author: Sam Robinson, Associate Justice.

text:
    Rich v. Walker.
    5-3166
    374 S. W. 2d 476
    Opinion delivered January 27, 1964.

      Laois D. Jones, for appellant.

      Lewis Fj. Epley, Jr., Rex W. Pcrldns, Townsend & Toivnsend, for appellee.
   Sam Robinson, Associate Justice.

The City of Eureka Springs, by Resolution No. 58, authorized the issuance of $85,000 in revenue bonds to finance the improvement of the water and sewer systems. Appellants herein circulated and filed a petition asking that a referendum election be held on the question. The City Commission refused to call an election, contending that the petition had not been legally circulated. Appellants then filed an action in chancery court asking that the City Commission be compelled to call the election. The court granted the petition and ordered that an election be held.

Pursuant to the order of the chancery court, the City Commission held the election. There were 446 votes in favor of Resolution No. 58, and 310 votes against it. Appellants then filed a petition in chancery court attacking the validity of the election. The city, appellee herein, demurred to the petition on the ground that the chancery court did not have jurisdiction of the subject matter. The chancellor sustained the demurrer and gave petitioners 15 days to plead further; petitioners failed to file any additional plea; appellees then filed a motion to dismiss the petition. The motion was granted, the petition was dismissed, and petitioners have appealed to this court.

The real issue in this case is whether the action filed by appellants is a suit to prevent an illegal exaction, or is it an election contest. Chancery courts have jurisdiction to enjoin an illegal exaction, even though such exaction is brought about by an election. Phillips v. Rothrock, 194 Ark. 945, 110 S. W. 2d 26; Ark-Mo. Power Corp. v. City of Rector, 214 Ark. 649, 217 S. W. 2d 335. See also Starnes v. Sadler, 237 Ark. 325, 372 S. W. 2d 585, on the power of chancery courts to enjoin an illegal exaction.

Amendment No. 7 to the Constitution of Arkansas, regarding local petitions' such as the one in the case at bar, gives the chancery court jurisdiction only to review the action of the county or city clerk in determining the sufficiency of the petitions. But chancery courts do not have jurisdiction to decide an election contest. Hutto v. Rogers, 191 Ark. 787, 88 S. W. 2d 68; Hester v. Bourland, 80 Ark. 145, 95 S. W. 992; Gladish v. Lovewell, 95 Ark. 618, 130 S. W. 579; Davis v. Wilson, 183 Ark. 271, 35 S. W. 2d 1020.

This is ail election contest. True, appellants contend that there was an insufficient ballot title, and an insufficient ballot title was held to render the election void in the Arkansas-Missouri Power Corp. case. But here, the ballot title was made a part of the petition and it shows on its face that the title was sufficient; that it fully informed the voters of the issue involved. Hence, the Arkansas-Missouri Power Corp. case is not applicable. The ballot title in the case at bar is as follows: "Resolution No. 58 authorizes the refunding of the outstanding balance of the City’s water and sewer revenue bonds issued under date of January 1, 1954, in order to enable the City to issue parity bonds for the purpose of improving and extending the water and sewer systems and to increase the service mains of both systems, at an estimated cost to the City of $85,000, which will make the City eligible for a grant of a like amount from the Federal Public Works Acceleration Administration.”

Appellants also argue that the election judges were improperly selected, but no facts are alleged which, if true, would sustain such allegation. A demurrer admits as true only those allegations that are well pleaded. United Interchange, Inc. v. Rowe, 230 Ark. 905, 327 S. W. 2d 547; Jeffery, County Judge v. Trevathan, 215 Ark. 311, 220 S. W. 2d 412.

Moreover, appellants made no contention prior to the election that the ballot title was insufficient or that the election judges had been illegally selected. The complaint also alleges that people, not naming such people, were allowed to vote who were not qualified electors; that the ballots were miscounted, but did not state in what manner they were miscounted; and that the defendants intimidated the voting public and misrepresented the facts to the people of the city, and deliberately destroyed the integrity of the hallots and the election. These allegations are in the nature of an election contest, although not specific enough to amount to more than conclusions of law. Other allegations, such as the defendants "did other things to destroy the integrity of the ballot” are also merely conclusions of law and are not good against a demurrer. City of Marianna v. Gray, 220 Ark. 468, 248 S. W. 2d 379; Seubold v. Ft. Smith Special School District, 218 Ark. 560, 237 S. W. 2d 884; Main v. Drainage District No. 2 of Monroe County, 204 Ark. 506, 162 S. W. 2d 901.

In Orr v. Carpenter, 222 Ark. 716, 262 S. W. 2d 280, this court reaffirmed the following principle stated in Henderson v. Gladish, 198 Ark. 217, 128 S. W. 2d 257. There the court said: “ ‘It is the duty of the courts to uphold the law by sustaining elections thereunder that have resulted in full and fair expression of the public will, and, from the current of authority, the following may he stated as the approved rule: All provisions of the election law are mandatory, if enforcement is sought before election in a direct proceeding for that purpose; hut after election all should be held directory only, in support of the result, unless of a character to affect an obstruction of the free and intelligent casting of the vote or to the ascertainment of the result, or unless the provision affects an essential element of the election, or unless it is expressly declared by the statute that the particular act is essential to the validity of the election, or that its omission shall render it void.’ ”

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

Affirmed.


source: Caselaw Access Project

author: Jim Johnson, Associate Justice.

license: Public Domain

text:
    Souter v. Carruthers.
    5-3124
    374 S. W. 2d 474
    Opinion delivered January 27, 1964.

      Smith, Williams, Friday & Bowen and B. S. Clark, for appellant.

      Felver A. Rowell, Jr., for appellee.
   Jim Johnson, Associate Justice.

This is an appeal from a judgment for damages sustained as a result of floodwater inundating land. The judgment is against appellants Hubert H. Souter and The First National Bank in Little Rock, co-executors of the estate of H. Avery Souter, deceased, who during his lifetime was engaged in the contracting business. Appellees are owners of certain farm lands near Morrilton which are part of the Point Remove Levee and Drainage District of Conway County.

A levee was constructed several years ago pursuant to an agreement with the U. S. Corps of Engineers along Point Remove Creek and near the Arkansas River. A drainage ditch was also constructed by the Engineers and thus the flood protection and drainage sought by the District was accomplished.

A levee box consisting of two 66-inch drainage pipes or culverts and a flood control gate was built into the levee. The culverts are located at the base of the levee and are utilized to control drainage from the lands involved. In 1961 it was determined that the culverts were defective and should he repaired. The Engineers agreed to perform the work and the necessary plans and specifications were prepared by that agency. Thereafter the Engineers awarded a contract to H. Avery Souter which was executed on October 25, 1960. Souter moved his equipment onto the job site and started the work immediately. The work was under the direct supervision and control of the Engineers.

The plans specified that the levee should be cut initially down to the culverts. The elevation of the levee is 310 feet above sea level and the culverts are at 282 feet. This excavation Avas completed and Souter then constructed two coffer dams, one on the river side of the levee, and the other on the land side. Due to continued rainfall Souter requested and received permission from the Engineers to discontinue the work. Before being alloAAred to do so he Avas directed by the Engineers to construct a temporary dam between the flood gate and the levee.

The cessation of work Avas in the spring of 1961 and thereafter íavo floods occurred, both of AArhich involved Point Remove Creek and the Arkansas River. The first occurred in April and caused no damage other than to the temporary dam and this was soon repaired. The second flood in May washed over the dam, flooded appellees’ land, and damaged certain growing crops. The water also caused a delay in planting soybean and cotton crops resulting in a below average yield.

Appellees filed their complaint alleging that Souter was negligent in leaving the levee in the above condition with no protection against overflow and in failing to refill the levee after receiving repeated warnings to do so.

Shortly after the complaint Avas filed, Souter died and the action was revived in the name of the co-executors of his estate.

This cause was tried before a jury and a verdict was returned for appellee Dr. H. C. Carruthers in the sum of $5,000.00, and for appellee Roy Carruthers in the sum of $3,000.00. Judgment was entered in accordance therewith, from which appellants prosecute this appeal.

For reversal, appellants, rely principally upon two points, which are: (1) that the contractor at all times followed the plans and specifications contained in the contract, received his instructions from the Engineers, and was under their direct supervision; and (2) Souter did not commit any independent acts of negligence.

This court has very recently decided cases involving this same problem. In Southeast Construction Co., Inc. v. Eilis, 233 Ark. 72, 342 S. W. 2d 485, we held that a contractor who performs in accordance with the terms of his contract with the governmental agency involved, and under the direct supervision of that agency, and is guilty of neither a negligent or wilful tort, is not liable for damages resulting from his performance. This proposition was reaffirmed in Ben M. Hogan & Co. v. Fletcher, 236 Ark. 951, 370 S. W. 2d 801.

Appellees seek to distinguish these cases by urging that the temporary dam was not a necessary part of the construction contract but was built solely for the convenience of the contractor. On this assumption they contend that the contractor did not build the dam of sufficient height and was negligent.

Under the circumstances hero presented, we are unable to agree with appellees’ position and assumption. There is no evidence that Souter failed to follow the plans and specifications contained in the contract. The contract required him to take necessary precautions to protect the entire structure at all times. The evidence is uncontradicted that the temporary dam was built not only for what flood protection it would afford during the necessary shutdown but also was essential to protect the work that had already been performed. Also, the dam was built on instructions from the Engineers and under that agency’s direct supervision. Moreover, the Engineers specified the height to which the temporary dam was built.

The facts in the instant case are similar to the facts in the Ben M. Hogan & Co. case, supra, decided subsequent to the judgment here appealed from. In that case a big ditch, usually full of water, lay between appellees’ property and the highway. When Ben M. Hogan Co. started construction of the bridge or reconstruction of the road involved, the ditch was filled in. When this occurred, appellees’ pasture would not drain and water began to stand there. We held that appellees were damaged Avhen the big ditch Avas filled in accordance Avith the State Highway Department’s plans and specifications, but the contractor Avas only doing Avhat the Highway Department required of him. In the instant case, appellees’ lands Avere damaged because a cut in the leAme Avas made, but here again, the contractor Avas only doing Avhat the Engineers required of him.

Several witnesses testified on behalf of appellees that they had on numerous occasions in past years seen the Avater of Point Remove Creek and the Arkansas River rise substantially higher than the coffer dams and temporary dam. Since the structures Avere built to the maximum height possible under the conditions existing, it is apparent that flooding could not have absolutely been avoided by dams constructed-to any elevation short of the original height of the levee.

Prom all the evidence adduced, Ave are impelled to the conclusion that the real cause of the damage sustained by the land OAvners was the cut in the levee which A\ras necessary to repair the defective culverts. This cut was made pursuant to the conditions and requirements of the contract, and the other work on the job was performed under the direct supervision and control of the U. S. Corps of Engineers. In the absence of proof of negligence on the part of the contractor in such performance, the judgment must be reversed and the cause dismissed.


author: Frank Holt, Associate Justice. Paul Ward, Associate Justice

text:
    Riverside Ins. Co. v. Parker.
    5-3113
    375 S. W. 2d 225
    Opinion delivered January 27, 1964.
    [Rehearing denied March 2, 1964.]

      Wood, Chesnutt & Smith; Wright, Lindsey, Jennings, Lester & Shults, for appellant.

      Wootton, Land & Matthews, for appellee.
   Frank Holt, Associate Justice.

The question presented in this case is whether the appellant effectively canceled the automobile insurance policy issued by it to the appellees. In a declaratory judgment proceeding’ the trial court, sitting as a jury, resolved the issue in favor of the appellees. The judgment recited, in pertinent part:

“That the attempted cancellation of the aforesaid policy by the defendant, Riverside Insurance Co. of America, on or about the 15th day of May, 1961, was not effective for the reason that the defendant did not tender to the plaintiffs the unearned or unused portion of the premium of $250.70 paid by the plaintiffs to the defendant as aforesaid and covering the period of time from November 11, 1960 to November 11, 1961, and that up to the time of this decision [March 19, 1963] no tender has been made by the defendant, Riverside Insurance Co. of America to the plaintiffs of such unearned portion of the premium paid; * * ® and that the plaintiffs are not bound by any transactions had by the defendant and the said Cordon Reader, d/b/a Reader’s Insurance Agency, as to the return of the unused portion of the premium;”.

On appeal appellant urges for reversal that “failure to tender return premium did not render ineffective cancellation as of May 25, 1961, and appellant insurance company had no insurance in force on August 20, 1961.”

The essential facts in this case appear to be undisputed. Through the Reader Insurance Agency, the appellees purchased an automobile insurance policy from appellant, Riverside Insurance Company of America, on November 11, 1960 and paid in full the annual premium of $250.70. The relevant part of the cancellation clause of this contract of insurance provides:

“* * * If the Company cancels, earned premiums shall be computed pro rata. Premium adjustment may be made either at the time cancellation is effected or as soon as practicable after cancellation becomes effective, but payment or tender of unearned premium is not a condition of cancellation.”

The appellees received a notice of cancellation dated May 15, 1961, advising that their insurance policy was canceled effective May 25, 1961. The cancellation notice reads, inter alia:

“If the premium has been paid, the excess of paid premium above the pro rata premium for the expired term, if not tendered to you herein, shall be made as soon as practicable after cancellation becomes effective, or upon demand.”

Upon receipt of this notice of cancellation Mr. Parker called Mr. Reader, who had handled his insurance for about ten years, and was advised by him “forget about it, you are covered”. Unknown to appellees, Reader later issued an office credit memo in their favor, intending to replace appellees ’ insurance business with, another company but through inadvertence did not do so. As advised by Reader, appellees forgot about the cancellation notice assuming continued coverage. They had no further knowledge of the status of their coverage hy appellant until after August 20, 1961 when their automobile was involved in an accident resulting in appellees’ claim of coverage and this action.

The initial premium from Reader to appellant and the unused return premium of $116.83 were both handled in Reader’s monthly “account current” with appellant. The “account current” or the debits and credits of Reader’s agency were adjusted at the end of each month. Therefore, in accordance with this bookkeeping procedure, it was not until the end of May that appellant credited Reader’s account with a total of $410.84 which included appellees ’ unused premium of $116.83. It is undisputed that no money representing the return premium has ever been tendered or refunded to appellees.

' ' It is appellant’s contention that under the language of the contract the payment or tender of appellees’ unearned premium is not a condition precedent to an effective cancellation of the insurance contract. In Merrimack Mutual Fire Insurance Co., v. Scott, 219 Ark. 159, 240 S. W. 2d 666, we held that the purpose of a notice of cancellation is to enable the insured to secure other coverage and, therefore, strict compliance with the cancellation provisions of a policy is a prerequisite to the assertion of the right of cancellation.

It is true that the cancellation clause of the contract in the case at bar provides that payment or tender of an unearned premium is not a condition of cancellation. However, there is another provision which states that the “premium adjustment may he made either at the time cancellation is effected or as soon as practicable after cancellation becomes effective”. Further, the cancellation notice received hy the insured appellees provides that any unused portion of the premium “shall be made as soon as practicable after cancellation becomes effectives”.- [Emphasis added] It was approximately three months from the time of receipt of this notice of cancellation until the accident from which arose this claim of coverage. Neither during this time nor since has there been a refund or a tender of the unused portion of appellees’ premium. The phrase “as soon as practicable” in insurance contracts means a “reasonable time”. National Surety Corporation v. Diggs, 272 S. W. 2d 604 (Texas 1954); U. S. Insurance Co., v. Brown, 285 S. W. 2d 843 (Texas 1955); Ellzey v. Hardware Mut. Ins. Co. of Minn., 40 So. 2d 24 (La. 1949). Under the facts in the case at bar we do not consider that appellant has complied with the provisions of its policy and its subsequent notice of cancellation. Certainly three months must be said to be more than a reasonable time for appellant to effect the plain and unambiguous provisions of its own policy and cancellation notice as to payment of the refund.

The appellant argues that upon appellees’ receipt of the cancellation notice the cancellation became effective. after ten days and thereafter a debtor-creditor relationship existed between appellant and appellees. We do not agree. Although the facts in General Exchange Insurance Corp., v. Coffelt, 192 Ark. 468, 92 S. W. 2d 213, differ somewhat from the case at bar, we think the same principle was involved there as in the instant case. In that case the policy expressly provided that cancellation could be effected with or without a refund of the unearned premium. -It also contained the provision that a refund must.be made upon demand. A notice of cancellation Avas given and a demand for refund Avas made as provided in the policy. Before a refund Avas tendered an accident' occurred upon AAhich the insured appellee based his claim of cor^erage. We said that this delay of the refund rendered the cancellation ineffective because there Avas a promise to refund -upon demand. There is, •also, a promise in .the instant case' that a refund of the ■unearned premium must be made upon demand or it “shall be made as soon as practicable after cancellation becomes effective”. [Emphasis added] We think that ■tlie failure to refund or make a tender of the unused premium as soon as practicable or within a reasonable time, under the facts in the case at bar, resulted in the cancellation of the policy being ineffective. Therefore, since appellees’ loss occurred during this period of delay they are entitled to a recovery.

Nor can it be said by appellant that crediting its agent by an adjustment of the running account between them at the end of the month was, in effect, payment to the insured. 29 Am. Jur., Insurance, § 396; Kinney v. Caledonian Ins. Co., 148 Ill. App. 256; Kinney v. Rochester German Ins. Co., 141 Ill. App. 543; Indiana Ins. Co. v. Hartwell, 100 Ind. 566.

Furthermore, we think the appellees were lulled into a false sense of security by appellant’s agent assuring them of continued coverage in spite of appellant’s cancellation notice. Appellees relied upon this assurance to their detriment. This, coupled with the fact that appellees have never received a return of their unearned premium from any source, estops the appellant from now contending the policy was canceled. See U. S. Insurance Co., v. Brown, supra. We think the following language in that case is applicable:

“* * * where appellant did not tender the unearned premium to Johnson at the time of the alleged cancellation, or ‘as soon as practicable’ thereafter, or at any time, * * * appellant is also estopped to contend that the policy in question was cancelled.”

In the case at bar the appellees paid the insurance premium for the entire term of the policy. This premium was accepted by the appellant and the unused portion was never refunded nor a tender thereof made to the insured appellees. Instead, the unused portion of appellees’ premium was used in a bookkeeping transaction in the adjustment of accounts between appellant and its soliciting agent after appellant had given notice of cancellation to appellees promising a refund “as soon as practicable”. The appellees were unaware of such a bookkeeping transaction. Although the payment or tender of the unearned premium is said not to be a condition of cancellation, there is the unconditional promise by appellant that such refund shall be made as soon as practicable after cancellation becomes effective. Such provisions must be strictly construed and strictly performed. To permit appellees to thus have the benefits and at the same time repudiate the burden of its own agreement would not be in harmony with the fundamental principles of justice.

Appellees request that we award an attorney’s fee for their services on this appeal. We think a fee of $150.00 is reasonable and it is so ordered.

Affirmed.

Ward and George Rose Smith, JJ., dissent.

Paul Ward, Associate Justice

(dissenting). I dissent because, in my view, the policy was cancelled when appellees received the notice of cancellation on May 15, 1961. The fact that Riverside did not “as soon as practicable” pay appellees the unearned premium in no way affected the cancellation, but only created the relationship of debtor and creditor between Riverside and appellees. My authority for the above statement is that portion of the policy which says: “payment or tender of unearned premium is not a condition of cancellation”.

George Rose Smith, J., joins in this dissent.


author: Carretón Harris, Chief Justice.

text:
    Peterson Produce Co. v. Cheney, Commr.
    5-3172
    374 S. W. 2d 809
    Opinion delivered February 3, 1964.

      Little <& Enfield, for appellant.

      Tjyle Williams, for appellee.
   Carretón Harris, Chief Justice.

Only one question is involved on this appeal, vis, are appellant’s purchases of incubators, in 1956, 1957 and 1958, for its commercial hatchery exempt from the Arkansas Compensating (Use) Tax? The Commissioner of Revenues assessed a tax of $1,250.19 against Peterson Produce Company, an Arkansas corporation with principal offices located in Decatur, Benton County, Arkansas, by reason of the purchase of hatchery equipment from outside the state. The company is engaged in a hatchery business at Decatur. The parties stipulated that all legal requirements by the State Revenue Department, concerning the assessment and establishment of the tax, have been met, and all procedures for resisting such action by appellant have been timely and proper. Following the usual administrative steps, the company instituted suit to restrain collection of the tax as an illegal exaction. On trial, the Benton Chancery Court dismissed appellant’s complaint, and from the decree entered, the company brings this appeal.

The tax exemption claimed by the Peterson Produce Company is based on Aide. Stat. Ann. § 84-3106 (d) (Repl. 1960), which sets out certain property that is exempt from the tax. The mentioned sub-section exempts,

“Tangible personal property used by manufacturers on processors or distributors, including ginners of cotton, and including the artificial drying of rice, for further processing, compounding or manufacturing; tangible personal property used for repair, replacement, or expansion of existing manufacturing or processing facilities, including the ginning of cotton, and including the artificial drying of rice or in creating new manufacturing or processing facilities; * ” *”

The equipment purchased by the company, and upon which exemption is claimed, consists of incubators used for hatching eggs. These incubators are made up of two separate units, known as setting units and hatching units, and are used in the following manner:

Eggs set in trays are first placed in a setting unit, where they remain for eighteen days under automatically controlled conditions. Temperature in the setting unit is controlled electrically, and uniform temperature is maintained by fans circulating the air in the unit. Humidity is controlled. The units are ventilated to supply oxygen and remove gases given off by the eggs. Eggs in the unit are turned hourly by an electric motor. After the eighteen-day period in the setting unit, the eggs are transferred to a hatching unit where they remain until they have hatched or until it is apparent that the remaining eggs will not hatch. The operation of the hatching unit is similar to the operation of the setting unit; temperature, humidity, and air are automatically controlled in the hatching unit. After hatching, the chicks are removed from the unit and transported to the i)lace where they will be grown.

Appellant contends that it is a “processor” within the contemplation of the tax exemption provision, and that the Legislature, in enacting the exemption provision, intended to exempt incubators purchased from out of state sources for use by Arkansas hatcheries.

We do not agree. In the first place, we have held that under the statute involved, the word “processing” has reference only to some step or process of manufacturing. Scurlock, Comm. of Rev. v. Henderson, 223 Ark. 727, 268 S. W. 2d 619. Pellerin Laundry Machinery Sales Co. v. Cheney, Commr., 237 Ark. 59, 371 S. W. 2d 524. In the latter case, we stated:

“Appellant emphasizes the word, ‘processing,5 but in interpreting the pertinent statutes, we do not consider ‘manufacturing5 and ‘processing5 as two distinct operations. 5 5

We agree with the learned Chancellor, who delivered an excellent opinion at the conclusion of the case, to the effect that one does not “manufacture” a baby chick, and the use of incubators is not a “processing” step therein. As he stated,

“Thus, by plaintiff’s [appellant’s] vieAV, if he chose to hatch his eggs in the old-fashioned way, by having brooder hens sit on them, his purchase of hens from out of state would be exempt from use tax, because such hens were ‘processing5 the eggs into, chicks. An incubator merely aids and abets the natural course of hatching, and is not a process in itself.”

A similar question arose in the case of Teague v. Scurlock, Commr. of Revenues, 223 Ark. 271, 265 S. W. 2d 528. There, it was contended that feed, purchased for chicks and poults, was exempt. Teague bought day-old chicks and poults, and fed them only commercial poultry feed until such time as they reached a proper size and weight for marketing. The grower contended that he was a manufacturer of chickens and turkeys, and the commercial feed purchased by him was a process in the “manufacturing” thereof. In denying the exemption, this court said,

“Without lengthening this opinion to state in detail appellant’s arguments and our reasons for holding against them, it is sufficient to say that we hold that the statutory language of exemption, as hereinbefore copied, does not afford the appellant any relief, because his business is not such ‘processing, compounding or manufacturing’ of commercial feed into broilers as is contemplated by the language used in the Statute.”

Appellant points out certain exemptions that have been added to the statute by the Legislature, following court decisions which had refused the exemption. For instance, the Henderson decision was handed down in 1954. In this decision, the court held that cotton ginners were not exempt. Thereafter, the 1955 Legislature amended the statute to specifically exempt “ginners of cotton.” In 1957 the Legislature again amended the statute to exempt “the artificial drying of rice.” Other instances of added exemptions by the G-eneral Assembly, following decisions of this court, are mentioned. Appellant argues thusly:

“These amendments to the statute by the Legislature, coming as they did after denials of exemptions had been made to specific processors, seem to be a clear pronouncement by the Legislature as to what was meant by the original exemption Act. This pronouncement made it clear that the Legislature did not intend to give the exemption statute the limited construction relied upon by appellee.”

We do not agree with this logic, for, though other exemptions were added, the subject matter of this litigation (incubators) was not included. Had the Legislature intended to exempt incubators, purchased from out of state, it could have as well amended the law in that respect as in the instances already cited. Certainly, an existing law is not presumed to be changed further than is declared in the amendatory act. To the contrary, the presumption is that the Legislature intended no changes other than those clearly expressed in the amendments. Hendricks v. Hodges, 122 Ark. 82, 182 S. W. 538. The point is discussed in 82 C.J.S., Section 384, Page 903, as follows:

“Where an amendment leaves certain portions of the original act unchanged, such portions rate continued in force, with the same meaning and effect they had before the amendment. So, where an amendatory act provides that an existing statute shall be amended to read as recited in the amendatory act, such portions of the existing law as are retained, either literally or substantially, are regarded as a continuation of the existing law, and not as a new enactment. The amendment of an act does not control the interpretation of another statute enacted prior to the amendment, nor does it change the meaning which the original statute acquired prior to the amendment.”

Let it also be remembered that a tax exemption must be strictly construed, “and to doubt is to deny exemption.” Morley v. E. E. Barber Construction Co., 220 Ark. 485, 248 S. W. 2d 689; Scurlock, Comm. of Rev. v. Henderson, supra.

We think, under all our decisions, that appellant falls short in establishing that he is a “processor” within the meaning of the Arkansas Compensating (Use) Tax Law exemption provision.

Affirmed.


author: Ed. F. McE1 addin, Associate Justice.

text:
    Hollis v. Erwin, County Judge.
    5-3250
    374 S. W. 2d 828
    Opinion delivered February 3, 1964.

      Robert M. Smith, for appellant.

      E. W. Brockman, Smith, Williams, Friday é Bowen, by Jlérschel 11. Friday and John G. Echols, for appellee.
   Ed. F. McE1 addin, Associate Justice.

This is a test suit to determine the legality of the proceedings and election ballot involving the County Hospital Units in Desha County; and necessitates a study of Amendments 17 and 25 of the Arkansas Constitution, as well as the cases construing these amendments. On July 9, 1963, the County Court of Desha County made an order, the pertinent portions of which are:

‘ ‘ That there exists the necessity for the constructing and equipping of a hospital at McGehee and that plans, specifications and estimates of cost as may be necessary for reasonable understanding of the nature, extent and approximate cost thereof shall be prepared and filed in the office of the County Clerk of the County and shall there remain and be held subject to the inspection of any and all persons interested. That Stowers & Boyce, Architects, Little Rock, Arkansas be, and they are hereby appointed and employed to prepare and file such plans, specifications and estimates of cost.

! ‘ That there exists the necessity for the reconstructing, extending and equipping of the county hospital at Dumas and that plans, specifications and estimates of cost as may be necessary for reasonable understanding of the nature, extent and approximate cost thereof shall be prepared and filed in the office of the County Clerk of the County and shall there remain and be held subject to the inspection of any and all persons interested. That Wittenberg, Delony & Davidson, Architects, Little Rock, Arkansas, be, and said firm is hereby, appointed and employed to prepare and file such plans, specifications and estimates of cost.”

The said plans and specifications were duly filed; and on August 5, 1963, the County Court entered an order, the pertinent portions of which aro:

“That Wittenberg, Delony & Davidson, Architects, Little Rock, Arkansas, heretofore appointed by this court, filed in the office of the County Clerk of the County on the 10th day of July, 1963, plans, specifications and estimates of cost covering the constructing and equipping of a hospital at McGehee and that said plans, specifications and estimates of cost are now on file in the office of the County Clerk and are subject to the inspection of any and all persons interested. The estimated cost to the County of the proposed work is approximately $240,000, it being contemplated that the balance of the total estimated cost will be obtained from an agency or agencies of the Government of the United States of America. The Court has examined said plans, specifications and estimates and has determined that the work covered thereby would be in -the best interest of the County and its citizens.

“That Stowers & Boyce, Architects, Little Rock, Arkansas, heretofore appointed by the Court, filed in the office of the. County Clerk of the County on the 10th day of July, 1963, plans specifications and estimates of cost covering the reconstructing, extending and equipping the county hospital at Dumas and that said plans, specifications and estimates of cost are now on file in the office of the Comity Clerk and are subject to the inspection of any and all persons interested. The estimated cost to the Comity of the proposed work is approximately $160,000, it being contemplated that the balance of the proposed work is approximately $160,000, it being contemplated that the balance of the total estimated cost "will be obtained from an agency or agencies of the Government of the United States of America. The Court has examined said plans, specifications and estimates, and has determined that the work covered thereby would be in the best interest of the County and its citizens.

“That the proposed County Hospital units at Mc-Gehee and Dumas shall be parts of the single Comity Hospital to serve the citizens of the County and shall be operated and administered by the single County Hospital Board. As such, and in order to avoid unnecessary duplication of medical facilities, said Hospitals units shall be deemed to be one improvement within the meaning of Amendment No. 17 to the Constitution of the State of Arkansas and should be submitted as a single ballot question in the special election mentioned herein below.

“That the questions of constructing, reconstructing, extending and equipping said projects, heretofore in this Order specifically identified, and the levying of a building tax for the purpose of paying the principal of, interest on and Paying Agent’s fees in connection with bonds of the Comity proposed to be issued under the provisions of Amendment No. 17 to the Constitution of the State of Arkansas, as amended by Amendment No. 25, to obtain the necessary funds for financing the said portion of the cost of said projects to be borne by the County shall be submitted to the qualified electors of Desha Comity, Arkansas at a special election which is hereby called to be held on the 10th day of September, 1963, and that said questions shall be placed on the ballot in substantially the following form:

“It is proposed to construct, equip and extend County Hospital facilities for the citizens of Desha County by constructing and equipping a hospital at McGehee at an estimated cost to the County of $240,000, and by re constructing, extending and equipping the Hospital at Dumas at an estimated cost to the County of $160,000 (it being contemplated that the balance of the total estimated cost of both said Hospital and facilities will be obtained from cm agency or agencies of the Government of the United States of America), and to issue General Obligation Bonds of the County under Amendment No. 17 to the Constitution of the State of Arkansas, as amended by Amendment No. 25, to provide funds for the payment of the estimated cost of said Hospital units to be borne by the County, in accordance therewith there is hereby submitted to the voters of Desha County, Arkansas, the questions of voting for or against said construction, reconstruction, extension and equipment (called ‘Construction’), and for or against the levying of a building tax to pay the principal of, interest on and Paying Agent’s fees in connection with said bonds.

“Indicate hoto you wish to vote by marking the ballot with cm ‘X’ in the box opposite the question:

“For Construction ..............................................................................□

“Against Construction ..................................................................□

“For Building Tax.............................................................................□

“Against Building Tax ..............................................................□”

(Emphasis supplied.)

The election was duly held on September 10, 1963, with the ballot having the full matter before it, as italicized above; and the vote was in favor of the hospital issue and the building tax therefor. The appellant then filed this suit ■ in the Chancery Court to enjoin the County Judge from further proceedings in the matter of the hospital; and the complaint alleged:

“That the purported approval of said questions in said manner was illegal and of no effect, being in violation of Amendment 17 to the Constitution of the State of Arkansas, as amended by Amendment No. 25, in that the voters were deprived of an opportunity to vote upon each contemplated improvement separately, as provided in said Amendments.

“That the purported approval of the equipping of the hospitals to be constructed and a tax to pay bonds, a portion of the proceeds of which will be used to equip, was illegal and of no effect, being withiout sanction under Amendment No. 17 to the Constitution of the State of Arkansas, as amended by Amendment No. 25. Said Amendments make no provision for equipping hospitals and, therefore, the proposal to equip is unauthorized and the inclusion of the proposal in the proceedings renders them illegal and void.

“That unless restrained and enjoined, the defendant will convene the Quorum Court of Desha County, Arkansas for the purpose of levying a continuing annual building tax to pay the principal, interest, and paying agent’s fees of bonds of the County which will be issued to pay the County’s portion of said costs, all in violation of the Constitution and laws of the State of Arkansas, and in violation of the right of plaintiff and others similarly situated, to be secure from unlawful and illegal exactions.”

The defendant (County Judge) resisted the complaint, and, inter alia, prayed for a decree:

“. . . declaring and holding that the election of September 10, 1963, and all proceedings prior to and in connection with the election were legal, valid'and effective and that defendant is authorized by law to proceed to take the necessary action to secure the construction and equipping of the hospital buildings at McGehee and Dumas, to issue bonds to finance the County’s portion of the costs thereof and to levy a continuing annual building tax to pay the principal of, interest on, and paying agent’s fees for the bonds.”

The cause was heard by the Chancery Court on an agreed statement of facts which incorporated most of the matters that we have already detailed, and also stated -.

“The proposal approved by the voters of Desha County, Arkansas, in the election is for the constructing and equipping of a hospital in the city of McGehee, Deslía County, Arkansas, and for reconstructing, extending and equipping an existing hospital in the city of Dumas, Desha County, Arkansas. There will be no physical connection between the hospital to be constructed and equipped at McG-ehee and the hospital to be reconstructed, and extended and equipped at Dumas. The plans, specifications and estimates of cost for the two hospital building's were prepared and submitted separately by different architectural firms. The question of construction and reconstruction of the two physically separate buildings was submitted to the voters of the County as a single proposal. The voters were required to approve or disapprove the construction and reconstruction of both buildings, there being no provision whereby a voter could vote for construction or reconstruction in one location and against construction or reconstruction in the other location. The proposal for the building tax to finance the County’s proportion of the cost of both hospitals was also submitted as a- single question, and there was no opportunity for a voter to vote for the building tax to finance the County’s proportion of the cost of the hospital in one location and against the building tax to finance the County’s proportion of the cost of the hospital at the other location.

“The proposal submitted to and approved by the voters in the election of September 10, 1963, includes the equipping of the hospital to be constructed at McGeheo and the equipping of the hospital to be reconstructed and extended at Dumas. A portion of the proceeds of the bonds also will be used to pay the cost of equipping the hospitals.

‘ ‘ The reconstruction, extension and equipping of the hospital at Dumas and the construction and equipping of the hospital at McGeheo are necessary for the hospitalization needs of Desha County and its citizens and the separate locations at Dumas and McGehee are necessary and in the public interest from the standpoint of the ready and near availability of adequate hospitalization facilities to all citizens of the County. One facility without the other would be inadequate and insufficient to meet the hospitalization needs of the County and its citizens.”

Trial in the Chancery Court resulted in a decree in favor of appellee and this appeal ensued, in which the appellant urges three points:

“I. The proposed action of appellee is prohibited by Amendment No. 10 to the Constitution and should be enjoined unless authorized by Amendment No. 17 to the Constitution as amended by Amendment No. 25.

“1.1. The proposed action of appellee is not authorized by Amendment No. 17 as amended by Amendment No. 25 because at the election piirporting to authorize the proposed action of appellee the voters were deprived of the right to vote separately on each contemplated improvement.

“III. The proposed action of the appellee to equip the two hospitals is not authorized by Amendment No. 17 as amended by Amendment No. 25.”

I. Are The Two Hospital Units Separate Hospitals? Appellant’s first two points are discussed together under this topic. The appellee claims that he is acting under the power and authority of Amendments 17 and 25 to the Arkansas Constitution. The real issue presented is whether the ballot should have allowed the voter to vote separately on the hospital project at Mc-Geliee and separately on the hospital project at Dumas. It is evident from the order and the ballot that the voter had to vote for or against the hospital project as a whole, and was not permitted by his ballot to vote for MeG-eliee and against Dumas, or vice versa. The appellee particularly calls attention to Section 4 of Amendment 17, which reads:

“More than one building or improvement may be embodied in all such proceedings, except that separate plans, specifications and estimates for each building or extension shall he made and filed, and a description of each building sufficient to indicate to the electors with reasonable certainty what building or extension he is voting on, shall appear on the ballot, beneath which shall be the words, ‘For Construction’ and ‘Against Construction’, after each contemplated improvement . . .”

The appellant says that each “building” in the above quoted provision means exactly what it says; and that since one building is to be in Dumas and one is to be in McGehee, there should have been a separate vote on each one. But it must be remembered that only three building projects are listed and concerned in Amendments 17/25. These are: (a) court house; (b) county jail; and (c) county hospital. The language in Section 4 of Amendment 17 about “each building,” means that the construction, etc., of a court house cannot be combined on the same ballot item with construction of a jail, or the construction, etc., of a jail combined on the same ballot item with the construction of a hospital, etc.; but the Amendment does not mean that if a hospital consists of two buildings, in the same town or in separate towns, each building must be listed and voted on separately. The case of' Kenoin v. Hillman, 226 Ark. 708, 292 S. W. 2d 559, involved the building of a main hospital in Fordyce “with emergency units thereof in Sparkman and Carthage. ” It was there urged that the Amendments 17/25 contemplated the construction of a single hospital unit in one town, and did not contemplate or authorize the construction of emergency units located at points other than the place of the main hospital. We held that the separate emergency units at other places were proper and legal.

The County Court stated, in the case at bar, that the County Hospital of Desha County was to consist of two units, one at McGehee and one at Dumas, but both were to be under the same Hospital Board. By rules of judicial notice we know: that Dumas is in the northern portion of Doslia Comity and had a population of 3,540 according to the 1960 Ü. S. Census; that McGehee is in the southern portion of Desha County and had a population of 4,448 according to the 1960 U. S. Census; and that these two towns are over twenty miles apart. The purpose of a county hospital is to provide for the county and not for any one portion. The County Court said that the feasible way to provide the people of Desha County with hospital facilities was to have a unit situated at Dumas and a unit situated at McGehee, but both under one Hospital Board. We find that this was proper under the facts of this case and in line with our holdings for the liberal interpretation to be given Amendments 17/25, some of which cases are: Bond v. Kennedy, 213 Ark. 758, 212 S. W. 2d 336; Garner v. Lowery, 221 Ark. 571, 254 S. W. 2d 680; and Jeffery v. Fry, 220 Ark. 738, 249 S. W. 2d 850. We hold that there is no merit in the first two points urged by the appellant.

II. Hospital Equipment. The appellant urges that the Amendments 17/25 provide for the “construction, reconstruction, or extension” of a county hospital, but that there is no provision for the equipment for a county hospital; and that, therefore, the equipping of the hospital is not within the purview of the Amendments; and on this point the appellant is supported by a brief amici curiae. We find no merit in this point argued by the appellant and the amici curiae. While not involving the Amendments 17/25, nevertheless this Court said in Railey v. Magnolia, 197 Ark. 1047, 125 S. W. 2d 278: “The building and equipping of a hospital is a single enterprise. ...” A hospital is' more than a mere building of four walls and a roof. Webster’s Dictionary defines a hospital as: “An institution or place where sick or injured persons are given medical or surgical care.” A bare and empty building could hardly fit that definition. We like the language of the Supreme Court of Alabama in Noble v. First National Bank, 1 So. 2d 289: “The definition of a hospital, established by the proof and uncontraclicted, was as follows: ‘An institution for the reception, care, and medical treatment of the sick or wounded; also the building used for that purpose.’ ” Certainly the equipping of the hospital is an essential part of its construction.

Furthermore, in McArthur v. Campbell, 225 Ark. 175, 280 S. W. 2d 221, we held that the air conditioning of the Pulaski-County Court.House was a "reconstruction or extension” of the Court House, and said:

"There is authority for the equipping and furnishing of buildings authorized by Amendment No. 17. See Atkinson v. Pine Bluff, 190 Ark. 65, 76 S. W. 2d 982; Lindsay v. White, 212 Ark. 541, 206 S. W. 2d 762; Railey v. City of Magnolia, 197 Ark. 1047, 126 S. W. 2d 273; Tunnah v. Moyer, Mayor, 202 Ark. 821, 152 S. W. 2d 1007.”

The decree of the Chancery Court in this cause is in all things affirmed; and for good cause shown an immediate mandate is ordered.

       The County Court order also involved a jail at Arkansas City, and Court House reconstruction at Arkansas City. These two matters were defeated by the vote of the electors and are not before us.

       Amendment No. 25 amended Section 1 of the original Amendment No. 17 so as to add “county hospital” to Section 1 of Amendment No. 17. See Hughes v. Jackson, 213 Ark. 243, 210 S.W. 2d 312; and Garner v. Lowery, 221 Ark. 571, 254 S. W. 2d 680.

        Bonner v. Jackson, 158 Ark. 526, 251 S. W. 1; Forehand v. State, 53 Ark. 46, 13 S. W. 728; Hano v. Fayetteville, 90 Ark. 292, 119 S. W. 287; Board of Trustees v. Pulaski Co., 229 Ark. 370, 315 S. W. 2d 879; Stephens v. City of Springdale, 233 Ark. 865, 350 S. W. 2d 182.


author: George Rose Smith, J. Ed. F. McFaddin, Associate Justice

text:
    Ark. State Hwy. Comm. v. Sub-Dist. No. 3 of Grassy Lake and Tyronza Drainage Dist. No. 9
    5-3117
    376 S. W. 2d 259
    Opinion delivered February 3, 1964.
    [Rehearing denied March 30, 1964.]

      Dowell Anders, Don Gillaspie and Mark Woolsey, for appellant.

      G. M. Buck, Bruce Ivy and James E. Hyatt, Jr. for appellee.
   George Rose Smith, J.

These two condemnation suits, consolidated below, are actually test cases by which the parties seek a determination of this question: Does a drainage district, by reason of its uncollected assessment of benefits, have a property interest in lands within the district for which it is entitled to compensation, in a condemnation proceeding, in addition to the award made to the landowner? The trial court answered this question in the affirmative, holding that the district was entitled to recover a sum equal to the total amount of all the unpaid future drainage district assessments that had been levied by the district against the land being condemned. By direct appeal the Commission contends that it does not owe the district anything. By cross appeal, which we do not reach, the district contends that it should recover a sum equal to the uncollected portion of the benefits assessed against the land being condemned.

The lands in question, which the Commission is taking in fee simple, lie within several overlapping drainage districts. This appellee, a typical drainage district, was organized in 1924 under the Alternative Drainage District Law. Ark. Stat. Ann. §§ 21-501 et seq. (Repl. 1956). Benefits from the proposed improvement were assessed against lands within the district. § 21-513. Funds for the construction of the drainage system were raised by the issuance and sale of bonds, secured by a pledge of the assessed benefits. § 21-553. For the payment of the bonds taxes are levied in annual installments against the assessment of benefits. § 21-554. This particular district now has an outstanding bonded debt with annual maturities running until 1980. The trustee for the bondholders was made a party to this litigation.

In these test cases the parties selected two fact situations for the presentation of their problem to the courts. In the first case the Highway Commission, without notice to the drainage district, acquired a tract within tin? district by purchasing the fee simple title from the landowner. The Commission then brought this condemnation action against the district, alleging, however, that the district had no compensable property interest apart from that already acquired by the Commission from the landowner.

In the second case, involving another tract, the Commission joined the landowner and the district as defendants in a condemnation suit. The case was first tried with respect to the landowner’s interest alone. He received an award for the fee simple estate. It was stipulated that whatever rights the drainage district might have would be determined at a later date.

The trial court, as we have said, held in both cases that the district had a separate compensable property right in the lands. This was error. There is no tenable theory upon which it can be said that the Commission is taking from the district an independent property right that is separable from the landowner’s fee simple estate.

Two possible theories come to mind. First, the district has a lien against the assessment of benefits—a lien which, upon the landowner’s failure to pay his taxes, may be enforced against the land itself by means of a foreclosure suit. Ark. Stat. Ann. § 21-546 (Repl. 1956). Thus the district has a remedial right against the land that is, if not actually a lien, at least in the nature of a lien.

Such a remedial right is not an estate in the land. With respect to true liens, such as mortgages, the condemnation award takes the place of the land, so that the lienholder’s remedy is to proceed against the award. Nichols, Eminent Domain (Rev. 3d Ed.), § 5.74. Hero the district chose to forego any claim against the landowner’s award and to insist instead that it has a distinct cause of action against the condemnor. It is clear, however, that if the district’s claim is in the nature of a lion its sole remedy is against the award.

Secondly, in addition to its remedy in the event of a delinquency the district also has a substantive right to levy taxes in the future against the assessed benefits. It might be argued that the destruction of this power of taxation is a taking of property for which compensation must be made.

We think it plain that the district’s potential ability to collect the assessed benefits must necessarily be regarded as an element in the landowner’s fee simple estate, for which payment has admittedly been made. To illustrate: We were told in the oral argument that many years ago Mississippi county, where this litigation arose, contained extensive swamp areas of little value. By the creation of levee and drainage districts those swamps have been converted into valuable farm lands. That transformation has been financed by the assessment of benefits against the lands. It is perfectly clear that the physical benefits conferred by the various improvement districts are reflected in the increased market value of the farm land. When the condemnor pays that increased market value, as it has done in these cases, it also pays for the benefits conferred by the districts. If the condemnor were compelled also to pay the districts for their potential power of taxation, the condemnor would be paying twice for the same enhancement of value. If by any chance—and we express no opinion on this point—• the district has some sort of equitable claim arising from the fact that the assessment of benefits has not been paid in full, that controversy is between the district and the landowner and can be of no concern to the condemnor.

This drainage district earnestly argues that, as a matter of equity, if the potential tax liability of the condemned land should be extinguished without compensation to the district the result will be to increase the payments that will eventually have to be made by the other landowners in the district. No doubt this is. true, but the situation is simply an unavoidable consequence of the State’s sovereign immunity from taxation. In fact, this situation is commonplace. Almost every tract of land taken by eminent domain is subject to future taxation for public improvements already made, such as a levee, a drainage system, a courthouse, a municipal auditorium, a schoolhouse, and so on. There can, as a practical matter, obviously be no requirement that the sovereign satisfy all these nebulous obligations as a condition to the acquisition of the land. (See Public Water Supply Dist. No. 3 v. U.S., 135 F. Supp. 887.) That some shift in the burden of taxation may take place is merely one of the risks that every taxpayer incurs.

A somewhat similar argument is that the value of the district’s outstanding bonds might be destroyed if the State should elect to condemn all the land in a particular improvement district. Whether equity might provide a remedy in that situation is a question that we prefer to leave unexplored until it arises. In the case at bar the lands being taken represent such a tiny part of the total taxable property in the district that there is not even a hint that the security of the outstanding bonds has been impaired. We do not feel called upon to adopt an unsound rule of law, by affirming this decree, merely to hedge against a contingency so remote that it does not seem ever to have arisen or to be likely ever to arise in the future.

Reversed.

Harris, C.J., and McFaddin and Holt, JJ., dissent.

Ed. F. McFaddin, Associate Justice

(dissenting).

The appellant, Arkansas State Highway Commission (an agency of the State), will sometimes be referred to as “Highway Commission”; and appellee, Sub-District No. 3 of Grassy Lake and Tyronza Drainage District (duly created pursuant to law) will sometimes be referred to as “District.” The brief of the appellant oegins with the following clear statement:

“This case involves the determination .of an important question of law, which has never before reached this Court. The outcome will directly affect the acquisition of a majority of the right of way for State highways in the future. Interstate Highway Ño. 55 traverses Mississippi Comity. The lands acquired for its construction AA’-ere subject to benefits assessed by five drainage districts. Some of the property was purchased by Avarranty deed from the record holders of title to Avhich deed the districts were not a party. In this situation, a separate laA\rsuit aauis filed against the districts in order to determine Avhether they had any compensable interest. The remaining property Avas condemned (the districts Avere parties defendant in the action), but the cases proceeded to judgment AAdth the understanding betAreen the Commission and the districts that their interest Avould be reseived and determined separately.”

Directly involved are tAvo tracts of land herein referred to as Tract No. 5 and Tract No. 11. The HigliAvay Commission acquired title to Tract No. 5 by eminent domain proceedings, and acquired title to Tract No. 11 by direct AArarranty deed from the OAvner. This case Avas tried before the Circuit Judge Aidthout a jury on an agreed statement, from AAdiich Ave copy the folloAAdng pertinent excerpts:

“1. This hearing shall adjudicate the interests of Sub-District No. 3 ... in the property designated as Tract No. 5 . . . and Tract No. 11 . . .

“2. That Tract No. 5, consisting of 50.058 acres, AAras condemned by the Arkansas State HigliAvay Commission (hereinafter referred to as the Commission) on the 15th day of April, 1959, for State higlrway purposes; that the interest condemned and taken by the Commission AAras a fee simple absolute interest of the lancloA\mer; that the District was a party to this action and Avas properly summoned, but it ions agreed and understood that the interest of the District ivas not to be, and was not, determined- at the time of trial or settlement of the landowner’s interest, and that the rights of all Drainage Districts were reserved and were to be determined, at a later date that a trial by jury AAras conducted in this case, and judgment Avas entered on the 31st day of May, 1960, against the Commission, ordering the Commission to pay to E. L. Taliaferro, et al., record OAAmers, the sum of $37,885.50 as just compensation for tlieir interest, and the said judgment purported to vest full title in fee simple absolute in the Commission. . . .

“3. That the original benefit assessed to Tract No. 5 is in the amount of $1,992.98; that this benefit has never been reduced; that the present annual levy on the tract is 3.3 per cent of the benefit assessed, amounting to $65.77 per year . . .

“4. That Tract No. 11, consisting of 11.579 acres, was purchased by the Commission for State highway purposes by warranty deed from Mrs. it. J. Brown, Sr., Trustee, et al., record holders of title, on the 10th day of January, 1959; and that the sum of $13,500.00 was paid to the record holders of title in exchange for a warranty deed purporting to convey a fee simple absolute interest to the Commission. . . .

“5. That the original benefit assessed to Tract No. 11 is in the amount of $115.75; that this benefit has never been reduced; that the present annual levy on the tract is 3.3 per cent of the benefit assessed, amounting to $3.82 per year. . . .

“8. That benefits were assessed on the lands in the District by Order of the County Court of Mississippi County on the 24th day of September, 1925, in the amount of $3,776,262.81; and that the total of assessed benefits on the property taken by the Commission from the District is $25,597.92; . . .

“10. That there was outstanding at the time of taking the sum of $1,363,000.00 in refunding bonds, issued by the District and secured by a ‘pledge and mortgage’ to Union Planters National Bank, as Trustee, . . .

“12. That the total area of the District is 162,229 acres, and the total area acquired by the Commission within the District is 1,341.319 acres. . . .

“14. That the interests claimed by the District in Tract No. 5 and Tract No. 11 are those that arise under the laws of the State of Arkansas, from an Order of the County Court dated the 23rd day of December, 1924, other orders made by the Comity Court in compliance with Statutes, and from subsequent Orders of the County Court creating an annual levy against the assessed benefits as adjudged in the Order of 1924 referred to above.”

The Trial Court was asked to answer certain questions, which said questions and answers as made are as follows:

‘ ‘ A. Does the District have such' an interest in Tract No. 5 that it is a necessary party to a condemnation action under the eminent domain power of the Commission?” ANSWER: “Yes.”

“B. Does the District have such an interest in Tract No. 5 that it is entitled to compensation for the taking of this interest by the Commission in a condemnation action under the eminent domain power?” ANSWER: “Yes.”

“C. Does the District have such an interest in Tract No. 11 after its purchase in purported fee simple absolute from the record holder of title as to require the Commission to pay ‘just compensation’ for the taking of this interest in an eminent domain proceedings?” ANSWER: “Yes.”

“D. If the District is entitled to compensation for the taking of its interest in these tracts, how is the amount to be calculated?” ANSWER: “By calculating the sum equal to the total annual levy for the life of the present outstanding bond issue.”

The Trial Court rendered judgment for the District and against the Highway Commission for amounts as follows: for the taking of Tract No. 5, $1,223.20; and for the talcing of Tract No. 11, $84.04. By this appeal the Highway Commission insists that the District is entitled to absolutely nothing, now or at any time in the future, for the taking of said Tracts Nos. 5 and 11. The Highway Commission claims that when it takes title to property for public use the same becomes exempt from taxation or payment of benefits already assessed. Furthermore, the Highway Commission claims that the assessment of benefits constitutes onty a lien and in no sense a title or interest in the land. Thus, the suit was to determine whether, under the stipulated facts, the Highway Commission would now or at any time in the future have to pay the District any amount whatsoever. As I see the case, there are presented two situations that necessitate separate consideration.

I.

LAND ACQUIRED BY DEED.

The Highway Commission acquired Tract No. 11 by deed direct from the landowner; and I insist that the Highway Commission must pay the future accruing assessments on the benefits the same as any other grantee would have to do who took a deed from the landowner. This conclusion is because of Ark. Stat. Ann. § 50-401 (1947), which reads as follows:

“All lands, tenements, and hereditaments may be aliened and possession thereof transferred by deed without livery of seizin, and the words, ‘grant, bargain, and sell’ shall be an express covenant to the grantee, his heirs and assigns, that the grantor is seized of an indefeasible estate in fee simple, free from incumbrance done or suffered from the grantor, except rents or services that may be expressly reserved by such deed, as also for the quiet enjoyment thereof against the grantor, his heirs and assigns and from the claim and demand of all other persons whatever, unless limited by express words in such deed; provided, that as betioeen the grantor and grantee, neither the statutory nor general express covenant of warranty against incumbrances shall be held to cover any taxes or assessments of any improvement district of any hind, whether formed under general statutes authorizing the assessment of lands for local improvements of any hind, or whether such improvement district be formed, by public or private act of the Legislature, but the lien for any such local assessment or tax shall run with the land, and be assumed, by the grantee, and the grantee shall pay any and all installments of such tax or assessment becoming due after the execution and delivery of the deed, unless otherwise expressly provided.” (The italicized language was added by 1917 Act, later to be discussed.)

This statute is interesting and a study of it is enlightening. It originally appears in Revised Statutes, Chapter 31, Section 1, and also was Section 731 of Kirby’s Digest. It read exactly as it now does down to the word “provided.” All the words after the word “provided” (and all italicized above) were added by Act No. 332 of 1917, which Act was captioned: “An Act to Amend Section 731 of Kirby’s Digest of the Statutes of Arkansas, for the Purpose of Providing for the Payment of Taxes, Assessments, and Liens against Real Estate as between Grantor and Grantee.” Evidently after improvement districts became numerous in Arkansas someone realized that under what had been Section 731 of Kirby’s Digest (Ark. Stat. Ann. 50-401 [1947], down to the proviso) the lien of the improvement district was a judgment against each tract of land in the district and that such judgment would cloud the title to the land whenever a person desired to sell it. So the Legislature adopted Act No. 332 of 1917 so that as between grantor and grantee the unmatured payments on the assessment of benefits would not be a cloud on the title.

At all events, said Section 50-401 now clearly states: “. . . the lien for any such any local assessment or tax shall ran with the land and be assumed by the grantee, and the grantee shall pay any and all installments of such tax or assessment becoming due after the execution and delivery of the deed, unless otherwise expressly provided.” The State Highway Commission, by taking a deed from the landowner of the Tract No. 11, became a grantee and so is governed by the above statute, because we have no statute in Arkansas that exempts the Highway Commission from payment under the situation here existing.

The case of Willis Creek Drainage Dist. v. Yazoo County, 209 Miss. 849, 48 So. 2d 498, involved a situation practically the same as the one here, and the holding of the Supreme Court of Mississippi was in accordance with, the views that J am now expressing. The Willis Creek Drainage District was an improvement district, created under the laws of Mississippi, which gave the lien of assessed benefits practically the same force in that State as our statutes do in this State. (See Ark. Stat. Ann. § 21-542 [Repl. 1956].) The Willis Creek District had assessed its benefits and had issued bonds which were outstanding. Yazoo County purchased land from the owners at private sale for public purposes (i.e., an aviation field); and then Yazoo County, claiming to be a subdivision of the State (just as the Highway Commission claims here), refused to pay the maturing assessments on the benefits. The District brought suit to have the land sold if the County refused to make the payment. The defense made by Yazoo County was that under the law of Mississippi all property owned by the State or its subdivisions was exempt from taxation. The Supreme Court of Mississippi held that the County must still pay the assessments on the .benefits, saying that the provisions for examption was never “intended to abate an existing judgment lien as fixed by a final decree of the chancery court against lands subsequently purchased by the State or any of its subdivisions.” The Mississippi statute said that the assessed benefits constituted a judgment, just as does our statute (Ark. Stat. Ann. § 21-542 [Bepl. 1956]), and the Mississippi Court said: “. . . we are of the opinion that while a drainage district assessment is a species of taxation, and is taxation in the broad sense of that term, the assessment is not a tax within the meaning of Section 9697, supra,- . . . and, moreover, we think that Section 4695, Code of 1942, Section 4450 of Hemingway’s Code of 1917, declaring that the decree of the chancery court confirming an assessment of benefits made by the drainage commissioners ‘shall .have all the force of a judgment’ constitutes an express statutory authority for holding that this land was purchased subject to a lien for the unpaid drainage assessments, and that the only way that the county could have discharged the lien was to have paid off the same.”

As to exemption, the Court further said:

“While it is true that there is no statute which specifically imposes on the county the duty to pay a drainage assessment on land such as those involved in this suit, it is likewise true that there is no statute which would expressly, or by necessary implication, authorize a county to acquire by purchase lands in a drainage district and hold them as long as it may choose to do so without paying the yearly installment due on the betterments assessed against said land, and there is therefore involved the well settled rule that one claiming exemption from taxation has the burden of showing that the claim conies clearly within the exemption law, unaffected by other statutes which clearly render the property subject to a lien for the assessment in question.”

I maintain that the decision of the Supreme Court of Mississippi is sound; and I am persuaded that we should apply that holding to the facts in this case, which are in all respects similar. The Highway Commission says that lands used for road purposes are public roads and are not liable for assessment of benefits; and in support thereof cites Board of Imp. v. School Dist., 56 Ark. 354, 19 S. W. 969; Waterworks Imp. Dist. v. Logan County, 155 Ark. 257, 244 S. W. 4; and Board of Comm. v. Arkansas County, 179 Ark. 91, 14 S. W. 2d 226. These three cases specifically hold that public property cannot be assessed for benefits when the property is already used as public property; but these cases do not hold that the assessments cannot be collected when the benefits have already been assessed before the sovereign agency purchases the property. I readily agree that a district cannot levy an assessment of benefits against property that is already public when the assessment is being made. But when the improvement district assesses benefits against private property—as here—then the subsequent acquisition of the property by the public agency does not extinguish the assessment of benefits previously made. Our statute (§ 50-401) says that the grantee shall make the payments accruing after the date of the deed. The Highway Commission was the grantee in this deed and there is nothing in the statute that grants the Highway Commission any exemption.

If the Hig’hway Commission desires to he relieved of future payments of improvement district assessments on any lands for which it may accept deeds, then the Highway Commission should ash the Legislature to provide a procedure for ascertaining* the lump sum payment that the Highway Commission should pay. That is a matter which addresses itself to the legislative department. Under the law as it now stands the Hig’hway Commission cannot become the grantee in a deed and still claim an exemption. Therefore I dissent from so much of the Majority Opinion as holds that the State Hig’hway Commission is not required to pay the District anything, now or any time in the future, for maturing benefits on the land to which the Highway Commission received a deed.

II.

LAND ACQUIRED BY CONDEMNATION.

The Highway Commission acquired Tract No. 5 by condemnation; and I insist that the Highway Commission is liable to the District in this case for maturing* benefits on such land. Such liability is clear to me because of the way this case was tried and because of the stipulation. It will he recalled that the Highway Commission elected to try the case against the landowner on the value of the land and then to try the case against the District separately. The stipulation recites: . . it was agreed and understood that the interest of the District ivas not to be, and was not, determined at the time of trial or settlement of the landowner’s interest, and that the rights of all drainage districts were reserved and to ere to be determined at a later date.” The Highway Commission could have tried all of the cases at one time and then the jury could have determined the total value of the land and also the present cash value due the District for the unmatured assessments. But the Highway Commission stipulated that the interest of the District was not determined by the settlement of the landowner’s interest. If the District was entitled to anything* against the landowner originally, then it is entitled to that amount against the Hig’hway Commission now under the stipulation by ivhieh this present case toas tried.

It was stipulated that this district was organized under the alternate drainage district law. The applicable statute (Ark. Stat. Ann. § 21-542 [Repl. 1956]) provides that when the assessment of benefits is filed, the county court shall “. . . enter upon its records an order, ivhieh shall have all the force of a judgment, providing that there shall be assessed upon the real property of the district a tax sufficient to pay the estimated cost of the improvement . . . which tax is to be paid by the real property in the district in the proportion to the amount of the assessment of benefits thereon, . . . The tax so levied shall be a lien upon all the real property in the district from the time the same is levied by the county court . . . and shall continue until such assessment . . . shall have been paid.” (Emphasis supplied.)

When the assessed benefits were approved and the order was entered by the county court, such order became “a judgment” and the benefits became a lien on the land which continued until paid. I do not claim that the District had any title to the land condemned, hut I do claim that the District had a judgment lien on the land, like a mortgage, for the payment of benefits as they mature ; and as such lien claimant the District is entitled to have its claim satisfied. In 18 Am. Jur. p. 868, “Eminent Domain”, § 235, the text reads: “It is a general and well established rule that, when the mortgaged property is taken by eminent domain . . . the mortgagee’s rights against the land follow the award, and he may have the mortgage debt satisfied out of that fund ...”

In 45 A.L.R. 2d p. 522 there is an annotation entitled: Rights in respect'of real estate taxes where property is taken in eminent domain”; and on Page 552 cases from several jurisdictions are cited to sustain this text: “The rights of a mortgagee, a judgment creditor, or an easement holder, in respect of taxes in a condemnation proceeding, have been considered in a few cases, in the majority of which it was held substantially that under the circumstances present such lienor had an enforceable interest in the award.” And on Page 555, in the same annotation, in discussing eminent domain proceedings, a number of federal and state cases are cited to sustain this text: “Taxes which have accrued or become a lien on real estate under the local law prior to its acquisition by the United States by eminent domain proceedings are payable out of the compensation fund. ’ ’ I maintain that the Highway Commission properly made the District a party defendant in the condemnation case and that the District was entitled to be paid out of any award made; but when the Highway Commission elected, as it did in this case, to try the landowner’s rights in one case and then try the District’s case separately, the Highway Commission necessarily became liable to the District for the amount of the District’s lien.

The Majority Opinion says that the amount of land here taken is small and that the benefits on such land bear a very small ratio to the total benefits in the District. But the doctrine of de minimus 3*cannot apply to a case involving lands and payment of benefits. See Lumsden v. Erstine, 205 Ark. 1004, 172 S. W. 2d 409; and Reeves v. Jackson, 207 Ark. 1089, 184 S. W. 2d 256. If the Highway Commission can take title to six acres of land in one case, then another agency of the sovereign can take title to six thousand acres.

The effect of the present Opinion is far reaching. If the District in this case can be entirely ignored when the Highway Commission takes a deed to land or acquires title by eminent domain, then the same holding would apply if any other agency of the sovereign should do likewise. The Game and Pish Commission could acquire title to thousands of acres for a hunting or fishing preserve; and all the lands so acquired would be exempt from the collection of all future benefits in all improvement districts. The districts would be ruined, and the bond holders would bo left to whistle for their money.

For the reasons herein stated, I dissent from the Majority Opinion. The Chief Justice and Justice Holt join in this dissent.

       Emphasis supplied.

       The doctrine of de minimus comes from the Latin maxim, de minimus non curat lex, and is translated, “the law does not take notice of little things.” See annotation in 44 A.L.R. 168.

       For the benefit of anyone interested in further study of the questions in this case, attention is called to the following: Bacon v. Road Imp. Dist., 157 Ark. 309, 248 S. W. 267; Drainage Dist. v. Exchange Trust Co., 175 Ark. 934, 2 S. W. 2d 32, 278 U.S. 421 and page 579, 73 L. Ed. 436 and page 517; Ridgeway v. Lewis, 203 Ark. 1063, 160 S. W. 2d 50; Annotation in 105 A.L.R. 1169 entitled: “Constitutionality of statutes relieving property subject to assessment for improvements from all or part of such assessments”; Annotation in 90 A.L.R. 1137 entitled: “Public property as subject to special assessment for improvement”; and Adaman Mutual Water Co. v. United States, 278 F. 2d 842.


author: Paul Ward, Associate Justice.

text:
    Lyman Lamb Co. v. Union Bank of Benton.
    5-3188
    374 S. W. 2d 820
    Opinion delivered February 3, 1964.

      Patten é Brown, John M. Loftin, Smith, Williams, Friday & Bowen, by George E. Pihe, Jr. for appellant.

      Fred E. Brimer, for appellee.
   Paul Ward, Associate Justice.

We are herein concerned with priority of liens on a house and lot owned by Kelly Welch. The four appellants furnished materials and appellee furnished the money to construct the house, and both parties claim a first lien. The trial court ruled in favor of appellee bank, and appellants now seek a reversal on appeal.

The facts are not in dispute, and only one issue of law is relied on by appellants.

It is appellants’ contention that the mortgage executed by Welch to appellee is not a “construction mortgage” as is required by Ark. Stat. Ann. § 51-605 (1947) as it has been interpreted by this Court. We agree with that contention.

Facts. On May 9, 1962 Welch and wife executed a note to appellee (Union Bank of Benton) for the amount of $2,500, and at the same time they also executed a mortgage on “Lot 40, Block 4 in Beautiful Lakeview sub-division, Saline County, Arkansas” to secure said note. Following the above description in the mortgage appear these typewritten words:

“This loan shall be used for the purpose of construction of a dwelling house on the above described property and shall cover and secure additional advances to be made by mortgagee to mortgagors in the total amount not to exceed $14,500.”

The mortgage, except for the above quoted language, was in regular form, and it was filed on May 11, 1962. The $2,500 was paid to "Welch on the day the note was executed. Following that date, and on May 25, 1962, one of appellants furnished certain materials—placed on the lot—and construction began. Following the last mentioned date, and on June 1, 1962, Welch executed another note for $2,500 to appellee bank and received the money. Thereafter Welch executed four other notes to appellee, each time receiving the money—to a total of $14,500. After the first material was furnished at the time previously mentioned all the appellants furnished other materials and labor. The unpaid balance amounts to approximately $2,600.

In the decree of foreclosure the bank was given a first or prior lien to secure the amount due from Welch, and the land and improvements were ordered sold by a commissioner. At the sale the property was bought by appellee. Later the sale to appellee was confirmed, and the court ordered the purchase price credited on the judgment which appellee had received against Welch.

Only Issue. It is conceded by appellants that appellee’s mortgage is a first lien to the extent of $2,500. This is a concession by appellants that the previously quoted language in the mortgage constitutes a compliance with the statute and our decisions so as to make it a “construction loan”—the mortgage having been filed before any materials were furnished. However, appellants contend, and we agree, that appellee’s mortgage did not constitute a prior or first lien as to subsequent advances because the bank was not obligated to make them. This obligation was a prerequisite to appellee’s lien, as was clearly announced in Planters Lumber Co. v. Jack Collier East Co., 234 Ark. 1091, 1096, 356 S. W. 2d 631. There, in construing § 51-605, we said: “The mortgagee must be bound to advance the money for the construction . . . ”, citing Ashdown Hardware v. Hughes, 223 Ark. 541, 267 S. W. 2d 294.

We find no language in the mortgage here which unequivocally binds the bank to make the additional loans to Welch. Rather, the contrary is indicated by certain language in the mortgage. This language appears :

“The sale [mortgage] is on condition that whereas we are justly indebted unto said mortgagee in the sum of . . . $2,500 evidenced by one promissory note of even date. ...” (Emphasis added.)

We think the language in this mortgage falls far 'short of the standard (to bind the mortgagee) set in the case of American Bank & Trust Company v. First National Bank of Paris, 184 Ark. 689, 43 S. W. 2d 248, where, among other things, the Court said:

‘ ‘ One may execute a valid mortgage to secure a debt to be contracted in the future . . . but in order to do so, there must be an unequivocal agreement in the instrument itself that it is given for debts to be incurred in the future.” (Emphasis added.)

The word “unequivocal”, according to Webster, means “clear,” “not doubtful”, “not ambiguous”. We are not willing to say the language in this mortgage unequivocally obligated appellee to make the subsequent loans.

It is conceded by appellants that appellee must have had notice of appellants’ lien previous to making subsequent advances (Superior Lumber Co. v. National Bank of Commerce, 176 Ark. 300, 2 S. W. 2d 1093), but it was stipulated here that appellee knew materials were furnished to Welch before the second advance was made. As we interpreted § 51-607 and § 51-613 [Ark. Stab Ann. (1947)] in the Planters Lumber Co. case, appellants’ liens dated back to the time when the first material was furnished and all of appellants ’ liens were on an equality.

Somewhat incidentally it seems, appellants, claiming they had no notice, ask that, on reversal, the sale be set aside. We see no merit in this request. Regardless of whether appellants had a first or second lien, a sale was necessary. Appellee says one of appellants was at the sale and even made a bid. In all events, appellants certainly knew of the trial court’s decree and its contents, and it provided for a sale of the land. Also, the record fails to show any objection by appellants when the sale to appellee was confirmed.

Accordingly, the decree of the trial court is reversed, and the cause is remanded for further proceedings consistent with this opinion.

Reversed and remanded.

Harris, C.J., and Robinson, J., dissent.


text:
    City of Jonesboro v. Agee.
    5-3140
    374 S. W. 2d 827
    Opinion delivered February 3, 1964.

      Frierson, Walker >£ Snellgrove, for appellant.

      W. B. Hotuard, Jack Segars, for appellee.
   Sam Robinson, Associate Justice.

The City of Jonesboro filed this suit asking for a declaratory judgment to the effect that the east boundary line of the private property in Block 52 of Knight’s Second Addition to the City of Jonesboro is 46 feet west of the 'quarter section line between the northeast quarter and the northwest quarter of Section 19, Township 14 North, Range 4 East; and that the 46 feet between such alleged property line and the quarter section line has been dedicated as a public street. The Chancellor held that the evidence failed to show that the 46 feet in question had been dedicated as a street. We agree.

The original plat of Knight’s First and Second Addition to Jonesboro was filed for record in 1891. It shows the private property line on the east side of Block 52 as being 16 feet west of the quarter section line, which is the east boundary line of the addition. Apparently the 16 foot strip was left as an alley. Main Street, which Block 52 adjoins on the west, has a width of 60 feet as shown by the plat, and all the other streets in the addition have a width of 60 feet, except a 30 foot strip was left for streets at the north and south boundaries of the addition, and a 16 foot strip was left as a right of way at the west boundary the same as a 16 foot sti’ip was left at the east boundary.

Appellant bases its claim that there are 46 feet between the quarter section line, which is the east boundary line of the addition involved, and the private property line in Block 52, on a plat filed in 1902 of Culberhouse’s Subdivision of various lots in Knight’s Second Addition, including Block 52. Unless the plat of Culberhouse’s Subdivision is sufficient to show a dedication of land on the east side of Block 52, designated as Church Street in the plat, in addition to the 16 feet shown by the 1891 plat, appellant cannot prevail. The Culberhouse plat is not sufficient to show a dedication of more land on the east side of Block 52 for use as a street than is shown in the 1891 plat of Knight’s First and Second Addition.

Apparently there are several errors in the Culberhouse plat. It contains no scale, and yet it appears to be drawn to the scale of one inch to 200 feet. It designates Church Street as adjoining Block 52 on the east, but does not give the width of the street. The plat shows Block 52 as being divided into- six lots measuring 200 feet east and west, but if the scale of one inch to 200 feet is used, the lots would measure 220 feet.

According to the original plat of Knight’s Additions, Block 52 is 220 feet east and west leaving 16 feet between the end of the block and the section line. This shows a distance of 236 feet from the quarter section line on the east of the addition to the east line of Main Street. Although the Culberhouse plat shows the lots as measuring only 200 feet east and west, there is no showing whether the 20 feet apparently taken from the lots in Blocks 52 was added to Church Street or to Main Street. In fact, from the lines on the Culberhouse plat, the 20 feet appears to have been added to Main Street. There is no way of determining the location of the property shown on the Culberhouse plat except by reference to the original plat, and there is no testimony in the record ticing the Culberhouse plat in with the original plat of Knight’s Addition in such manner that it can be said that a preponderance of the evidence shows that any land has been dedicated to what is now called Church Street other than the dedication- shown in the original plat of Knight’s First and Second Addition.

Affirmed.


author: Jtm Johnson, Associate Justice.

text:
    Holland v. Malvern Sand & Gravel Co.
    5-3159
    374 S. W. 2d 822
    Opinion delivered February 3, 1964.

      Mathis £ Arnold, TTuie £ Hide, by Jerry Thomasson, for appellant.

      Smith, Williams, Friday £ Bowen, by William II. Sutton, for appellee.
   Jtm Johnson, Associate Justice.

This is a workmen’s compensation case. Appellant Vernon Holland has sought medical and compensation benefits for a lung .disease which he contended was either caused or aggravated by breathing rock dust during the time that he worked for appellee Malvern Sand & Gravel Company.

Appellant worked for Malvern Sand & Gravel Company on two separate occasions. His first employment covered a period of nine months from April 21, 1957 through December 20, 1957. He was unemployed for six months and then returned to work for appellee on May 30, 1958 and worked until July 7, 1959, a period of thirteen months. After July 7, 1959, appellant worked for other employers for a period of eighteen months until he became disabled in December of 1960.

Two hearings were held before referees, at the conclusion of which appellant’s claim was denied on the grounds that the evidence failed to show a causal connection between the claimant’s lung disease and his employment with appellee, as to the origination of appellant’s condition or as to aggravation of an existing condition. It was also found that appellant’s claim was barred because of the statute of limitations and late notice to the employer. No new evidence was presented when the case was appealed to the full commission and the full commission sustained the findings and conclusions of the referee. The circuit court affirmed the commission’s holding, whereupon an appeal was taken to this court.

Appellant contends that there is no substantial evidence to support the findings of the commission.

The general principles applicable to the workmen’s compensation law, its remedial nature requiring liberal construction, the function of the commission and the scope of review by this court have been repeatedly announced by the numerous decisions of this court in this field. And, the effective administration of this law to accomplish the intended purposes depends to a large extent upon a consistent adherence to these principles. The most important rule, carrying out the humane purpose of the act, is that the commission must follow a liberal approach and in a situation where one inference would support an award and another would defeat it, the inference supporting the award must be adopted. See Stout Construction Company v. Wells, 214 Ark. 741, 217 S. W. 2d 841. There are other established rules which have been held to he necessary for the proper administration of the act, including the rule that a claimant has the burden of proving a causal connection between his condition and his employment, and the rule that this court must give the testimony its strongest probative force in favor of the action of the full commission. Auto Salvage Co. v. Rogers, 232 Ark. 1013, 342 S. W. 2d 85. To recover a claimant must either prove that his employment aggravated a pre-existing condition.

There is no question about the seriousness of this claimant’s physical ailment.

The proof showed that during appellant’s first nine month period of employment with appellee, his duties required him to work near a large conveyor belt system which fed into a rock crusher. Conditions were such that the fine rock dust would frequentH cover his body and clothing. Dust conditions varied with wind direction and the type rock that was being crushed. Wet rock taken from the river, as compared to dry rock, creates little dust and it was estimated that half of the rock being crushed during appellant’s employment was wet.

During the second period of appellant’s employment his basic duties were changed. He was assigned to a different foreman and his primary responsibility called for him to work as a clean-up man around the railroad yard. Although he was required on occasions to woiit .on the conveyor where the rock dust was heavy, the great majority of his working time was spent in other areas.

When appellant became disabled in December of 1960, Dr. Clyde Tracy felt that a diagnosis of silicosis was the most consistent with the claimant’s symptoms. However, appellant admits that as a matter of law, he has no claim for an occupational disease grounded on silicosis, due to his limited exposure. See Ark. Stat. Ami. § 81-1314 (b) (2) (Repl. 1960).

Dr. Grimsley Graham stated that, in his opinion, appellant suffered from an advanced pulmonary disease which was more consistent with Boeck’s Sarcoid. While Dr. Tracy agreed that appellant’s symptoms were compatible with a diagnosis of sarcoidosis, neither doctor was able to say with any degree of certainty exactly what was wrong with the claimant except that he suffered from some kind of lung disease.

Dr. Tracy testfied that if appellant had sarcoidosis, it -would not be possible to determine what caused the disease or when its onset began. It might develop over a period of years before manifesting itself but might develop in a matter of a few weeks. He stated that there was no doubt that appellant had a lung disease now and that breathing rock dust would aggravate an existing lung' condition. However, this testimony was offered in answer to an abstract question directed to Dr. Tracy. When, bn cross-examination, he was asked the direct question as to whether appellant had a lung disease at the time he was employed by appellee he stated, “I do not know.” Appellant, testifying in his own behalf, stated that he had experienced a shortness of breath before leaving his job with appellee. Neither doctor related this symptom to appellant’s present disability. Although two competent physicians apparently contributed all of the knowledge available to them through medical science, the questions as to what disease the claimant had, what caused it, when it began, and whether it existed during or was aggravated by his employment with appellee remain unanswered in the evidence. This being true, it necessarily follows that, based upon the firmly established principles applicable to the workmen’s compensation law, and based upon our thorough review of all of the evidence in this record, we have no choice but to conclude that the commission’s finding's are supported by the record and must be sustained.

Having readied the above conclusion, we find it unnecessary to consider whether appellant’s claim -was barred by the statute of limitations.

Affirmed.

Robinson, J., dissents.