author: Richard B. Adkisson, Chief Justice. Steele Hays, Justice,

text:
    Bill WORTHEN v. Joe DILLARD, County Judge, and Arnold R. KNIGHT, County Clerk, of Baxter County, Ark.
    81-238
    628 S.W. 2d 7
    Supreme Court of Arkansas
    Opinion delivered February 16, 1982

      Roy Danuser, for appellant.

      Friday, Eldredge & Clark, by: John C. Echols and Robert S. Shafer, for appellees.
   Richard B. Adkisson, Chief Justice.

Appellant brought suit under the Declaratory Judgment Act, Ark. Stat. Ann. §§ 34-2501 — 2512 (Repl. 1962), to have a Bond Purchase Agreement entered into by appellees declared invalid as violating Arkansas’ usury provision, Art. 19, § 13 of the Arkansas Constitution. The Baxter County Chancery Court’s ruling in favor of appellees is now appealed.

On August 27, 1981, appellees, the County Judge and the County Clerk of Baxter County, authorized a contract for the sale of Baxter County Hospital Revenue Bonds for the purpose of upgrading and expanding the Baxter General Hospital, a county owned and operated hospital. This contract called for an interest rate on the bonds in excess of ten percent for the years 1988—2011. Appellant, a citizen, resident, and taxpayer of Baxter County, brought this action individually and as a representative of other residents of Baxter County to enjoin the sale and issuance of the bonds as an illegal county expenditure in violation of Art. 19, § 13. This section provides:

All contracts for a greater rate of interest than ten percent per annum shall be void, as to principal and interest, . . .

The trial court held that the Depository Institutions Deregulation and Monetary Control Act of 1980, as amended, preempted the ten percent limit on interest rates as applied to the bonds at issue here. Section 511 of this Act is codified in Title 12 U.S.C.A. § 86a (a) and provides:

(a) If the applicable rate prescribed in this section exceeds the rate a person would be permitted to charge in the absence of this section, such person may in the case of a business or agricultural loan in the amount of $1,000 or more, notwithstanding any State constitution or statute which is hereby preempted for the purposes of this section, take, receive, reserve, and charge on any such loan, interest at a rate of not more than 5 per centum in excess of the discount rate, including any surcharge thereon, on ninety-day commercial paper in effect at the Federal Reserve bank in the Federal Reserve district where the person is located. (Emphasis added)

Appellant argues that the loan as evidenced by the bonds is not a “business loan” within the meaning of § 86 (a). We agree. The Act does not define “business or agricultural loan” and there is nothing in the legislative history to clarify congressional intent except a Senate report which contrasts “business and agricultural loans” with “consumer and personal loans.” Therefore, in absence of any guidance in the statute or legislative history, the term “business loan” must be given its plain and ordinary meaning. We conclude that a loan to upgrade a county owned and operated hospital is not within the plain meaning of the term “business loan” as used in the Monetary Control Act.

Reversed.

Hays, J., concurs.

Steele Hays, Justice,

concurring. I concur entirely in the result, but I believe there is a sounder basis for reversal than whether the revenue bonds to upgrade and enlarge a county hospital constitute a “business loan” within the meaning of § 511 of the Monetary Control Act. The answer is not that clear and appellees’ arguments are not that easily denied. They submit that Congress intended to classify loans generally as either “consumer or personal” or “business or agricultural” and, thus, by a process of elimination the loan becomes a “business loan.”

However that may be, I would reverse for another reason. It is one thing for Congress, acting under the Commerce Clause, to pre-empt the right to govern the interest rate private lenders and borrowers set between themselves, but quite another to claim the pre-emptive right to deny to a state the power to limit its own governmental subdivisions to a rate of interest fixed by the constitution of that state. I cannot say the Monetary Control Act does not purport to do that, but nothing is cited to us to support such an arrogation of power. It is questionable whether the power exists at all, and certainly not in the absence of an express provision. See National League of Cities v. Usery, 426 U.S. 833 (1976); Metcalf & Eddy v. Mitchell, 269 U.S. 514 (1926); United States v. California, 297 U.S. 175 (1936).

Appellees draw a distinction that in Usery, Congress sought, to impose a burden on the states by amendments to the Fair Labor Standards Act, whereas here, Congress is simply providing an opportunity to compete in the bond market. But the issue is deeper than one of a burden versus a benefit; it involves the fundamental question of where state sovereignty ends and federal sovereignty begins. See Lane County v. Oregon, 7 Wall. 71, 19 L. Ed. 101 (1869).


source: Caselaw Access Project

author: George Rose Smith, Justice.

license: Public Domain

text:
    ATKINS PICKLE COMPANY, INC. v. BURROUGH-UERLING-BRASUELL CONSULTING ENGINEERS, INC. and Allen R. HENSON
    81-224
    628 S.W. 2d 9
    Supreme Court of Arkansas
    Opinion delivered February 16, 1982

      Friday, Eldredge 6- Clark, by; John Dewey Watson, for appellant.

      Jones, Gilbreath & Jones, for appellee Burrough-Uerling-Brasuell Consulting Engineers, Inc.

      Barber, McCaskill, Amsler, Jones & Hale, for appellee Henson.
   George Rose Smith, Justice.

This is the second attempt by the appellant, Atkins Pickle Company, to fix Pope county as the venue of an action against the two appellees, a corporate engineering company having its principal office in Sebastian county and an individual residing in Faulkner county. The trial court’s dismissal of the first suit, for improper venue, was affirmed by the Court of Appeals. Atkins Pickle Co. v. Burrough-Uerling-Brasuell, 271 Ark. 897, 611 S.W. 2d 775 (1981). The plaintiff then filed the present suit, the complaint asserting essentially the same cause of action for breach of contract with additional language purporting to allege a cause of action for injury to real property in Pope county. See Ark. Stat. Ann. § 27-601 (Repl. 1979). The trial court again dismissed the action for improper venue. The appeal is brought to us under Rule 29 (1) (c).

Many of the salient facts are given in the Court of Appeals opinion and need not be restated. The plaintiff employed the two defendants (1) to design a large concrete storage structure, partly underground, for the long-term storage of cucumbers in brine and (2) to supervise the construction work done by contractors and subcontractors. The present complaint alleges that after the structure had been completed and the plaintiff began to fill the tanks with brine, “the concrete walls moved with actual force and violence, resulting in permanent injury to the fixtures” and to the land described in the complaint. The complaint alleges that the defendants were negligent in designing the structure and in failing to properly supervise its construction. The complaint seeks damages of $1,205,600 for the defendants’ negligent damage to the freehold, without specifying the elements of that damage.

Alternatively, the complaint seeks damages for breach of contract, also in the amount of $1,205,600, for improper design and supervision. Again the elements of damage are not stated. The complaint in the first case, as quoted in the present record and briefs, also sought damages of $ 1,205,600. There the items of damage were enumerated, including such matters as the cost of labor and materials for rebuilding the storage structure, excess labor costs, general inconvenience, and $113,219.73 for “[c]omplete demolition and haul off.” Of the sixteen items listed in the earlier complaint only the quoted one seems to relate directly to repairing the physical injury to the real property.

The trial court’s finding of improper venue was correct. Ever since the adoption of our Civil Code in 1869 our statutes have defined certain local actions and directed that all other actions be brought in the county of the defendant’s residence. § 27-613. We have said repeatedly that our underlying policy is to fix the venue in the county of the defendant’s residence unless for policy reasons there is a statutory exception. Bituminous, Inc. v. Uerling, 270 Ark. 904, 607 S.W. 2d 331 (1980); Wernimont v. State ex rel. Little Rock Bar Assn., 101 Ark. 210, 142 S.W. 194, Ann. Cas. 1913D, 1156 (1911).

Here the plaintiff’s asserted exception to the general rule is found in Section 27-601, which provides that actions for the recovery, partition, or sale of real property, or for an injury to real property, must be brought in the county where the land or part of it is situated. The motion to dismiss must be taken to admit that the concrete storage tanks were fixtures and therefore part of the land. The question, however, is whether the complaint so definitely states a cause of action for an injury to real property that the venue can only be in Pope county, where the land lies. The complaint attempts to state a cause of action for an injury to the concrete fixtures on the plaintiff’s land, but that allegation is subordinate to the basic breach of contract.

Which allegation governs? We have no case in point, but the decisions elsewhere reach a common-sense result, that when a complaint asserts both local and transitory causes of action the venue is determined by the real character of the action, by its principal purpose or object, by the principal right being asserted. Haines v. Lamb, 24 Cal. Rptr. 146 (1962); McMullen v. McMullen, 122 So. 2d 626 (Fla. App., 1960), Quinn v. Butler Bros., 167 Minn. 463, 209 N.W. 270 (1926); Bee County Coop. Assn. v. Dominy, 489 S.W. 2d 418 (Tex. Civ. App., 1972); Lake v. Reid, 252 S.W. 2d 978 (Tex. Civ. App., 1952); Fond du Lac Plaza v. H. C. Prange Co., 47 Wis. 2d 593, 178 N.W. 2d 67 (1970). The wisdom of the rule was shown in a child custody case in which the mother tried to establish venue in her own county by alleging that the father had committed a trespass on land in wrongfully taking the child from her possession. The appellate court affirmed the trial judge’s conclusion that the trespass was only an incident to the mother’s cause of action, not the basis for it. Boyd v. Crabb, 205 S.W. 2d 606 (Tex. Civ. App., 1947).

Here the real character of the action is not hard to determine. Professor Seaver spelled out a basic distinction: The purpose of the law of contracts is to see that promises are performed; the law of torts provides redress for various injuries. Book Review, 45 Harv. L. Rev. 209 (1931). Here the object of the pickle company’s complaint is to obtain damages for a breach of contract. Under the allegations of the complaint the plaintiff cannot establish its right to recover except by proving a contract and the defendants’ failure to perform their promises. That one of several consequences of that failure was a physical damage to land is merely an incident to the plaintiff’s cause of action, not the basis for it. Thus the substance of the complaint states a transitory cause of action, not a local one.

Affirmed.


author: Frank Holt, Justice.

text:
    Darrell W. RODGERS v. UNIVERSITY OF ARKANSAS FOR MEDICAL SCIENCES
    81-188
    628 S.W. 2d 11
    Supreme Court of Arkansas
    Opinion delivered February 16, 1982

      Lynn R. McClinton, for appellant.
    /. Gayle Windsor, Jr., for appellee.
   Frank Holt, Justice.

A jury awarded appellee a judgment in the amount of $5,457.65 for medical bills incurred by appellant’s wife while a patient at the appellee Medical Center. For reversal he contends the trial court erred in denying his motion which asserted that counsel for the appellee could not properly represent the appellee, an agency of the state, since appellee’s counsel was not the attorney general, an assistant attorney general, nor special counsel appointed by the attorney general. Ark. Stat. Ann. §§ 12-1701 and 12-719 (Repl. 1979). Neither is there any statute authorizing this state agency to hire its own attorney.

In Wade v. Moody, Judge, 255 Ark. 266, 500 S.W. 2d 593 (1973), the appellant asserted that the court erred in refusing his motion to dismiss the case because it was not brought in the name of the state as required by statute. There we said:

The motion was oral and out of time. It was made on the morning of the trial and, of course, after the case had been set for trial. See Rule 2, Uniform Rules for Circuit and Chancery Court, March 1, 1969. Furthermore, the court’s refusal to consider the oral and untimely motion suggests no prejudice to appellant; in fact the motion went to a matter of form rather than substance.

To the same effect are: Warren v. State, 261 Ark. 173, 547 S.W. 2d 392 (1977); and City of Benton v. Connerly, 261 Ark. 262, 547 S.W. 2d 432 (1977). Here, on the trial date, immediately before trial, appellant made a motion to dismiss which was untimely and not in compliance with the requirements of Rule 2 of Circuit and Chancery Courts, Ark. Stat. Ann. Vol. 3A (Repl. 1979). Furthermore, the case had been pending for more than two years during which time appellant had filed various pleadings. Appellant has demonstrated no prejudice.

Another deficiency is that the ruling of the court denying the motion is not abstracted, which is a violation of Rule 9 (d) of the Supreme Court, Ark. Stat. Ann. Vol. 3A (Repl. 1979). In fact, it is not in the transcript; we have only a stipulation by the parties that the court overruled the motion. Therefore, we have no way of knowing for what reason the court denied it. Suffice it to say that when the trial court reaches the right result, as here, we do not reverse, even though its refusal to dismiss the motion might be based on an erroneous reason. Moose v. Gregory, 267 Ark. 86, 590 S.W. 2d 62 (1979).

Affirmed.


author: Robert H. Dudley, Justice.

text:
    Charles E. JAMES v. J.F.K. CARWASH, INC., Billy D. MANSELL and David F. GRUBBS
    81-196
    628 S.W. 2d 299
    Supreme Court of Arkansas
    Opinion delivered February 16, 1982
    [Rehearing denied March 22, 1982.]

      Tucker ir Stafford, for appellant.

      Thurman & Capps, Ltd., by: Rita W. Gruber, for appellees.
   Robert H. Dudley, Justice.

The issues on appeal are whether a corporate promissory note which was given for an ultra vires repurchase of corporate stock is void and whether there is liability because of an accompanying personal guaranty of the corporate promissory note. Jurisdiction in this court is pursuant to Rule 29 (1) (c) as the appeal involves the interpretation and construction of Ark. Stat. Ann. § 64-105 (Repl. 1980), which provides that a corporation may repurchase its own shares out of earned surplus, and § 64-106, which restricts the use of defenses based on an ultra vires act.

Appellee Mansell organized the appellee J.F.K. Car-wash, Inc., and sold a one-third interest each to appellant James and appellee Grubbs. Appellant James wanted out of the operation and eventually all three agreed that the corporation would repurchase his shares. This debt for the repurchase of corporate stock was evidenced by appellee’s corporate promissory note which was secured by the personal guarantees of appellees Mansell and Grubbs. On the date the note and guaranty were signed the corporation had a deficit of $16,184.36 and had no unrestricted earned surplus. One of the applicable statutes, § 64-105, requires that stock be repurchased out of unrestricted earned surplus except in limited situations not germane to this case. The corporation was unable to make the payments as they became due and the appellant filed suit for the unpaid principal. The appellees contended that the note was void because it was ultra vires. The trial court relied on American Fidelity Fire Insurance Co. v. Builders United Construction, Inc. et al, 272 Ark. 179, 613 S.W. 2d 379 (1981) and held that appellee corporation’s promissory note was void because the corporation had insufficient earned surplus to repurchase appellant James’ stock as required by § 64-105. The trial court further concluded that since the promissory note was void, the underlying personal guarantees were void. See Ryder Truck Rental, Inc. v. Kramer, 263 Ark. 169, 563 S.W. 2d 451 (1978). We reverse.

The promissory notes in American Fidelity Fire Insurance Co. v. Builders United Construction, Inc., supra, and Ryder Truck Rental, Inc. v. Kramer, supra, were void because they were evidence of a debt arising from a transaction which had been declared by law to be prohibited. In the first case the statute required that an insurance agent be licensed in this State and we held that an indemnity agreement executed by a non-licensed agent in violation of that statute was void, while in the second case the contract called for more than 10 percent interest per annum and Article 19, § 13 of the Arkansas Constitution provides that such contracts are “. . . void as to principal and interest ... ”In the case before us the statute provides that ultra vires acts shall not be invalid except in some circumstances which are not applicable. Thus there is no prohibitory statute which in turn causes the note to be void.

The ability of a corporation to acquire and dispose of its own shares is one of the segments of a symmetrical statutory structure dealing with corporations. Section 64-104 grants general powers to a corporation. Section 64-105 delineates the restrictions on a corporation purchasing its own stock and§ 64-106 provides that when a corporation acts in excess of its powers such action will not be invalid solely because the corporation was without either the capacity or the power to do such act. This latter section provides:

Defense of ultra vires. — No act of a corporation and no conveyance or transfer of real or personal property to or by a corporation shall be invalid by reason of the fact that the corporation was without capacity or power to do such act or to make or receive such conveyance or transfer, but such lack of capacity or power may be asserted: . . .

None of the conditions for asserting lack of capacity or power are applicable to this case. They are:

A. A shareholder may sue the corporation to enjoin the performance of an ultra vires contract.
B. A stockholder may bring a derivative suit for damages in favor of the corporation against officials who have diverted business by ultra vires acts.
C. The Attorney General is authorized to enjoin unauthorized or ultra vires acts.

The juxtaposition of the statutes is not mere coincidence; it is because the General Assembly wanted to confer limited powers on corporations and to limit causes of action and defenses based on an act in excess of those powers. None of the statutory conditions are present for an assenting stockholder to assert the defense of ultra vires. The promissory note is not invalid as an ultra vires instrument and, accordingly, the underlying personal guarantee is not invalid. The holding of the trial court that the instruments are void is reversed and remanded.


author: Steele Hays, Justice.

text:
    Ches WILLIAMS and Gaye B. WILLIAMS v. J. W. BLACK LUMBER COMPANY
    81-185
    628 S.W. 2d 13
    Supreme Court of Arkansas
    Opinion delivered February 16, 1982

      Donald A. Forrest, for appellants.

      Frierson, Walker, Snellgrove & Laser, by: G. D. Walker, for appellee.
   Steele Hays, Justice.

Appellants Ches and Gaye Williams are the owners of Cow Island, a part of Shelby County, Tennessee, but attached to Arkansas. J. W. Black Lumber Company, appellee, brought suit against appellants claiming damages of $14,531.25 for breach of contract to sell four parcels of timber on Cow Island. The complaint alleges the parties contracted in writing on April 17,1978, for the sale of 640 acres, more or less, for $30,000.00 but only 330 acres of timber were actually marked off for cutting, resulting in a shortage of 310 acres. The circuit judge found the buyer was due 640 acres as stated in the contract, but received only 355 acres. He awarded damages of $11,359.38 for the 285 acre shortage. Appellants argue five points for reversal. We find no error.

I.

Appellants first contend that their motion to dismiss the complaint pursuant to Rule 12 (h) (2) A.R.C.P. for failure to state facts upon which relief could be granted was denied because it was made on the morning of trial and, therefore, untimely. They contend that the rule permits the motion at any time. But appellants have misconstrued the trial court’s ground for denying the motion to dismiss. Although he did criticize the timing, the motion was denied because he found the suit was for breach of contract and jurisdiction was properly vested in the circuit court (see p. 78 of the record.).

II.

Appellants argue the complaint fails to state facts upon which relief can be granted at law because it is a suit to reform the contract rather than for its breach. Although the complaint alleges some facts which would support a reformation theory, it is nevertheless sufficient to support an action in breach of contract. A complaint that alleges facts to support a cause of action under more than one theory is not demurrable if a cause of action on at least one theory is stated. 17A C.J.S. Contracts § 533 (1963). This complaint states, first, that appellants agreed to sell all merchantable timber on four parcels of land containing 640 acres, more or less; secondly, that appellants supplied only 330 acres, and, finally, that the damages suffered as a result of the breach were $14,531.25. The complaint need only assert the “existence of a valid and enforceable contract between the plaintiff and defendant, the obligation of defendant thereunder, a violation by the defendant, and damages resulting to plaintiff from the breach.” 17A C.J.S. Contracts § 533 (1963). See also Caldwell v. Guardian Trust Co., 26 F. 2d 218 (8th Cir. 1928). We find no deficiency in the complaint requiring dismissal under Rule 12 (h) A.R.C.P. and conclude the trial court was correct in denying appellants’ motion.

III.

Appellants allege the court erred in allowing evidence which varied the terms of the written contract over their continuing objection. The relevant section of the contract states:

In consideration of Thirty Thousand Dollars ($30,-000.00) . . . Owners hereby sell to Company and Company hereby purchases from Owners all of the merchantable timber growing, standing and lying in four separate parcels of land comprising portions of “Cow Island,” the approximate boundaries of said parcels are shown on the aerial photograph attached hereto and incorporated herein by reference thereto, the exact boundaries of said parcels being located on the ground and established either by painted lines or lines cut by bulldozer, and shown by Company’s representative, said four parcels of land containing 640 acres, more or less. . . .

In spite of the provision that the exact boundaries were marked and seen by appellee’s representative, appellee was permitted to offer proof that the boundaries were not marked until well after the contract was signed and contained only about half of the 640 acres called for.

There are cases holding that “more or less” after the stated acreage is merely descriptive and does not entitle the buyer to recovery for any deficiency in acreage. But the rule is applicable where the discrepancy is slight or trifling. Hays v. Hays, 190 Ark. 751, 81 S.W. 2d 926 (1935); Carter v. Finch, 186 Ark. 954, 57 S.W. 2d 409 (1933); First National Bank of Belleville, Illinois v. Tate, 178 Ark. 1098, 13 S.W. 2d 587 (1929); Glover v. Bullard, 170 Ark. 58, 278 S.W. 645 (1926); Harrell v. Hill, 19 Ark. 108, 68 Am. Dec. 202 (1857). Where the stated acreage goes to the essence of the contract and is not merely a matter of description, the purchasers, in case of deficiency, are entitled to a reduction in price. Glover, supra. The appellee presented evidence of a survey of the property prepared after all the boundaries were marked. This survey revealed the total acreage of the four parcels to be 330 acres, 310 less than stated in the contract. The trial court subtracted another 25 acres to adjust for an 8% margin of error in the method of computation and fixed the deficiency at 285 acres. Where a discrepancy of this magnitude exists, representing an error of almost 50 per cent, the words “more or less” should not prevent recovery for the deficiency. We find no cases that take issue with that view.

Appellants insist any parol evidence which disputes the total acreage as being 640 acres or that the boundaries were not marked is inadmissible. We disagree. Parol evidence, though not admissible to vary contractual terms to be performed, is admissible to show what the parties to the contract intended. In Ward v. McIlroy, 172 Ark. 704 at 709, 290 S. W. 2d 46 (1927), we said that parol evidence to vary the terms of a written contract is not admissible, but is admissible to enable the court to say what the parties intended to express by the language adopted. It is a rule of construction.

Here it is uncertain whether the consideration the appellee bargained for is “640 acres, more or less” or the four parcels as marked. And while there may have been no ambiguity on the face of the contract, there was a material disparity (according to the findings of the trial court) between the actual acreage marked and the stated acreage. That being so the court properly permitted evidence to expose a latent ambiguity. University City Mo. v. Home Fire & Marine Ins. Co., 114 F. 2d 288 (8th Cir. 1940); Queen Ins. Co. of America v. Meyer Milling, 43 F. 2d 885 (8th Cir. 1930). In University City, at 295, 296, the court stated:

Ambiguities in written instruments are of two kinds. They are either patent or latent. A patent ambiguity is one arising upon the face of the instrument without reference to the described object while a latent ambiguity is one developed by extrinsic evidence, where the particular words, in themselves clear, apply equally well to two different objects. A latent ambiguity may be one in which the description of the property is clear upon the face of the instrument, but it turns out that there is more than one estate to which the description applies; or it may be one where the property is imperfectly or in some respects erroneously described, so as not to refer with precision to any particular object. If such an ambiguity develops, extrinsic evidence is admissible to show the real intent of the parties. (Citations omitted.)

The evidence appellants dispute was admissible under yet another theory. It is always permissible to show by oral testimony that the consideration recited in the contract is not the consideration actually agreed on between the parties. Newberry v. Newberry, 218 Ark. 548, 237 S.W. 2d 447 (1951); Sewell v. Harkey, 206 Ark. 24, 174 S.W. 2d 113 (1943); Hockaday v. Warmack, 121 Ark. 518, 182 S.W. 2d 263 (1916).

IV.

Appellants’ fourth argument is that the court erred in using an erroneous measure of damages. The trial court found the acreage the appellee received to be 285 acres less than stated in the contract. The contract provided for a lump sum of $30,000.00 for the timber rights on “640 acres, more or less” but did not specify a price per acre. The trial court divided the contract price by the total acreage to arrive at a price per acre of $46.87. The damages were then fixed by multiplying 285 times $46.87 to arrive at $13,359.77.

J. W. Black, an experienced timber dealer, testified that the value of the timber was approximately $50.00 per acre. There was no evidence to dispute this figure. The inference from his testimony is that if the acreage had been set at a lesser figure in the contract, his offer would have been reduced by $50.00 per acre of reduction.

Timber contracts are contracts for the sale of goods and governed by the Uniform Commercial Code. Ark. Stat. Ann. § 85-2-107 (2) (Supp. 1963). The buyer’s measure of damage where there is any non-conformity of tender is defined in Ark. Stat. Ann. § 85-2-714 (Repl. 1961). Subsection 1 of § 85-2-714 allows the damages to be “determined in any manner which is reasonable.” In light of the testimony that the timber was worth approximately $50.00 per acre, we believe the method used by the trial court in fixing damages by reducing the price of $30,000.00 by the amount of the shortage on a ratio of $46.87 per acre was not unreasonable.

Appellants rely on Eagle Properties Inc. v. West & Co. of Louisiana, 242 Ark. 184, 412 S.W. 2d 605 (1967), and Harmon v. Frye, 103 Ark. 584, 148 S.W. 2d 269 (1912), for the proposition that damages cannot be allowed where they are speculative or based on conjecture. But those facts are dissimilar; both cases involved the loss of use of commercial property and the damages claimed were found to be too speculative. No similar speculation is present here. “It is not a sufficient reason for disallowing damages claimed that a party can state their amount only proximately; it is enough if from the proximate estimates of witnesses a satisfactory conclusion can be reached.” 25 C.J.S. Damages § 26 (1966). The amount fixed by the trial court was based on evidence of specific damage and was not unfair to appellants.

V.

Finally, appellants urge that the court’s findings of fact are not supported by the record. Appellants’ abstract is insufficient to enable us to address the argument on this point. Where we are unable to evaluate the merit of the argument we affirm the trial court. See Rule 9 (e) (2), Rules of the Supreme Court.

The judgment is affirmed.

      This figure was reduced to $11,359.77 for an unrelated off-set.

      The commentary to Ark. Stat. Ann. § 85-2-714 provides:
      2. The “non-conformity” referred to in subsection (1) includes not only breaches of warranties but also any failure of the seller to perform according to his obligations under the contract. In the case of such non-conformity, the buyer is permitted to recover for his loss “in any manner which is reasonable.”


author: John S. Cherry, Jr., Special Chief Justice. Steele Hays, Justice,

text:
    Linda Ann ELROD v. G & R CONSTRUCTION COMPANY
    81-104
    628 S.W. 2d 17
    Supreme Court of Arkansas
    Opinion delivered February 16, 1982

      Jacoway ir Sherman, by: William F. Sherman, for appellant.

      Laser, Sharp ir Huckabay, P.A., for appellee.
   John S. Cherry, Jr., Special Chief Justice.

Plaintiff appeals from a jury verdict awarding her $5,000.00 compensatory damages and $1,000.00 punitive damages. She raises two issues on appeal. First, she urges reversal of the trial Court’s refusal to allow her to go to the jury on two separate theories of recovery, i.e., respondeat superior and negligent entrustment. Second, she urges reversal of the trial Court’s refusal to grant her motion for mistrial following an allegedly improper question of a witness by defense counsel. We affirm the trial Court’s decision to allow the plaintiff to proceed on only the theory of respondeat superior, but reverse on other grounds.

At the time of the accident giving rise to this lawsuit, plaintiff, operator of a passenger vehicle, was stopped in a line of traffic that had developed because of a malfunctioning traffic light. Apparently, traffic was stopped in all directions and motorists were proceeding in-turn through the intersection. When it was plaintiff’s turn to proceed, she moved forward too cautiously to suit the driver immediately behind her. Lemon Dye, who was immediately to plaintiff’s rear, was operating a tractor-trailer owned by appellee and either pushed or struck plaintiff’s vehicle from the rear with sufficient force to move it into the intersection so that Dye could effect a left turn. After striking or pushing plaintiff’s vehicle into the intersection, Dye left the scene of the accident. However, a witness to the accident followed Dye to appellee’s place of business. The witness advised G 8c R’s superintendent of that accident and the superintendent and the witness went to the accident scene.

Plaintiff, Linda Ann Elrod, sued Dye’s employer, G & R Construction Company, for personal injuries. Plaintiff’s complaint, as amended, sought recovery against G 8c R on two theories of liability and sought both compensatory and punitive damages under each theory. Plaintiff alleged that G 8c R was vicariously liable for Dye’s negligent acts and willful and wanton conduct committed during the course and scope of his employment thereby entitling plaintiff to recover both compensatory and punitive damages. Plaintiff further alleged that she was entitled to compensatory and punitive damages against G 8c R because it either negligently or willfully and wantonly entrusted Dye with a motor vehicle to operate while employed by G 8c R.

In Chambers immediately prior to trial, G 8c R admitted that at the time of the accident complained of, Dye was its employee acting within the course and scope of his employment and further that G 8c R would be liable for any compensatory and/or punitive damages which the jury found plaintiff was entitled to recover. Following this admission, G 8c R moved to dismiss those portions of plaintiff’s Amended Complaint which it sought to recover on the theory of negligent entrustment or willful and wanton entrustment. The Court granted this motion to dismiss as to plaintiff’s second theory of recovery. Plaintiff made an offer of proof outside the hearing of the jury which offer consisted of Dye’s traffic record over the last four years. The record indicated that Dye had been involved in some six motor vehicle accidents, two of which resulted in personal injury. The record also indicated that Dye had citations for failure to yield and unsafe operation of a vehicle unrelated to the accidents mentioned above. Dye’s motor vehicle record did not indicate whether his negligence was the cause of any of the accidents referred to therein.

Following argument of counsel, the trial Judge ruled that when the employer admits agency, course and scope of employment, and concedes liability for any damages which might be awarded for either the negligence or willful and wanton conduct of the employee, plaintiff could not pursue a separate claim of negligent or willful and wanton entrustment. Plaintiff recovered a jury verdict for $5,000.00 compensatory damages and $1,000.00 punitive damages.

When a defendant denies liability, no problem is encountered by allowing a plaintiff to proceed under two consistent theories of recovery such as respondeat superior and negligent entrustment. Breeding v. Massey, 378 F. 2d 171 (8th Cir. 1967); Ozan Lumber Co. v. Neeley, 214 Ark. 657, 217 S.W. 2d 341 (1949). However, when defendant admits liability under one of plaintiff’s theories of recovery such as respondeat superior, difficulties do arise and the authorities are divided on the issue whether plaintiff should be allowed to proceed on one or both theories. See Woods, Negligent Entrustment Revisited, 30 Ark. L. Rev. 288 (1976); 74 Am. Jur. 2d, Automobiles and Highway Traffic, § 643 (1980). In view of this Court’s holding in Kyser v. Porter, 261 Ark. 351, 548 S.W. 2d 128 (1977), we are inclined to follow the majority view which allows plaintiff to proceed on only one theory of recovery in cases where liability has been admitted as to one theory of recovery. In Kyser, plaintiff sought to recover from the parents of a minor who permitted their son to operate a vehicle and plaintiff based his claim upon both statutory liability of a parent pursuant to Ark. Stat. Ann. § 75-315 (Repl. 1979) and negligent entrustment. Though there was no claim for punitive damages, parents conceded liability under 75-315 and the Court prohibited plaintiff from pursuing his theory of negligent entrustment. Plaintiff’s tender of the driving record of the minor was excluded and we said:

Our cases hold that a negligent entrustor, though guilty of a separate tort, is only liable to a third party for his entrustee’s negligence, if any. (cases cited) Thus, in the case at bar, had the appellant been allowed to present any available evidence on this theory of negligent entrustment to the jury, the end result could only have been established, at best, that the [defendant] was liable, . . .

Appellant argues that Kyser does not control because in that case, the Court was not presented with a claim for punitive damages. While appellant concedes that while Kyser represents a majority view, she urges that when a claim for punitive damages is made in connection with negligent entrustment, more Courts are accepting the view that plaintiff be allowed to proceed on both theories even when liability has been admitted.

The fact that appellee in this case admitted liability for both compensatory damages that might be awarded for its employee’s negligent acts and punitive damages that might be awarded for its employee’s willful and wanton misconduct distinguishes it from all those cases cited wherein both theories of recovery were allowed to be presented to the jury.

In this case, plaintiff was given the right to pursue her claim in its entirety, i.e., claims for both compensatory and punitive damages. Further in this case, plaintiff was allowed to introduce all proof that bore directly on her entitlement to recover both compensatory and punitive damages and the only evidence the trial court rejected was the prior driving-record of G 8c R’s employee, Dye. The potential problems and possible prejudice that could be created by the introduction of a prior bad driving record in our view outweigh any possible advantages. Moreover, for plaintiff in this case to have been entitled to punitive as well as compensatory damages from G 8c R on the theory of negligent entrustment plaintiff would have had to have proved that G 8c R not only negligently entrusted the vehicle to Dye, but also that G 8c R had willfully and wantonly entrusted the accident vehicle to Dye. Even in light of Dye’s prior bad driving record, we can only surmise that in some of those instances, he may have negligently operated his motor vehicle. There is nothing in the record or in the offer of proof consisting of Dye’s prior bad driving record which would have put the employer on notice or conceivably enabled the employer to foresee that Dye would commit a willful and wanton act or possibly an intentional act.

We affirm the trial Court dismissing that portion of the Amended Complaint which sought to recover on negligent entrustment or willful and wanton entrustment adhering to the holding in Kyser and join the majority of courts that have dealt with this problem. However, we reverse the trial Court on the second issue raised by appellant.

The defense attorney, while questioning a witness who was a passenger in the plaintiff’s car during the accident, said: “I believe you settled your case for two thousand dollars.” The plaintiff moved for a mistrial. The trial Court denied the motion and, instead, admonished the jury. The remark was uncalled for and undoubtedly prejudiced the plaintiff’s case. The excuse is that the plaintiff opened the door by questioning the witness about the extent of her injuries. The door certainly was not opened enough to permit such a statement by defense counsel. It was a statement rather than a question and the defendant’s purpose was obvious — the jury was meant to infer that $2,000.00 would be enough for the plaintiff. Offers of compromise or settlement are not admissible. Ark. Stat. Ann. § 28-1001, Rule 408 (Repl. 1979); 2 Weinstein’s par. 408 [06] (1981).

The trial Court should have granted plaintiff’s motion for a mistrial. Realizing that declaration of a mistrial is a drastic step, we feel that in this case no admonition of the jury by the Court would have been sufficient to eliminate any possible prejudice which might have resulted to plaintiff by the statement referring to the offer of settlement.

Reversed and remanded.

Purtle, Dudley and Hays, JJ., dissent.

Adkisson, C.J., not participating.

Steele Hays, Justice,

concurring in part, dissenting in part. I disagree with that part of the majority opinion which denies to the plaintiff the right to introduce evidence of the driving history of an employee where punitive damages against the employer is an issue. The majority opinion purports to follow the majority view “which allows the plaintiff to proceed on only one theory of recovery in cases where liability has been admitted as to one theory of recovery.” But that does not reach the issue of this case at all. That issue was settled, sensibly, in Kyser v. Porter, 261 Ark. 351, 548 S.W. 2d 128 (1977). Butin Kyser, only compensatory damages were sought. Here the plaintiff is claiming punitive damages from the employer, based on allegations of wanton misconduct by the employer, so how can he be denied the opportunity to prove those allegations?

Where there is a valid claim against an employer, a parent or other entrustor for punitive damages in the wanton entrustment of a dangerous instrumentality to someone incompetent to justify that trust, the injured party is entitled to have the evidence supporting that theory submitted to the jury, if the evidence is such that reasonable minds could reach differing results. The exact issue presented here was decided affirmatively by United States District Judge Gordon E. Young in a thoughtful and well-reasoned opinion which the Court of Appeals for the Eighth Circuit upheld. See Breeding v. Massey, 378 F. 2d 171 (1967). To the same effect see Plummer v. Henry, 7 NC App. 84, 171 S.E. 2d 330 (1969). Both the District Court and the Court of Appeals in Breeding, after reviewing Arkansas decisions in the general fields of negligent entrustment and punitive damages expressed the conviction that the Arkansas Supreme Court would, if presented with the question, permit the issue of punitive damages to be submitted to the jury. We are not bound by those assumptions, of course, but the merit of their reasoning deserves at least the attention of the majority opinion.

The result reached here cannot be justified by the argument that a plaintiff cannot complain if he is compensated for all the damages caused by an employee, including punitive damages, for willful and wanton misconduct. The error of that lies in the rationale for punitive damages: such damages are recoverable in appropriate cases not to compensate the injured party but to exemplify the conduct of the wrongdoer. The purpose is to deter others from like conduct. Ray Dodge v. Moore, 251 Ark. 1036, 479 S.W. 2d 518 (1972); Dunaway v. Troutt, 232 Ark. 615, 339 S.W. 2d 613 (1960).

The effect of this decision is that no matter how culpable the conduct of one who entrusts to another the means of injury to third persons, such entrustor cannot incur direct liability for punitive damages and can prevent evidence of wanton misconduct from being considered by the jury by the simple expediency of admitting agency or entrustment. I can see no logic in this holding.

Purtle and Dudley, JJ., join.


author: Per Curiam.

text:
    John W. WALKER v. SUPREME COURT OF ARKANSAS COMMITTEE ON PROFESSIONAL CONDUCT
    81-158
    628 S.W. 2d 552
    Supreme Court of Arkansas
    Opinion delivered February 16, 1982
    [Rehearing denied March 29, 1982.]

      John P. Sizemore, E. J. Ball, and Vashti O. Varnado, for appellant.

      Winslow Drummond, for appellee.
   Per Curiam.

This appeal is brought before this Court from a proceeding and determination of the Arkansas Supreme Court’s Committee on Professional Conduct, involving the conduct of appellant, John W. Walker, who is a member of the bar of this state. Roosevelt Watson, the complainant, having been previously represented by the law firm of Kaplan 8c Walker, of which appellant was a member, allegedly engaged appellant to represent him in connection with an automobile accident which occurred on July 8, 1975. On July 12, 1980, Mr. Watson initiated proceedings before the Committee on Professional Conduct alleging that appellant failed to undertake any legal action on his behalf during the period permitted by the Statute of Limitations. On April 6, 1981, after hearing, the Committee determined appellant’s conduct to be in violation of DR6-101 (A) (3) and DR6-102 (A). A Caution was accordingly given to appellant by the committee. This appeal was thereafter instituted by appellant, John W. Walker.

Appellant bases his appeal upon four points:

I.

Appellant submits that he was deprived of procedural due process by being deprived of the right to participate in an inquiry by the committee addressed to this court regarding use of discovery procedures in proceedings before the committee.

II.

Appellant further alleges that he was denied procedural due process by the failure of the committee to separate the adjudicatory and prosecutorial functions of its Executive Secretary.

III.

Appellant further states that he was deprived of procedural due process when he was found to be in violation of DR6-102 (A) without having first been charged with such violation.

IV.

Appellant lastly states that the finding that appellant’s conduct was in violation of DR6-101 (A) (3) and DR.6T02 (A) is not supported by a preponderance of the evidence presented before the committee.

The court will address each of these points in the order presented.

I.

Appellant submits, in support of his first point, that the ex parte communication of the committee, through its Executive Secretary, and the response thereto by this court, constituted a proceeding before and a determination by this court of appellant’s right to discovery procedures before the committee. Appellant cites, as supportive of his right to discovery, Weems v. Supreme Court Committee on Professional Conduct, 257 Ark. 673, 523 S.W. 2d 900 (1975). This court is unable to extrapolate from the principles of the Weems decision, supra, that any right to discovery exists in disciplinary proceedings before the Committee on Professional Conduct. Hearings before the Committee on Professional Conduct take neither the form of criminal nor civil trials. They are, for the most part, administrative proceedings carried out through an administrative agency of the court, to-wit: The Committee on Professional Conduct. The rules of procedure promulgated by this court make no provision therein for discovery in disciplinary proceedings. Discovery in such instances appears also to be unauthorized by the statutes of this state. This court feels compelled to establish such discovery procedures, as a matter of right, to proceedings of the Committee on Professional Conduct.

The record of this case does not reflect that appellant Walker was involved in the communication between this court and the Committee on Professional Conduct regarding discovery. This communication consisted of no more than administrative inquiry to the court by its own committee, seeking advice under the rule-making power of the court. Such action did not constitute a “proceeding” before this court involving appellant and appellant’s exclusion from such process could not deprive him of procedural due process. The action of the committee and this court was not one of adjudication, but was one of rule-making. Supreme Court of Virginia, et. al. v. Consumers Union of the United States, et. al., 446 U.S. 719 (1980).

II.

Appellant Walker submits, in support of his second point, that the Executive Secretary of the committee, Taylor Roberts, acted as “prosecutor” before the committee and was permitted to participate in the deliberations of the committee. He alleges this deprived him of procedural due process of law. Such a committee, with dual functions of prosecution and adjudication has been held constitutional. Withrow v. Larkin, 421 U.S. 35 (1975). The Executive Secretary did remain with the committee when it deliberated. But there is no evidence he participated or acted improperly in any way. The appellant has the burden of demonstrating that he was denied due process of law. Omni Farms, Inc. v. Arkansas Power & Light Co., 270 Ark. 61, 607 S.W. 2d 363 (1980). He has not done so. The Executive Secretary should not have remained with the committee when it deliberated. No doubt this caveat will prevent such actions in the future.

III.

It appears that appellant’s argument is uncontroverted regarding the committee’s finding that appellant’s conduct was a violation of DR6-102 (A). The basic principles of procedural due process support appellant’s entitlement to notice of any alleged violation of this rule. In re Buffalo, 390 U.S. 544 (1968). No notice of such charge appears to have been given appellant in advance of the proceeding and the finding of the committee in this respect cannot be permitted to stand. The finding of the committee regarding appellant’s violation of the provisions of DR6-102 (A) is, therefore, accordingly, vacated.

IV.

Having disposed of the committee’s finding that appellant’s conduct constituted a violation of DR6-102 (A) upon the reasons hereinbefore stated, this court will consider appellant’s fourth point only in light of the charge that his conduct was a violation of DR6-101 (A) (3).

Review of the transcript in this proceeding leads this court to conclude that the findings of the committee, whereby appellant has been found to be in violation of DR6-101 (A) (3), are supported by a preponderance of the evidence. The findings of the committee, in this respect, are not contrary to the weight of the evidence and must be affirmed. Hurst v. Bar Rules Committee of the State of Arkansas, 202 Ark. 1101, 155 S.W. 2d 697 (1941). This courtis not unaware that “neglect”, as set out in DR6-101 (A) (3), can be interpreted to mean any conduct ranging from a single act or omission to one of gross negligence which would support an action for malpractice. However, this court takes notice that the guidelines of this rule have been sufficiently established by its previous applications and review. The Weems case, supra, is illustrative of such. Any neglectful conduct of a member of this bar regarding the interests of a client is, in fact, contemplated as answerable under the provisions of DR6-101 (A) (3). That is not to say, however, that citations incommensurate with the degree of neglect involved under this rule will never be subject to review by this court. In the instant case it is argued by appellant Walker that his conduct falls far short of negligence which might be required to support an action for malpractice and he should not, therefore, be held accountable under the provisions of the rule. For the reasons aforesaid, this court is unable to be so persuaded. It is also to be noted that the citation levied by the committee was a “Caution” rather than a “Reprimand”. We believe such action is not incommensurate with the neglect of appellant Walker as reflected by the evidence in this proceeding. The findings of the committee in this respect will be undisturbed by this court.

With the exception of the modification of the finding as to appellant’s violation of DR6-102 (A), the findings and decision of the Committee on Professional Conduct are affirmed.

Special Justice Claude M. Williams, Jr. joins in this opinion.

George Rose Smith, J., not participating.

Dudley, J., did not participate in the final decision.


text:
    ARKANSAS POWER & LIGHT COMPANY v. ARKANSAS PUBLIC SERVICE COMMISSION
    81-204
    628 S.W. 2d 555
    Supreme Court of Arkansas
    Opinion delivered February 22, 1982
    [Rehearing denied March 29, 1982.]

      House, Holmes ir Jewell, P.A., and Mitchell, Williams if Selig, by: E. B. Dillon, Jr., for appellants.

      Jeff Broadwater, for appellee.
   George Rose Smith, Justice.

In 1979 the Attorney General began this proceeding by filing a complaint with the Public Service Commission, asserting that the Arkansas Power & Light Company had misinterpreted a 1976 Commission decision approving part of a requested rate increase. The discussion part of that decision was reported as Re Ark. Power & Light Co., 15 PUR 4th 153 (April 21, 1976). The Attorney General’s complaint alleged that the Company’s misinterpretation of the decision had resulted in overcharges to its ratepayers of $17,297,124, which should be refunded. The Company answered, first, that its interpretation was correct, and second, that the Commission was estopped to interpret the decision any other way. The Commission rejected both the Company’s defenses, but found that the refunds should total only $7,791,544.59, with interest. This appeal is from a circuit court judgment affirming the Commission.

The issue is whether the fuel adjustment clause that the Company put into effect after the 1976 decision conformed to that decision. The Commission held that the Company’s clause did not conform and that there was no estoppel.

A fuel adjustment clause permits a power company to pass on to its ratepayers all or part of any increase (or decrease) in the cost of the fuel the company uses to generate electricity. AP&L’s three principal sources of electricity are the Company’s own generation of current by using nuclear fuel, its own generation by burning fossil fuel (oil or gas, for example), and its purchase of current from other power companies. The proportion in which the Company’s electricity is being derived at any particular time from those three sources is called the “generation mix.”

Several possible fuel adjustment clauses were presented to the Commission in 1976. The Company sought a single-base clause, which it had used for many years. The Commission refused to approve the continued use of that clause, on the ground, as more fully explained in a slightly later but overlapping AP&L rate case, that the single-base clause provides a utility no incentive to use its most efficient plants. Re Arkansas Power & Light Co., 19 PUR 4th 53, 81 (March 15, 1977).

The Commission, in discontinuing the single-base fuel adjustment clause, directed AP&L to use a multiple-base clause, which necessarily takes the generation mix into account. The Commission’s exact language was: “The base generating mix shall be that mix used in the system redispatch for determining the test-year revenue and expenses.” Two phrases in that directive need explanation. The test year is the hypothetical year that AP&L used, as is customary in rate cases, to demonstrate its need for a rate increase. The system redispatch is a computation made every 90 seconds by AP&L’s parent company, Middle South Utilities, to determine the cheapest combination of the system’s available sources of power. In AP&L’s test year the redispatch generation mix was 22.516% fossil fuel, 35.806% nuclear, 40.467% purchased power, and 1.211% hydroelectricity. In the next succeeding AP&L rate case, cited above, the Commission adhered to its position, using this language: “The commission determines the appropriate fuel adjustment clause is the one specified in [the 1976 case]. The generation mix will be that mix used to determine the test-year revenue and expenses.” 19 PUR 4th 81.

There is no doubt that the Commission’s 1976 discussion recognized the importance of the generation mix to be used in the fuel adjustment clause, but the question is: Just what generation mix did the Commission intend? The Commission found in the present case that it had intended a fixed mix in the proportion used in the system redispatch shown in the test year. The Company contends that the Commission’s discussion contemplated not a fixed mix but whatever actual mix the Company might select in serving its ratepayers. The Commission’s final order, implementing its 1976 opinion, was entered on April 8, 1977, but it did not mention the generation mix and so provides us no assistance. (It may be added that a multiple-base mix is never exact in its operation. It may result in the utility company’s recovery through the fuel adjustment clause of either more or less than the true change in the cost of fuel.)

The appellant first argues that there is no substantial evidence to support the view that the Commission’s 1976 decision contemplated a fixed generation mix rather than a variable actual mix. In making this argument the Company’s brief in chief discusses only the testimony of the Company’s own witnesses, with the broad statement: “There is no evidence to the contrary.” The Commission’s brief responds by citing the testimony of the witnesses Copeland, Burns, and Douglas. In reply the appellant insists that Copeland and Burns merely gave “unsupported opinions” about what the Commission had intended — opinions that the Commission itself disregarded.

We cannot accept that narrow view of the testimony supporting the decision under review. Counsel for AP&L did move to strike a few lines from Copeland’s testimony, which ran to scores of pages, as being merely his opinion about what the Commission intended. The motion to strike was not acted upon, but in any event it questioned the admissibility of only a small fraction of Copeland’s testimony. Copeland testified concerning various formulas that were doubtless understood by the Commission but are beyond our expertise as appellate judges, in the absence of any attempt by the parties to explain the formulas. Copeland stated, and was not cross-examined on the point, that during the 1976 case a Staff witness, Gary Goble, had urged the Commission to adopt a formula that was mathematically identical to AP&L’s later actual generation mix, but Goble’s formula was rejected. Yet AP&L’s actual practice put that formula into effect, according to Copeland.

Douglas’s testimony also supported the Commission’s conclusion. He impliedly recognized the Commission’s earlier emphasis on the need for incentives for the use of the most efficient sources of electricity and pointed out that the Company had profited by using fossil fuel even when it was more expensive than purchased fuel. He said that in 21 of the 22 months in question fossil fuel generation was more expensive than purchased power, but the Company apparently used it. His conclusion, as the Commission noted in the present case, was that AP&L’s fuel adjustment clause had the potential for “rewarding increased waste with increased profits.” On the case as a whole we cannot say that the Commission’s decision is not supported by substantial evidence.

The appellant argues, secondly, that the Commission is estopped to disapprove AP&L’s interpretation of the 1976 decision. This argument was summarily rejected by the Commission under our long-standing rule that the state cannot be estopped by the acts of its agents. Since the Commission’s decision, however, we have modified our rule by holding that although estoppel is not a defense that should be readily available against the state, our inflexible rule that the state can never be estopped should be abandoned. Foote’s Dixie Dandy v. McHenry, 270 Ark. 816, 607 S.W. 2d 323 (1980). We therefore consider AP&L’s argument on its merits.

After the 1976 decision a Commissioner suggested to AP&L that it work with Goble, who was then the Commission’s Chief of Rates, in designing new rate schedules and in drafting a fuel adjustment clause. Goble and AP&L representatives did work together in the matter. However, neither the new rate schedules nor the order implementing the Commission’s decision contained any specific reference to the generation mix. Goble did not inform the Commission that the proposed fuel adjustment clause did not specify the redispatch fixed mix, but he did submit a memorandum to the Commission stating that he thought the proposed rate schedules conformed to the 1976decision. The Commission entered a brief order approving the proposed rates, apparently as a matter of routine. AP&L filed 22 monthly reports that showed the actual generation mix was being used. Goble examined the first few reports before he left the Commission’s employ and evidently considered them to be in conformity with the Commission’s decision. It is not contended that the Commission itself ever reviewed the monthly reports or that it was expected to do so.

We find hardly any real basis for an estoppel and certainly not .the comparatively clear showing that is essential if the state is to be estopped. Goble, as an employee of the Commission, had no authority to make a binding interpretation of the Commission’s language. His participation in the drafting of rate schedules which, according to Copeland, represented Goble’s own views but not those of the Commission, could not create an estoppel. No doubt there was some ambiguity in the Commission’s 1976 decision, but we discern hardly any want of clarity in this sentence from its 1977 decision, handed down before the entry of the implementing order: “A multiple fuel adjustment clause, when the generation mix is determined by the optimum redispatch system for the test year, provides the necessary incentives for the firm always to employ the most efficient plants.” 19 PUR 4th 81.

We think it clear that if the Commission’s decision was open to different interpretations, as the estoppel argument assumes, that fact was readily apparent to AP&L. On this point the Commission said in the present case, with respect to the substantial evidence argument: ‘‘[Ijnsofar as the Company may be understood to argue that the Orders are susceptible to more than one interpretation, we point out the obvious fact that the Company should have petitioned the Commission to resolve ambiguities. It proceeded at its peril in placing what we find to be an unreasonable interpretation most favorable to its interests on the Orders involved and acted accordingly.” That reasoning also pinpoints the weakness in the Company’s defense of estoppel: The necessary reliance upon misleading action by the Commission is lacking.

Affirmed.

Hays, J., not participating.


text:
    Chester PERRY v. STATE of Arkansas
    CR 82-11
    628 S.W. 2d 304
    Supreme Court of Arkansas
    Opinion delivered February 22, 1982

      Haskins &r Wilson, by: John W. Achor, for petitioner.

      Steve Clark, Atty. Gen., by: Alice Ann Burns, Asst. Atty. Gen., for respondent.
   George Rose Smith, Justice.

Less than three weeks ago the petitioner was tried by jury, found guilty of first-degree murder and second-degree battery, and sentenced to concurrent terms of 40 and 6 years and to a $10,000 fine. Prior to trial Perry had been free on a $10,000 bond, set by a municipal judge; but after the return of the verdicts the circuit judge, without making written findings, fixed the appeal bond at $50,000. On the day after trial, counsel for Perry filed a notice of appeal and also filed the present petition for certiorari, asking that we set aside the requirement of a $50,000 appeal bond and immediately release Perry on his original bond, pending appeal. There is no indication that counsel has applied to the circuit judge for a reduction of the appeal bond. A writ of certiorari lies to correct proceedings erroneous on their face. Bridges v. Ark. Motor Coaches, 256 Ark. 1054, 511 S.W. 2d 651 (1974). We find no such patent error and deny the petition.

Petitioner’s argument is based on Rule 9.2 (e), A. R. Crim. P., which provides among other things that the pretrial release bond serves to guarantee subsequent appearances of the defendant on the same charge before any court, including appearances relating to appeals, and that a judicial officer (here the circuit judge) may upon making written findings increase the amount of a bond required by another judicial officer (here the municipal judge). It is accordingly argued that the circuit judge was without power to fix an increased appeal bond without making written findings.

The fallacy in this argument is its failure to distinguish between a pretrial release bond and an appeal bond. The pretrial bond is usually a matter of right. It is governed by Rule 9.2, which provides in subparagraph (c) (viii) that the judicial officer may consider the nature of the charges, the apparent probability of conviction, and the likely sentence as affecting the risk of nonappearance.

Even though the pretrial bond guarantees the defendant’s appearance in appellate proceedings if the bond is still in force, that does not make it an appeal bond. Appeal bonds are governed by Rules 36.5,36.6, and 36.7. When such a bond is to be set the circuit judge has already heard the evidence at the trial, knows the actual sentence imposed, and is thus in an improved position to weigh the risk of the defendant’s nonappearance pending appeal. Moreover, under Rule 36.5 the trial judge may deny an appeal bond altogether and deliver the defendant to the custody of the sheriff, under conditions that were not even applicable when the pretrial bond was set. With respect to the appeal bond there is no requirement that the trial judge make written findings in fixing the amount of the bond. If this petitioner thinks that the appeal bond is too high, his remedy is not in this court but in the trial court.

Writ denied.


text:
    SHARP COUNTY, Arkansas v. NORTHEAST ARKANSAS PLANNING AND CONSULTING COMPANY
    81-207
    628 S.W. 2d 559
    Supreme Court of Arkansas
    Opinion delivered February 22, 1982
    [Rehearing denied March 29, 1982.]

      Jim Stallcup, Pros. Atty., and Stewart K. Lambert, for appellant.

      William R. Haas and H. David Blair, for appellee.
   Frank Holt, Justice.

The appellee filed a claim in Sharp County Court against the appellant for $7,000 based upon an alleged agreement between the two parties whereby appellee was to provide consulting services for the appellant in preparing a preapplication and application for federal assistance under the Housing and Community Development Act of 1974. The county court found that the claim was not valid and denied payment. The appellee appealed to the circuit court where a jury awarded it a judgment for $4,530 plus interest.

Appellant first contends the trial court erred in permitting appellee to amend its claim in circuit court by reducing the amount from $7,000 to $4,530. It further asserts that the claim in county court was based upon a February 9, 1975, order and the amended claim was based upon a December, 30, 1976, order. It argues that these amendments constituted a new cause of action permitting the circuit court to exercise original jurisdiction which is vested in the county court. Art. 7, § 28, Arkansas Constitution (1874).

We have held that on appeal from the county court, the circuit court could not allow a substitution of parties since this would permit the circuit court to exercise original jurisdiction, McLain v. Miller County, 180 Ark. 828, 23 S.W. 2d 264 (1930); nor can the circuit court allow claims to be amended which increases the amount of relief sought, Madison County v. Nance, 182 Ark. 775, 32 S.W. 2d 1073 (1930) (one from $185 to $500 and one from $200 to $1,000). However, the circuit court, in its discretion, may permit amendments which do not change the original cause of action. Freeman v. Lazarus, 61 Ark. 247, 32 S.W. 2d 680 (1895); and Saline County v. Kinkead, 84 Ark. 329, 105 S.W. 581 (1907).

Appellee submitted its claim to the county court on November 16, 1977. One document, bearing that date, was an unnotarized instrument captioned “Affidavit to County Account” bearing the notation February 9,1975, court order in the amount of $7,000. Another document, dated November 16,1977, was an invoice or statement of charges showing professional services were rendered between the dates of December 31, 1976, to March 31, 1977, and itemizing the number of hours and hourly rate of charges totaling $7,000. Appellant argues that there is no February 9, 1975, court order evidencing this agreement or a basis for a valid claim. In other words, appellant asserts that the claim, as amended in circuit court, is based upon a 1976 county court resolution and a different amount, neither of which was presented to the county court.

However, the appellant overlooks appellee’s cover letter dated November 16, 1977, enclosing the county claim and itemized invoice. That letter reads:

On the 30th day of December, 1976, the County Court of Sharp County entered into a contract with Northeast Arkansas Planning and Development Corporation to prepare and file a pre-application for federal assistance to the Department of Fíousing and Urban Development in Little Rock. Provisions of this order required the County to pay a fee of $7,000.00. According to information that we have, this contract has been fulfilled and the County is in receipt and has accepted a $250,000 grant from the Department of Housing and Urban Development. I feel that the employment of our firm has been completed and fulfilled as per the agreement and payment of $7,000.00 is due our company. You will find our invoice for these services included within this letter and should you have any questions pertaining to the statement of the services rendered, please feel free to contact me at any time.

Even so, the appellant argues that an affidavit in circuit court by a successor county judge states that the county could not pay the claim since it referred to a February 9,1975, county court order which has been adjudicated by the courts. (Sharp County v. Northeast Ark. Ping, & Cnsltg., 269 Ark. 336, 602 S.W. 2d 627 [1980]). However, appellant overlooks that the affiant also stated that he knew from his own personal knowledge that a resolution was passed by Sharp County, Arkansas, dated December 30, 1976, which permitted Sharp County to enter into the asserted agreement with the appellee. In our view appellant was clearly aware that appellee was claiming payment for services pursuant to the December 30, 1976, resolution. Further, we cannot perceive how the county was prejudiced when the circuit court permitted the claim of $7,000, the maximum contingent fee, to be reduced to $4,530. No prejudice is demonstrated. Therefore, the circuit court did not abuse its discretion in permitting the amendments since it did not change the original cause of action in the county court.

Appellant next asserts that the trial court erred in overruling its motion for summary judgment in that (a) the trial court was without jurisdiction to hear the amended claim of plaintiff and (b) plaintiff was allowed to file an affidavit during or after the hearing. A sufficient answer to this contention is that “the denial of a motion for summary judgment is not subject to review even after final judgment in a suit.” Henslee v. Kennedy, 262 Ark. 198, 555 S.W. 2d 937 (1977). See also Life and Cas. Ins. Co. of Tenn. v. Gilkey, 255 Ark. 1060, 505 S.W. 2d 200 (1974).

Appellant further argues the county court resolution dated December 30, 1976, was not an agreement for appellee to perform any services for appellant which were compensable, and, therefore, the trial court erred in overruling appellant’s motion for a directed verdict and motion for judgment notwithstanding the verdict. These motions were based upon the assertion that the circuit court lacked jurisdiction. We have already determined that the circuit court had jurisdiction. Further, a directed verdict is proper only when there is no substantial evidence from which the jurors, as reasonable persons, could possibly find the issues for the party opposing the motion. Ark. Kraft Corp. v. Johnson, Adm’n, 257 Ark. 629, 519 S.W. 2d 74 (1975). Here, the resolution dated December 30, 1976, was in evidence. There was ample testimony and other evidence that an agreement existed between the parties and the services were rendered pursuant to it. Whether or not this resolution and the acts of the parties constituted an agreement is a question of fact for the jury to decide. Manhattan Factoring Corp. v. Orsburn, 238 Ark. 947, 385 S.W. 2d 785 (1965).

Appellant next contends the trial court erred in awarding appellee interest on its judgment. Appellee concedes this' is correct. Ark. Stat. Ann. § 29-125 (Repl. 1979). To this extent the judgment is modified.

Affirmed as modified.

Hickman, J., dissents as to first issue.


author: John I. Purtle, Justice.

text:
    Billy J. CHAMBERS v. STATE of Arkansas
    CR 81-109
    628 S.W. 2d 306
    Supreme Court of Arkansas
    Opinion delivered February 22, 1982

      Robert A. Newcomb, for appellant.

      Steve Clark, Atty. Gen., by: William C. Mann, III, Asst. Atty. Gen., for appellee.
   John I. Purtle, Justice.

The appellant was convicted of rape by a jury and sentenced to 50 years.

Appellant filed a timely notice of appeal and alleged three points for reversal: (1) that the victim’s testimony should have been excluded because of her age; (2) that appellant’s statement should have been suppressed due to the lack of a valid waiver of counsel; and, (3) that the remarks of the deputy prosecutor in closing arguments were improper and should have been grounds for a mistrial. We find no merit in any of the contentions of the appellant and affirm the judgment as expressed by the trial court.

The facts of the case reveal that in July 1980 appellant’s wife had gone to Texas for her sister’s funeral. On July 26, 1980, appellant took the victim, age six, and her brother, age 13, from their home with their mother’s permission. The appellant was apparently a family friend. That evening appellant and the 13 year old brother were drinking beer and at one point a game of strip poker was played which resulted in at least the two children stripping completely naked. Later, in the appellant’s bedroom, appellant had oral sexual contact with the victim and she was forced to take appellant’s penis into her mouth. Afterwards, appellant, the girl and her brother all slept naked in the appellant’s bed.

The appellant feels that due to victim’s tender age (she was six at the time of the incident, seven at the time of trial) the trial court should have excluded her testimony. In DeVoe v. State, 193 Ark. 3, 97 S.W. 2d 75 (1936), this court held, in regard to an 8 year old rape prosecutrix:

As to her competency, it may be said, first, that her competency was peculiarly within the trial court’s discretion, and the trial court’s ruling on the question will not be disturbed unless there was a gross abuse of discretion.

In the present case, the victim stated that she had learned about telling the truth from Bible stories read to her, and that if she told a lie she would be put in jail. The trial court was apparently convinced of the victim’s ability to understand the consequences of not telling the truth. Our guidelines in regard to the common law tests of the competency of a witness in a criminal trial have been set out numerous times, they are:

The ability to understand the obligation of an oath and to comprehend the obligation imposed by it; an understanding of the consequences of false swearing; and the ability to receive accurate impressions and to retain them, to the extent that the capacity exists to transmit to the factfinder a reasonable statement of what was seen, felt or heard.

Kitchen v. State, 271 Ark. 1, 607 S.W. 2d 345 (1980). The question of the competency of witnesses in a criminal trial is a matter lying within the sound discretion of the trial judge and in the absence of clear abuse of discretion, or obvious error, its exercise is not reviewable on appeal. Hamblin v. State, 268 Ark. 497, 597 S.W. 2d 589 (1980).

The appellant was arrested on July 27, 1980, by the Pulaski County Sheriff’s Office. During the investigation, Deputy Prosecutor Mike Martin was called to assist in interviewing the appellant. The appellant signed a standard rights form and then gave a statement to Martin which was recorded. The rights statement contained the language: “I have been advised . . . that I have the right to talk with an attorney, either retained by me or appointed by the court, before giving a statement, and to have my attorney present when answering any questions.” We have recently ruled on the question of the validity of this particular portion of a similar Miranda warning and held it to be adequate. Thomerson v. State, 274 Ark. 17, 621 S.W. 2d 690 (1981). When we examine the totality of the circumstances surrounding the giving of the appellant’s statement we cannot say that his right to counsel was not voluntarily waived. Deputy Prosecutor Martin, being an attorney and in attendance at the taking of the statement should have perhaps exercised more authority and specifically advised the appellant that he could have had immediate access to an attorney without cost. However, according to the record, appellant was advised of his rights on at least two occasions, and from all of the evidence presented, signed the waiver freely and voluntarily. We feel that the appellant’s constitutional rights as expressed in Miranda v. Arizona, 384 U.S. 436 (1966), have been adequately safeguarded.

Appellant’s final contention is that the deputy prosecutor’s closing remarks were improper and that a mistrial should have been granted by the trial court. Upon looking at the record we find that the remarks were not prejudicial. In any event, after defense counsel objected, the trial court admonished the jury that the deputy prosecutor was presenting argument, not evidence, and that they should not consider it as evidence. The trial court has broad discretion in controlling, supervising and determining the propriety of arguments of counsel, and its exercise will not be reversed in the absence of gross abuse. Shaw v. State, 271 Ark. 926, 611 S.W. 2d 522 (1981).

Therefore, the judgment is affirmed.

Affirmed.


text:
    Melody ROBERTS v. Leon L. SIMPSON
    81-197
    628 S.W. 2d 308
    Supreme Court of Arkansas
    Opinion delivered February 22, 1982

      Barrett, Wheatley, Smith & Deacon, for appellant.

      William C. Ayres, for appellee.
   Robert H. Dudley, Justice.

Appellee Leon Simpson brought suit against appellant Melody Roberts for damages incurred in an automobile accident. The material evidence is appellee indisputably suffered $1,441.00 in property damage and $6,659.22 in medical expense. These damages total $8,100.22. In addition appellee testified that during a period of disability totalling thirteen and one-half months following the accident, he suffered $24,439.00 in loss of earnings. Appellee’s doctor corroborated the amount of time lost from work. The $8,100.22 in undisputed damages plus the $24,439.00 which appellee claims for loss of earnings amounts to $32,539.22. The trial judge gave an instruction on comparative negligence and the jury returned with a verdict of $7,500.00. Appellee filed a motion for new trial which the court granted upon the grounds set forth in Rule 59 (a) (5) and 59 (a) (6), A. R. Civ. P., Ark. Stat. Ann., Vol. 3A (Repl. 1979), which are, "error in the assessment of the amount of recovery” and “the verdict... is contrary to the... evidence . . .” This appeal is from the granting of the new trial. We affirm.

In Worth James Construction Co. v. Jean Herring, 242 Ark. 156, 412 S.W. 2d 838 (1967), we said that a new trial is proper “where the injury is susceptible of definite pecuniary measurement such as in loss of earnings and medical expense, and where the amount of the verdict may be based on comparative negligence.” In the case before us $8,100.22 of the damages were not disputed and were exact. The $24,439.00, which appellee testified was his loss of earnings is disputed as a matter of law because a party’s testimony is not treated as undisputed. Raiborn v. Raiborn, 254 Ark. 711, 495 S.W. 2d 858 (1973). Still, this loss of earnings testimony concerns damages which are susceptible of pecuniary measurement as distinguished from those not easily measurable, such as pain, suffering or mental anguish. See Law v. Collins, 242 Ark. 83, 411 S.W. 2d 877 (1967).

The trial judge held that the $7,500.00 verdict was contrary to evidence of damage which was susceptible of pecuniary measurement and that ruling was not an abuse of discretion. The trial judge is vested with great discretion in ruling on a motion for a new trial and will not be reversed unless there is a manifest abuse of that discretion. Garner v. Finch, 272 Ark. 151, 612 S.W. 2d 304 (1981). In addition, a showing of abuse of discretion is even more difficult when a new trial has been granted because the beneficiary of the verdict which was set aside has less basis for a claim of prejudice than does one who has unsuccessfully moved for a new trial. Security Insurance v. Owen, 255 Ark. 526, 501 S.W. 2d 229 (1973).

The trial judge did not abuse his considerable discretion.

Affirmed.


text:
    CONSTRUCTION ADVISORS, INC. and WEAVER-BAILEY CONTRACTORS, INC. v. Charles H. SHERRELL and Bernice B. SHERRELL
    81-211
    628 S.W. 2d 309
    Supreme Court of Arkansas
    Opinion delivered February 22, 1982

      Penix, Penix & Mixon, for appellants.

      Robert D. Stroud and H. David Blair, of Murphy, Blair, Post & Stroud, for appellees.
   Robert H. Dudley, Justice.

Appellee Charles Sherrell was injured while performing construction work on the Baxter-Travenol industrial plant at Ash Flat. The jury awarded $450,000 to appellee Charles Sherrell and $25,000 to appellee Bernice Sherrell for loss of consortium. Ninety percent of the. negligence was apportioned to appellant Construction Advisors, Inc., and ten percent to appellant Weaver-Bailey Contractors, Inc. We affirm.

The primary issue on appeal is whether a comment by the judge to the jury compromised the rights of the appellants. While the issue is simple, the facts leading to the comment are rather complex. Baxter-Travenol Laboratories desired to construct a large industrial plant in Ash Flat and entered into a contract with appellant Construction. Ad-visors. A part of the contract was that Construction Advisors would procure all of the contractors and subcontractors who would actually construct the plant. Construction Advisors was to have all of the supervisory responsibility over the construction work and had the specific duty of seeing that there was compliance with all safety laws and regulations. Appellant Construction Advisors subsequently entered into a contract with Fiske-Carter Construction Company to perform the rough carpentry work and the masonry work. Appellee Charles Sherrell was an employee of Fiske-Carter. Appellant Weaver-Bailey was a concrete subcontractor under Fiske-Carter. The contracts of Fiske-Carter and Weaver-Bailey provided that they would comply with all safety codes. On the date of the injury Charles Sherrell was directed by his Fiske-Carter supervisor to assist one of Weaver-Bailey’s crews in the finishing of a concrete floor. He was severely injured trying to move a 40-foot vibrating screed used to level wet concrete. Fiske-Carter’s workers’ compensation carrier commenced making payments to appellee. Because workers’ compensation is an exclusive remedy for workers injured in the course of their employment, Charles Sherrell was prohibited by law from suing his employer, Fiske-Carter. However, Sherrell did have a cause of action against appellants Construction Advisors and Weaver-Bailey for failing to follow safety codes and creating an unreasonably dangerous work area. The appellees filed their suit against appellants and then appellant Construction Advisors filed a third party complaint against FiskeCarter alleging that their contract provided for indemnity to appellant Construction Advisors. Two material procedural steps took place prior to trial: One, the indemnity suit by appellant Construction Advisors against Fiske-Carter Construction Company was severed for a later trial and, two, the trial court granted appellees’ threshold motion to prohibit mention of the fact that appellee had received workers’ compensation benefits.

During opening statement, during cross-examination and during closing argument the apparent strategy of appellant Construction Advisors was to lead the jury to believe there was some importance to the absence of FiskeCarter. To illustrate, we quote from one of the many references to Fiske-Carter, this particular one being made during appellants’ opening statement.

Fiske-Carter was Mr. Sherrell’s employer. The Plaintiffs have chosen not to sue Fiske-Carter in this case... but that does not mean that you are not going to be asked to consider whether or not Fiske-Carter is the one at fault, and I want you to keep in mind what I think the proof is going to indicate to you... What was the involvement of Fiske-Carter, did they live up to their obligation to meet these OSHA regulations or not. . .

The case was submitted to the jury on interrogatories. All of the interrogatories were read to the jury but they were initially asked to decide only three. The three interrogatories asked the jury to determine whether appellee Charles Sherrell, appellant Construction Advisors and appellant Weaver-Bailey were negligent. After a short deliberation the jury returned to ask the court if they were to give a yes or no answer or a percentage answer. Then one juror stated:

I’d sure like to know why they didn’t sue Fiske-Carter. A lot of us would. I will just put it that way.

In response, and by agreement of all parties, the judge replied:

... Fiske-Carter is a party to this lawsuit, but the extent of responsibility of Fiske-Carter, if any, is not being submitted to you at this time. The case has been separated to be tried in two stages, and we need ... to take care of this part of the lawsuit now and then that part of it will be taken care of at that time. Now, let me re-emphasize to you, when you start trying to worry about something that you haven’t been asked to worry about and trying to figure the ramifications of things, it does not help you reach justice but more likely injustice. It has been agreed that I tell you what I did because of your apparent concern about it, but I must remind you again to remember the evidence in this case, the instructions in this case without regard to any other part of this case or any other.

Then over the objection of appellants the judge made the following additional statement to the jury:

One other clarification, Mr. Sherrell won’t be involved in the other part of the case.

Appellant Construction Advisors argues on appeal that when the jury was told that appellee Sherrell would not be involved in the subsequent trial there were two implications to the j ury: One, appellee Sherrell would have no chance for additional damages and, two, appellant Construction Ad-visors had indemnity against the verdict.

Appellant is correct in stating that our rule prohibits a trial court, in submitting a case upon special interrogatories, from informing the jury of the effect that their answers may have on the ultimate liability of the parties. The reason for the rule is that the special interrogatories are intended to elicit the jury’s unbiased judgment upon the issues of fact, and this purpose might be frustrated if the jurors are in a position to frame the answers with a conscious desire to aid one side or the other. Wright v. Covey, 233 Ark. 798, 349 S.W. 2d 344 (1961). We do not decide whether the comment by the court informed the jury of the effect of their answer to the interrogatories because the appellant led the jury to think that there was a great significance to the absence of Fiske-Carter, which in turn, quite naturally gave rise to the question by the juror. Even if the comment was error, it was invited. The trial court gave a factually correct answer which was not improper under these circumstances.

We quickly dispose of the second phase of the argument because the only comments which could have left a suggestion of indemnity were those comments agreed to by all parties.

Appellant Construction Advisors, the prime contractor, next contends that it has no liability to a subcontractor’s employee when the prime contractor and the subcontractor agreed for the subcontractor to comply with all safety codes. It argues specifically that the trial court erred in not granting a directed verdict. Our general rule is that a prime contractor only has a duty to exercise ordinary care and to give warning in event there are any unusually hazardous conditions which might affect the welfare of the employees. Gordon v. Matson, 246 Ark. 533, 439 S.W. 2d 627 (1969). However, where the primary contractor is guilty of negligence which causes the injury there can be liability. Aluminum Ore Co. v. George, 208 Ark. 419, 186 S.W. 2d 656 (1945). Thus, a prime contractor may be held liable for failure to perform a duty which it has undertaken. Here, Baxter-Travenol entered into a contract with Construction Advisors by which Construction Advisors undertook to supervise the construction and see that there was compliance with all safety laws and regulations. The safety codes are for the benefit of workers like Charles Sherrell and those workers were the third-party beneficiaries of the contract. Construction Advisors was liable to any worker injured as a result of its negligent failure to perform its contract. The fact that the subcontractor also agreed to comply with the safety codes does not absolve the prime contractor of liability. The trial court did not err in denying the motion for a directed verdict.

Affirmed.


text:
    HAMLIN FLYING SERVICE, INC. and James HESS v. B. J. BRECKENRIDGE and Earl D. ANDERSON
    81-199
    628 S.W. 2d 312
    Supreme Court of Arkansas
    Opinion delivered February 22, 1982

      Wright, Lindsey ir Jennings, for appellants.

      Fletcher C. Lewis, for appellees.
   Steele Hays, Justice.

The single issue presented by this

appeal is a challenge to the sufficiency of the evidence in support of a jury verdict. Appellees Breckenridge and Anderson brought suit against appellants James Hess and his company, Hamlin Flying Service, Inc., alleging damage to plaintiffs’ cotton as a result of hormone herbicides sprayed on a nearby rice field belonging to Davis Brothers, Incorporated (not a party to the suit). The jury awarded $29,000.00 in damages to Breckenridge and Anderson and for reversal Hess argues that the trial court should have granted defense motions for a directed verdict and for judgment n.o.v. because there was no substantial evidence the defendants caused the damage. We think the evidence was sufficient.

In 1979 Breckenridge and Anderson planted 160 acres of cotton in Woodruff County. The acreage was in eight parcels, relatively close together, just west of Bayou DeView and south of the Jackson County line except for one parcel just north of the line. The bayou runs north and south at that point and approximately three-quarters of a mile east of the bayou lies the Davis rice field, an 80-acre tract and the subject of this dispute. The rice field is one-half mile long, north to south, and one-quarter mile wide, east to west, Jackson County being its northern boundary. Near the northwest corner of the rice field, just inside Jackson County, is what is described as a “tall communication tower.”

Stating the facts most favorably to the appellees, around 6 a.m. one morning in mid July, 1979, a yellow, single wing airplane was observed spraying an area just south of the tower and east of the bayou. The wind was from the east. A strong odor of 2-4 D was present in appellees’ cotton fields, which lay almost due west of the Davis rice field. The plane appeared to be working an east-west pattern and twice crossed over the bayou as it made its turns. Some five or sfx days afterward, on what appellees say was July 16, the cotton began to show initial signs of hormone herbicide poisoning characteristic of 2-4 D and 2-4-5 T. The residual damage to appellees’ cotton was moderate to severe resulting in an appreciable loss. It is conceded by both sides that the effects of hormone herbicide poisoning require a five-to-six day incubation period. Several witnesses for appellees testified positively the spraying occurred on July 11 and the ill effects were visible by July 16.

Appellants admit they sprayed 2-4 D and 2-4-5 T on the Davis field, but they insist it was on July 16, and they stoutly deny any responsibility for appellees’ damage because, they say, they did not spray the herbicides anywhere near the area in question on July 11 or at any time which could conceivably produce visible damage to cotton on July 16. Thus, the very crux of this dispute is not so much whether the appellants sprayed herbicides in the manner and location claimed by appellees, but whether they sprayed on July 11, as appellees claim. Appellants point out, correctly, that there is no direct evidence that the plane seen by the appellants’ witness, David Pritchard, was theirs — Pritchard could only say that the plane was a yellow, single wing plane that resembled appellants’ plane, a Rockwell Thrush. Pritchard testified to having seen the plane spraying east of the bayou and south of the tower at about 6 a.m. on the morning of July 11. He went immediately to appellees’ cotton fields and detected a strong odor of 2-4 D. Shown a photograph of appellants’ plane and asked if he had ever seen a plane like it before, he answered that he had, saying the plane looked like the one he saw.

Appellants concede that at about 6:30 on a July morning, which they say was the 16th, James Hess, flying the Thrush, sprayed 30 gallons of 2-4 D and 2-4-5 T on the rice field belonging to Davis Brothers. Hess insisted he worked north and south, that being the longer leg, rather than east to west, always turning away from the bayou. He said that at no time did he cross the bayou or come closer than a half mile. To prove he kept a greater distance from the cotton fields, Hess and Walter Davis, who flagged for him, testified that only the east 40 acres of rice was sprayed (farthest from the bayou) there being “no indigo problem” in the west half.

The only issue on appeal is the sufficiency of proof and in gauging that we are required by a multitude of cases to view the evidence, with all reasonable inferences to be drawn from it, in the light most favorable to the appellees and we are bound to affirm if any substantial evidence exists. Washington National Insurance Co. v. Meeks, 252 Ark. 1178, 482 S.W. 2d 618 (1972). In order to reverse we must be able to say there is no reasonable probability that the incident could have occurred as found by the jury. Fanning v. Hembree Oil Co., 245 Ark. 825, 434 S.W. 2d 822 (1968).

Appellants point to two weaknesses in appellees’ evidence: (1) the absence of positive identification of the yellow plane and (2) the absence of direct evidence that the plane was spraying the Davis rice field. We agree the proof on the first point is weak, though we disagree it is fatal. Pritchard was unable to see the markings or registration numbers of the yellow plane and, hence, his testimony was inconclusive, in spite of what he perceived to be a resemblance between the plane he saw and the one in the photograph. If that were the sum and substance of the evidence connecting the appellants to the spraying we would be hard pressed to say the verdict was supported by substantial evidence. But that is not the entire proof, and when all the circumstantial evidence is examined, we believe it meets the test.

With respect to the two contentions, the solution to each point provides a clue to the other, because if it was the Davis rice field being sprayed by the yellow plane Pritchard saw, then the reasonable inference is that it was the appellants’ plane he saw. Mr. Walter Davis of Davis Brothers testified that Hess sprayed the rice with 2-4 D and 2-4-5 T around the middle of July (he was not sure of the exact date). He spoke of only one such spraying. Moreover, Hess testified that the fields could not have been sprayed twice with herbicides because it would have damaged the rice to apply that much.

As to the second point, both direct and circumstantial evidence supports the finding that it was the Davis rice field being sprayed. Direct testimony by David Pritchard placed the plane spraying the herbicides as east of the bayou and south of the tower, or adjacent to the rice field. Added to this testimony is the evidence supplied by plaintiffs’ Exhibit 2, which shows the rice field to be surrounded by soybean fields on the east, south and west sides (the exhibit does not identify crops to the north). Mr. John Chronister, an inspector for the State Plant Board, testified that 2-4-5 T, and to some extent 2-4 D, were harmful to soybeans. Thus, the only likely spraying of 2-4 D and 2-4-5 T south of the tower and east of the bayou would be the Davis rice field, being the only rice field fitting that description. Since the plane Pritchard saw was spraying 2-4 D and 2-4-5 T, it follows that it was the Davis field being sprayed and the appellants’ plane that was spraying.

Turning to the dispute over dates, appellants ask in effect that we reverse the jury’s findings based on their contention that the spraying could only have occurred on July 16 because their records permit no other conclusion. It is true that a variety of appellants’ records, consisting of a report to the State Plant Board (plaintiffs’ Exhibit 3), invoices from his flying company and supply company, as well as an accounting ledger, support July 16 as the date the spraying was done. But the weight and credibility of these records were matters for the jury to consider and it was not bound to accept the records as more credible than the oral testimony. The proof showed that Hess kept his own records and could have completed them as he chose. There is nothing to suggest the records were altered in any manner, but the credibility of business records of a litigant is an issue for the jury to determine. There is no requirement in the law that a fact-finder must give greater weight to records than to oral testimony in determining when events occur. Besides, while appellants’ records seem worthy of probative value, even a casual inspection reveals a distinct variation between appellants’ records and their proof: Hess and Walter Davis testified that when the 80-acre rice field was sprayed by Hess only the east half, the 40 acres away from the bayou, was sprayed. But plaintiffs’ Exhibit 5, Hess’s report to the State Plant Board, reflects that he treated the entire 80 acres of rice, not just the 40 acres he claims to have treated. That discrepancy is further evidenced by appellants’ invoice no. 866 of Hamlin Flying Service, Inc., which shows Davis Brothers being charged $372.00 for spraying the full 80 acres ($4.40 per acre of “D & T,” or $352.00; and 25 cents per acre of “lo-drift,” or $20.00). Hess’s report to the State Plant Board also reflects that he applied a spray mixture of 3 gallons per acre. Since 30 gallons of 2-4 D and 2-4-5 T were used (appellants’ invoice no. 1597) a ratio of 3 gallons per acre would be correct only if the entire 80 acres of rice were sprayed. Thus, if the testimony of Walter Davis and James Hess is true and only 40 acres of rice was sprayed with herbicides, then appellants’ report to the State Plant Board and his invoices are incorrect. Be that as it may, we cannot say that there is no reasonable probability that the events could have occurred so as to be consistent with the jury’s findings and we affirm the judgment.