text:
    HOERNER WALDORF CORPORATION and INSURANCY COMPANY of NORTH AMERICA v. Carl Lee ALFORD
    73-99
    500 S.W. 2d 758
    Opinion delivered November 5, 1973

      Smith, Williams, Friday, Eldredge ir Clark, by: George Pike Jr., for appellants.

      McMath, Leatherman & Woods, for appellee.
   J. Fred Jones, Justice.

This is a workmen’s compensation case and the question on appeal is whether there is any substantial evidence to sustain the Commission’s finding that the claimant-appellee’s heart attack and resulting disability grew out of, and occurred within the course of, his employment as a truck driver.

Carl Lee Alford was 58 years of age when on September 13, 1971, he suffered a severe heart attack while driving a truck-trailer rig on a return trip to Little Rock from Rossville, Tennessee, where he had delivered a truckload of corrugated paper boxes bound up in 500 pound bales. Mr. Alford had worked for the. appellant-employer, Hoerner Waldorf Corporation, for approximately 20 years, the first five years as a “slitter operator,” and the last 15 years as a truck driver. He had been hospitalized and treated for a hiatal hernia but that condition is of no importance in this case except as it relates to Mr. Alford’s complaints as hereinafter set out. The heart attack suffered by Mr. Alford on September 13 was diagnosed as a myocardial infarction and the correctness of that diagnosis is not questioned.

It was Mr. Alford’s contention before the Commission that the stress and strain of the work he performed as a truck driver brought about his heart attack on the day in question and aggravated his pre-existing coronary atherosclerosis to the point of a myocardial infarction and permanent disability. The appellant-employer and its compensation insurance carrier contended that Mr. Alford’s heart attack on September 13 was a natural result of his progressive degenerative heart disease and was unrelated to his occupation as a truck driver. The Commission found in favor of Alford and awarded compensation for a 70% permanent partial disability in addition to medical benefits that normally follow an award in favor of the claimant. The award of the Commission was affirmed by the circuit court so the employer and insurance carrier contend on this appeal that the “claimant failed to sustain his burden of proving by substantial evidence that there was any causal relationship between his driving the truck and his heart attack.”

Mr. Alford testified by deposition as well as in person before the Referee. He said that September 13 was on a Monday and he did not work on the 11th or 12th. He said he just sat around the house on Saturday and Sunday and did not recall having any chest pains on Saturday or Sunday. He said on Sunday afternoon he became drowsy and felt tired and worn-out. He said he started to call his employer to get someone else to work in his place on Monday but thought he might get to feeling better so he decided to go ahead and go to work Monday. He said that he got up about 1:30 or 2:00 o’clock on Monday morning and reported to work; that his trailer was already loaded and he attached the tractor to the trailer and left on his assigned trip for the delivery of merchandise to Rossville, Tennessee. He said he stopped in Palestine, Arkansas, for breakfast and delivered his cargo in Rossville at 7 a.m. He said that prior to stopping in Palestine, he had “a kind of heavy feeling” in his chest but thought it would pass and didn’t say anything to anyone about it. He said his cargo consisted of cardboard boxes bound up in bales weighing approximately 500 pounds; that when he arrived in Rossville, the bundles were unloaded with a forklift and he assisted the forklift operator in pulling over about 10 of the bundles so that the forklift could get under them. He said the heaviness he felt in his chest between Palestine and Rossville had lightened up on his return trip to Little Rock but that after he came through Memphis, Tennessee, and West Memphis, pain in his chest started getting worse and that between Palestine and Wheatley, Arkansas, about two hours after he left Rossville, he had to pull to the side of the highway and stop. He then testified as follows:

“Q. What kind of problem were you having at that time?
A. Well, I turned deathly sick and felt like I was going to vomit, and that’s the reason I jerked the tractor trailer over off the road as soon as I could, and it just felt like something just popped me in the chest right hard, and I slumped over my steering wheel, I suppose, so according to the time that I left Rossville and the time that these boys come along and all I was probably there maybe thirty or forty-five minutes. I don’t know just how long it was.”

Mr. Alford said two other truck drivers employed by the same company stopped and offered to bring him on in to Little Rock but he managed to bring his own truck to Little Rock. He said that after delivering his truck back to his place of employment, he went home and a day or so later was hospitalized under the treatment of Dr. William B. Bishop.

At the hearing before the Referee, Mr. Alford described his attack in more detail. He said that when he pulled his truck to the shoulder of the highway and stopped, he first laid over on his steering wheel and then got so sick he had to get out of his truck and vomit. He said that for a short time after he stopped he felt dizzy and did not know what he was doing. He said this condition soon cleared up but the pain in his chest never did cease or get any better. He described the attack as starting with sharp pain in his chest under his breast bone. He said it just kept getting worse and worse and he then testified as follows:

“When it did hit me it was a solid jolt. It just felt like someone stomped me in the chest... I had been hit in my chest with a bale of hay and it kind of felt like that. . . then I knew there was something wrong with me. I had never had that to happen to me before.
Q. Now you had never had this particular type of pain before?
A. I never had.
Q. Now had you ever had any pains in your stomach or in your chest area before?
A. Yes, sir.
Q. Were they anything like this?
A. Never was, no, sir.”

He said he had previously experienced pain in his stomach and chest on several occasions when he was in the hospital with a hiatal hernia. He said when his chest pains first started on the 13th, he thought perhaps it was the same thing, but it didn’t start hurting in his stomach as it usually did. He said the pain started in his chest on the 13th; that it was of a different nature than he had previously experienced and when it grew worse, he knew it was not from his stomach or hernia. He said after he left Rossville on his return trip to Little Rock, the pain in his chest really started hurting bad and then kept getting worse.

Mr. Robert Cearley, production manager for the appellant-employer, testified that Mr. Alford was an excellent employee. He said Alford worked about five years as a slitter operator in the plant before being assigned to driving a truck.

Both the truck drivers who came upon Mr. Alford while he was stopped at the side of the highway on his return to Little Rock, testified that he was deathly sick, complaining of pain and said that nothing like that had ever happened before.

Orville Jenson, another truck driver for the appellant-employer, testified that a driver of a truck-trailer rig is under constant pressure in keeping a lookout to prevent accidents and that there is a lot of heavy physical exertion involved in such work.

Dr. William B. Bishop did not testify but his letter-report dated January 26, 1972, directed to Mr. Alford’s attorney, was introduced into evidence without objection. Dr. Bishop stated that Mr. Alford had been under his treatment since September 16, 1971, and in his opinion Mr. Alford had advanced arteriosclerotic heart disease with angina on exertion. Dr. Bishop stated that Mr. Alford most likely had an intramural myocardial infarction which precipitated his hospitalization from September 16 through October 11, 1971. He said that in addition, Mr. Alford had symptoms of vertebral basilar artery insufficiency. It was his opinion that Mr. Alford would be unable to resume any occupation which would require any type of physical activity "including pulling, hauling, lifting, standing or walking over a protracted period of time.” Dr. Bishop concluded his report with a statement as follows:

"In that Mr. Alford’s initial symptoms occurred while he was driving a truck during the course of his occupation, I would have to presume that his pre-existing condition was aggravated by his driving the truck.”

At the request of the compensation insurance carrier, Mr. Alford was examined by Dr. Alfred Kahn, Jr. who reported the results of his examination and also testified by deposition. Dr. Kahn expressed the opinion that there was no causal connection between Mr. Alford’s work and his heart attack on September 13. The Commission, however, was entitled to consider and weigh all of Dr. Kahn’s testimony together with all the other evidence in arriving at its decision as to where the preponderance lies. Dr. Kahn’s examination was so thorough, and his testimony so important to the question before us, we feel justified in quoting his testimony at some length. Dr. Kahn’s report reads in part as follows:

“It is my opinion based on Mr. Alford’s history, physical examination, laboratory work performed elsewhere and performed here that Mr. Alford probably had an acute myocardial infarction while he was driving his truck as described in the present illness. * * * A myocardial infarction means death of heart muscle which in turn is the result of an inadequate blood flow through the coronary arteries. This inadequacy of blood flow through the coronary arteries is the result of a progressive degenerative disease seen in American males and known as coronary arteriosclerosis. This progressive degenerative disorder is accelerated by hypertensive disease, hyper-cholesterolemia, certain endocrine disorders as thyroid disease, sedentary living, hereditary traits, etc.; the reverse holds true. As a result of this patient’s coronary artery disease, he not alone had the myocardial infarction but the inadequacy of blood flow through the coronary vessels is still symptomatic and this patient is having what is known as angina pectoris. Angina pectoris is a syndrome of chest pain caused by temporary inadequacy of blood flow through the coronary vessels; this does not produce lasting damage to the heart, but could be looked on as a warning signal that there was a temporary inadequacy of blood flow. At this time I am unable to state that this patient has failure of his heart as a pump; he does not have any notable cardiac arrhythmia.
All of this brings up the question as to whether or not this patient’s work was related to his heart attack. The basic underlying cause of the patient’s heart attack or myocardial infarction as it is called is coronary atherosclerosis which as I have stated above is a progressive degenerative disease of the coronary vessels. A myocardial infarction may be precipitated in the presence of coronary arteriosclerosis if the patient undergoes excessive or unusual exertion. This unusual exertion has to have a good time relationship with the onset of the symptoms or there cannot be a cause and effect relationship. In the case of Mr. Alford, I do not believe that there is any causal relationship between this man’s work as a truck driver and his myocardial infarction.”

Dr. Kahn then reported that he made a careful search for any other disease suffered by Mr. Alford which might simulate coronary artery disease. He said that Mr. Alford does have a hiatal hernia and he was of the opinion that some of the pain described by Mr. Alford could have come from the hernia. He found that Mr. Alford did have hypertensive cardio-vascular disease; this could definitely accelerate coronary artery degeneration. He reported that Mr. Alford did not have an elevated blood cholesterol. Dr. Kahn then concluded his report as follows:

“In summary it is my belief that Mr. Alford has had a myocardial infarction. It was due to progressive arteriosclerosis. I think he is now probably suffering from angina pectoris. I think his principal problems are totally unrelated to his work.
Currently because of the cardiac disease, I think Mr. Alford is totally incapacitated for driving a truck. At the most, Mr. Alford might have some type of sedentary job where he sat or stood for short periods of time; he should not do any heavy lifting. He should not be exposed to any extremes of fatigue or climate.”

In Dr. Kahn’s deposition he testified on direct examination in part as follows:

“I think the thing that occurred to Mr. Alford was this; that he had a chronic degenerative disease of the blood vessels, which involved his heart,’ among other places. This disease, as I stated, is progressive, and eventually the blood supply to the heart muscle is inadequate. This inadequacy might take two forms. One, the inadequacy might precipitate what is known as coronary artery insufficiency, and this is a condition in which there is an inadequate flow of blood to the heart, and as a result there is temporary pain when the individual exercises or exerts. The other disorder is known as myocardial infarction, and it’s a more severe disorder, and this is characterized by a much greater impairment of blood supply, and in fact such that the individual has muscle death afterwards. It’s my opinion that Mr. Alford’s diagnosis is a myocardial infarction, and that it is a severe form of loss of blood supply through the coronary vessels. This used to be called coronary artery occlusion, but we know that these individuals who have myocardial infarction may have a partially patent blood vessel and the muscle still dies. My belief is that Mr. Alford suffered a myocardial infarction while he was driving his truck. I don’t think of this as being violent exertion, and I feel that the progression of the disease was the most important thing in producing his myocardial infarction.”

Dr. Kahn then testified that there had been studies made to determine the effect and relationship between exertion and myocardial infarction. He said these statistics showed that 95% of myocardial infarctions occurred while the individuals were either being quiet or at least relatively sedentary. He said that in only about 5% of the cases was there found to be a relationship between the infarction and exertion. Dr. Kahn testified that he agreed with these surveys and, before he would relate a myocardial infarction to exertion, it should be clearly shown that the exertion was quite severe for the particular individual and there would have to be a good time relationship between the exertion and the onset of the symptoms. He said that from the history given him by Mr. Alford, he felt that the exertion, or activity he was engaged in while driving his truck, was not sufficient to relate his activity to his myocardial infarction. Dr. Kahn then continued on direct examination as follows:

“Q. . . . had you known, the extent of his condition before he had this attack, let’s say the day before, what would have been your restriction on his activity?
A. Well, I think had I known he had had coronary artery disease sufficient to have caused a myocardial infarction, I would have told him not to take the trip. I would have taken him off this type of work.
Q. You would take him off this type of work, you mean truck driving?
A. Yes, I would. I would have put him on what I would have termed light work.
Q. And what are you putting him on now after he’s had the attack; what is the nature of that. . .
A. . . . well, the same, light work.
Q. For example, could he handle a job now or after he reaches his complete healing, as a shipping clerk, for example, where he is to receive and send out materials, provided he did not have to do any lifting and provided he was given an opportunity to sit down periodically in the course of his work?
A. I think he could, provided he weren’t exposed to extremes of temperature either. I think sitting and standing, no extremes of temperature, no extremes of exertion, probably a five pound limit on lifting weights and that not very repetitively.”

Dr. Kahn then testified that he thought Mr. Alford might be able to carry on the job of slitting machine operator if he was not required to lift anything more than the pieces of cardboard he would feed through a machine. Dr. Kahn said that following death of heart muscle which occurs in a myocardial infarction, the dead muscle tissue is replaced by scar tissue and it is thought that this scarring process continues for around six weeks before complete healing occurs. He said that in such healing process the small blood vessels tend to open up and carry the blood in place of the large vessel which had been occluded or almost occluded.

On cross-examination Dr. Kahn made his prognosis for Mr. Alford as not good. He said any person who has had a myocardial infarction is subject to more coronary disease and that in his opinion this condition is permanent. Dr. Kahn then outlined a regular course of treatment he would suggest under the direction of Mr. Alford’s attending physician, Dr. Bishop, who Dr. Kahn said “is an excellent man.” Dr. Kahn then testified on cross-examination as follows:

“Q. Is it true, Doctor, that physical or chemical trauma, or a sudden exertion on the body as a whole would require an increased amount of blood?
A. Yes, certainly exertion would. I don’t know that trauma would.
Q. And if the body requires an increased amount of blood, I suppose that requires the heart to work harder?
A. Yes.
Q. Where there’s exertion and a patient has this narrowing of the coronary artery due to this disease, might there be an inadequate supply of blood to the heart muscle that would cause damage?
A. With exertion?
Q. Yes.
A. Yes, it’s conceivable.
Q. And where you have this inadequate supply of blood to the heart muscle or the heart, may this result in pain?
A. Yes.
# * #
Q. I believe you indicated that a deficiency of blood supply to the heart or heart muscle could cause a myocardial infarction?
A. Yes, it could.
Q. Is there any similarity in symptoms from a hiatal hernia and a heart condition?
A. Yes, they are quite similar at times.
Q. Would they be confusing to a patient unless they knew exactly what was wrong with them?
A. Very.”

Dr. Kahn testified that whether or not emotional strain would cause damage to a diseased heart with insufficient blood supply is a very difficult question. He said that a sudden emotional shock could place additional strain on the heart but that whether or not emotional stress does lasting damage to a heart is a matter of debate. He said that he felt it could precipitate angina pectoris. He said that emotional stress could increase the heart beat and increase blood pressure.

“Q. And if the heart is already damaged it could aggravate the condition?
A. Yes, it could aggravate it, temporarily, anyway.”

Dr. Kahn testified that it would not be advisable for Mr. Alford to engage in any physical labor of any magnitude and that he should limit his activities in lifting weights to not over five pounds. He said that if Mr. Alford strained very vigorously, it could cause his heart to require more oxygen; that Mr. Alford should not attempt to move a crate weighing 500 pounds, and that he should be limited to light duty in the future. He then concluded his testimony on cross-examination as follows:

“Q. Mr. Pike asked you if Mr. Alford had come to see you for advice and counsel and treatment on the 13 th of September, 1971, before he started out on this trip, what restrictions you would have then placed on his job activities, and I believe you have indicated that you would have placed the same restrictions as you are now placing on him?
A. Yes, I would.”

The appellants argue that Dr. Kahn was very definite in his opinion, whereas Alford’s medical evidence amounts only to a bare conclusion expressed by his attending physician and is without supporting evidence. They argue that Dr. Bishop does not mention significant history in Mr. Alford’s case. As already pointed out, Dr. Bishop did not testify. His deposition was not taken nor was he called as a witness by either party. Mr. Alford, however, had been under the care and treatment of Dr. Bishop from the date of his attack and it would appear just as logical, if not more so, that Dr. Bishop did take into considerar tion a history given him by Mr. Alford as it would be that he did not.

The appellants cite many of our decisions in which we have reversed the Commission under the substantial evidence rule. Ocoma Foods v. Grogan, 253 Ark. 1111, 491 S.W. 2d 65, was a protruding disc case in which the condition developed over a considerable period of time and the claimant’s employment consisted of sitting down and lifting nothing heavier than chicken parts.

In Southland Corp. v. Hester, 253 Ark. 959, 490 S.W. 2d 132, cited by the appellants, we reversed a Commission award in favor of the widow of a man who died of a gunshot wound. The deceased employee was found slumped at his desk with his own .22 rifle (he apparently had brought from home) propped with its butt against an electrical outlet on the floor and its muzzle against his shirt near his heart. The cause of death was a bullet wound through the heart, and there was powder burn on the shirt and if the death was accidental, there was no substantial evidence it grew out of the employment.

Another case cited by the appellants in which we reversed the Commission is the case of International Paper Co. v. Langley, 251 Ark. 859, 475 S.W. 2d 686. The primary distinction in that case was that . Mr. Langley was simply handling empty paper bags seven feet long and two feet wide. Langley had just returned from lunch and picked up one of the paper bags when he experienced one of his many heart attacks. The appellants also cite numerous cases in which we have sustained the Commission under the substantial evidence rule, but each case turns on its own peculiar facts and we only search the record to determine if there is any substantial evidence that will Support the decision reached by the Commission.

Heart cases are within the most difficult area of workmen’s compensation law, primarily because it is common knowledge that disabling heart attacks do occur in many instances without apparent reason as to time and activity. It has become a matter of common knowledge that excessive exertion or strain on a weak or diseased heart is likely to result in a disabling or fatal heart attack and the amount of exertion required may vary with the individual. Bettendorf v. Kelly, 229 Ark. 672, 317 S.W. 2d 708. It is unfortunate, therefore, that the precise and exact cause and extent of a disabling heart condition are difficult to determine short of heroic exploration or autopsy.

Ever since our decision in Bryant Stave & Heading Co. v. White, 227 Ark. 147, 296 S.W. 2d 436, there has been no requirement that a heart attack, to be compensa-ble, must be caused, or brought on, by some unusual exertion rather than by the employee’s regular work. Rebsamen West v. Bailey, 239 Ark. 1100, 396 S.W. 2d 822. See also Reynolds Metals Co. v. Cash, 239 Ark. 489, 390 S.W. 2d 100; W. Shanhouse & Sons, Inc. v. Simms, 224 Ark. 86, 272 S.W. 2d 68.

In Reynolds Metals Co. v. Cain, 243 Ark. 483, 420 S.W. 2d 872, we said:

“It is appellant’s contention that appellee’s attack was due to pre-existing arteriosclerotic disease, and his work had nothing to do with precipitating the attack. It is true that Cain was suffering from arteriosclerosis, and there is no dispute in the medical testimony on that point. The test, however, is whether the work that appellee was doing aggravated the pre-existing condition to the extent that it (the work) was a factor in bringing on the attack, Reynolds Metals Company v. Robbins, 231 Ark. 158, 328 S.W. 2d 489. Numerous cases hold in like manner.”

In the case of Asphalt Materials Co. v. Coleman, 243 Ark. 646, 420 S.W. 2d 921, the question was whether or not there was any substantial evidence of a causal connection between the claimant’s work and a heart attack, and in that case we said:

“In resolving the issue before us, we are mindful of those cardinal principles so well established as to need no citation of authority: (1) the compensation act is to be construed liberally in favor of the workman; (2) the burden is on the claimant to show causal connection between his heart attack and his employment; and (3) we give the evidence its strongest probative force in favor of the commission’s findings because those conclusions carry the weight of a jury verdict.”

In Latimer v. Sevier County Farmer’s Coop., Inc., 233 Ark. 762, 346 S.W. 2d 673, we said:

“In U.S.F. & G. Co. v. Dorman, 232 Ark. 749, 317 S.W. 2d 708, this court quoted from Bettendorf v. Kelly, 229 Ark. 672, 317 S.W. 2d 708, as follows: ‘. . . an accidental injury arises out of the employment when the required exertion producing the injury is too great for the person undertaking the work, whatever the degree of exertion or the condition of his health, provided the exertion is either the sole or a contributing cause of the injury. In short, an injury is accidental when either the cause or result is unexpected or accidental, although the work being done is usual or ordinary.’ ”

And in Hall v. Pittman Construction Co., 235 Ark. 104, 357 S.W. 2d 263, we said:

“Under the substantial evidence rule that prevails in a case of this kind the appellant shoulders a heavy burden in seeking a reversal of the commission’s decision upon an issue of fart. In order to succeed the appellant must show that the proof is so nearly undisputed that fair-minded men could not reach the conclusion arrived at by the commission. After studying the record we are unable to say that the appellant is entitled to a reversal; that is, that there is no substantial evidence to support the commission’s findings.”

There is no question from the medical evidence in this case, that Mr. Alford had an arteriosclerotic heart condition for at least some period of time prior to his attack on September 13, 1971. Prior to that date, however, there is no evidence that his condition interfered with his regular duties as a truck driver and there is no evidence that he even knew he had the condition. There is little direct evidence as to the amount of stress and physical exertion involved in driving a truck-tractor trailer such as Mr. Alford was driving. It is clear from Dr. Kahn’s testimony that the basic underlying cause of Mr. Alford’s myocardial infarction was the inadequacy of blood supply to the heart muscles through arteries which were occluded, or nearly so, by nonoccupational arteriosclerosis, and this principal problem was unrelated to Mr. Alford’s work. It is reasonable to assume that if Mr. Alford had been free of this basic underlying principal problem, his acute infarction would never have occurred and he would still be able to follow his occupation as a truck driver or engage in any other physical activity on an unlimited basis.

Turning now from the “basic underlying cause” and Mr. Alford’s “principal problem” Dr. Kahn explains that a slight or temporary inadequacy of blood supply to the heart may result in warning chest pains known as angina pectoris when the individual exercises or exerts. He explains that a much greater inadequacy of blood supply may result in a myocardial infarction with permanent damage and he said that is what Mr. Alford had. “Inadequacy” is a relative term and Dr. Kahn readily agrees to the common sense proposition that physical exercise and exertion places a greater demand on the heart for its blood supply and while Dr. Kahn expressed the opinion that Mr. Alford’s truck driving did not precipitate his heart attack or aggravate his heart condition, he limited Alford’s activities to lifting not over five pounds in weight and said that had he had occasion to examine Mr. Alford prior to September 13, 1971, he would have placed him on lighter work than that of truck driving, and would have limited his activities to the same extent he did following the heart attack on September 13.

We are of the opinion that the Commission was justified in interpreting Dr. Bishop’s letter-report as differing in opinion with Dr. Kahn as to whether or not the truck driving aggravated Mr. Alford’s heart condition. Dr. Bishop’s qualifications are not questioned in this case and he placed practically the same limitations on Mr. Alford’s activities as did Dr. Kahn. Apparently both doctors would have recommended lighter work for Mr. Alford than that of truck driving had they had an opportunity to do so prior to September 13.

There is no evidence in the record as to how much either of the doctors knew about the exertion necessary in driving a truck-tractor rig through cities and on the highway, so it is reasonable to assume that Dr. Bishop knew as much about truck driving as did Dr. Kahn. Certainly Dr. Kahn, and apparently Dr. Bishop, would have recommended against attempting to drive the truck on September 13 had they had an opportunity to examine Mr. Alford before he made the trip. Dr. Bishop did not merely say that he presumed the truck driving aggravated Mr. Alford’s condition, he said he would have to presume that the pre-existing condition was aggravated by driving the truck. Perhaps Dr. Bishop recognized, as Dr. Kahn apparently did, that Mr. Alford was in immediate danger of a myocardial infarction if and when additional demand was made on his diseased arteries and they only differ in the amount of exertion that would create such demand.

It is true that Dr. Bishop did not go into detail as to how he arrived at his opinion as did Dr. Kahn, but he was not asked to do so. Dr. Kahn does not say whether a myocardial infarction occurs over an extended period of time or suddenly. He does say that in his opinion Mr. Alford suffered an acute myocardial infarction. He explains that a myocardial infarction occurs for lack of blood supply through diseased arteries and the substance of his testimony is to the effect that anything, including exercise, which would increase the demand on the heart and arteries for blood supply, would likely result in insufficient blood oxygen to the heart muscles and result in a myocardial infarction.

From the overall evidence in this case, under the above rules we have announced in previous cases, we are of the opinion that there is substantial evidence to support the Commission’s finding in this case, and that the judgment of the trial court affirming the Commission must be affirmed.

Judgment affirmed.

Fogleman, J., concurs.

      The duties of a slitter operator were described as feeding paper cardboard through a machine which trimmed it to proper size for making cardboard boxes.

      Approximately the same type of light work Alford did as a “slitter Operator" and which the doctors say he might still be able to do.


source: Caselaw Access Project

author: J. Fred Jones, Justice.

license: Public Domain

text:
    The DOW CHEMICAL Company and The City of RUSSELLVILLE, Arkansas v. BRUCE-ROGERS Company et al
    73-118
    501 S.W. 2d 235
    Opinion delivered November 5, 1973

      Ike Allen Laws Jr., P.A., for appellants.

      Williams é Gardner, James A. McLarty, Jon Sanford and W. H. Schulze, for appellees.
   J. Fred Jones, Justice.

This is an appeal by Dow Chemical Company and the City of Russellville, Arkansas, from a chancery court decree enforcing statutory materialmen’s liens filed by the appellees against the leasehold interest of Dow Chemical in land and improvements owned by the City of Russellville.

Most of the facts were agreed to by stipulation and they appear as follows: The City of Russellville sold industrial development bonds under the municipality and county development revenue bond law [Act 9 of 1960 (ex. session)] [Ark. Stat. Ann. §§ 13-1601 — 13-1614 (Repl. 1968)] and with the proceeds from said sale purchased land adjacent to Russellville in Pope County and leased the land to Dow Chemical Company over a period of years with option to purchase. The lease rentals to be paid by Dow Chemical were pledged to service the bonds. Upon retirement of the bonds, under Dow Chemical’s option to purchase, it had a right to purchase the property including the improvements thereon for the sum of $100. Dow Chemical went into possession of the property under its lease and employed Russco Corporation and Russco Builders, Inc. in the building of two manufacturing plants on the property. These apparent two separate corporate entities will hereafter be referred to in the singular, simply as “Russco.”

In the early part of 1972 Russco became unable to meet obligations and numerous liens for labor and materials were filed against the property, and numerous garnishments after judgments were filed against Dow Chemical and the City of Russellville. Russco had completed its work under its contract when the liens were filed and the judgments were obtained against it, but Dow Chemical and the City of Russellville were still indebted to Russco in the amount of $7,740. This amount still owed to Russco was far less than the amounts of the claims filed and judgments obtained against it. As a result of the liens and garnishments, Dow Chemical and the City of Russellville filed a bill of inter-pleader and deposited the amount still owed to Russco into the registry of the court.

A trial on the issues resulted in a decree adjudicating the amounts of the liens as valid claims against Russco but holding that the land and improvements were public property and beyond the reach of the statutory liens. The chancellor held, however, that the leasehold interest of Dow Chemical was subject to the claims of the lien claimants. The chancellor entered judgments for the lien claimants against Russco and decreed liens in favor of the lien claimants in the amounts of their respective judgments against the leasehold interest of Dow Chemical Company. The decree provided that if the judgments be not paid within 10 days that the leasehold interest of Dow Chemical be sold at public auction, with the proceeds from the sale to be used, after the payment of all costs and expenses of the sale, to satisfy the lien claimants pro rata with the excess, if any, to be remitted to Dow Chemical Company. The decree provided for a stay bond pending appeal to this court, and such bond was filed by Dow Chemical. The appellants contend on this appeal that the chancellor erred in holding that the liens attached to the leasehold interest of Dow Chemical.

Ark. Stat. Ann. § 51-601 (Repl. 1971) provides that:

“Every . . . workman ... or other person who shall do or perform any work to or upon, or furnish any material, . . . for any building, erection, improvement to or upon land, . . . under or by virtue of any contract with the owner or . . . his . . . contractor or subcontractor, upon complying with the provisions of this act . . . shall have for his work or labor done, or materials, . . . furnished a lien upon such building, erection or improvement, and upon the land belonging to such owner or proprietor on which the same is situated. . . .”

By statute as well as case law in Arkansas, leasehold interests are subject to liens for materials and labor. Ark. Stat. Ann. § 51-606 (Repl. 1971); Meek v. Parker, 65 Ark. 367, 38 S.W. 900. Public policy, however, forbids the attachment of liens on public buildings and land for labor and materials furnished by contractors in the construction of public facilities. Plummer v. School Dist. No. 1 of Marianna, 90 Ark. 236, 118 S.W. 1011; Holcomb v. American Surety Co., 184 Ark. 449, 42 S.W. 2d 765. The parties in the case at bar seem to recognize the municipal immunity to liens on the fee title in this case. So, the question actually boils down to whether this municipal immunity extends to the leasehold interest owned by Dow Chemical Company.

The appellants argue that the leasehold interest of Dow Chemical is pledged toward the retirement of the $20 million bond issue and the enforcement of material-men’s liens against this interest would amount to enforcing liens against public property held by the City of Russellville. The appellees argue that Dow Chemical contracted with the City of Russellville that it would not permit liens to attach to the subject property, and that appellees stand as third party beneficiaries of that contractual obligation. They also argue that appellants are estopped from claiming immunity by virtue of their failing to comply with Ark. Stat. Ann. § 51-632 (Repl. 1971) which provides as follows:

“No contract in any sum exceeding $3,000 providing, for the repair, alteration, or erection of any public building, public structure or public improvement shall be entered into by the State of Arkansas, or any subdivision thereof, any ' county, municipality, school district, other local taxing unit, or by any agency of any of the foregoing, unless the contractor shall furnish to the party letting the contract a bond in a sum equal to the amount of the contract.”

Under the contract entered into between the City of Russellville as lessor, and Dow Chemical Company as lessee, it was provided that the lessor would obtain all necessary approvals from any and all governmental agencies requisite to the constructing and equipping of the project “and the project shall be constructed and equipped in compliance with all state and local laws applicable thereto.” The contract further provided that the lesseee shall, after occupancy of the premises under permits, approvals and authorities obtained by lessor, promptly comply with all valid statutes, laws, ordinances, orders, judgments, decrees, regulations, directions and requirements of all federal, state, local and other governments or governmental authorities, now or hereafter applicable to the leased premises. The contract provided, however, that the lessee should have the right to contest any such statutes, etc. and in such event compliance is to be postponed during the contest thereof, and:

“[E]ven though a lien against the leased premises may be incurred by reason of such non-compliance Lessee may nevertheless delay compliance therewith during contests thereof, provided Lessee, if required, furnishes Lessor reasonably satisfactory security against loss by reason of such lien and effectively prevents foreclosure thereof.”

Section 801 of the lease pertains to mechanic’s liens and recites as follows:

"After the completion of original construction and equipping, if any lien shall be filed against the interest of Lessor, Lessee, or the Trustee in the leased premises or asserted against any rent payable hereunder, by reason of work, labor, services or materials supplied or claimed to have been supplied on or to the leased premises at the request or with the permission of Lessee, or anyone claiming under Lessee, Lessee shall, within thirty (30) days after the receipt of notice of the filing thereof or the assertion thereof against such rents, cause the same to be discharged of record, or effectively prevent the enforcement or foreclosure thereof against the leased premises or such rents, by contest, payment, deposit, bond, order of Court or otherwise. Nothing contained in this Lease and Agreement shall be construed as constituting the express or implied consent to or permission of Lessor for the performance of any labor or services or the furnishing of any materials that would give rise to any such lien against Lessor’s interest in the premises.”

The lease contract further provides that commencing with the completion of the project, or when the lessee takes possession if prior to the completion of the project, the lessee agrees to indemnify and save lessor harmless against and from all claims by or on behalf of any person, firm or corporation arising from the conduct or management, or from any work or thing done on the leased premises during the term.

Section 1001 of the lease provides that if the lessee shall fail to keep the leased premises lien free, the lessor has the right to satisfy such lien and charge the amount thereof back to the lessor as rent or to exercise the same rights and remedies as in the case of default by the lessee in the payment of back rent.

Under section 1501 of the lease it provides that the lessee may assign the lease or sublet the leased premises but in such event, the lessee is to remain liable and bound by the contract.

Section 1601 of the lease provides that the leasehold estate is, and shall continue to be, superior and prior to the trust indenture and any and all encumbrances, mortgages, deeds of trust and trust indentures constituting or granting a lien on the leased premises or any part thereof or interest therein.

Section 1801 of the lease provides the lease may be terminated by the lessor if:

“This Lease and Agreement or the leased premises or any part thereof shall be taken upon execution or by other process of law directed against the Lessee, or shall be taken upon or subject to any attachment at the instance of any creditor of or claimant against the Lessee, and said attachment shall not be discharged or disposed of within ninety (90) days after the levy thereof.”

Mr. Jack Capps, acting plant manager for Dow Chemical, testified that Russco constructed the buildings involved in this case under a contract with Dow Chemical and that the contract was entered into through Dow Chemical’s Houston office. He said it was his understanding that Russco was to be paid out of the bond money raised for the construction of the plant. He said that bids were taken on the job and that Russco was not the low bidder but the contract was awarded to Russco because it was a local construction company. He said that Russco was not bonded and that Dow Chemical did not generally require a bond on their contracts. He said that so far as he knows Dow Chemical was never advised by the City of Russellville, or anyone else, that there was supposed to be a bond required of a contractor on the job. He said that Russco,had completely performed its contract.

Had the City of Russellville or its lessee Dow Chemical seen fit to comply with the mandatory provisions of § 51-632, supra, the difficulty presented in this case should never have arisen because under Ark. Stat. Ann. § 14-604 (Repl. 1968) a surety bond would have protected against the claims for labor and materials, and the provisions of the bond would have become a part of the contract. New Am. Cas. Co. v. Detroit Fid. & Surety Co., 187 Ark. 97, 58 S.W. 2d 418; Stewart-McGehee Const. Co. v. Brewster, 171 Ark. 197, 284 S.W. 53.

In the case of Nat’l Surety Corp. v. Edison, 240 Ark. 641, 401 S.W. 2d 754, the City of Texarkana in a similar situation failed to exact a bond from the general contractor. Apparently as a device to circumvent the statute, it created a private corporation to go through the procedure of letting a contract for the construction of buildings before transferring the property to the city. In that case, however, National Surety had issued a performance bond to a subcontractor protecting the subcontractor from claims arising out of an additional subcontract. The bonding company contended it was not liable for labor and material lien claims under the general performance bond since the bond was not for the perfor-manee of a public contract. We affirmed the liability of the bonding company and the concurring opinion pointed out as follows:

“[T]he appellant must have known that the bond was made in connection with construction falling within the scope of Section 1 of Act 351, cited in the bond. In the circumstances the provisions of § 14-604 ought to be read into the bond, just as would have been the case if the city had complied with the law.”

It would appear from the record in the case at bar, that the City of Russellville also attempted to circumvent the mandatory provisions of the statute by simply requiring its lessee, Dow Chemical, to assume all responsibility made mandatory under the statute for the protection of laborers and materialmen on municipal property not subject to materialmen’s and laborer’s liens. Such could have been the only reason and effect in requiring Dow Chemical to protect and hold harmless the city against unenforceable laborer’s and materialmen’s liens against public property. Dow Chemical agreed to assume this responsibility under its lease contract and apparently elected to forego a bond on its contractor. According to the testimony of Mr. Capps, Dow Chemical as a matter of practice simply does not require bonds of its contractors. There is no question that Dow Chemical’s leasehold interest was assignable by it.

In Grinnell Co. v. City of Crisfield, 287 A. 2d 486, cited by the appellants, the Rubberset Company owned land and sold it to the city under a contract providing that the city would build a plant thereon and lease the property back to Rubberset at a specified rental over a 20 year period, at the end of which Rubberset had an option to purchase the property. In that case the city contracted with Weidemuller Construction Company (without written approval of Rubberset) to erect the building on the property. Weidemuller entered into a subcontract with Grinnell for the installation of a fire protection system for the plant and when Grinnell was not paid for the materials it furnished, it filed a mechanic’s lien on the property. The trial court held that the subcontractor Grinnell had no recourse against the city, and also held that the interest of Rubberset was subordinate to that of the city and was not subject to Grinnell’s lien. The trial court sustained a demurrer filed by Rub-berset. In affirming the action of the trial court, the appellate court remarked as “significant” the fact that Rubberset was not a signatory to the construction contract, as required in the lease agreement, and the court in Grinnell cited from a previous case as follows:

“ ‘ * * *[A] mechanic’s lien ordinarily attaches to whatever interest the person responsible for the improvements has in the property.’ ”

The court in Grinnell seemed to place the emphasis on who was responsible for the improvements- or who was the employer of the contractor and as the appellees readily point out in the case at bar, Dow Chemical was the party responsible for contracting with Russco for the construction of the buildings involved in this case.

In the case of Tropic Builders, Ltd. v. United States, 475 P. 2d 362 (Supreme Court of Hawaii 1970) Len Company and Associates was the prime contractor on a government housing project. The Aloha Company was performing construction work for Sam Len. A subsidiary of Len referred to as “NADLQ” had a 55 year lease on the site from the United States Government, and upon completion of the project the ownership stock was transferred to the federal government. Tropic was a subcontractor under Aloha and when it was not paid for its services, it filed a mechanic’s lien against the interest of NADLQ and the improvements thereon. In the meantime NADLQ had merged into another corporate entity referred to as NCQ. The trial court held that Tropic had a valid lien against NCQ’s lease on the project site and its interest in the improvements thereon. NCQ, Len, and his surety appealed and. as assigned error contended that the mechanic’s lien could not be enforced against property belonging to the United States or in which the United States had any interest. In affirming the trial court the Supreme Court of Hawaii said:

"The judgment recognized the existence and enforceability of mechanic’s lien not on the fee simple interest of the United States but on the interest of NCQ, as successor to NADLQ, in the lease and leasehold improvements on the project site.
* * * The fact that the project site was owned by the United States in fee simple did not make NADLQ’s lease and NADLQ’s interest in the leasehold improvements immune from such liens. Basic Refractories v. Bright, 72 Nev. 183, 298 P. 2d 810 (1956); Crutcher v. Block, 19 Okla. 246, 91 P. 895 (1907).
W vr
It is stated in Keifer & Keifer v. Reconstruction Finance Corp., 306 U.S. 381, 388, 59 S. Ct. 516, 517, 83 L. Ed. 784 (1939), that the ‘government does not become the conduit of its immunity in suits against its agents or instrumentalities merely because they do its work.’ That statement was made with reference to a corporation organized under the authority of a Congressional act. It should apply with equal or greater force to a corporation organized under a state law relating to private corporations.”

In the Crutcher case, cited by the Hawaii Supreme Court in Tropic Builders, supra, the lien was against houses erected by Crutcher in a housing project on land owned by the United States Government under lease to Crutcher. In approving the liens in that case the Oklahoma Supreme Court said:

". . . Under the rule here adopted, it is immaterial that the legal title to the land in question is in the United States. The United States authorized the leasing of such land for townsite purposes, and by the terms of such a lease an estate is created. The territory and the general government are bound by their contracts the same as an individual, and it is only the estate held by the appellant that can be affected by this lien.
. . . where the government leases land for a term of years, such lease must be measured by the general law applicable to such instruments, unless exceptions affirmatively are made by the law itself. . . . ”
In 53 Am. Jur. 2d, § 44, at p. 557, is found the following:
‘The courts generally hold that, subject to the paramount title of the owner in fee and the conditions of the lease, a leasehold estate is subject to a mechanic’s lien for an improvement erected by or under a contract with the lessee. It has been so held even though the land is the property of a municipality or of the United States. Some statutes expressly provide that the lien extends to leasehold interests.” See also 57 C.J.S., § 17, Mechanic’s Lien.

We are of the opinion the chancellor did not err in holding that the materialmen’s liens involved in this case attached to the leasehold interest of Dow Chemical and in ordering the foreclosure of same.

The decree is affirmed.


author:
Conley Byrd, Justice.
      John A. Fogleman, Justice,

text:
    Wanda J. REAGAN v. Roy REAGAN
    73-3
    500 S.W. 2d 754
    Opinion delivered November 5, 1973

      Osborne W. Garvin, for appellant.

      Eubanks, Files ir Hurley, for appellee.
   Conley Byrd, Justice.

The trial court granted a divorce to appellee Roy Reagan on the grounds of personal indignities and awarded alimony to the appellant Wanda J. Reagan in the amount of $250 per month until remarriage or until further order of the court. For reversal the appellant contends:

“1. There was condonation of the conduct alleged;
2. Roy Reagan came into Court with unclean hands; and
3. The grounds of divorce were not established by a preponderance of the evidence.”

The record shows that appellee asked for a divorce on the ground of personal indignities alleged to have occurred prior to March 15, 1971. Appellant filed a general denial and by way of cross complaint alleged non-support and desertion and requested a divorce from bed and board — i.e., separate maintenance.

The proof shows that the parties were married April 1, 1944! They had two sons both of whom were born deaf. The older child died in 1967, and the other would be 21 on his birthday in October, 1972. The parties first separated in December, 1969. In January, 1970, appellee filed an action for divorce and appellant filed an answer and cross-complaint for a divorce. The complaint and cross-complaint were dismissed without prejudice in September 1971. Thereafter, the present action was instituted in October 1971, alleging a separation in March 1971.

Appellee testified that most of their marital problems revolved around their son Dean, the son’s desire to attend the Church of Christ, appellee’s mother and appellant’s extravagant spending. He stated that if a meal was cooked in his house, he did both the cooking and the cleaning-up afterwards.

Appellee stated that over the years appellant had developed an intolerance for his mother to such an extent that she had prohibited his mother from visiting in his home. As a result his mother went by his office to bring him a Christmas present, he and Dean and appellant having been somewhere together went by the office for just a minute. Appellant started a verbal barrage against his mother and wound up hitting his mother over the head with her purse. This incident was corroborated by Beverly Stubblefield, appellee’s secretary at the time.

Both appellee and Joe Madey, a lawyer, had offices in the Donaghey Building. One evening while appellee was visiting in Mr. Madey’s office near the end of the work day, appellant barged into Mr. Madey’s office and unleashed a verbal barrage on appellee. Mr. Madey was reluctant to repeat the exact language used by appellant but explained to the court if his wife had used the same language against him in the privacy of his bedroom, he would have slapped her.

Witness Gilbert Leigh corroborated still another occasion and time when appellant unleased a verbal barrage and backed her car up and made a run at appellee as if she intended to run over him.

Appellee testified that his mother was deaf and that she attended the Church of Christ where the services were repeated in sign language. Dean had attended church there with his grandmother and this upset appellant. In fact appellant forbade Dean to attend church there. As a result of the conflict, Dean had asked the minister to visit and talk with his parents. At 7:30 p.m. one evening he and Dean arrived home in time to find appellant using a pistol to run off the minister and another visiting minister from Ohio.

There was other testimony by appellee to the effect that he had been hit on the head with a candlestick and a shoe. On one other occasion appellant had attacked him with a knife with the stated purpose of cutting out his “black heart”.

Appellee also testified that appellant did her shopping all over the United States without consulting him. He had received bills from Neiman Marcus in Dallas, Marshall Field’s Company in Chicago and New York, Macy’s in New York and other places in Chicago and Atlanta. Appellant had charged as much as $150 for a pair of shoes, $15 for a pair of hose and $5 for a bar of soap. Appellee says that he would not be aware of the charges until he was threatened with a suit.

Appellee also testified that the hostility between Dean and appellant had grown to such an extent that Dean had lived with his grandmother for the last two years.

Appellee readily admits that after the December, 1969, separation a reconciliation was attempted. However, he says that it was on condition that appellant would improve her attitude toward their son Dean and his mother and that she would stop her extravagant spending. Admittedly, during the period from April, 1970, to March, 1971, the appellee maintained the home place, and appellant lived in a rented apartment. Appellee sometimes spent the night with appellant at the apartment and took her to Memphis with him on some occasions. Appellee says that all efforts toward reconciliation broke off when the appellant surreptitiously forged his name to the title of a 1966 Cadillac and a 1967 Grand Prix and traded them in on a 1971 Grand Prix for herself.

Appellant’s explanation of the cooking was that their son, during his last illness, could not stand the smell of cooking. At that time they started eating out and they continued to eat out with the appellee’s acquiescence. Her explanation of the incident at the office-when she hit appellee’s mother was that she was acting in self-defense. The incident in Joe Madey’s office occurred because she was talking to appellee on the telephone and he hung up on her. As a result she went looking for him and found him in Mr. Madey’s office. She says the incident with Gilbert Leigh occurred because appellee was wining and dining his friends while she was hungry. She does not deny getting the pistol after the ministers but says it was late at night. Her testimony was that she was no more extravagant than appellee — i.e., “He earns a good, great deal of money, and we spend a great deal of money.”

We find no merit in the appellant’s argument that the evidence is insufficient to sustain the chancellor’s award of a divorce nor in the contention that such conduct was condoned.

It is settled law that condonation of past matrimonial offenses is impliedly conditioned upon the future good behavior of the offending spouse, Longinotti v. Longinotti, 169 Ark. 1001, 277 S.W. 41 (1925). Moreover, the forging of titles to two automobiles on a trade for a new one without consent of the other spouse would cause some disharmony in most marriages.

Appellant’s contention that appellee came into court with unclean hands has reference to a proffer of proof made with reference to appellee’s conduct with one June Laney following the March, 1971, separation. The trial court sustained objections to all such testimony on the basis that appellant had not alleged adultery. Appellant does not here argue that the court erred in sustaining the objection to such testimony but merely argues her case as if the testimony had been admitted and considered by the court. The record also shows that the trial commenced March 16, 1972, and was recessed to April 18th. Some testimony was heard and trial was recessed to July 27th. Another recess was granted until August 9th, when the trial was concluded. During all of that time the appellant did not make a request to amend her pleadings. Consequently, in view of the arguments made here, we must consider that the testimony is not before the court and that any error the trial court may have committed in sustaining objections to the testimony is waived.

In the alternative appellant has asked that we increase the $250 per month alimony and that we order a division of the property held by an estate of the entirety. There is a dispute in the testimony as to ,the appellee’s earnings. He and his accountant fixed his last year’s earnings at $10,118.31. Appellant claims that appellee’s income was $42,620.96 at one place and from another formula and at another place in her brief she fixes his income at $24,-968.31. The chancellor in fixing alimony at $250 per month may have accepted the $10,118.31 which would place the alimony at about 30% of appellee’s earnings. Then too the chancellor in fixing the amount of alimony had the benefit of the long drawn out trial. At the time of the temporary order appellant’s earnings were $300 per month, but shortly after the entry of the temporary order allowing $530 per month support appellant lost her employment and thereafter stated that she did not look for work. Thereafter, appellant violated the trial court’s temporary order by making additional charges to appellee and invading appellee’s home and selling the air-conditioners therefrom. Under the circumstances we cannot say that the chancellor abused his discretion in making an award of $250.

Admittedly appellant did not ask in the trial court for a division of the property held by an estate of the entirety. In affirming the decree of the trial court, however, we do so without prejudice to appellant’s right to apply to the trial court for a division.

Affirmed with all costs of the record and briefs being charged to appellee and appellant being responsible for her own counsel fees.

Affirmed.

Fogleman and Holt, JJ., dissent in part.

John A. Fogleman, Justice,

dissenting. I dissent from that portion of the opinion and disposition of this case by which the allowance of only $250 per month alimony is affirmed. I do not see any appropriate basis for a reduction from the $550 allowed as alimony pendente lite and would allow at least that amount. I would also allow appellant some amount for attorney’s fees.

Appellee in answering interrogatories and in his testimony stated both his gross and his net income as $15,000 per year. His 1970 income tax returns showed an adjusted net income of $15,846.35. His accountant testified that his 1971 gross income was $42,620.96, and his “net business income” was $10,118.51, and that Reagan’s testimony did not agree with the accountant’s records. In arriving at the business income, an item of $14,850 paid for a covenant not to compete, from an insurance agency acquired by appellee, was treated as a wholly deductible item in arriving at the accountant’s “net business income,” described as a method to avoid the “tax bite” otherwise involved. In other words, Reagan is paying for the insurance agency through this device and actually deducting the amount paid to the seller from his income. It is wholly unrealistic to treat his net income, for the purposes of this action, as $10,118.51. It should be treated at least as $25,000 annually.

There is no real evidence that appellant is employable. The only testimony on the subject indicates that she is not. She clearly has health problems. Her apartment rent is $185 per month. Her needs, as she related them, included $100 per month for drugs, a clothing allowance of $75 and utilities amounting to $65. These items were not seriously controverted, even though other estimates by her may have been extravagant. The scale of living of both parties had undoubtedly been high.

All circumstances considered, the $550 allowance seems modest.

I am authorized to state that Mr. Justice Holt joins in this dissent.


author: Conley Byrd, Justice. Carleton Harris, Chief Justice,

text:
    Inez SIMS and Ruby HEFNER v. Faber WILSON and Pearl WILSON
    73-114
    501 S.W. 2d 214
    Opinion delivered November 5, 1973
    [Rehearing denied December 10, 1973.]

      Guy H. Jones, Phil Stratton ér Guy Jones Jr., tor appellants.

      Hartje ér Hartje, by: Geo. F. Hartje Jr., for appel-lees.
   Conley Byrd, Justice.

Appellants Inez Sims and Ruby Hefner appeal from a decree refusing reformation or recission of a deed to them from appellees Faber Wilson and his wife Pearl Wilson. Appellants contend that the trial court erred in overruling a demurrer to the third party complaint against their husbands and in holding that the proof was not sufficiently clear and convincing to order reformation.

The record shows that appellees ran a roofing business adjacent to their home. The property, including the home, fronted 291 feet on Tyler Street in Conway. There was a circle drive for the business and the property behind the dwelling. The negotiations for the purchase of the property by appellants were carried out by their husbands William O. Sims and Opie Hefner. In reaching the terms for the purchase of the property all parties agree that there was a metal tab in the driveway and that it was understood that the parties would share the costs of a partition fence to the rear of the building. The deed conveyed all but the east 90 feet. Admittedly, the description in the deed leaves from 2.7 to 2.8 feet of the business building on the Wilson 90 feet of the property.

Mr. Wilson says that the property line was discussed before the sale and that he placed marks on the building and pointed them out to Mr. Hefner before the sale. Shortly after the conveyance and before the appellants started their remodeling, the appellants caused a survey to be made. The survey in fixing the western boundary did so in accordance with the metal tab in the driveway. Wilson also caused a fence to be erected along the common boundary in back of the building before appellants started their remodeling, and the appellants, upon completion of the fence, paid their half of the costs thereof.

George Lachowsky, a surveyor, fixed the boundary in accordance with the metal tab in the driveway and along the fence line where it joined the building.

William O. Sims testified that it was mutually understood that the driveway would be shared and that the property included everything from the corner of the building west. Mr. Sims admits that the stake or metal tab was viewed by the parties and that the first survey was made after the sale and before the fence was put up. He also admits that the partnership fence was put up before appellants moved in and occupied the building.

Opie Hefner testified that they were buying from the east end of the building west. He saw the metal tabs in the driveway but does not remember what was said about the metal tabs. He also saw the location of the partnership fence when it was finished but made no complaint.

The record is rather conclusive that this litigation was not commenced until after Wilson erected an elec- • trie power pole at the location of the metal tab and strung a temporary fence so as to prevent the use of the circle drive by appellants.

Appellants admit that one seeking to reform or rescind a deed is put to the task of proving his case with clear, cogent and convincing evidence. Here the proof shows: that the appellants viewed the metal tab before the purchase; that they caused a survey to be made; that the partnership fence was built before they remodeled the buildings in accordance with Wilson’s understanding of the location of the boundary; and that appellants paid for their half of the cost of construction without making complaint of the location thereof. Under the circumstances we cannot say that appellants have sustained their burden of proof by clear, cogent and convincing evidence.

In arguing that the trial court erred in not sustaining the demurrer to the Wilsons’ cross-complaint against appellants’ husbands, appellants contend that reversible error was committed because the husbands’ testimony as witnesses would be entitled to more weight than as parties. Even if we should agree with appellants still the alleged error would be harmless here. When we give full credit to testimony of the husbands who negotiated on behalf of their wives and to the fact that one does not ordinarily purchase property when the improvements are located partly on and partly off the property, still such evidence does not become clear and convincing when it is viewed in the light of the parties subsequent conduct— i.e., having the property surveyed and participating in the erection of the partnership fence.

Affirmed.

Harris, C.J., dissents.

Carleton Harris, Chief Justice,

dissenting. I cannot agree with the conclusions reached by the majority. In the first place, in my view, the chancellor decided the case on an erroneous premise. He stated, “The cases seem to hold that the proof required for reformation must be such that there is no possibility of error [my emphasis] in the decision,” and cited the case of Mitchell v. Martindill, 209 Ark. 66, 189 S.W. 2d 662. The language referred to is a quote from the earlier case of Sewell v. Umsted, 169 Ark. 1102, 278 S.W. 36, and reads:

“The authorities all required that the parol evidence of the mistake, and of the alleged modification, must be most clear and convincing, ... or else the mistake must be admitted by the opposite party; the resulting proof must be established beyond a reasonable doubt. Courts of equity do not grant the high remedy of reformation upon a probability, nor even upon a mere preponderance of the evidence, but only upon a certainty of the error.”

To me, this is no more than saying that the evidence must be clear, cogent, and convincing, which is what practically all of our cases hold, though some use the reasonable doubt language. Certainly, I do not agree that the case can be construed as saying that the proof must be such that there is no possibility of error.

In my view, the evidence was clear, cogent, and convincing, and I do not depend upon the fact that two witnesses testified as to the transaction on behalf of appellants, while only appellee Faber Wilson testified on behalf of appellees. Of course, this portion of the evidence was a “swearing match,” Faber Wilson testifying that he told Sims and Hefner that the east line of the property did not clear the building, and Sims and Hefner testifying that Wilson did not tell them that the east line severed a portion of the building. Therefore, considering this testimony a “stand-off”, I think the balance of the evidence, and the conclusions to be drawn therefrom bring appellants’ evidence to the required status of being clear, cogent, and convincing. The testimony is undisputed that appellants had full use of the entire building, painted the exterior after acquiring title in August, 1970, and had the interior renovated and adapted to their use as a day care center; also enjoying the full use of the circle drive until subsequently halted by Wilson. I consider it incredible that one would purchase land which conveyed only a portion of a building situated on the premises, and which was to be used daily. Not only that, I consider it so unusual, that I believe a prudent seller, who was attempting to reserve a portion of a building, would spell out such reservation clearly and unequivocally. That, of course, was not done. Of even more significance to me is the fact that appellees, approximately a month after this litigation was instituted by appellants, conveyed the residue of their property constituting a homesite to Dr. James Smith Garrison, subsequently made a party defendant by appellants. The warranty deed from the Wilsons to Garrison excluded the area in dispute in this litigation, but on the same day, the Wilsons gave Dr. Garrison a quitclaim deed to the disputed area. It is significant to me that the Wilsons were unwilling to warrant the title to the disputed property, and even more interesting is the reason Mr. Wilson gave for giving two deeds. He said he "didn’t want Doc Garrison involved in it, and that’s the reason I gave it.” I suggest that a more likely reason would be that he felt that he did not have title to the disputed area, and not wanting to become liable to Garrison, executed only a quitclaim deed. In my judgment, the decree should be reversed.


author: Conley Byrd, Justice. John A. Fogleman, Justice,

text:
    Jerry MOORE, Special Administrator of the Estate of Michael MOORE, Deceased v. Johnny RYE
    73-119
    500 S.W. 2d 751
    Opinion delivered November 5, 1973

      Bon McCourtney & Associates, by: Troy L. Henry, for appellant.

      Barrett, Wheatley, Smith <k Deacon, for appellee.
   Conley Byrd, Justice.

This is á wrongful death action brought by appellant Jerry Moore, Special Administrator of the estate of Michael Moore, deceased, against ap-pellee Johnny Rye. The jury found the issues in favor of Rye, and Moore appeals on the ground that the trial court erred in giving and denying the instructions hereinafter discussed and in overruling objections to testimony elicited on cross-examination.

The record shows that West Second Street in Marked Tree at the intersection with Oak Street is straight and without obstructions along side the road to block the vision of a driver. There are six homes on the east side facing West Second, and on the west side there is one home facing West Second. There are other homes just off Second Street on, Oak Street.

Mr. Rye states that he was traveling north on West Second Street and that when he- was 50 yards from the house on the west side, he noticed some people standing in the front of the porch. At the same time he also noticed some people sitting on the porch of the Moore house on the east side. He admittedly waved to the people on the west side and after they waved back looked straight ahead down West Second Street. He neither saw the’ IB month old Michael Moore standing in the road, nor his mother racing across the yard toward him and did not know anything had happened until he heard a scream and then a thud. Mr. Rye had previously seen children about 150 yards from the houses where the collision occurred.

Mrs. Phyllis Moore states that when she saw the pickup truck driven by Rye, the decedent was by the ditch. She hollered at the decedent, but by the time she got to the ditch the decedent had climbed up at the side of the road and was struck as he stood up.

Mrs. Mary Lassiter who lived at the house where Gene Herrod was standing testified that as Mr. Rye waved, she saw the Moore baby and hollered, “Watch that baby.” In addition to the Moore’s three children, Mrs. Lassiter had a thirteen month old child, and another girl living on West Second had three or four children all below school age.

POINT NO. 1. Over the objection of appellant the trial court gave AMI 604 on unavoidable accident. To sustain the trial court appellee argues that because a child of such tender years is not chargeable with negligence and because there was evidence that the mother, not a party, may have been negligent, this instruction was proper. We disagree, and for the reasons set forth in Houston v. Adams, 239 Ark. 346, 389 S.W. 2d 872 (1965), we hold that the trial court committed reversible error in giving the instruction. See also, Connor v. Cooper, 245 Ark. 386, 432 S.W. 2d 761 (1968).

POINT NO. 2. The trial court refused to instruct the jury, in accordance with AMI 909, as follows:

“Streets and highways are available for the use of both pedestrians and motorists. The driver of a motor vehicle must anticipate the presence of pedestrians on streets and highways and use ordinary care to avoid injuring them.”

Appellee argues that the trial court did not abuse its discretion in refusing this instruction because a thirteen months old baby is not a pedestrian. We hold that the trial court erred in refusing the instruction. Nothing is more common or accepted as a way of American life than the visiting that takes place between neighbors living along and across the streets in the many cities of this nation.

POINT NO. 3. The proof here shows that the West Second Street was a busy industrial street with a few remaining residences on both sides of the street. Furthermore, the appellee admittedly knew that children habitually played within 150 yards of the point of collision. Under the circumstances we hold that the trial court erred in refusing to instruct the jury, in accordance with the second paragraph of subsection “B” of AMI 901, to the effect that “when the driver sees danger ahead, or it is reasonably apparent if he is keeping a proper lookout then he is required to use ordinary care to have his vehicle under such control as to be able to check its speed or stop it, if necessary, to avoid damage to himself or others.” The proof here also shows that both Mary Lassiter and the mother tried to warn appellee of the presence of the baby before it was struck.

POINT NO. 4. The trial court refused to give AMI 605 which provides:

“A person who knows or reasonably should know, that a child may be affected by .his act, is required to anticipate the ordinary behavior of children and to use care commensurate with any danger reasonably to be anticipated under the circumstances. A failure to use this degree of care is negligence.”

As we understand the record, there is proof that tends to show no reason why appellee did not see the child crawling in the slight ditch along the street before the child stood up on the edge thereof and was struck by appellee’s vehicle. Furthermore, since appellee’s attention was attracted to the people on the west side of the street, one could logically expect the same conduct to attract the attemion of a child living in the homes on the east side of the same street. Under the circumstances we hold that the instruction should have been given.

POINT NO. 5. Appellant on direct had testified that he and the child’s mother had been separated some four or five months at the time of the accident. On cross-examination he was interrogated, over objections, with reference to the amount of child support he had contributed during that time and as to the amount of fines he had paid for driving while intoxicated and public drunkeness during the same time. When we consider that to recover for mental anguish one must show that he suffered more than normal grief, we cannot say that the trial court abused its discretion in permitting the evidence to go to the jury. The evidence as to the support of a child or the lack of support would certainly be relevant as to appellant’s affection and attitude toward the child during his life time. The testimony as to the amount of fines paid for driving while intoxicated and for public drunkeness would show a source of funds or the ability to raise funds that were not used for support.

The trial court also permitted appellant to be interrogated relative to a divorce suit filed by the mother of the child against him and the service of the summons on him that day. This we hold was error. We fail to see how the filing of the divorce action could have any relevancy to the issue of whether appellant suffered mental anguish as a result of the death of his child.

Reversed and remanded.

Fogleman, J., dissents in part.

John A. Fogleman, Justice,

dissenting in part, concurring in part. My dissent is directed to one point only. It seems to me that this case presents one of those exceptional cases, in which the unavoidable accident instruction should be given. It was recognized in Houston v. Adams, 239 Ark. 346, 389 S.W. 2d 872, that there are such cases.

There is testimony from which a jury would be warranted in finding that this unfortunate incident was an unanticipated and unexpected occurrence which no reasonable person would have foreseen and for which no one is to blame. This, then, would be an unavoidable accident. St. Louis-San Francisco Ry. Co. v. Bryan, 195 Ark. 350, 112 S.W. 2d 641. Because the infant could not be guilty of negligence, the occurrence could well have been found to have occurred without negligence on the part of either party. This, in my opinion, would bring the facts within the exceptional circumstances which would make the occurrence an unavoidable accident. Caldwell v. McLeod, 235 Ark. 799, 362 S.W. 2d 436. The instruction should be given when there is evidence tending to prove that the injury resulted from some cause other than the negligence of the parties. Elmore v. Dillard, 227 Ark. 260, 298 S.W. 2d 338; Rhoden v. Lovelady, 239 Ark. 1015, 395 S.W. 2d 756. If a case, in which the sole proximate cause is the unpredictable and unanticipated action of a child, does not fall into the category of an unavoidable accident, then I doubt that any case can.

Certainly the giving of the instruction would not be error, even if it could be said that its refusal would not have been error. I concur in the opinion as to all other points.


author: Frank Holt, Justice.

text:
    Sharon Kay JONES v. AMERICAN PIONEER LIFE INSURANCE COMPANY
    73-120
    500 S.W. 2d 748
    Opinion delivered November 5, 1973

      Tom Allen and Murphy, Arnold ir Blair, by: H. David Blair, for appellant.

      Davidson, Plastiras & Horne, Ltd., by: Allan W. Horne, for appellee.
   Frank Holt, Justice.

Appellant is the beneficiary of a life insurance policy issued by appellee to her former husband who was accidentally killed. The appellee refused payment on the basis that the policy had lapsed for nonpayment of premium. Appellant contended in the trial court and now on appeal that the policy had not lapsed because the appellee had accepted a check as absolute payment for the premium due and, in the alternative, the appellee had waived any forfeiture and by reason of its conduct should be estopped from claiming a forfeiture. The issues were submitted to the trial court, sitting as a jury, upon the pleadings, request for admissions and the answers, exhibits, including the policy, and a stipulation of facts. The trial court found the policy had lapsed for nonpayment of premiums. We affirm the trial court.

The $15.03 monthly premium on the $10,000 policy (accidental death) was to be paid on the fifth of each month by a pre-authorized or sight draft. A thirty-one day grace period was provided. The policy was in effect approximately one year when the March, 1971, sight draft was returned on March 15 because of insufficient funds. The appellee so notified the insured. A March 17, 1971, sight draft was then issued and it was also returned due to insufficient funds. On April 5 the thirty-one day grace period for the March payment expired. On that date the appellee insurance company drew a draft for the April monthly payment which was returned on April 8 because of insufficient funds. On that date the appellee insurer forwarded the insured’s personal check for the March premium for collection to the bank with instructions to hold it for five days and if not paid to return the check. Three days later the insured was accidentally killed. The check was never paid and at no time during the month did the insured ever have sufficient funds in the bank to pay his personal check. Following the death of the insured, payment for the March premium was mailed on April 14, 1971, by a third party. On April 15 the insurer addressed .a letter to the insured not yet knowing of his accidental death, advising that he should forward a money order for the March and April premiums if he desired to continue his policy in force. On April 23, having learned of the insured’s demise, the appellee refused payment on the policy and returned the premium paid by the third party.

Appellant first contends for reversal that “appellee accepted the insured’s check as payment of the premium for the relevant period, and therefore, the trial court erred in holding the policy to have been forfeited for nonpayment of premiums.” The thrust of appellant’s argument, as we understand it, is based upon the assertion that the March draft was accepted as absolute and not conditional payment of the premium. In support of this contention, appellant makes the argument that appellee’s failure to expressly condition the receipt of the drafts, the failure to explain the terms of any agreement by which the appellee drew the drafts, the invitation to pay by draft, and the repeated collection attempts are consistent with the intent of the appellee insurer to regard the policy as being continued in force upon mere receipt of the drafts. Appellant asserts this is true despite the fact that the policy provides the insurance coverage is automatically terminated upon the expiration of the grace period for the payment of the monthly premium, subject to reinstatement, and that no liability exists except for injury sustained following reinstatement. The reinstatement provision is in accord with Ark. Stat. Ann. § 66-3607 (Repl. 1966).

The burden of proof on these asserted factors was upon the appellant to demonstrate and convince the trier of the facts that the pre-authorized or March sight draft or insured’s personal check was intended as an absolute payment. The law is well settled that receiving a check as payment for an insurance policy is conditional and will not prevent a forfeiture of the policy for nonpayment of the premium. Nation Life Co. v. Brennecke, 195 Ark. 1088, 115 S.W. 2d 855 (1938). Of course, if the insurance company’s acts indicate that receipt of the check is payment then such will justify a finding that the insurance company is so bound. Brennecke, supra, and National Fire Insurance v. Wright, 163 Ark. 42, 257 S.W. 753 (1924). We have held that when the insured attempted to pay the premium the day before the grace period expired the policy lapsed because the check was dishonored when presented for payment five days later. Webb v. The Manhattan Life Insurance Company, 220 Ark. 478, 248 S.W. 2d 385 (1952). In accord is Hare v. Illinois Bankers Life Assurance Company, 199 Ark. 27, 132 S.W. 2d 824 (1939), where the insured failed to pay his premium within the grace period and subsequent thereto sent a check to his insurance company which was dishonored and the policy was never reinstated. Appellant says that a “check or draft may itself constitute payment of the premium and whether it does so depends primarily upon the manifest intent of the insurer.” In the case at bar, the sight drafts for the March and April premiums were dishonored and the insured’s personal check was never paid even though the bank was instructed to hold it for five days for collection. We find no merit in appellant’s contention that the court erred in not finding the “insured’s check” was accepted and constituted payment of the premium. There is substantial evidence to support the contrary finding made by the court.

Appellant next asserts for reversal that “appellee’s conduct was totally inconsistent with an intent to forfeit policy until it learned of insured’s death and therefore should be deemed to have waived any right to forfeit policy.” The terms of the policy are clear that the policy lapses if the monthly premium is not paid within the thirty-one day grace period. To continue the policy the appellee’s activities must be inconsistent with the lapse provision. Therefore, we have held that where the insurance company repeatedly accepted premiums ranging in tardiness from two to seventeen days, it would justify finding a waiver of the grace period until notice was given that such favor would no longer be extended. American Life Ins. Co. v. Claybough, 227 Ark. 946, 302 S.W. 2d 545 (1957), and in accord, Universal Life Ins. Co. v. Bryant, 196 Ark. 1143, 121 S.W. 2d 108 (1938). In the case at bar the insurance company had on one occasion accepted a premium payment (January, 1971) one day after the grace period. Appellant insists that the one tardy payment (another one previously occurred during the grace period), together with the other activities of or transactions with the insurer previously discussed, is so inconsistent with the forfeiture provision of the policy as to constitute a waiver. Even so, this presented a factual issue for the fact finder.

Appellant finally contends that “appellee represented to insured that he had a period of five (5) additional days to pay premium, within which five days insured was killed and therefore appellee should be estopped from forfeiting policy until expiration of this period.” The letter to the insured’s bank, following nonpayment of the March and April sight drafts, stated:

We are enclosing for collection a check in the amount of $15.03 drawn on your bank and signed by Dale Williams.
We are advising Mr. Williams that we have mailed the check direct to your bank for collection. Would you please hold it for five days and if Mr. Williams fails to pay, return to us?

The letter indicated that a copy was being sent to the insured. Certainly the court could draw the inference that the check was to be held as a conditional payment and nothing in the language of the letter indicated that the policy was absolutely or unequivocally considered to be in force and effect and extended for five days. Further, there is no evidence that the deceased received a copy of the letter or relied upon it.

On appeal we review the evidence and all deducible inferences therefrom in the light most favorable to the appellee and affirm the fact finder if there is any supportive substantial evidence. Fanning v. Hembree Oil Co., 245 Ark. 825, 434 S.W. 2d 822 (1968). When we consider the facts and circumstances, together with the policy provision and other exhibits, we cannot say there is no substantial evidence to support the findings of the trial court.

Affirmed.


author: Carleton Harris, Chief Justice.

text:
    JEFFERSON COOPERATIVE GIN, Inc. v. Dr. Max MILAM, Director of the Department of Finance & Administration for the State of Arkansas (Commissioner of Revenues)
    73-125
    500 S.W. 2d 932
    Opinion delivered November 13, 1973

      Smith, Williams, Friday, Eldredge 4? Clark, by: Byron Eiseman Jr. and Lewis H. Mathis, and Chowning, Mitchell ir Hamilton, by: Robert C. Lowry, for appellant.

      Walter Skelton, Karl Daly Glass Jr., John F. Gwatney Jr., Alexander W. Nisbet, Dewey Moore Jr., and J. R. Nash, for appellee.
   Carleton Harris, Chief Justice.

Appellant, Jefferson Cooperative Gin, Inc., is an agricultural cooperative organized under the provisions of Act 153 of 1939 (Chapter 10, Ark. Stat. Ann. §§ 77-1001 — 77-1025 [Repl. 1957 and Supp. 1971]). Section 77-1001 inter alia provides that associations organized under the act shall be deemed to be non-profit, not being organized for the purpose of making profits for themselves or the members, as proprietors, but only for their members, as patrons and employees of the association. Section 77-1023 provides that each association organized under the act shall pay an annual license fee of ten dollars to the Secretary of State, and “shall be exempt from all privilege, franchise, license or other taxes, but not from taxes upon its real estate and personal property.” In 1969, the General Assembly enacted Act 311 amending the section just mentioned, and providing that each association shall pay an annual license fee of ten dollars to the Secretary of State, “and in addition shall be subject to the Arkansas Gross Receipts Tax Act of 1941 (§§ 84-1901 — 84-1929), as amended, and the Arkansas Compensating Tax Act of 1949 (§§ 84-3101 — 84-3128), as amended, and all other taxes levied in this State, except that any association which immediately distributes at the close of each business year all surpluses by cash or certificate to its members shall not be subject to the Arkansas Income Tax Act (§ 84-2001 et seq.) with respect to such income. All such associations shall be subject to taxes upon its real estate and personal property.”

Following enactment of this legislation, the Department of Finance and Administration levied a corporate franchise tax in the amount of $222.79 plus penalties upon appellant; the tax was paid under protest and thereafter appellant sought relief by instituting suit in the Pulaski County Chancery Court, praying that the court declare the assessment and collection of said tax to be illegal, and asking that the court declare it (Jefferson) entitled to a refund of said tax. The matter was heard upon a stipulation between the parties, it being inter alia stipulated that appellant is an Arkansas agricultural cooperative association, organized under the aforementioned act and that it had exhausted its administrative remedies before instituting suit. It was also stipulated that the question before the court was whether Act 311 of 1969, or any other statute of this state, authorized the assessment and imposition of the corporate franchise tax on agricultural marketing associations organized under Act 153 of 1939, as amended by Act 311 of 1969. On trial, the court entered its decree holding that the assessment and collection of franchise taxes against appellant was legal and valid; appellant’s complaint was dismissed, and judgment rendered for appellee for the taxes as collected, together with costs. From the decree so entered, appellant brings this appeal.

At the outset, it should be borne in mind that certain basic differences exist between an agricultural cooperative and a general corporation. It has already been pointed out that under Ark. Stat. Ann. § 77-1001, agricultural cooperatives (although not eleemosynary) are deemed to be non-profit, existing solely for the purpose of making a profit for the members in their individual capacities as producers. Chapter 18 (§§ 84-1833 — 84-1842), entitled “Corporate Franchise Taxes”, passed as Act 304 in 1953, deals with the franchise tax for profit making corporations. However, the act makes clear that non-profit associations are not included, § 84-1833 providing:

“The term ‘corporation,’ as used in this act (§§ 84-1833 — 84-1842), shall mean and include all corporations, domestic and foreign, active and inactive, organized or qualified to do business under the laws of the State of Arkansas permitting the doing of business for profit [our emphasis], and shall include all corporations operated by receivers and trustees of any court, and corporations which rent or lease their property to any person, firm or corporation.”

With this background, it is argued by the state that it is clear that the legislature, in enacting Act 311 of 1969, removed agricultural cooperatives from the franchise tax exemption. In construing the statute, the state points out that the primary rule is to ascertain and give effect to the intention of the law makers, and it is correctly stated that there are several aids in determining this intent. Appellee calls attention to the title of Act 311, as follows:

“AN ACT to Amend Section 24 of Act 153 of 1939 (Ark. Stats. [1947] Section 77-1023) to Subject Agricultural Cooperative Associations to All Taxes Now or Hereafter Imposed On Corporations; and for Other Purposes.”

Contemporaneous legislation passed during the same session is also mentioned, viz., Act 395 of 1969, whereby the exemption for rural telephone cooperatives from the sales tax and use tax was specifically removed; also Act 119 of 1969 removed the exemption for electric cooperative corporations from the sales tax and the use tax. It is demonstrated, says appellee, that in the last mentioned acts, exemptions were removed for specific taxes only, but that in the act, now under discussion, by adding the words “and all other taxes levied in this State,” the General Assembly made it clear that it had in mind subjecting agricultural cooperatives to additional taxes besides those specifically mentioned.

However, let us bear in mind that there is also a cardinal rule which must be observed in construing taxing legislation. In Commissioner of Revenues v. Arkansas State Highway Commission, 232 Ark. 255, 337 S.W. 2d 665, we said, quoting an earlier case:

“It is the general rule that a tax cannot be imposed except by express words indicating that purpose. The intention of the Legislature is to be gathered from a consideration of the entire act, and where there is ambiguity or doubt it must be resolved in favor of the taxpayer, and against the taxing power.”

See also Cook, Commissioner of Revenues v. Ayers, 214 Ark. 308, 215 S.W. 2d 705, and cases cited therein.

The franchise tax was levied on corporations doing business for profit, but none of the acts mentioned levy a franchise tax on non-profit corporations, or associations. Section 84-1833, relating to general corporations, provides for the payment of a franchise tax by those corporations “permitting the doing of business for profit” and this language clearly does not include non-profit corporations, and we have so held. In State v. Bankers’ and Planters’ Mutual Insurance Association, 152 Ark. 182, 238 S.W. 17, the state attempted to impose the franchise tax upon a mutual insurance association that paid death benefits to its members. In finding the state’s position to be unsound, this court held that the insurance company was not liable for the tax because it was not doing business for profit, stating:

“The term, ‘doing business for profit,’ as used in the statute, refers to the operation of the corporation itself — whether it is doing business for profit — and has no reference to the remuneration received by its officers.
“In order to impose liability for tax it must be found that the character of business sought to be taxed falls, either expressly or by fair implication, within the language used. It does not appear to us that the language of the statute includes a corporation doing business according to the method pursued by appellee.”

This opinion construed Act 122 of 1913, the corporation franchise tax act in effect at that time, and in 1953, the General Assembly passed Act 304 of 1953, the present corporation franchise tax act, but the language as affecting non-profit corpora dons is not substantially different, i.e., neither act subjects a non-profit corporation to the franchise tax. We have held that the legislature is presumed, in enacting a statute, to have had in mind court decisions pertaining to the subject legislated on and to have acted with reference thereto, Terral v. Terral, Admx., 212 Ark. 221, 205 S.W. 2d 198; accordingly, under the presumption of legislative awareness, the General Assembly is presumed, in enacting Act 311 of 1969, to have acted with full knowledge that this court had construed the franchise tax act as being inapplicable to non-profit corporations. Ark. Stat. Ann. § 77-1018 (a part of the agricultural cooperative associations act) provides that the provisions of the general corporation laws of the State apply to the associations organized under the act except where such provisions are in conflict with or inconsistent with the express provisions of §§ 77-1001 —77-1025. As already pointed out, this act declared associations organized under its authority to be non-profit. This provision has not been changed by any legislation.

Summarizing, the language of Act 311 of 1969 “and all other taxes levied in this State” certainly does not itself levy a tax; as herein pointed out, since there is no act that, by express words, indicates the intent to levy such a tax on agricultural cooperatives, and ambiguity or doubt being resolved in favor of the taxpayer, we hold that appellant is not liable for the tax.

Reversed.

        Scurlock v. City of Springdale, 224 Ark. 408, 273 S.W. 2d 551.