliens in civil service positions. It is totally inconsistent to invalidate a loyalty oath provision and allow to stand a statute which punishes a certain class, state employees, for mere membership in a political organization. The philosophy of the loyalty oath cases reinforces the strength of the First Amendment to the U. S. Constitution. See also Brandenburg v. Ohio, 395 U.S. 444, 89 S.Ct. 1827, 23 L.Ed.2d 430 (1969); Yates v. U.S., 354 U.S. 298, 77 S.Ct. 1064, 1 L.Ed.2d 1356 (1957); Noto v. U.S., 367 U.S. 290, 81 S.Ct. 1517, 6 L.Ed.2d 836 (1961).

This Court has no choice but to follow these decisions of the Court which is the final arbiter when constitutional interpretation is in dispute. To uphold the provisions of Ark. Stats. Ann. 41-4113(c) as protecting a valid state interest, i.e. teaching in a state institution the communist theory of government, would be to ignore the controlling authority on this issue. This Court cannot accept those arguments made by Henslee with reference to Cooper’s particular position and the interest of the state therein as applicable to justify affirming the constitutionality of a statute that has such a chilling effect on the exercise of valid First Amendment rights such as freedom of speech and freedom of association.

We are not unmindful of Adler v. Board of Education, 342 U.S. 485, 72 S. Ct. 380, 96 L.Ed. 517 (1952), and Beilan v. Board of Education of Philadelphia, 357 U.S. 399, 78 S.Ct. 1317, 2 L.Ed.2d 1414 (1958), relied on by appellees.

However much one might wish to accept Adler as authority for upholding Sec. 41-4113(c), one must also face the reality that Adler has been so thoroughly eroded, if not overruled by the later cases of Keyishian, Rabel and others, that we cannot view it as an acceptable precedent to uphold this particular statute.

The issue before us is not whether appellant Cooper’s beliefs, his advocacy and teaching of PLP’s aims and principles or his PLP membership merit our approval. The sole relevant issue is whether his membership in PLP constitutionally disqualifies him from employment by the State. We must hold that it did not.

As an example of the overbreadth of the provisions of 41-4113(c) which require the discharge of a state employee regardless of the relationship of his employment to a valid state interest, a person operating a mowing machine for the State Highway Department, or an elevator operator in a State building, would be deprived of his First Amendment rights without any compelling state interest in his political philosophy.

The Constitution of the United States does not permit us to take a contrary view. Article 6, Clause 2, the Supremacy Clause, provides in part:

“This Constitution, and the Laws of the United States .... shall be the supreme law of the land; and the Judges in every State shall be bound thereby .... the Constitution or Laws of any State to the contrary notwithstanding. ”

The federal supremacy granted by this clause applies not only to the Constitution and laws of the United States, but to the interpretation of that Constitution and those laws by the United States Supreme Court. Cooper v. Aaron, 358 U.S. 1, 78 S.Ct. 1401, 3 L.Ed.2d 5, citing Chief Justice Marshall’s forceful exposition of this point in Marhury v. Madison, 1 Cranch 137. 177, 2 L.Ed. 60.

In view of our holding we find it unnecessary to reach any conclusion as to the validity of Ark. Stats. 41-4111 or any of the provisions of Ark. Stats. 41-4113 other than subsection (c). Subsection (a) provides for the punishment, upon conviction, for violation of the prohibitions of the statute and subsection (b) bars any person so convicted from State employment for a period of five years, but the record here shows no such conviction, thus eliminating any necessity to consider the validity of these subsections. Nor do we find it material whether this subsection is a bill of attainder, for in any event subsection (c) cannot be upheld.

The injunction of the lower court was issued on the basis of subsection (c), and since it must fall, we reverse the decree of the Chancery Court and remand with directions to dissolve the injunction against appellants Ross and the Trustees, to dismiss the complaint and intervention, and for other proceedings consistent with this opinion.

The writer is authorized to state that Justices George Rose Smith, Brown and Jones join in this opinion and in the concurring opinion of Justice Fogleman.

The Chief Justice concurs in part and dissents in part.

Fogleman, George Rose Smith, Brown and Jones, JJ concur.

Holt, J. disqualified.

Carleton Harris, Chief Justice,

concurring in part; dissenting in part. I concur in part and dissent in part to the majority opinion. My concurrence is based on the fact that I agree that the decree must be reversed, but my dissent is premised on the fact that I disagree with the reason for reversal.

I would reverse because I do not feel that the chancery court had jurisdiction. The statues passed upon by the chancellor are a part of the criminal law of our state, listed under the heading, “Treason, Disloyal Conduct, Sabotage.” While I agree with the majority that, under a number of United States Supreme Court decisions, membership alone in a communist organization, is insufficient to bar one from State employment, it is my view that the trial court, in rendering its decree, also took into consideration the provisions of Ark. Stat. Ann. § 41-4111 (Repl. 1964), which state:

“(a) It shall be unlawful for any person; (1) to knowingly or willfully advocate, abet, advise, or teach the duty, necessity, desirability, or propriety of overthrowing or destroying any government in the United States by force or violence, or by the assassination of any officer of any such government; (2) with the intent to cause the overthrow or destruction of any government in the United States, to print, publish, edit, issue, circulate, sell, distribute, or publicly display any written or printed matter advocating, advising, or teaching the duty, necessity, desirability, or propriety of overthrowing or destroying any government in the United States by force or violence; (3) to organize or help to organize any society, group, or assembly of persons who teach, advocate, or encourage the overthrow or destruction of any government in the United States by force or violence; or to be or become a member of, or affiliate with, any such society, group, or assembly of persons, knowing the purposes thereof, (b) For the purposes of this section, the term ‘government in the United States’ means the government of the United States, or the government of this state.”

A violation is a felony, and subjects the offender to a fine of up to $10,000 or imprisonment for not more than 10 years, or both, and the statute further provides that any person convicted shall not be eligible for employment by the state or any agency or department for the next five years following his conviction.

The first finding made by the chancellor was that the activities of Cooper are in violation of the quoted section; it is then found that subsection (c) of § 41-4113 is valid and that Cooper is ineligible for employment by the State of Arkansas. In fact, the only reason for taking testimony was for the purpose of showing the activities of Cooper; there was certainly no reason to take testimony simply to show that he belonged to a communistic group, for he very readily admitted that.

The constitutionality of § 41-4111 in its application to appellant, in my opinion, depends upon the extent of the activities of Cooper in furtherance of the prohibited objectives therein mentoned (with particular reference to subsection [a] [1], Yates v. United States, 354 U.S. 298, Noto v. United States, 367 U.S. 290, and I agree with appellant that the chancery court was without authority to make this determination for it had no jurisdiction. In this state, criminal felony violations are heard in the circuit court and we held in Ferguson v. Martineau, Chancellor, 115 Ark. 317, 171 S.W. 472, “It is no part of the mission of equity to administer the criminal law of the State. A court of equity has no jurisdiction over matters merely criminal or merely immoral.”

The case of Gordon v. Smith, Chancellor, 196 Ark. 926, 120 S.W. 2d 325, involved efforts of certain citizens to enjoin police officers within this state from arresting, threatening to arrest, or otherwise interfering with the citizens in operating their automobiles upon the streets and highways because they had not complied with a statute providing for the testing of motor vehicles, it being the contention of the citizens that this statute was unconstitutional. This court, citing a number of cases, held that the chancery court was without jurisdiction and that the matter should be determined in a court of law.

I do not reach the question of whether the evidence before the chancellor sustains a violation of § 41-4111 or any subsection therein, which would stand under United States Supreme Court decisions, for I am firmly convinced that the chancery court was without jurisdiction.

John A. Fogleman, Justice,

concurring. I concur in the result, but I never reach the considerations which bring the majority to it. There was a finding by the chancery court that the activities of Dr. Cooper were in violation of Ark. Stat. Ann. § 41-4111 (Repl. 1964). Viewed in the light most favorable to the court’s decree, Dr. Cooper’s testimony may be summarized as follows:

The Progressive Labor Party of which I am a member believes that there is a ruling class, consisting of a very small group of people, which controls the country’s economy, and through that power, also controls the government and that this control creates oppression. The Party also believes that there must be a dictatorship of the working class, but since the ruling class will not surrender its power voluntarily, there will be violence. The Party is prepared for that eventuality. I joined the Party knowing of these guidelines. I adhere to them and believe that violence and a revolution are necessary. I explain to my students that I believe revolution is necessary. The Party believes that the government, as the agent of the small group constituting the ruling class, practices violence on most people, who can only escape this violence by violence and I agree.
I do not believe the Progressive Labor Party can obtain power through constitutional means. I explain to my students that, looking at the record of American history, the only possible solution is revolution. The Progressive Labor Party thinks we have to overthrow the government of the United States. I personally adhere to this philosophy. I view the necessity for the revolution as a moral imperative but I am not talking about anything imminent or in the near future. I do not think the overthrow of the government will occur in the next few years. I discuss politics with teachers and students and tails about the situation and what I think should be done about it.

Dr. Cooper and his party believe that violence and a revolution are necessary. I take this to mean essential, indispensable, requisite, denoting that which fills an urgent need. The American Heritage Dictionary; Webster’s New International Dictionary, 2d Ed. (see “needful”) See also, Webster’s Third New International Dictionary; Rodale, The Synonym Finder. He explains this to his students. This necessity, to him is a moral imperative. This means that it is obligatory, mandatory, directive, compulsory; more than urgent need or demand that cannot be deferred or evaded; something to be acted on; an unavoidable fact compelling or insistently calling for action. The American Heritage Dictionary; Webster’s New International Dictionary, 2d Ed. They believe the only possible solution is revolution — that they have to overthrow the government. This seems to be rather compelling and seems to be more than the expression of an idea.

Just the belief that his dreams are not going to come true within the next few years does not conceal the fact that he believes in and advocates that which he thinks should be done now. To me, advocacy and encouragement of action are implicit in his expression and explanation of these beliefs. Clearly, Dr. Cooper has the specific intent to further the unlawful aims of his organization, shares its unlawful purposes and is an active member. The Party’s aim, of which he seems to be fully aware, is established by his own testimony. Assuming that they may not be unlawful, his own characterization is that they are not “constitutional means”. It may be that one must command or invite an instantaneous assault upon the officers or seat of government before he is removed from the area of First Amendment protection, under some of the authorities cited in the majority opinion. Permitting a veil so transparent, woven largely from finespun semantical thread, to become a constitutional shield against such “teaching” is so distasteful to me that I prefer to take another approach to the matter.

Unlike the majority, I consider the very first point for reversal relied upon by appellant, i.e., that Ark. Stat. Ann. § 41-4113(c) (Repl. 1964) is an unconstitutional bill of attainder. With this argument, I must agree, although there seems to be some lack of consistency in decisions where the Communist Party is involved. Article I, § 10 of the United States Constitution provides that no state shall pass a bill of attainder, i.e., a legislative act which inflicts punishment without a judicial trial. The constitutional provision was adopted as a direct reaction to English bills of attainder, some of which were enacted for retribution and some for preventive purposes. The latter were legislative judgments, based largely on past acts and associations, that a given person or group was likely to cause trouble, perhaps overthrow the government, and therefore deprivations were inflicted upon the person or group in order to prevent the feared event. United States v. Brown, 381 U.S. 437, 85 S.Ct. 1707, 14 L.Ed.2d 484. There can be no disavowal of such a purpose in § 41-4133(c). For that reason it seems to me to be an unconstitutional bill of attainder which cannot be viewed in any other light, under the most recent decisions of the United States Supreme Court by which we are bound in matters involving the federal constitution. The decisions from which I reach this result span a century and are completely consistent.

The bill of attainder had been a device to which resort was frequently had in England in the sixteenth, seventeenth and eighteenth centuries for dealing with persons who had attempted, or threatened to attempt to overthrow the government. Our constitutional prohibition was adopted by the Constitutional Convention unanimously and without debate. United States v. Brown, supra.

“Bill of attainder” under the federal constitutional provision is an all-inclusive term, encompassing what formerly had been known as bills of pain and penalties, which were, along with the classic bill of attainder imposing the death penalty, legislative acts inflicting punishment without a judicial trial. Cummings v. The State of Missouri, 71 U.S. (4 Wall.) 277, 18 L.Ed. 356 (1866); Ex parte Garland, 71 U.S. (4 Wall.) 277, 18 L.Ed. 366 (1866); United States v. Lovett, 328 U.S. 303, 66 S.Ct. 1073, 90 L.Ed. 1252 (1946); United States v. Brown, 381 U.S. 437, 85 S.Ct. 1707, 14 L.Ed.2d 484 (1965). The word punishment, in the sense of the constitutional provision, is more comprehensive than when used to describe imprisonment, fines, or deprivation of life. In the constitutional sense, it also includes penalties of a civil nature, by deprivation or suspension of civil or political rights, depending upon attendant circumstances and the causes of the deprivation. Disqualification from the pursuit of a lawful profession or vocation, as well as a bar from government service, may constitute this type of punishment. Cummings v. The State of Missouri, supra; Ex parte Garland, supra; United States v. Lovett, 328 U.S. 303, 66 S.Ct. 1073, 90 L.Ed. 1252 (1946); United States v. Brown, supra. Bill of attainder may be directed against individuals or against a whole class or easily ascertainable group. Cummings v. The State of Missouri, supra. United States v. Lovett, supra; United States v. Brown, supra.

It seems to me that under United States v. Brown, supra, the latest and most authoritative case on the subject § 41-4113(c) must fall as a bill of attainder because it makes eligibility for employment dependent upon non-membership in a Nazi, Fascist or Communist society, and not upon the activities in which either the person or society may be engaged. See, Communist Party of the United States v. Subversive Activities Control Hoard, 367 U.S. 1, 81 S.Ct. 1357, 6 L.Ed.2d 625 (1961). I am not unaware of American Communications Assn. v. Douds. 339 U.S. 382, 70 S.Ct. 674, 94 L.Ed. 925 (1949) which upheld a provision of the National Labor Relations Act, as then written. I do feel that, in Brown, the U.S. Supreme Court, in distinguishing Douds, strictly limited it, to say the least, and, in effect, removed a part of its foundation, saying that this part resulted from a misreading of United States v. Lovett, supra. Be that as it may, the court pointed out in Douds that the bar of access of a union having an officer who was a member of the Communist party to the National Labor Relations Board did not necessarily bar any Communist party member from office in his union, even though loss of his position was a possible indirect result. Here, and in Brown, the bar was absolute. Concluding language in the Brown opinion seems pertinent and applicable. Since I think it requires that § 41-4113(c) as written be declared void as a bill of attainder, I quote it, as follows:

We do not hold today that Congress cannot weed dangerous persons out of the labor movement, any more than the Court held in Lovett that subversives must be permitted to hold sensitive government positions. Rather, we make again the point made in Lovett: that Congress must accomplish such results by rules of general applicability. It cannot specify the people upon whom the sanction it prescribes is to be levied. Under our Constitution, Congress possesses full legislative authority, but the task of adjudication must be left to other tribunals.
This Court is always reluctant to declare that an Act of Congress violates the Constitution, but in this case we have no alternative. As Alexander Hamilton observed:
“By a limited constitution, I understand one which contains certain specified exceptions to the legislative authority; such, for instance, as that it shall pass no bills of attainder, no ex post facto laws, and the like. Limitations of this kind can be preserved in practice no other way than through the medium of the courts of justice; whose duty it must be to declare all acts contrary to the manifest tenor of the constitution void. Without this, all the reservations of particular rights or privileges would amount to nothing.”

Since it appears clear to me. that this is a bill of attainder I would avoid penetrating the more tangled jungle in which cases involving bars to employment, those involving mere qualifications for employment and those requiring test oaths seem to be so intermingled and intertwined that drawing clear distinctions is difficult, if not impossible.

I must add that I agree with the majority on the jurisdictional question. If § 41-4113(c) rendered Dr. Cooper’s employment an illegal contract, it was unenforceable. K. & S. Sales Co. v. Lee, 164 Ark. 449, 261 S.W. 903; Tallman v. Lewis, 124 Ark. 6, 186 S.W. 296. The payment of his salary would be an illegal exaction under those circumstances. See, Tollman v. Lewis, supra. Enjoining that payment from tax funds is not the enforcement of the criminal law any more than refusing to enforce a gambling contract would be. To enforce a contract prohibited by law would permit the law to aid in its own undoing. Tallman v. Lewis, supra.

For the reasons I have stated I would reverse the decree.

      For an enlightening discussion of the history of the bill of attainder, both in England and the United States, and the application of our constitutional prohibition, see Notes and Comments, the Bounds of Legislative Speculation: A Suggested Approach to the Bill of Attainder Clause, 72 Yale Law Journal 330 (1962-1963).

      It is worthy of note that this case involved the right of Augustus H. Garland to continue to practice law before the Supreme Court of the United States after he had served first as a representative and later as a senator in the Congress of the Confederate States. Except for this decision Attorney General Garland could not have been the first Arkansawyer to serve in the president’s cabinet.

      The efficacy of Douds on this point seems to have been doubtful in the minds of several members of the court many years ago. See dissenting opinions in Killian v. United States, 368 U.S. 231, 82 S.Ct. 302, 7 L.Ed.2d 256 and in Bryson v. United States, 396 U.S. 64, 90 S.Ct. 355, 24 L.Ed.2d 264 (1969), where the majority declined to decide whether the section of the act questioned in Douds and later repealed, would then have passed constitutional muster and whether Douds would be reaffirmed. Justices Black and Douglas, dissenting, pointed out that only 6 members of the court participated in Douds, and their analysis indicates that only one half of them joined in this part of the “opinion of the Court.”


author: Georoe Rose Smith, Justice.

text:
    McArthur DAVIS v. GENERAL MOTORS CORPORATION
    74-351
    521 S.W. 2d 214
    Opinion delivered April 14, 1975

      Paul K. Roberts, for appellant.
    Shackleford, Shackleford and Phillips, for appellee.
   Georoe Rose Smith, Justice.

Smart Chevrolet Company, after having repossessed and resold a car which it had originally sold to McArthur Davis, brought this suit against Davis for a deficiency judgment. Davis filed a counterclaim against Smart (the dealer) and a third-party complaint against General Motors Corporation (the manufacturer), asserting breaches of warranty. General Motors succeeded, upon the pleadings alone, in obtaining a dismissal of the third-party complaint against it. This appeal is from the order of dismissal. Inasmuch as that order affects a substantial right and strikes a pleading, it is an appealable order within the terms of the statute. Ark. Stat. Ann. § 27-2101 (Supp. 1973).

The dismissal came about in this way: The original summons was served upon Davis on April 10, 1974. On April 24 Davis filed an answer to the complaint, a counterclaim against Smart, and a motion “pursuant to Arkansas Statutes, Section 34-1007,” for leave to make General Motors a party and to serve a summons and third-party complaint upon that corporation. On April 30 the trial court entered an order which, without making any reference to the statutes, directed that General Motors be made a party to the case. On May 6 Davis filed his third-party complaint against General Motors, seeking damages for breach of warranty. Counsel for General Motors, in asking that Davis’s third-party complaint be dismissed, pointed out that Davis’s motion of April 24 had cited a section of the Uniform Contribution Among Tortfeasors Act, Ark. Stat. Ann. § 34-1007 (Repl. 1962). Counsel asserted that General Motors was not a joint tortfeasor and that the third-party complaint should therefore be stricken.

The motion to strike the third-party complaint should have been denied. Obviously Davis’s motion for leave to bring in General Motors was in error in its reference to the Uniform Contribution Among Tortfeasors Act, because Davis was asserting a cause of action against General Motors, not a claim for contribution. The third-party complaint itself made that fact perfectly clear. Davis was entitled to file that pleading. Ark. Stat. Ann. § 27-1134.1 (Supp. 1973). There is no possibility whatever that General Motors was misled by the superfluous reference to the Uniform Act. The error must therefore be disregarded, as it does not affect the substantial rights of General Motors. Ark. Stat. Ann. § 27-1160 (Repl. 1962).

Reversed.


author: Lyle Brown, Justice.

text:
    FIRST FEDERAL SAVINGS & LOAN ASSOC. of MALVERN, ARK. v. ARKANSAS SAVINGS & LOAN ASSOC. BOARD, ET AL
    74-331
    521 S.W. 2d 542
    Opinion delivered April 14, 1975

      Hail, Tucker & Lovell, for appellant.

      Harold E. Anderson, Jr., for appellee Arkansas Savings & Loan Bd., Stubblefield & Matthews, for appellee First Security Savings & Loan Ass’n. of Hot Spring County.
   Lyle Brown, Justice.

On October 24, 1973, an application was filed with the Arkansas Savings & Loan Association Board for a state chartered association to be located in Malvern, Hot Spring County, and to be known as First Security Savings & Loan Association of Hot Spring County. Protests to the application were filed by Malvern National Bank, Bank of Malvern, and First Federal Savings & Loan Association of Malvern. After a pre-hearing conference and a public hearing the application for the proposed charter was granted. The circuit court affirmed. Appellant here is First Federal Savings & Loan Association of Malvern, and the appellees are Arkansas Savings & Loan Association Board and First Security Savings & Loan Association of Hot Spring County.

At the outset of this appeal First Federal argues that the Board erred in failing to make specific findings of underlying facts, as required by a provision in the Administrative Procedure Act. Ark. Stat. Ann. § 5-710 (b) (Suppl. 1973) which states:

“In every case of adjudication a final decision or order shall be in writing or stated in the record. A final decision shall include findings of fact and conclusions of law, separately stated. Findings of fact, if set forth in statutory language, shall be accompanied by a concise and explicit statement of the underlying facts supporting the findings.”

The quotation is a part of the Administrative Procedure Act, and of course applies to most every state board such as Arkansas Savings & Loan Board, appellee here.

We have taken a hard line on the proposition that the quoted statute must be followed. We have so stated in two very recent opinions. Arkansas S. & L. Bd. v. Central Ark. S. & L., 256 Ark. 846, 510 S.W. 2d 872 (1974); First State B. & L. Ass’n v. Arkansas S. & L. Bd., 257 Ark. 599, 518 S.W. 2d 507 (1975).

In the hope that it will prove helpful to the administrative boards, the trial courts and attorneys, we shall set out the order, paragraph by paragraph, entered by the Board and compare them with the requirements of Ark. Stat. Ann. § 67-1824 (Supp. 1973).

Section (1) of § 67-1824

“All the prerequisites for the approval of the charter set forth in this Act (Sections 67-1801 — 67-1862) have been complied with.”

Board’s Order:

“1. That an application for charter containing the items required by Section 16 of Act 227 of 1963 has been properly filed with the Supervisor of the Board by First Security Savings and Loan Association of Hot Spring County, Malvern, Arkansas.
“2. That the application for charter and supporting documents of First Security Savings & Loan Association of Hot Spring County complies with all of the prerequisites for the approval of a charter as set forth in Act 227 of 1963, as amended, and the rules and regulations of the Arkansas Savings and Loan Association Board.”.

Findings No. 1 and No. 2 merely paraphrase Section (1) and are not accompanied by a concise and explicit statement of the underlying facts supporting the findings.

Section (2) of § 67-1824

“The character, responsibility and general fitness of the persons named in the articles of incorporation and who will serve as directors and officers of such Association are such as to command confidence and warrant belief that the business of the proposed association will be honestly and efficiently conducted in accordance with the intent and purpose of this act and the proposed association will have qualified full-time management.”

Board’s Order:

“3. That the information submitted to the Board demonstrates that those persons named in the Articles of Incorporation and who will serve as officers and directors of First Security Savings & Loan Association of Hot Spring County, possess a general background reflecting the responsibility, character and general fitness necessary to instill confidence and convey the belief that the business pursued by the Association will be conducted efficiently and with the honesty and integrity by Act 227 of 1963, as amended.
“4. That First Security Savings & Loan Association of Hot Spring County will have qualified full-time management in that it will submit to the Supervisor of the Board detailed biographical information and a personal financial statement of the proposed full-time managing officer, and said managing officer will not be employed until it is determined by the Supervisor of the Board that he is qualified.”

Finding No. 3 simply rearranges the wording found in Ark. Stat. Ann. § 67-1824 (2) (Suppl. 1973). The finding is devoid of any concise and explicit statement of the underlying facts supporting the finding.

Finding No. 4 states that the applicant will have qualified full-time management which is verbatitn from the requirement of Section 67-1824 (2). The finding goes on to say that the applicant will submit information on the managing officer who will not be employed until the Supervisor determines that he is qualified. A careful reading of the statute requires the Board, not the Supervisor, to find that the proposed association will have qualified full-time management. The Board has not made this affirmative finding but has delegated that statutory requirement to the Supervisor of the Board. This is in violation of the statute.

Section (3) of § 67-1824

“There is a public need for the proposed association and the volume of business in the area in which the proposed association will conduct its business is such as to indicate a successful operation.”

Board’s Order:

“5. As indicated by the application, exhibits thereto, and testimony of the witnesses on behalf of the applicant, it is found that there exists a public need at the present time for First Security Savings & Loan Association of Hot Spring County because of the area’s untapped savings potential and the unsatisfied demand for long-term loans.
“6. That the volume of business in the areas surrounding and including Malvern, Arkansas, where First Security Savings & Loan Association of Hot Spring County will conduct its business is sufficient to indicate a successful operation based on the evidence submitted to the Board of the area’s savings potential, demand for long-term loans and overall economic growth.”

Findings No. 5 and No. 6 are again a mere recital of the statutory language of Ark. Stat. Ann. § 67-1824 (3) (Suppl. 1973). Finding No. 5 merely states that there exists a public need from the application, exhibits thereto and testimony of the witnesses. There is no explicit statement of the underlying facts supporting this finding as well as the finding that the volume of business is sufficient to indicate a successful operation. There is total absence of any fact, figure or computation constituting an underlying fact which formed the basis for the statutory language used. We have no way of knowing what specific facts the Board relied upon in making this finding.

Section (4) of § 67-1824

“The operation of the proposed association will not unduly harm any other existing association or federal savings and loan association or other financial institution.”

Board’s Order:

“7. That the operation of First Security Savings & Loan Association will not harm any existing state-chartered savings and loan association, Federal Savings and loan association, commercial bank or any other financial institution since the proof shows that there is sufficient savings and loan potential in the proposed service area to adequately support the existing institutions and the proposed savings and loan association.”

No underlying facts are pointed out to support the statutory language used in Finding No. 7. We are left to guess what facts the Board found to substantiate that sufficient savings and loan potential is in the area. The finding should have related the basis for an amount of the savings and loan potential; the sources from which the savings and loans would be derived; the amount of savings and loans required to support the applicant; the loss of savings and loans which might be suffered by the existing financial institutions; and other underlying facts supporting their finding.

Section (5) of § 67-1824

“The proposed association will be independent of the other financial institutions, that those persons named in the articles of incorporation as directors and officers do not have such affiliations with any financial institutions or other businesses closely related to the savings and loan association business which would affect the independence of the proposed association, and that the directors are representative of the community.”

Board’s Order:

“8. That the matters submitted to the Board establish that the subscribers to withdrawable capital of First Security Savings & Loan Association of Hot Spring County represent a cross-section of the community to be served and that the Applicant will be established and operated in a manner independent of other financial institutions since those persons named in the Articles of Incorporation as directors and officers to not have any affiliations with any financial institutions or other businesses closely related to the savings and loan association business which would affect the independence of the proposed association, and that the directors are representative of the community.”

Finding No. 8 is again a copy of Section 67-1824 (5). There is no explicit statement of the underlying facts supporting this finding.

The judgment is reversed and the cause remanded through the Circuit Court to the Board for such further proceedings as may be necessary.