text:
    ARKANSAS STATE HIGHWAY COMMISSION v. FIRST PYRAMID LIFE INSURANCE COMPANY OF AMERICA et al
    78-277
    579 S.W. 2d 587
    Opinion delivered April 2, 1979
    (In Banc)
    [Rehearing denied May 21, 1979.]

      Thomas B. Keys and Kenneth R. Brock, for appellant.

      Spitzberg, Mitchell & Hays, by. John P. Gill, for appellees.
   Conley Byrd, Justice.

Appellant Arkansas State Highway Commission by eminent domain took 58.39 acres from three separate tracts of land, the title of which was held by appellee First Pyramid Life insurance Company of America, for construction of the East Belt Freeway where it connects with Í-40. Appellant deposited $44,960.00 as estimated just compensation at the time of the taking. Appraisal witnesses Jack Farris, James Larrison and Wesley Adams called on behalf of appellee testified to damages of $550,150, $640,950 and $495,000 respectively. For appellant Dave Roberts placed damages at $73,743 and William B. Putnam placed the damages at $46,945. The jury returned a verdict for $495,000. For reversal of the judgment entered on the jury’s verdict, appellants contend:

“I. The trial court erred in permitting Wesley Adams to be called as a witness by the appellees over appellant’s objection.
II. The trial court abused its discretion in allowing appellees to call Wesley Adams in rebuttal.
III. The trial court erred in admitting into evidence certain transactions between 1st Pyramid and Harris Cattle Company.
IV. The trial court erred in not striking the value testimony of appellee’s expert witness, Jack Farris, relating to his before value.
V. The trial court erred in not striking the before value testimony of appellee’s expert witness, James Larrison.
VI. The trial court erred in not granting a mistrial.
VII. The trial court erred in not allowing appellant’s Exhibit “D” and the testimony relative thereto into evidence.
VIII. The trial court erred in not permitting appellant to introduce its proffered Exhibit No. 11.”

POINT I. Appellant makes two contentions under this point — i.e.:

“(1) The trial court erred in allowing appellees to call Wesley Adams, an appraisal expert, as a witness in order to ascertain the amount of his appraisal, and
(2) The trial court erred in permitting appellee to bring out that Wesley Adams had been hired by appellant as an expert appraisal witness and the appellant was not calling him as a witness.”

Both questions were virtually answered in Arkansas State Highway Comm’n v. Witkowski, 257 Ark. 659, 519 S.W. 2d 743 (1975), wherein we cited Boyles v. Houston Lighting and Power Company, 464 S.W. 2d 359 (Tex. 1971), State ex rel State Highway Comm’n v. Texaco, Inc., (Mo. 1973) and Logan v. Chatham County, 113 Ga. App. 491, 148 S.E. 2d 471 (1966). Those cases hold that neither party to a condemnation case is bound by rejected opinions of expert witnesses employed by them to appraise property being condemned and cannot be prejudiced by the admission in evidence of rejected appraisals made at their instance. All of those cases also hold that testimony as to the original employment of the expert is not pertinent to the issue of just compensation and when admitted over the objection of the party who originally employed the expert the same constitutes prejudicial error requiring a new trial.

It follows that the trial court erred in permitting appellee to show that Wesley Adams had been employed by appellant to make an appraisal of the estimated just compensation due.

POINT II. In view of the fact that Adams if called must be called as a witness for the landowner, this alleged error is not apt to occur on a retrial.

POINTS III. and VII. The record shows that appellee in the purchase of the property from Harris Cattle Company had some kind of an agreement for the sharing of development costs with Rector, Phillips and Morse, Inc. The 1973 deed from Harris Cattle Company to appellee recites a consideration os $10,000 paid and the execution of a Vendor’s Lien Note in the amount of $2,000,765.30 with interest at 4%. The deed provided that the lien retained could be released upon any part of the property by the payment of $7,700.00 per acre. The Vendor’s Lien Note provided:

“VENDOR’S LIEN NOTE
$2,000,765.30 September 6, 1973
First Pyramid promises to pay Harris Cattle Company $2,000,765.30 with intersst at rate of 4% per annum. Principal sum due September 6, 1979. Interest due and payable March 6, 1975, and annually then after. Note is evidence of unpaid balance of purchase price for 260 acres and payment of note is secured by Vendor’s lien retained in deed between parties. Harris not entitled to obtain a judgment against First Pyramid in event of default — sole and exclusive remedy of Harris is to retain any payments previously made and require First Pyramid to reconvey the said land, or that part which they still have. Upon reconveyance it shall be by Warranty Deed free and clear of any liens. If upon default First Pyramid fails to reconvey upon written demand by Harris within 10 days, then Harris can obtain judgment plus 10% interest and attorney’s fees.”

Rudolph S. Del Donno, the Senior Vice-President of appellee in charge of investments, testified that appellee had laid out for improvements $1,425,000. That the North Little Rock Water Department, Plough Incorporated [The Maybelline Plant], North Little Rock Chamber of Commerce and Fifty For The Future had reimbursed appellee for $640,-318.00, leaving appellee’s unreimbursed improvement costs at $784,682.00. Other than for the lands involved in this litigation appellee according to the terms of the Vendor’s Lien Note had paid $57,000 on the principal. The witness was permitted to show by cancelled check that for the lands involved in the eminent domain action, appellee had paid to Harris Cattle Company at the rate of $7,700 per acre for a total of $448,500. Mr. Del Donno also stated that at the request of appellee’s counsel in a lawsuit in chancery court between appellee and Harris Cattle Company, he had executed a deed of the property back to Harris Cattle Company but he did not know whether the deed had been accepted.

Appellant to rebut the foregoing proof sought to call Allan W. Horne, a member of appellee’s board of directors and its legal counsel in the chancery court action between appellee and Harris Cattle Company, to show how appellee was attempting to extricate itself from any obligation on the Vendor’s Lien Note by trying to return the land to Harris Cattle Company. In its proffer of proof appellant elicited from Horne that appellee was not necessarily a volunteer in paying the $7,700 per acre to Harris Cattle Company for the 58.39 acres involved in this eminent domain action — i.e. the $448,500 check — but that the obligation arose because the Vendor’s Lien Note failed to make an exception in cases of eminent domain actions. However, the trial court excluded all of the testimony of Horne.

To support the action of the trial court in permitting appellee to show the price that it paid for the land, appellee relies upon Arkansas State Highway Commission v. Hubach, 257 Ark. 117, 514 S.W. 2d 386 (1974), where we stated:

“When a parcel of land is taken by eminent domain, the price which the owner paid for it when he acquired it is one of the most important pieces of evidence in determining its present value. However, this assumes that the sale was recent, was a voluntary transaction between parties each of whom was capable and desirous of protecting his own interest, and that no change in conditions or marked fluctuation in values has occurred since the sale. A price paid under such conditions is a circumstance which a prospective purchaser would seriously consider in determining what he himself should pay for the property. As evidence before a jury, it consumes little time in introduction and raises few collateral issues, so that every argument is in favor of its admissibility.”

Based upon the foregoing we agree with appellee that the trial court did not err in permitting appellee to show what it had paid for the land. It does not follow that the court was correct, in refusing to permit appellant to show through Horne, that appellee was attempting to extricate itself from the transaction. Rules 401 and 402 of the Uniform Rules of Evidence, Ark. Stat. Ann. § 28-1001 (Supp. 1977) provides:

“Rule 401. Definition of ‘Relevant evidence.’ — ‘Relevant evidence’ means evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.
Rule 402. Relevant evidence generally admissible — Irrelevant evidence inadmissible. — All relevant evidence is admissible, except as otherwise provided by statute or by these rules or by other rules applicable in the courts of this State. Evidence which is not relevant is not admissible.”

In view of the foregoing rules the appellant was certainly entitled to produce any evidence that it might have to show the Two Million Dollar transaction between appellee and Harris Cattle Company was a sick or sham transaction. Consequently, the trial court erred in refusing to admit the testimony of Horne.

POINT IV. Jack Farris, called as a real estate expert by appellee, testified that in determining that the fair market value of the property taken had a fair market value of $569,-425 he considered that the highest and best use of the property was for industrial purposes. Farris stated that he used the comparable sale approach in appraising the property. The first comparable sale he used was First Pyramid Life Insurance Company to Pulaski Equipment Company, 5 acres sold for $21,800 per acre. The second sale was First Pyramid Life to Kenneth Penebaker, one acre sold to Twin City Bank for $53,000. The third sale was First Pyramid to Mapco, an easement at $12,000 per acre. The fourth sale was Faulkner and Saterra to Southwestern Bell, eight acres at the corner of 1-40 and Highway 161 at $22,500 per acre. Farris also used the sale of Winrock Homes in 1976, next to the Southwestern Bell tract, at $12,148 per acre for 14.89 acres. On cross-examination Farris stated that he did not consider the Penebaker purchase (Twin City Bank) as comparable. He was not sure whether Mapco had the power of eminent domain. Neither did he know whether Southwestern Bell had the power of eminent domain for the eight acre tract.

At the conclusion of Farris’ testimony appellant moved “to strike the before value testimony ... and consequently the figure on just compensation ... on the grounds he has given no fair and reasonable basis for his value.” Appellant contends here that the sales used by Farris were either sales to a condemning authority or sales which were located near interchanges, small in size and in developed areas and consequently not comparable.

The trial court was not asked to exclude the Mapco and Southwestern Bell sales on the grounds now suggested and, consequently, committed no error. However, since the issue is likely to arise on a retrial^ we point out that sales to one having the right of eminent domain do not ordinarily fall in the category of voluntary sales in the ordinary course of business and, consequently, are not fair criteria of value for purposes of comparable sales in determining the just compensation due in eminent domain actions, Arkansas Power & Light Company v. Harper, 249 Ark. 606, 460 S.W. 2d 75 (1970). The party relying upon comparable sales to show estimated just compensation has the burden of proving that such sales are voluntary. May v. Dewey, 201 Va. 621, 112 S.E. 2d 838 (1960). As pointed out in Transwestern Pipeline Company v. O’Brian, 418 F. 2d 15 (5th Cir. 1969), the burden is a heavy one when the purchaser of the proposed comparable sale falls in the category of those possessing the power of eminent domain.

As to the second contention that the comparables used by Farris were located near interchanges, small in size and in developed areas, we cannot say from the record as abstracted that appellant demonstrated that Farris had no fair and reasonable basis for his value. As pointed out in Arkansas State Highway Commission v. Russell, 240 Ark. 21, 398 S.W. 2d 201 (1966), where the testimony shows only a weak or questionable basis for the opinion of the expert, the issue becomes one of credibility for the fact finder rather than a question of law for the court. Thus, the mere showing that an expert witness uses an eight and a fourteen acre tract as a comparable tract for appraising three parcels of property comprising 58.39 acres does not as a matter of law show that the witness has no fair or reasonable basis for his opinion.

POINT V. James Larrison, an expert witness for the landowner, testified that estimated just compensation for the three tracts involved in the taking would total $640,950. On cross-examination he testified that he considered the Plough sale, the Mack Truck five acre sale, the Winrock sale north of Protho Interchange and the Southwestern Bell sale just north of the Winrock sale. He also considered two sales in the Little Rock Port development, i.e., Reynolds Metal consisting of 17.62 acres and the 7 !4 acre Hershey sale. Larrison admitted that the demand for industrial sites between the period of 1973 to January, 1978, was stagnant all over Arkansas.

Following Larrison’s testimony, appellant moved to strike his before value testimony and, consequently, his figure of just compensation on the grounds that “he has given no fair and reasonable basis for his value testimony.” Appellant now contends that the sales used by Larrison were not comparable and that there was no competent testimony as to the value of the property condemned as industrial property.

We have searched appellant’s abstract of Larrison’s testimony and failed to find any statement by Larrison that he relied upon the enumerated sales as being comparable. So far as the abstract shows Larrison only considered the enumerated sales in arriving at his estimated just compensation. As pointed out in Arkansas State Highway Commission v. Johns, 236 Ark. 585, 367 S.W. 2d 436 (1963), the admissibility of the opinion of a real estate expert is not conditioned upon his stating facts upon which the opinion is based. Furthermore, once an expert has given his opinion, the burden shifts to the condemnor to demonstrate that the expert had no basis for his opinion. Consequently, we cannot say that the trial court erred in refusing to strike Larrison’s testimony.

Larrison’s statement that the demand in Arkansas for industrial sites was stagnant for five years prior to the taking, while detracting from the present value of the land for industrial sites, cannot be taken as a matter of law to mean that no land in Arkansas had a value for use as an industrial site.

POINT VI. In view of the action of the trial court in striking that portion of witness Byron Morse’s testimony with reference to the use of federal funds in the building of a highway interchange, we do not rule upon this contention as it is not apt to arise upon a new trial.

POINT VIII. Appellant’s proffered Exhibit /II is an aerial photograph made on the date that the eminent domain action was filed. Since the witness admitted that it was not a photograph of the lands taken by the appellant, we cannot say that the trial court abused its discretion in refusing to admit the photograph.

Reversed and remanded.

Fogleman, J., dissents in part.

John A. Fogleman, Justice,

dissenting in part. I agree that the judgment must be reversed because of the exclusion of the testimony of Allen Horne. I cannot agree, however, with the court’s holding as to the testimony of Wesley Adams.

The trial of any lawsuit should be a search for truth, not a “cat and mouse” game. This should especially be true in an eminent domain suit. It is a procedure for seeking a truth based on an idealistic concept, that of “just compensation” for “private property . . . taken, appropriated or damaged for public use.” Art. 2, § 22, Constitution of Arkansas. The application of this concept in a realistic way is essential to a government which puts more emphasis on the rights of the individual and on the concept of private property than on sovereign rights. Under the Constitution of Arkansas, great emphasis is put upon the rights of the individual by Art. 2. Specifically, in the context of this case, § 22 of that article expresses the philosophy of this state in seeking to balance the inequality inherent in a contest between the might of the sovereign and the relative impotence of its subject. Before the “State’s ancient right of eminent domain” is “conceded” by Sec. 23, this document pronounces in Sec. 22 that “[t]he right of private property is before and higher than any constitutional sanction.” That section goes further than most American constitutions in that it requires just compensation for damaging private property, as well as for its taking. The fundamental basis of the American system is the accentuation of the rights of the citizen-subject, accompanied by limitations on sovereign power.

In this case, the ultimate power of the sovereign is pitted against the private citizen-subject, who bears the burden of proving by a preponderance of the evidence the amount of “just compensation” due him for his property taken by the sovereign. The combatants in this contest are not equal. The Arkansas State Highway Commission is the state in these proceedings. Once we did not think so, especially where the power of eminent domain was exercised. Campbell v. Arkansas State Highway Com’n., 183 Ark. 780, 38 S.W. 2d 753. But later, the state’s sovereign immunity was extended to this commission. Arkansas State Highway Com’n. v. Dodge, 190 Ark. 131, 77 S.W. 2d 981. All the might of the sovereign became fully vested by Arkansas State Highway Com’n. v. Nelson Bros., 191 Ark. 629, 87 S.W. 2d 394, and has remained so continuously. It was extended to eminent domain actions by Arkansas State Highway Com’n. v. Kincannon, 193 Ark. 450, 100 S.W. 2d 969. The continuous emphasis placed upon the posture of the commission is illustrated in the following unbroken line of cases, some of which admittedly produced extremely harsh results by leaving the property owner to the grace of the sovereign, i.e., by “filing an administrative claim for such relief as the State may see fit to provide.” See Bryant v. Arkansas State Highway Com’n., 233 Ark. 41, 342 S.W. 2d 415 and the following cases: Arkansas State Highway Com’n. v. Partain, 193 Ark. 803, 103 S.W. 2d 53; Federal Land Bank of St. Louis v. State Highway Com’n., 194 Ark. 616, 108 S.W. 2d 1077; Arkansas State Highway Com’n. v. Bush, 195 Ark. 920, 114 S.W. 2d 1061; Arkansas State Highway Com’n. v. Palmer, 222 Ark. 603, 261 S.W. 2d 772; Arkansas State Highway Com’n. v. McNeil, 222 Ark. 643, 262 S.W. 2d 129; Roesler v. Denton, 239 Ark. 462, 390 S.W. 2d 98; Arkansas State Highway Com’n. v. Lasley, 239 Ark. 538, 390 S.W. 2d 443; Arkansas State Highway Com’n. v. Cunningham, 239 Ark. 890, 395 S.W. 2d 13; Arkansas State Highway Com’n. v. Flake, 254 Ark. 624, 495 S.W. 2d 855; Arkansas State Highway Com’n. v. Rice, 259 Ark. 190, 532 S.W. 2d 727; Tri-B Advertising, Inc. v. Arkansas State Highway Com’n., 260 Ark. 227, 539 S.W. 2d 430. Casting aside “due process” and “equal protection” arguments that might be advanced against barring inverse condemnation where the taker (or “damager”) is the Arkansas Highway Commission, via the dilution of Art. 2, § 22 by making Art. 5, § 20 superior, the appellant in this case is the complete sovereign in its field. That sovereignty has been more firmly established since, in the wisdom of the people of Arkansas, the ultimate sovereign (see Art. 2, § 1, Constitution of Arkansas), Amendment 42 was adopted.

Thus, when the property was taken, the appellee bore the burden of showing, to the satisfaction of a jury, by a preponderance of the evidence, the amount by which it would be justly compensated. A preponderance of the evidence is another concept that is more susceptible to perception than definition. We spoke of it in Titan Oil & Gas Co. v. Shipley, 257 Ark. 278, 517 S.W. 2d 210. There we said:

The weight to be given evidence depends upon its effect in inducing belief. Romines v. Brumfield, 199 Ark. 1066, 136 S.W. 2d 1023. Where evidence is in conflict, that which preponderates is the evidence entitled to the greater weight in respect to credibility. Missouri Pacific Railroad Co. v. Hancock, 195 Ark. 414, 113 S.W. 2d 489. There is a preponderance of the evidence only when there is a preponderance of all reasonable inferences that might be drawn to prove the principal facts sought to be established, sufficient to outweigh all other contrary inferences. Smith v. Magnet Cove Barium Corp., [212 Ark. 491, 206 S.W. 2d 442].

In Smith v. Magnet Cove Barium Corp., supra, we had more to say on the concept. Omitting that portion of the language upon which we relied in Titan, we said:

*** The term does not mean preponderance in amount, but implies an overbalancing in weight. United States v. Mancini, D.C. Pa., 29 F. Supp. 44-5. ***
The words “weight,” “credibility,” “overbalancing,” “degree,” “force,” “tipping of the scales,” and others of similar connotation, have been used by opinion writers so long that one would suppose their inclusion in “preponderance of the evidence” gives to the term a fixed, inflexible meaning, applicable alike to all cases where the rule invokes the use. Much must be left to the Judge who considers the evidence. Nature of the testimony, demeanor of the witness if the hearing is oral, opportunity for acquiring the information it is sought to impart, interest in the subject matter or in the parties to be affected, bias based upon political, secular, or novel social beliefs, regard for accepted conventions in dealing with conduct and behavior, environment, a capacity to understand, fidelity to the oath that has been taken, — these and other considerations are, or may be, components of that general result called “preponderance.” The number of witnesses is not controlling, and may even be unimportant. It is possible for cumulus error to overshadow intrinsic truth, and the statement of a single witness may be entitled to more consideration than assertions of a dozen whose source of knowledge or capacity for appraising value impairs the probative force of testimony. [Emphasis mine.]

In arriving at the truth as to just compensation, there are rules of evidence to be followed. The most recent ones are the Uniform Rules of Evidence, set out in Ark. Stat. Ann. § 28-1001 (Repl. 1976). They are to be construed to-secure fairness in administration and promotion of growth and development in the law of evidence, to the end that truth may be ascertained and proceedings justly determined. Rule 102. Relevant evidence is evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence. Rule 401. The evidence in this case falls into the category of expert opinion testimony, which is admissible when specialized knowledge will assist the trier of fact to understand the evidence or determine a fact issue. In such a case, a witness qualified as an expert by knowledge, skill, experience, training or education, may testify by stating his opinion. Rule 702.

Wesley Adams fell into this category. What is important, however, is the weight to be given his testimony. Appellee should have been permitted to show every factor which might persuade the jury to give his testimony more weight than it gave that of other witnesses. The only prejudice to the sovereign in this case was that there were compelling reasons for giving his testimony more weight than might have been given testimony of those who had been employed by appellee for the express purpose of giving an opinion or by others employed by the sovereign, whose opinions found greater favor in its sight.

The question as to the showing that Adams was employed to make an appraisal for the Arkansas State Highway Commission must be examined in the interest of fairness, and in light of emphasis on the rights of the subject and the preservation of the right of private property.

I suggest that it is very important that Adams was caused to make his appraisal and express his opinion as to just compensation at a very critical stage of the proceeding. It was at the time the sovereign was to decide the amount of money it would deposit in the registry of the court to assure the private property owner that it would receive just compensation, in order that the sovereign might take possession of the property before a jury decided the amount which constituted just compensation.

Appellant must have thought that Adams’ testimony would be given considerable weight. During discovery procedures, it successfully avoided disclosing the fact that Adams had made an appraisal for it until it was compelled to do so by the trial court. When Wesley Adams was called as a witness by appellee, appellant objected that his appraisal was privileged (but it was not). Appellant seems to have abandoned that objection. It further made the objection that use of his testimony should be prohibited on the ground that Adams had a contractual relationship with the Arkansas State Highway Department.

It was important for the jury to know the purpose for which Adams made his appraisal. It was also important for the jury to know that this expert had not been employed by anyone who had any interest in the lands taken. Appellant says that it should not be put in the position of having to explain why it did not choose to use Mr. Adams as one of its expert witnesses. Why not? It says in its brief that the reason was that he considered, as a basis for his opinion, the transaction between Harris Cattle Company and First Pyramid Life Insurance Company, the details of which we hold to be admissible evidence on retrial. Appellant is still going to have to explain why this transaction does not afford a basis for an opinion as to the land value, even if Adams does not testify. Other witnesses used by appellant also used this transaction as a basis. Furthermore, appellant informs us that Adams’ appraisal, and all other appraisals, are reviewed by a reviewing appraiser, who may reject an appraisal based upon a factual consideration he considers inaccurate. If the reviewing appraiser is competent to perform his job, why can’t he show the inadequacies of the appraisal that caused it to be rejected? What is there about the fact that Adams submitted an appraisal that was rejected by the party who employed him that would arouse passion in the breast of a juror or embed prejudice in his mind? Prejudice cannot be inferred from the fact that the jury verdict was for the exact compensation that was just, in the opinion of Adams. It simply indicates that the jury found that his testimony carried the greatest weight.

It was also important for the jury to know that Adams was under contract with appellant to make appraisals when he testified.

I would suggest that the majority has a new definition for “reconsidered.” The rule stated in Phillips was to “be reconsidered.” In today’s opinion the majority says that the questions posed by appellant were “virtually answered” in Arkansas State Highway Com’n. v. Witkowski, 257 Ark. 659, 519 S.W. 2d 743. The two terms are certainly not synonymous. Furthermore, a different question was posed in Witkowski, i.e., whether a party to an eminent domain action could present evidence to a jury that the adverse party had used appraisers that were not called to testify. In this case, the appraiser in question was called to testify. I am unable to see how Witkowski answered the question.

I am convinced that the cases cited by the majority in support of its position are not sound. One of them does not seem to me to support that position at all. That case is State Highway Com’n. v. Texaco, Inc., 502 S.W. 2d 284 (Mo., 1973). In that case, the landowner moved to strike the testimony of three expert valuation witnesses on the ground that the state withheld an appraisal by a fourth such expert, more favorable to the landowner than the other three. The landowner sought to equate this action with that of the state in Brady v. Maryland, 373 U.S. 83, 83 S. Ct. 1194, 10 L. Ed. 2d 215 (1963), where evidence favorable to the defendant was withheld by the state. Naturally the court held Brady inapplicable. Furthermore, there the landowner knew the value put on his land by this expert.

I am willing to join with the court in holding Adams’ testimony admissible when called by appellee. In that respect, I am persuaded by cases cited by appellee such as State v. Steinkraus, 76 N.M. 617, 417 P. 2d 431 (1966); Town of Thomaston v. Ives, 156 Conn. 166, 239 A. 2d 515 (1968), and cases cited in those opinions. But I also agree with the holding in City of Baltimore v. Zell, 279 Md. 23, 367 A. 2d 14, that the matter of admitting the fact that the appraiser had been employed by the condemning authority is a matter lying in the sound judicial discretion of the trial court. The Maryland court said:

*** We also have no disagreement with the general principle that a party ordinarily may not sustain the credibility of his own witness absent an attack upon credibility by the other side. *** Nevertheless, we believe that the opinions in the above-cited cases, and the City’s position in the instant case, represent too rigid an application of the general principle.
The rule that one cannot bolster the credibility of his own witness, absent an attack upon credibility by the other side, is not without exception. *** Moreover, the rule is usually applied in completely different circumstances than presented in the instant case, such as an attempt to call an additional witness to testify concerning the good character for veracity of the witness .or an attempt to offer a prior consistent statement of the witness solely for the purpose of supporting his veracity. *** In those circumstances, as Wigmore points out, valuable trial time is taken up by the introduction of unnecessary and often cumbersome evidence, as an unimpeached “witness may be assumed to be of normal moral character for veracity ...” *** However, merely asking a witness a brief preliminary question concerning his employment in connection with the case is not subject to this same objection.
It is a routine practice in trials for an attorney to ask his witness certain preliminary questions which may not be relevant to the issues being litigated, which may go beyond mere identification and which are designed to show that the witness will be somewhat credible or not biased in favor of the side calling him. For example, the educational background or professional status or employment position of a non-expert witness may be asked, or the witness’s lack of prior contact with the side who has called him may be brought out. These questions give the jury some knowledge of the individual and a more complete perspective in considering his testimony. *** [Citations omitted.]

Í believe that the majority has gone too far in indicating that Adams’ testimony was not properly admitted in rebuttal, and in attempting to control the trial court’s discretion in that respect on retrial. It did tend to rebut testimony by the two expert witnesses presented by the state. One of them had been employed the week before the trial, and his identity first disclosed to appellee virtually on the eve of trial.

In all other respects, I agree with the majority opinion.

       It appears that we have been faced with such an argument only once. Wc somewhat summarily rejected it in Arkansas State Highway Com'n. v. Flake, 254 Ark. 624, 495 S.W. 2d 855.


source: Caselaw Access Project

author: Frank Holt, Justice.

license: Public Domain

text:
    Phil BUCK v. STATE of Arkansas
    CR 78-214
    578 S.W. 2d 579
    Opinion delivered April 2, 1979
    (In Banc)

      Philip M. Clay, for appellant.

      Steve Clark, Atty. Gen., by: Catherine Anderson, Asst. Atty. Gen., for appellee.
   Frank Holt, Justice.

Appellant was charged with violating Ark. Stat. Ann. §§ 41-3578 and 41-3580 (Repl. 1977) (Act 411 of 1967) in that he exhibited, circulated or had in his possession an obscene film. The jury found appellant guilty only of possession and fixed his punishment at one year’s imprisonment, with 11 months suspended, and a $1,000 fine. Appellant first contends that the mere private possession of an obscene film, within the confines of his own home, is constitutionally permissible and cannot be made a crime.

Section 1 of Act 411 of 1967 (41-3578) reads:

Hereafter, it shall be unlawful for any person knowingly to exhibit, sell, offer to sell, give away, circulate, produce, distribute, attempt to distribute, or have in his possession any obscene film. (Italics supplied.)

Section 3 of Act 411 of 1967 (41-3580) reads:

Any person who knowingly exhibits, sells, offers to sell, gives away, circulates, produces, distributes, or attempts to distribute any obscene film shall be guilty of a felony, and upon conviction thereof shall be fined not more than $2,000 or be imprisoned for a period of not less than one (1) year nor more than five (5) years, or be both so fined and imprisoned. Any person who shall have in his or her possession such obscene film shall be guilty of a misdemeanor and upon conviction thereof shall be fined not more than $1,000 or be imprisoned in the county jail for a period not to exceed one (1) year, or both. (Italics supplied.)

It is true, as the State argues, that we have previously held portions of Act 411 of 1967 to be constitutional. Holcombe v. State, 258 Ark. 591, 528 S.W. 2d 378 (1975); Smith v. State, 258 Ark. 549, 528 S.W. 2d 360 (1975); Herman v. State, 256 Ark. 840, 512 S.W. 2d 923 (1974), cert. den. 420 U.S. 953, 95 S. Ct. 1337, 43 L. Ed. 2d 431 (1975); see Gibbs v. State, 255 Ark. 997, 504 S.W. 2d 719 (1974). In Holcombe and Smith, the appellants attacked the applicable statute on the ground that it is overbroad, because it made mere possession of an obscene film a crime. However, in both cases, the appellants were charged with the sale of such a film, not possession of it. In Herman and Gibbs, the statute was attacked as being over-broad in the definition of obscenity under the requirements of Miller v. California, 413 U.S. 15, 93 S. Ct. 2607, 37 L. Ed. 2d 419 (1973). In Smith, we rejected appellant’s argument and said:

A complete answer to this argument lies in the separability of that part of the statute prohibiting the possession of an obscene film. Section 3 of the Act declares possession to be a misdemeanor, but the other prohibited acts (all of which involve conduct affecting some other person) are declared to be felonies. Ark. Stat. Ann. § 41-2731 [now Ark. Stat. Ann. § 41-3580]. We cannot say that the two provisions are so interwoven and so interdependent that the legislature would not have passed one without the other. To the contrary, it appears to be reasonably certain that the lawmakers would have prohibited the enumerated felonies even if the misdemeanor provision had been known to be invalid. Hence the latter is separable and does not affect the constitutionality of the felony provisions.

We adhere to this view that the act may be unconstitutional in part and valid in part. See also Levy v. Albright, 204 Ark. 657, 163 S.W. 2d 529 (1942).

Here, as indicated, the appellant was convicted of possession only. The evidence contained no reference to his possession of an obscene film in any place other than his home. There was considerable evidence concerning the viewing of three films by young men on a particular night while in appellant’s home. The jury, however, did not find appellant guilty of the offense of exhibiting. So, for the first time we are presented with the precise question as to whether the State can constitutionally make it a criminal offense for a person to possess an obscene film within the confines of his own home. The appellant argues that the State cannot and cites Stanley v. Georgia, 394 U.S. 557, 89 S. Ct. 1243, 22 L. Ed. 2d 542 (1969). There it was noted that no “decision of this court [has] dealt with the precise problem” of possessing obscene material in one’s home. Stanley was convicted for possession of obscene films found in his home. There, in discussing the rights and interests of a private party and the State, the court held that “the First and Fourteenth Amendments prohibit making mere private possession of obscene material a crime.” Also, “we think that mere categorization of these films as ‘obscene’ is insufficient justification for such a drastic invasion of personal liberties guaranteed by the First and Fourteenth Amendments.” That decision holding the home area is protected from governmental intrusion was reaffirmed in Paris Adult Theatre I v. Slaton, 413 U.S. 49, 93 S. Ct. 2628, 37 L. Ed. 2d 446, reh. den. 414 U.S. 881, 94 S. Ct. 27, 38 L. Ed. 2d 128 (1973); and United States v. Orito, 413 U.S. 139, 93 S. Ct. 2674, 37 L. Ed. 2d 513 (1973).

Here we conclude that Stanley is controlling and the State’s attempt to make mere private possession of obscene material a crime is an unconstitutional invasion of that person’s First Amendment rights. Our decision does not impair the other provisions of §§ 41-3578 or 41-3580 since the provision as to possession is separable. Smith v. State, supra.

We deem it unnecessary to discuss appellant’s other contentions for reversal.

Reversed and dismissed.


author: Conley Byrd, Justice. Darrell Hickman, Justice,

text:
    O. J. CHRONISTER v. STATE of Arkansas
    CR 78-156
    580 S.W. 2d 676
    Opinion delivered April 2, 1979
    (Division I)
    [Rehearing denied June 4, 1979.]

      John T. Harmon and Russell Reinmiller, for appellant.

      Steve Clark, Atty. Gen., by: Ray Hartenstein, Asst. Atty. Gen., for appellee.
   Conley Byrd, Justice.

Appellant O. J. Chronister was found guilty by a jury of criminal solicitation in violation of Ark. Stat. Ann. § 41-705 (Repl. 1977) and sentenced to 30 years imprisonment. We reverse because of the action of the trial court in permitting the prosecuting attorney to testify during closing argument of appellant’s counsel.

The record shows that the two key witnesses for the State were Virginia Gill and Galen Hutcheson. Their testimony, stated in the light most favorable to the jury’s verdict, shows that appellant hired Galen Hutcheson, an undercover policeman, to kill his wife. Virginia Gill, who was also known by her “CB” name as Delta Dawn, assisted appellant in finding someone to kill his wife by notifying the officers and setting up the initial contact between appellant and Galen Hutcheson.

On cross-examination Virginia Gill testified that she had been married and divorced and that the custody of her two minor children born of that marriage had been awarded to the father. Shortly after receiving the subpoena, which was served some five or six days before the trial, she had gone to Texas to visit a friend’s mother. She described the friend as a man she was planning to marry. She at first stated that she was then working at the Children’s Colony in Conway as a psychologist’s aide. The proof then developed that she only got into the ninth grade in high school and that she did not know anyone in the psychology department of the Children’s Colony. Subsequent interrogation developed that at the time she first met appellant she was living in a mobile home park in Russellville with a Bruce Kilgore. In developing her source of support at the time, she stated that she worked for the Russellville Nursing Home. Finally, in answer to the question of where she worked during the three months that she knew appellant prior to his arrest, Virginia Gill stated: “I just worked for a couple of weeks there at the Russellville Nursing Home, and I haven’t worked anywhere since.” While appellant’s counsel was making his closing argument to the jury the record shows the following:

“MR. HARMON: What is O.J. Chronister doing while this is happening to him? He has been separated from his wife for seven months, and Alex Streett asked him if he had been true to his wife. Don’t you know that if he could find one person in Pope County that had ever been with O. J. Chronister, he would have paraded them in here to tell you about it. The man has never been unfaithful to his wife. He has been faithful to her — he has been true to her. He has supported her.
MR. STREETT: I hate to keep objecting. Mr. Harmon knows better than that. He knows the Rules of Evidence, and that I can’t bring in someone to prove a specific incident of misconduct.
MR. HARMON: You asked him if he had been true to his wife.
BY THE COURT: I’m going to sustain the objection on that point.
MR. HARMON: Okay. Let’s get back to the common sense that Alex Streett talked to you about. O. J. Chronister’s reputation in this community seems to be of high stature. People have testified and told you what they know about him, and find him to be a law abiding citizen. They find his reputation for truth and veracity in this community to be good. I will stake that against Galen Hutcheson — you bet I will. I’ll stake it against Delta Dawn — you bet I will. Do you think that she works at the Children’s Colony? That will be a question for you to decide in determining her credibility.
MR. STREETT: I hate to object on this but that is improper.
BY THE COURT: Objection sustained.
MR. STREETT: Mr. Harmon knows personally that she was working at the Children’s Colony. I ask the Court to admonish him.
MR. HARMON: I don’t know that.
MR. STREET: You do know.
BY THE COURT: The objection is sustained.”

The State to sustain the action of the prosecuting attorney’s statement that counsel for appellant knew that Virginia Gill worked at the Children’s Colony contends that the error is harmless. In so doing the State, however, acknowledges that there is nothing in the record to indicate that appellant’s counsel had any such knowledge. In Brown v. State, 143 Ark. 523, 222 S.W. 377 (1920), Brown’s alibi defense depended upon the credibility of Mrs. Smith who ran the boarding house where Brown resided. In holding that the remarks of the prosecuting attorney were prejudicial when not supported by the evidence, we stated:

“The prosecuting attorney went out of the record and stated that he knew all about Mrs. Smith, but could not tell the jury what he knew of her and wished the jury could know. The prosecuting attorney is not allowed to state, as a matter of fact, that of which there is no evidence. His statement in the case at bar was not within the latitude of discussion the law accords to counsel. Its evil tendency and prejudice to the rights of the defendant are manifest.”

Appellant also argues that the trial court erred in ruling that the State could not call witnesses to attack his credibility to prove specific acts of misconduct. The trial court correctly ruled that the State could not call witnesses to contradict appellant’s testimony on cross-examination with reference to a collateral matter by showing specific acts of infidelity. See Ark. Stat. Ann. § 28-1001, Rule 608(b) (Supp. 1977) and Spence v. State, 184 Ark. 139, 40 S.W. 2d 986 (1931).

The trial court refused to instruct the jury at appellant’s request, in accordance with Ark. Stat. Ann. § 41-715 (Repl. 1977), which provides:

“It is an affirmative defense to a prosecution for criminal attempt, solicitation, or conspiracy that the conduct charged to constitute the offense is inherently unlikely to result or to culminate in the commission of a crime and neither the conduct nor the defendant presents a public danger warranting imposition of criminal liability.”

We can find no error in the refusal of the instruction offered. The plan or plans discussed by which the wife could be killed — i.e. breaking her neck in a faked automobile wreck — certainly cannot be characterized as conduct “inherently unlikely to result or to culminate in the commission of a crime. . . ” Furthermore, Ark. Stat. Ann. § 41-713(2) (b) (Repl. 1977), provides that it is no defense to the crime of solicitation that the person whom he solicits has feigned agreement.

Appellant’s contention that life imprisonment for criminal solicitation is unconstitutionally excessive punishment for nothing more than the spoken word cannot be considered by us since the jury only fixed appellant’s punishment at 30 years imprisonment — i.e. the issue is not ripe for review. See Venable v. State, 260 Ark. 201, 538 S.W. 2d 286 (1976).

The issues raised by appellant because of the denial of continuances are not apt to arise on a new trial.

Reversed and remanded.

We agree: Harris, C.J., and George Rose Smith and Purtlk, JJ.

Rehearing denied June 4, 1979; dissenting opinion on denial of rehearing.

Darrell Hickman, Justice,

dissenting. I would grant a rehearing in this case because in my judgment the majority was in error in reversing this case.

First of all, I do not consider the remarks of the prosecuting attorney so flagrant and improper as to warrant a mistrial. The attorneys in this case were both able trial counsel and it was a difficult case to try. It is not unusual for lawyers to argue with each other or interrupt each other during closing arguments.

I do not consider the first remarks of the prosecuting attorney objectionable. In fact, the court was quite proper in sustaining the objection to the remarks of the defense attorney. It would have been improper for the prosecuting attorney to collaterally attack the credibility of the witness by proving a specific act of misconduct by extrinsic evidence. Ark. Stat. Ann. § 28-1001, Rule 608 (b) (Supp. 1977).

The second remark the prosecuting attorney made, after an objection was made and sustained, related to whether a witness worked at the Children’s Colony. There was no evidence in the record that she did not work at the Children’s Colony at the time in question. Both counsel improperly “testified.”

The court, at the inception of its instructions to the jury, gave the standard instruction which is given to all jurors:

Arguments, statements, and remarks of attorneys are not evidence but are made only to help you in understanding the evidence and applicable law. Any argument, statements or remarks of attorneys having no basis in the evidence, should be disregarded by you.
I have not intended by anything I have said or done, or by any questions that I may have asked, to intimate or suggest what you should find to be the facts, or that I believe or disbelieve any witness who may have testified. If anything that I have done or said has seemed to so indicate, you will disregard it and form your own opinion.

Just before the colloquy occurred that is reported in the majority opinion, the judge said:

There was an objection earlier, which I sustained. I’m not sure myself from time to time trying to recall all of the evidence. Ladies and gentlemen, it is not my decision, it’s yours. You have heard the testimony and you are the ones who are to consider the evidence and the law. I’m going to admonish you again that if a lawyer tells you something that has no basis in the evidence, disregard it. If it does have basis in the evidence, you may consider it. [Emphasis added.]

This was a heated trial and both the State and the defendant were well represented. Both made long closing arguments to the jury, emphasizing the evidence that had been presented. The defense counsel was guilty of testifying to a certain extent. For example, he made the flat statement as quoted in the majority opinion: “The man has never been unfaithful to his wife. He has been faithful to her — he has been true to her.” In another instance he said, “O. J. Chronister did not lie to you when he took the witness stand. ”

Most trial lawyers exaggerate or emphasize favorable testimony. I do not consider the remarks as serious enough to warrant reversing the jury’s verdict and ordering a new trial. The jury had been admonished to disregard statements made by the attorneys, and this had been emphasized just before the remarks were made in this case.

Even so, all of this is academic because there was no objection whatsoever by the appellant to the remarks by the prosecuting attorney. The appellant asks us to consider the remarks as plain error and reverse the judgment of the trial court. The only case cited by the majority to justify its action in this case is Brown v. State, 143 Ark. 523, 222 S.W. 377 (1920). In the Brown case there was an objection to the remarks of the prosecutor. The same is true in the case of Hays v. State, 169 Ark. 1173, 278 S.W. 15 (1925). In the case of Williams v. State, 259 Ark. 667, 535 S.W. 2d 842 (1976), there was a prompt and proper objection to improper statements by the deputy prosecuting attorney. I cannot find a case where we reversed the judgment of a trial court for improper remarks of a prosecuting attorney where no objection was made.

We have also held many times that we will not consider an issue raised for the first time on appeal. O’Neal v. State, 253 Ark. 574, 487 S.W. 2d 618 (1972). if the majority is going to depart from these rules, it should say so. Reversal is a serious matter, justified only for prejudicial error or violation of a substantial right. I cannot agree that the remarks of the prosecutor in this case were prejudicial error. The defendant has shown nothing to indicate that prejudice existed, and, most importantly, there was no objection made.

Therefore, I would grant the rehearing and affirm the trial court’s judgment.


author: Darrell Hickman, Justice.

text:
    A. D. DUNAHAY v. ARKANSAS EMPLOYMENT SECURITY DIVISION, DEPARTMENT OF LABOR, CHARLES DANIELS, DIRECTOR
    78-283
    578 S.W. 2d 575
    Opinion delivered April 2, 1979
    (Division II)

      David Hodges, for appellant.

      Thelma M. Lorenzo, for appellee.
   Darrell Hickman, Justice.

The Circuit Court of Jackson County dismissed A. D. Dunahay’s suit against Charles Daniels, Director of the Department of Labor, Arkansas Employment Security Division, because the suit was brought in Jackson County and not in Pulaski County.

Dunahay appeals and alleges three errors: venue, or the place, for such a suit in Jackson County; if not, the appellee waived the right to object to venue; and, in any event, the suit should have been transferred to Pulaski County rather than dismissed.

All of these arguments are without merit.

Dunahay, a resident of Jackson County, was determined to be an “employer” as defined by the Employment Security Act, Ark. Stat. Ann., Title 81, Chapter 11 (Repl. 1976). His attorney filed a complaint for review of this decision in the Jackson County Circuit Court. The appellee moved to dismiss the action because of the lack of venue, citing Ark. Stat. Ann. § 81-1114 (b)(2) as requiring such suits to be brought in Pulaski County. The trial judge properly granted the motion for the statute is clear. It reads:

... A review of the determination made by the Commissioner or the Board of Review may be had by filing in the Circuit Court of Pulaski County a petition for review within fifteen (15) days after said determination becomes final. . . .

Dunahay argues that, regardless of the statute, the appellee waived the right to object to venue because.a lawyer for the appellee agreed to accept service in the case and did not inform the appellant’s attorney that venue for such a case was only in Pulaski County. It is undisputed that an attorney for the appellee agreed to accept service but it is also undisputed that appellee did not expressly waive the right to object to venue. In fact, according to the record, nothing was said by the appellee’s attorney about venue.

Finally, Dunahay argues that the case should have been transferred to Pulaski County rather than dismissed. There is no present statutory authority for a circuit court to transfer a case to another county solely because it is filed in the wrong county.

Affirmed.

We agree. Harris, C.J., and Fogleman and Holt, JJ.

       One who is a “claimant”, as opposed to one who is an “employer”, may petition for review of a decision in either Pulaski County or the county of the claimant’s residence. Ark. Stat. Ann. § 81-1107 (d)(7).


author: John I. Purtle, Justice.

text:
    Mark H. WILSON v. Mary WHITE
    78-250
    578 S.W. 2d 577
    Opinion delivered April 2, 1979
    (Division I)

      Tommy H. Russell, for appellant.

      Ward, Rhodes & Garrett, for appellee.
   John I. Purtle, Justice.

Joan Wordehoff purchased a $10,000 Certificate of Deposit from Pulaski Federal Savings and Loan Association on May 16, 1973, payable on her death to her sister, Mary White. April 22, 1974, Joan Wordehoff went by a branch office of Pulaski Federal Savings and executed a form appointing the officers of Pulaski Federal Savings to transfer the Certificate of Deposit to Mark Wilson, her brother, at her death. Joan Wordehoff died January 16, 1975. The original Certificate of Deposit was still in her possession at the time of her death. It was turned over to the First National Bank as administrator and the bank promptly abandoned the Certificate of Deposit as an asset of the estate and held it as escrow agent until the court ruled to whom it should be delivered. Mary White petitioned the Pulaski County Probate Court to give her the Certificate of Deposit and the court did so. The court then approved the final accounting of First National Bank and delivered the Certificate of Deposit to Mary White. Mark Wilson gave notice of appeal.

At the hearing on the petition of Mary White, an employee of Pulaski Federal Savings testified it was their custom to have the customer sign a signature card which was their contract with the customer. She further testified it was their custom, when changing the name of the beneficiary, to have the customer sign an authorization card allowing the account to be closed. The next step, when changing beneficiaries, was to surrender the original certificate and then issue a new one and finally obtain a newly executed signature card.

The customer completed the first step by executing a contract authorizing Pulaski Federal Savings to transfer the account to Mark Wilson. However, she never followed through with the other requirement of Pulaski Federal Savings in completing the transfer although she was notified by letter it would be necessary to surrender the old certificate and execute a new contract. At the time of the customer’s death, some nine months later, the original Certificate of Deposit was still in her possession and Pulaski Federal Savings had not accepted the transfer to the new account.

The controlling statute is Ark. Stat. Ann. § 67-1838 (Repl. 1966) which reads in part as follows:

(5) If a person opening or holding a savings account shall execute and file with the association a designation that on the death of the person named as holder, the account shall be paid to or held by another person or persons, the account, and any balance thereof which exists from time to time, shall be held as a payment on death account and unless otherwise agreed between the person or persons opening the account and the association:
(a) Upon the death of the holder of the account, the person or persons designated by him and who have survived him shall be the owners of the account (as joint tenants with right of survivorship if more than one) and any payment made by the association to any of such persons shall be a complete discharge of the association as to the amount paid;
(b) The person to whom such account is issued may change during his lifetime the designation of any of the persons who are to be holders at his death, by a written direction accepted by the association;
(c) The person to whom such account is issued may pledge, withdraw or receive payment and any such payment made by the association shall be a complete discharge as to the amount paid.

Evelyn Bowen, who handled the transaction for Pulaski Federal Savings, stated:

“I told her that I would need for her to sign an authorization, bring me the certificate so that I could transfer it from one account into the other account. I couldn’t transfer it without having the other certificate, the original certificate. Otherwise, the customer would have two money instruments.”

The cases cited by appellant either pre-date Ark. Stat. Ann. § 67-1838 or are cases concerning bank accounts as contrasted to savings and loan accounts. None of the cited cases were controlled by the above statute. § 5(b) of the statute requires the transfer in such cases to be in writing and accepted by the association. The evidence clearly establishes that Pulaski Federal Savings never accepted the transfer of the account because the old certificate was not surrendered, nor was a lost passbook or lost instrument affidavit signed by the depositor.

In view of the fact that the depositor still retained the original Certificate of Deposit in her possession at the time of her death nine months after the original authorization was executed, we cannot say she intended to follow through with the change. Additionally, she had been told in person and notified by letter that it would be necessary for her to complete the other transactions yet she never made any attempt to do so. In any event, the association never accepted the change in beneficiaries. Therefore, the necessary documents to effect the transfer were never completed.

We agree with the learned probate judge that Mary White was entitled to receive the Certificate of Deposit according to the contract between the depositor and the association.

We do not reach the question of whether appellant had standing to file the appeal as our decision would be adverse to his position in any event.

Affirmed.

We agree. Harris, C.J., and George Rose Smith and Byrd, JJ.


text:
    Seth WARD v. Thomas MEYERS
    78-287
    578 S.W. 2d 570
    Opinion delivered April 2, 1979
    (In Banc)

      Rose, Nash, Williamson, Carroll, Clay & Giroir, P.A., by: Kenneth Shemin and Webster L. Hubbell, for appellant.

      Dodds, Kidd & Ryan, by: Donald S. Ryan and Richard N. Moore, Jr., for appellee.
   John I. Purtle, Justice.

On August 12, 1975, appellee filed a Bankruptcy Petition in the United States District Court for the Southern District of Florida. Among the creditors listed were Seth Ward and Yvonne Ward who were unsecured creditors. The notice of the bankruptcy proceedings was mailed to Seth and Yvonne Ward at the address of 11701 Fairway Drive, Little Rock, Arkansas, 72201. This notice was returned to the bankruptcy court with an indication that it was returned because the forwarding order had expired. Appellant’s debt was discharged on December 18, 1975, in the Florida proceedings.

On November 23, 1976, appellant filed a complaint in the Pulaski County Circuit Court seeking to recover the balance of the promissory note which appellee had sought to discharge. Appellee made the affirmative defense that he had filed a voluntary Bankruptcy Petition which had resulted in the discharge of appellant’s obligation.

In the trial of the Pulaski Circuit Court case the appellee pleaded the Bankruptcy Act as a defense. It was admitted that appellant had moved from 11701 Fairway Drive to 48 River Ridge Road, Little Rock, Arkansas, in June 1974. It was further admitted that appellee had signed as a guarantor on the note which had been executed by Bigelow Manufacturing Company, Inc. to appellant and his wife. It was further admitted that appellee had visited appellant in his new residence in Little Rock during the summer of 1974. It was stipulated between the parties that the Bankruptcy Petition listed Seth Ward and Yvonne Ward as creditors for an unsecured claim based upon the personal guarantee of the promissory note given by Bigelow Manufacturing Company, Inc. to the Wards; also that the Bankruptcy Petition did not list the street address where appellant resided at the time of the filing of the Bankruptcy Petition. It was further stipulated that the notice sent to the Wards at 11701 Fairway Drive was returned to the bankruptcy court.

During the trial appellee testified that he had listed appellant’s debt on the bankruptcy schedule and that he subsequently obtained the appellant’s mailing address from the 1974 Little Rock telephone directory and furnished this to the bankruptcy court. He stated he thought the post office would forward the letter to Mr. Ward’s new address as he did not remember the exact mailing address. He had not been told by the bankruptcy court or his lawyer that the notice had been returned as being unable to be delivered to the appellant at his former address. The testimony further showed that appellee and appellant had been in business together operating the Bigelow Manufacturing Company, Inc. out of Bigelow, Arkansas. Appellant was not an officer of the company but he owned about 12-1/2% of the stock in the company. Appellee testified that the Bigelow Company fell into financial difficulties, which was constantly discussed with appellant. Appellee resigned and left the company in July of 1974. Appellee then testified that he had received in the mail, in December of 1975, a communication from the bankruptcy court showing that he had been discharged. The next notice that he received from Ward was the complaint in the Pulaski County Circuit Court.

The trial court found that there was no evidence of fraudulent intent or wrongful motive on the part of appellee toward the appellant. The court further found that it was reasonable to assume that appellant had knowledge of the pending bankruptcy action in Florida but took no action in regard to the same. Appellant did not appear at the trial in Pulaski County to testify regarding the matters surrounding the notice and his interest in the company. Accordingly, the court held that the appellee was discharged in bankruptcy and that such discharge extinguished the debt of appellant; the complaint was dismissed, and appellant brings this appeal.

The only point on appeal is that the court erred in holding that Meyers had properly scheduled his debt to appellant in the Bankruptcy Petition. The pertinent section of the Bankruptcy Act is 17a (3) which excepts from the operation of discharge in bankruptcy all provable debts which “have not been duly scheduled in time for proof and allowance, with the name of the creditor if known to the bankrupt, unless such creditor had notice or actual knowledge of the proceedings in bankruptcy. ” Therefore, all other debts would be discharged in the bankruptcy action. In order for a debt to be duly scheduled it must be on a list of creditors, filed in the bankruptcy court, showing the residence or place of business, if known, or if unknown that fact to be stated. The undisputed evidence in this case shows that the debt of appellant was duly listed but the mailing address was improperly stated.

Meyers’ excuses for failure to notify Ward are that when he filed the petition he did not have Ward’s new address “handy.” He took an address from a 1974 telephone book, admittedly knowing that Ward had moved from that address at least a year before the bankruptcy petition was filed. His excuse was that he thought it would be forwarded by the Post Office Department.

In Steele v. Thalheimer, 74 Ark. 516, 86 S.W. 305, it was neither alleged nor shown that the bankrupt knew the address of the creditor or that the failure to give his correct address was intentional or fraudulent. Perhaps Meyers could not recall Ward’s new address, but it is not unreasonable to assume that either he or his attorney, with only a slight inquiry, could have ascertained it. To say the least, Meyers could have told his attorney that he was giving an obsolete address. It is true that the evidence does not justify a finding that the failure of Meyers to give a correct address was fraudulent, but it cannot be said that it was not intentional. Furthermore, American Southern Trust Co. v. Vester, 183 Ark. 9, 34 S.W. 2d 747, is hardly appropriate for in that case the creditor’s lawyer, who had been employed to collect the debt, had notice of the bankruptcy and the lawyer’s name had been listed on the schedule as the person who held the note, evidencing the debt, for collection.

It seems clear that the debt under these circumstances was not duly scheduled, as required by the bankruptcy act. The act requires that the bankrupt file a list of all his creditors showing their residences or place of business, if known, and if not known, a statement of that fact. Meyers failed to comply with the requirement for scheduling debts by failure to schedule any address and by later giving an address known by him to be incorrect, without even stating that the correct address was not known to him, as he should have done if he did not know it. 1A Collier on Bankruptcy (14th Ed.) 1686.2, § 17.23 (4); Van Denburgh v. Goodfellow, 19 Cal. 217, 120 P. 2d 20 (1941). Furthermore, if Meyers failed to exercise due diligence in ascertaining Ward’s address (and his own testimony showed a total lack of diligence), the debt was not properly scheduled and it was not discharged. Continental Purchasing Co. v. Norelli, 135 N.J.L. 93, 48 A. 2d 816 (1946); 1A Collier on Bankruptcy (14th Ed.) 1687, § 17.23 (4). See also, Jones v. Martin, 23 Ariz. App. 182, 531 P. 2d 559 (1975); Van Denburgh v. Goodfellow, supra; Reed v. Dippel, 16 Pa. Dist. 126, 17 Am. B.R. 371 (1906); Marlenee v. Warkentin, 71 Cal. App. 2d 177, 162 P. 2d 321 (1945); King v. Harry, 131 F S 252 (D.C., 1955); Salmon v. Sarno, 265 App. Div. 114, 37 N.Y.S. 2d 870 (1942); Taylor v. Thompson, 39 S.W. 2d 923 (Tex. Civ. App., 1931). The requirement of duly scheduling the names and residences of creditors is to be strictly interpreted and applied by the courts. 1A Collier on Bankruptcy (14th Ed.) 1680, § 17.23 (1). See Salmon v. Sarno, supra, and cases cited therein; State Farm Mutual Auto Ins. Co. v. Hall, 221 Kan. 337, 559 P. 2d 357 (1977). In Chevron Oil Co. v. Dobie, 40 N.Y. 2d 712, 358 N.E. 2d 502 (1976), it is clearly recognized that a debt is not duly scheduled when the creditor’s correct name and address are not given. That court said in the opinion in that case: “Consequently, a debtor who has erred in scheduling is not penalized, provided always that he has, at least, taken care to ascertain, if necessary, and schedule the creditor’s correct name and address, (cf. Miller v. Guasti, 226 U.S. 170, 33 S. Ct. 49, 57 L. Ed. 173).” In that case, it was held that the debt was duly scheduled, without deciding whether previous holdings rested upon an outmoded view of the efficiency of the postal service, simply because the debtor was justified in relying on the only address ever provided him by Chevron Oil Company, the creditor, who was seeking to assert its insufficiency.

It was the intention of the bankruptcy act, as now written, to apply to bankruptcy proceedings the principle that due process of law contemplates notice of some kind to the creditor whose property is being taken in order that he may have his day in court and be heard before the court adjudicates against him. Tyrrel v. Hammerstein, 33 Misc. 505, 67 N.Y.S. 717, 6 Am. B.R. 430 (1900); Wheeler v. Newton, 168 App. Div. 782, 154 N.Y.S. 431 (1915); Continental Purchasing Co. v. Norelli, 135 N.J.L. 93, 48 A. 2d 816 (1946). The requirement of notice in the bankruptcy act is the only due process afforded to creditors. State v. Bean, 218 Ore. 506, 346 P. 2d 652 (1959); Wheeler v. Newton, supra.

If the scheduled address of the creditor is actually wrong, he will not be affected by the bankrupt’s discharge, in the absence of proof that the creditor had knowledge of the proceedings. 1A Collier on Bankruptcy (14th Ed.) 1689, § 17.23 (4). The notice or actual knowledge must be actually existent and not merely constructive notice or imputed knowledge. 1A Collier on Bankruptcy (14th Ed.) 1692, § 17.23 (4); Hunter v. Hall, 60 Ga. App. 493, 4 S.W. 2d 69 (1939). The bankruptcy act contemplates that there be either personal notice or knowledge of the proceedings that is equivalent to personal notice. Wheeler v. Newton, supra; Lynch v. McKee, 214 S.W. 484 (Tex. Civ. App., 1919).

It is quite clear that the burden of showing notice or knowledge by a preponderance of the evidence was upon Meyers. State Farm Mutual Auto Insurance Co. v. Hall, supra; Ragsdale v. Bothman, 81 Mont. 408, 263 P. 972 (1928); Venson v. Housing Authority, 337 F. 2d 616 (5 Cir., 1964); Industrial Loan & Investment Co. v. Chapman, 193 So. 504 (La. App., 1940). The matter is extensively covered in 1A Collier on Bankruptcy (14th Ed.) 1696 — 1698, § 17.23 (6), where it is said:

The superficial conflict of authority in regard to burden of proof (risk of persuasion) is reconciled by analyzing the language of § 17a(3), and by distinguishing the issues that may arise in a suit by a creditor upon a provable claim to which the bankrupt pleads a discharge in bankruptcy. The plea of a discharge in bankruptcy is an affirmative defense, i.e., a defense which the bankrupt has the burden of establishing. ***** When the bankrupt has put the certified copy of the order of discharge in evidence he has established a prima facie defense to any suit against him based on a debt existing at the time of the filing of his petition. The creditor then has the burden of proving that he comes within the exceptions enumerated in § 17a, which, as applied to clause (3), means that his claim was not duly scheduled in time for proof and allowance. ***** This done, the bankrupt must carry the burden of showing that the creditor comes within the “unless” clause, which reads, “unless such creditor had notice or actual knowledge of the proceedings in bankruptcy.” For, as stated by the Supreme Court in Hill v. Smith, (260 U.S. 592, 2 Am. B.R. (N.S.) 537, 43 S. Ct. 219, 67 L. Ed. 419, aff’g 232 Mass. 188, 43 Am. B.R. 186, 122 N.E. 310, 2 A.L.R. 1667, noted in (1923) 36 Harv. L. Rev. 749), immediately after the quotation set out above:
“But there is an exception to the exception, ‘unless the creditor had notice,’ etc., and, by the same principle, if the debtor would get the benefit of that, he must offer evidence to show his right. We agree with the court below that justice and the purpose of the section justify the technical rule that if the debtor would avoid the effect of his omission of a creditor’s name from his schedules, he must prove the facts upon which he relies.”

See also, Wheeler v. Newton, supra.

Since by the undisputed evidence, the debt was not duly scheduled, the burden of showing that Ward had notice or actual knowledge of the proceedings in bankruptcy rested upon Meyers. Meyers’ own testimony is that the Ward claim was the biggest debt listed. He relies upon the fact that Ward owned approximately 12-1/2% of the stock in the Bigelow Manufacturing Company, a corporation, located in Bigelow (of which Meyers was president and of which Ward was not an officer), as evidence that Ward knew of the bankruptcy, simply because Bigelow was also listed as a creditor to whom Meyers owed less than 10% of the amount listed as Ward’s claim. It was prior to July, 1974, over a year before the bankruptcy petition, that Meyers was last in contact with Ward about Bigelow’s financial condition. Meyers testified that he was not in contact with Ward about Meyers’ personal finances and that he had no discussions with Ward about whether or not Meyers had paid the note. It was stipulated that after all credits had been applied, there was still a balance of $94,950 due Ward. It was also stipulated that the debt had been secured by all the assets of Bigelow Manufacturing Company. It was alleged in Ward’s complaint, and not denied, that Ward foreclosed upon the security agreement and collected certain sums from the sale of Bigelow’s assets and equipment.

Apparently the trial court gave considerable weight to the fact that Meyers had just cause to believe that mail addressed to Seth Ward, a prominent citizen and businessman in the community, would be delivered to his (proper?) address. Perhaps the trial judge felt that the court could take judicial notice of Ward’s prominence. But he did not say that he was taking judicial notice of that fact, so appellant was not given an opportunity to be heard upon the propriety of that action. See Ark. Stat. Ann. § 28-1001, Rule 201 (Supp. 1977). In any event, this fact, if true, weighs heavily against appellee, because it establishes the fact that with only slight diligence, he could have ascertained Ward’s correct address. Lee v. Rousell, 347 So. 2d 298 (La., 1977). It certainly is not substantial evidence that Ward either had notice or knowledge of the bankruptcy proceedings. It is not reasonable to say that Ward must have known of the bankruptcy under these conditions.

The proof presented by Meyers presented a prima facie defense to the complaint filed by appellant. However, the appellant overcame this defense by proof that appellee knew the address listed on the bankruptcy schedule was incorrect and had in fact visited appellant at his new address on several occasions. The burden then shifted back to appellee to show that appellant fit into the “unless” clause which required him to prove appellant had actual knowledge or notice of the bankruptcy proceeding as stated in § 17a, stated above. We do not believe appellee discharged his second listed burden of proof. Therefore, the debt in question was not duly scheduled within the meaning of the act and was therefore not discharged according to the proof presented in the Pulaski County Circuit Court.

The case is reversed and remanded with directions to grant judgment to appellant for the unpaid amount of the debt owed by appellee to appellant.

Reversed and remanded.

Byrd, J., dissents.


author: John A. Fogleman, Justice.

text:
    Charles W. BOWLES v. STATE of Arkansas
    CR 79-12
    579 S.W. 2d 596
    Opinion delivered April 9, 1979
    (Division I)
    [Rehearing denied May 21, 1979.]

      Ralph E. Wilson, Sr., for appellant.

      Steve Clark, Atty. Gen., by: Robert J. DeGostin, Jr., Asst. Atty. Gen., for appellee.
   John A. Fogleman, Justice.

Charles W. Bowles was the operator of a liquor store in Osceola. He was approached by Jerry Baker, of Fresno, California, an undercover agent employed by the Memphis, Tennessee Police Department. He used the name of a convict serving a 75 year sentence in the State of Tennessee, as a means of introduction to Bowles. After some discussion between the two as to how they could make some money in illegal activities, unrelated to controlled substances, Baker asked Bowles where they could buy large quantities of marijuana. Baker testified that Bowles gave him names of two persons in Wilson, one of whom was H. P. Cash. According to Baker, he went to the first person named by Bowles, but this person said that he did not have any marijuana. Baker later purchased a rather large quantity of marijuana from Cash. Cash was charged with delivery of a controlled substance and Bowles with being an accomplice to the delivery of a controlled substance. They were charged in the same information and the offenses were alleged to have occurred on the same date, December 14, 1977. Cash pleaded guilty, so Bowles was tried separately and found guilty. His first four points for reversal question the sufficiency of the evidence to sustain the conviction. Since we find it insufficient, we reverse the judgment, but will not discuss the remaining point for reversal.

The particulars of the charge against Bowles were stated thus:

The said Defendant Charles William Bowles on/or about the 14th day of December, 1977, in the Osceola District of Mississippi County, Arkansas, did unlawfully, with the purpose of promoting or facilitating the commission of the offense of delivery of marijuana, solicit, advise, encourage the Defendant Horace P. Cash or aid, agree to aid or attempt to aid Horace P. Cash in the planning and committing of the crime of delivery of a controlled substance, marijuana, in violation of Ark. Stat. 41-303 ***

Insofar as applicable, Ark. Stat. Ann. § 41-303 (Repl. 1977) provides that a person is an accomplice of another in the commission of an offense if, with the purpose of promoting or facilitating the commission of an offense, he solicits, advises, or encourages the other person to commit it, or aids, agrees to aid or attempts to aid the other person in planning or committing it.

Viewing the evidence in the light most favorable to the state, it showed that:

After getting Cash’s name from Bowles, Baker took a note introducing him to Cash and talked to Cash about buying large quantities of marijuana. Baker told Cash that Bowles had sent him to see Cash. Cash told Baker to check back with him. Later Baker was told by Cash that Cash had checked him out and he was all right. Cash said that he was going to get a sample of marijuana for Baker to show to people who were prospective purchasers. Baker then, by a telephone call, arranged with Cash for a meeting on December 13, 1977 at Bowles’ liquor store to pick up the sample. When Baker was a little late arriving, he saw Cash pulling out of the parking lot at Bowles’ liquor store. Cash made a gesture directing Baker to follow him. Baker did follow Cash into a residential area, where Cash pulled his car over and Baker went up to Cash, talked a few minutes, obtained the sample and arranged to meet Cash in Wilson at 11:30 p.m. the next night. They actually met at about 1:00 a.m. and Cash gave Baker fifty pounds of marijuana in exchange for 13,750. Baker had no contact with Cash prior to Bowles’ introduction. Two days after the purchase, Baker went to Bowles’ liquor store, on December 16, told Bowles that he had bought the marijuana and made a little money off it, and offered Bowies $100. Bowles declined the offer, saying that he had done what he did as a favor and that Baker had then established a good contact. Baker and Bowles then had a conversation about selling a stolen automobile. Bowles gave Baker the name and address of a man who was interested in buying stolen automobiles. Baker had no conversation with Bowles between the time he first met Cash and the time of the purchase of the marijuana. Bowles was not involved in the transaction except for the introduction. Baker had no knowledge that Bowles knew of the sale of the marijuana when Baker offered him $100.
Cash checked Baker out by asking Bowles if Baker was ail right, i.e., if it was safe to do business with him. Cash said that all that Bowles did was introduce Baker and assure Cash that it was safe to do business with Baker. There was no testimony that anyone paid Bowles any money in connection with the sale and delivery.

In Henderson v. State, 255 Ark. 870, 503 S.W. 2d 889, we were faced with the question whether a witness was an accomplice of one charged with the delivery of a controlled substance. In holding that he was not, we said:

There is some apparent conflict in the authorities from other jurisdictions as to whether one who recommends, or directs a purchaser to, a seller of illicit drugs is an accomplice of the seller. In Arkansas, an accomplice, under the statute forbidding conviction of a felony on uncorroborated testimony of an accomplice, is one who could be convicted of the offense of which the defendant is charged. In Rich v. State, 176 Ark. 1205, 2 S.W. 2d 40, we held, upon the authority of Wilson v. State, 124 Ark. 477, 187 S.W. 440, that one who assists a purchaser in buying intoxicating liquors and confines his participation in the transaction exclusively to the buying, not the selling, is not guilty of the offense, and not an accomplice. *** We have also held that one who was employed as a laborer in the operation of a whiskey still and was an accomplice in its operation and in manufacturing liquor, was not an accomplice of his employer in the possession of the still, because he could not be convicted of the crime of possessing a still, either as a principal or accessory. *** In Beck v. State, 141 Ark. 102, 216 S.W. 497, we held that one who acted only as the agent of the buyer of intoxicating liquors and had no other interest in the sale, was not an accomplice of the seller. So long as one acts solely on behalf of the purchaser, he is not an accomplice of the seller. *** [Citations omitted.]
Under the same rationale, other jurisdictions have held that a “facilitator” of a sale of illicit drugs is not an accomplice of the seller, so long as he is interested only on behalf of the buyer. See U.S. v. Moses, 220 F. 2d 166 (1955); People v. Branch, 13 App. Div. 2d 714, 213 N.Y.S. 2d 535 (1961); Commonwealth v. Harvard, 356 Mass. 452, 253 N.E. 2d 346 (1969); People v. Lindsey, 16 App. Div. 2d 805, 228 N.Y.S. 2d 427, aff’d 12 N.Y. 2d 958, 238 N.Y.S. 2d 956, 189 N.E. 2d 492 (1963). These holdings are more compatible with our general test of the status of a witness as an accomplice and with our cases relating to dealing in intoxicating liquors than decisions in jurisdictions holding to the contrary.

This case was decided before Ark. Stat. Ann. §41-303 was adopted. Although the coverage of this statute may be slightly broader than former Ark. Stat. Ann. § 41-119 (Repl. 1964), defining an accessory before the fact, changes in the pre-existing law wrought by the new one do not materially affect what we had to say in Henderson, at least as it applies to this case. The strongest evidence that Bowles solicited, advised or encouraged Cash to commit the crime was Cash’s testimony that Bowles advised him it was safe to do business with Baker. There is nothing more than a suspicion that Bowles aided Cash in the transaction. We do not consider this sufficient evidence to show that Bowles was not acting only on behalf of the purchaser, or in his interest, as the “facilitator” of the sale of marijuana.

Since we find the evidence insufficient to support the verdict, we must dismiss the charge in order to prevent placing appellant in double jeopardy. Pollard v. State, 264 Ark. 753, 574 S.W. 2d 656 (1978).

The judgment is reversed and the case dismissed.

We agree. Harris, C.J., George Rose Smith and Puri-e, JJ-


text:
    HANNA LUMBER CO. v. Cleman NEFF, d/b/a CLEMAN NEFF DESIGN BUILDER
    78-280
    579 S.W. 2d 95
    Opinion delivered April 9, 1979
    (Division II)

      Jones & Segers, for appellant.

      Kelly, Luffman & Matthews, P.A, for appellee.
   Frank Holt, Justice.

Appellee brought suit against appellant to recover damages allegedly caused by the failure of a truss system manufactured by appellant. The jury awarded appellee $9,500. The court ordered a remittitur of $1,930.57. We first discuss appellant’s contention that the court erred in admitting certain checks into evidence to prove damages.

Appellee purchased prefabricated wood trusses from appellant to be used in appellee’s construction operations. During construction of a building for which the trusses were purchased, the entire truss system collapsed after a bottom cord broke when one of appellee’s workmen stood on it. In support of its proof of damages, over appellant’s objection, the court admitted into evidence certain checks signed by appellee or his employee on appellee’s bank account. The checks were offered to establish amounts paid by appellee to various parties for building new trusses and repairing damages to the building caused by the failure of the trusses. Some of the checks covered payments on other projects not relevant to the job in the case at bar. The checks (totaling $12,723.23) contained “little notations” on them (totaling $6,304.46). These notations indicated the amount included in each check which was attributable to the job or damages in question. It is these notations to which the appellant objected. It argues that the admission of these checks, with the notations, into evidence violated the hearsay rule of evidence. The appellee responds that the checks fall within the business record exception to that rule as set out in Ark. Stat. Ann. § 28-1001, Rule 803 (6) (Supp. 1977).

We agree with appellant that the checks constituted a violation of the hearsay rule. Neither do they fall within the business records exception. There was no showing that the notations were made at the time the checks were written or that it was a regular practice of the business to make such notations. Appellee’s testimony as to his damages was based upon these notations; he could not identify the source of the notations; he did not bring his business ledgers or books; and he could not testify from memory as to the work done by the parties to earn the amount noted on the checks. Error is presumed to be prejudicial unless it is demonstrated to be otherwise or is manifestly not prejudicial. Buckeye Cellulose v. Vandament, 256 Ark. 434, 508 S.W. 2d 49 (1974). Here we cannot say with confidence that the asserted error was not prejudicial.

Appellant also contends that the court erred in not directing a verdict in its favor as there was no evidence that its negligence in constructing the alleged defective trusses or its breach of a warranty was the proximate cause of appellee’s damages. We cannot agree with these contentions. On appeal we view the evidence in the light most favorable to the appellee. Green v. Harrington, 253 Ark. 496, 487 S.W. 2d 612 (1972). If there is any evidence in favor of the party against whom the directed verdict is sought, it is error for the court to take the matter from the jury. Home v. Mutual Fire Ins. Co. v. Cartmell, 245 Ark. 45, 430 S.W. 2d 849 (1968). In St. Louis-San Francisco Ry. Co. v. Bishop, 182 Ark. 763, 33 S.W. 2d 383 (1930), in discussing proximate cause, we said: “It will be sufficient if the facts proved are of such a nature and are so connected and related to each other that the conclusion therefrom may be fairly inferred.”

As indicated, the appellee purchased prefabricated wooden trusses from the appellant. They were manufactured according to preengineered specifications. The truss system collapsed the day following its installation. This occurred when a truss on which appellee’s employee was standing broke causing the remaining truss system to fall. According to appellee’s evidence, an inspection following the collapse revealed that pin knots went ail the way through the trusses which weakened the tensile strength of them. This would affect the capability of the trusses to withstand shifting. The joints showed weather cracking. The weak and defective condition of the trusses was the cause of the collapse of the trusses. Before they fell, a loud “pop” was heard. The trusses did not fall in the same direction, although it was indicated that, if trusses fell due to inadequate bracing, they would topple in the same direction like dominoes. We hold there was sufficient evidence to enable fair-minded men to draw the inference that the negligence of appellee proximately resulted in the injuries to appellee.

In its argument as to breach of warranty, appellant cites Jones v. Atkins, 254 Ark. 472, 494 S.W. 2d 448 (1973), as standing for the proposition that a buyer r precluded from recovering consequential damages in a bi each of warranty action when the buyer uses the nonconforming goods. A reading of that case shows, however, that the mere acceptance of the goods does not bar a claim for damages due to nonconformity. When it is reasonable to use the goods without inspection, recovery is not precluded. Ark. Stat. Ann. § 85-2-715 (2) (b) Comment 5 (Add. 1961). Here it was not the policy of the appellee to inspect the trusses when they were delivered inasmuch as they were represented and accepted as structurally sound. Upon delivery, they were stacked and banded together which prevented inspection. A limited inspection could only be made as the prefab material or section (250 to 550 lbs.) was hoisted into place during installation. The installation process itself made it virtually impossible to inspect the prefabricated truss system. In summary, the truss system was manufactured by appellant according to preengineered specifications, stamped and approved by appellant for use. It was accepted and understood by appellee as being reliable or fit for the purpose or use for which the trusses were designed and assembled, i.e., roof support. A cursory inspection would not reveal the flaw in the design or material which proximately caused the collapse of the system. The court did not err in failing to direct a verdict on the basis of lack of evidence of proximate cause on the issue of a breach of warranty.

It is also contended that the court erred in admitting evidence of the cost of replacement trusses, because appellee had not paid for the original trusses, and the court incorrectly gave jury instruction No. 11. With regard to the evidence of the cost of replacement trusses, appellant argues that the evidence was irrelevant and confusing and should have been excluded under Ark. Stat. Ann. § 28-1001, Rules 402 and 403 (Supp. 1977). Appellee responds that the evidence was properly admitted, arguing that he, as was his right under Ark. Stat. Ann. § 85-2-608 (Add. 1961), revoked his acceptance of the trusses and, under § 85-2-711, “covered” or purchased substitute goods in good faith and without reasonable delay. Thus, the difference in the price of the original trusses bought from appellant and the replacement trusses was the “essence” of what appellee was seeking to recover, as provided for in § 85-2-712. Further, the appellee contends that, if he did not effectively pursue this remedy, the evidence was relevant to the issue of damages for breach of warranty of accepted goods. Finally, he argues that, if the difference in value test is used, the evidence was relevant in determining both the reasonable market value of the trusses if they had been as warranted and the value of the collapsed trusses as salvage.

We agree that the evidence was relevant in determining the amount of damages attributable to a breach of warranty. § 85-2-714 provides that, in a proper case, any incidental and consequential damages stemming from a breach in regard to accepted goods may be recovered. The difference in the cost of the original and replacement trusses could be a proper element of such consequential damages. Accordingly, the court was correct in its admission of the evidence.

As to appellant’s argument that the court incorrectly gave Instruction No. 11, we point out that AMI Civil 2d 2221, from which that instruction was formulated, does, as appellee notes, permit the insertion of the elements of damages. However, in the “Note on Use” for that instruction, it is provided that the instruction must be completed by inserting the appropriate element of damage from among AMI 2222 through 2228; there is no provision for the court to insert language such as was used in the instruction here. We have said that it is impermissible to use a substitute instruction in place of an applicable AMI and, if an applicable AMI is not used, the court must state the basis for its refusal to use it. Gatlin v. Cooper Tire & Rubber Co., 252 Ark. 839, 481 S.W. 2d 388 (1972). See also C.R.I. & P.R.R. Co. v. Hughes, 250 Ark. 526, 467 S.W. 2d 150 (1971). Here the court gave no reason for its modification of the applicable AMI provisions, and in view of a possible retrial, we cannot agree that the instruction, as given, was not confusing.

The appellant next asserts that the trial court erred in its entry of judgment on the jury’s findings inasmuch as the jury’s answers to the interrogatories were inconsistent with its general verdict. We need not discuss this contention since it is not likely to happen upon retrial.

For the error indicated, the judgment is reversed and the cause remanded.

Reversed and remanded.

We agree: Harris, C.J., and Fogleman and Hickman, JJ-