author: Conley Byrd, Justice. MR. HOUGHTON, MR. BRAND,

text:
    Joe F. RUSHTON, M. D. v. FIRST NATIONAL BANK OF MAGNOLIA
    5-4417
    426 S. W. 2d 378
    Opinion delivered April 1, 1968
    [Rehearing denied May 6, 1968.]

      Harry B. Colay, Chambers & Chambers, and Warren & Bullion, for appellant.

      Keith, Clegg & Eckert and Gavghan & Laney, for appellee.
   Conley Byrd, Justice.

This appeal by Joe F. Rush-ton, M. D., is one of a number of lawsuits arising from the dismissal of W. C. Blewster as president of appellee First National Bank of Magnolia. Dr. Rushton contends that in endorsing certain notes for Numark Manufacturing Company he was acting as trustee for the benefit of the bank. The trial court found against Dr. Rushton because (1) the acts, if they had occurred, would be ultra vires and not binding on the bank; (2) Dr. Rushton failed to prove the facts alleged; (3) Dr. Rushton was barred by the “clean hands” doctrine; (4) Dr. Rush-ton, having recognized his liability as personal, was estopped to assert the trusteeship or guaranty of the bank; and (5) Dr. Rushton’s claim was barred hy the statute of frauds. In addition to denying relief, the trial court entered judgment against Dr. Rushton upon the bank’s counterclaim for $158,230.47, which included a note for $97,787.77, dated April 3, 1963, and signed by Dr. Rushton as trustee.

For reversal Dr. Rushton relies upon several points, but since there was error that calls for a complete new trial, we deal only with the alleged error of the trial court in permitting William A. Eckert, Jr., an attorney of record, to testify over Dr. Rushton’s objection that the rule had been invoked and that Mr. Eckert had remained in the courtroom throughout the trial.

UNCONTROVERTED FACTS

The record fairly establishes the following facts:

1. W. C. Blewster was president of the First National Bank of Magnolia from July 1942 until his termination on November 1, 1964. During his tenure the bank had suffered no large losses and had foreclosed only twice prior to the foreclosure of the Magnolia Wood Products property. The bank had grown from $856,000 Avlien he became active manager to $22,550,000 at the time of his termination. Mr. Blewster spent much of his time as hank president in trying to secure industries for Magnolia. In the words of Mr. T. A. Monroe, who succeeded Mr. Blewster as hank president, “Mr. Blewster ran the First National Bank of Magnolia. It was substantially a one-man hanking operation.”

2. Appellant Dr. Joe F. Rushton was a physician and surgeon in Magnolia, Arkansas. He had been a stockholder in the First National Bank of Magnolia since 1936 and a director since 1937 or 1938. He engaged in a number of enterprises — some with W. C. Blewster and some with Congressman Oren Harris, now U. S. District Judge for the Eastern District of Arkansas. His financial statement, as prepared by the First National Bank of Magnolia, on October 1, 1963, showed a net worth of $1,701,493.00.

3. T. A. Monroe, an insurance man, had been a director of the bank since 1951 and vice president from 1956 to 1964. Upon Mr. Blewster’s termination, Mr. Monroe became president and served until September 1965. As president, he was a member of the bank’s Executive Committee along with Mr. Eckert.

4. William A. Eckert, Jr., of Magnolia, Arkansas, had been attorney for the bank some fourteen years and a director since 1957. He served on the bank’s Executive Committee along with Mr. Monroe, after Mr. Blew-ster’s termination. He signed some of the pleadings herein as attorney for the bank, but most of the subsequent pleading's were signed by Graughan & Laney. He did not examine any witnesses during the trial, but is shoAvn here as counsel for appellee bank.

5. Odyssey Trailer Company was a corporation which Mr. Blewster was instrumental in organizing to build trailers. At one time Mr. Blewster prevailed upon Dr. Bushton to take $2,500 in stock and later asked him to please take another $2,500, as that was all the city of Magnolia lacked to get the company started. After Odyssey was organized, Mr. Blewster and others prevailed upon the Columbia County Industrial Commission to erect a building for it through a bond issue. Odyssey was financed through the First National Bank of Magnolia. After some forty trailers had been built, it became apparent that their cost was too high and the company was a sick industry. Dr. Bushton and Mr. Blewster were on Odyssey’s board of directors and had personally endorsed a note for $35,000 to the Bepublie National Bank of Dallas which was renewed several times.

6. Magnolia Wood Products Company was another industry that Mr. Blewster secured for Magnolia and that was financed by the First National Bank of Magnolia. This industry became sick, too; a friendly foreclosure was had; and on January 11, 1963, the foreclosure sale to First National Bank of Magnolia for .the amount of its judgment debt of $52,705.45 plus interest and attorney’s fee was confirmed.

7. Numark Manufacturing Company was the name given to the new venture resulting from a merger between Odyssey and Magnolia Wood Products Company. The Numark stockholders were the same as the stockholders of Odyssey and Magnolia. Dr. Bushton was elected president in his absence and urged to serve in that capacity by Mr. Blewster. Mr. Blewster was also on its board of directors. Numark obtained government contracts and operated until after Blewster’s dismissal as president of the bank. It went into bankruptcy some time before trial of this case.

8. The minutes of the January 16, 1963, meeting of the Numark board of directors, with reference to the issues here involved, showed the following:

“W. C. Blewster stated that the Firsts National Bank of Magnolia, Magnolia, Arkansas, had, by foreclosure proceedings, acquired title to all of the assets of Magnolia Wood Products Company, and that the bank is leasing the property to the corporation for a rental of $250 per month. He further stated that he and Mr. Drew had high hopes of arranging for the company to obtain an ABA loan so as to enable the corporation to purchase all of the assets of the old Magnolia Wood Products Company from the bank.”

The minutes of the special meeting of the Numark board of directors on March 6, 1963, reflected the following :

“Mr. Blewster stated that the First National Bank of Magnolia had conveyed all assets of the old Magnolia Wood Products Company to Joe F. Rushton, Trustee, that Numark Manufacturing Company was in possession of the old Magnolia Wood Products properties under a lease agreement entered into by and between Joe F. Rushton, Trustee, as lessor, and Numark Manufacturing Company, as lessee. It was explained that it was anticipated that Numark should attempt to obtain from the Area Redevelopment Administration a loan in the amount of $200,000, so that the corporation might purchase from the Trustee all assets of the Old Wood Products 'Company. After a full and complete discussion of the matter, a motion was made by Charles Viering and seconded by Felton Roberson that the corporation should attempt to borrow $200,000 from ARA, with which to purchase all of the assets of Magnolia Wood Products Company and other property related thereto, title to which is now in Joe F. Rushton, Trustee.”

9. On March 1, 1963, the First National Bank of Magnolia conveyed to Dr. Joe F. Rushton, Trustee, the property acquired in the Magnolia Wood Products Company foreclosure.

10. On April 3, 1963, Dr. Joe F. Rushton, Trustee, executed a deed of trust to Carl Black, Trustee for First National Bank of Magnolia, covering the property acquired from Magnolia Wood Products Company. This deed of trust was given to secure a note due 120 days from date, in the amount of $97,787.77, and signed hy Joe F. Rushton, Trustee.

11. On April 3, 1963, Numark Manufacturing Company executed a note to the Texarkana National Bank for $35,000. This note was endorsed by Dr. Rushton and Mr. Blewster.

12. From April 3, 1963, to September 26, 1964, Nu-mark was financed by First National Bank of Magnolia tlirough overdrafts which had accrued in the amount of $225,000 as of September 26, 1964. On that date Numark executed a note for $225,000 to the First National Bank of Magnolia. Texarkana National Bank participated in the $225,000 note to the extent of $125,000 upon a personal guaranty of Dr. Rushton and Mr. Blewster. In addition Dr. Rushton pledged as collateral 24,675 shares of Berry Asphalt Company.

13. On October 26, 1964, Numark executed a note for $35,000 to Texarkana National Bank. This note Avas endorsed by Dr. Rushton and Mr. BleA\ster.

14. On November 1, 1964, Mr. Blewster A\as dismissed as president of the bank.

15. On NoAember 23, 1964, Numark executed to Republic National Bank of Dallas, Texas, a note for $35,-000, endorsed by Dr. Rushton and Mr. Blewster.

16. After Mr. Blewster’s dismissal, Mr. T. A. Monroe found in Blewster’s desk drawer an unexecuted instrument wherein Numark was mortgaging the Magnolia Wood Products to First National Bank as security for the $225,000 note. Realizing that the bank had no security for its part of the $225,000 note and that title to the property was in Joe F. Rushton, Trustee, the hank, at Mr. Eckert’s suggestion, joined with Joe F. Rushton, Trustee, in conveying by deed on December 20, 1964, the Magnolia Wood Products Company property to Numark Manufacturing Company, and simultaneously caused the unexecuted deed of trust from Numark in favor of the bank to be executed. This removed this security from the $97,787.77 note signed by Dr. Rushton as Trustee and placed it on the $225,000 note of Numark.

17. On December 28, 1964, Numark executed to Republic National Bank of Dallas its note for $37,390.69, endorsed by Dr. Rushton and Mr. Blewster.

18. On January 25, 1965, Numark executed to Republic National Bank of Dallas its note for $19,000, also endorsed by Dr. Rushton and Mr. Blewster.

19. On February 25, 1965, Dr. Rushton signed an instrument acknowledging that he was indebted to the First National Bank for, among other things, the $97,-787.77 note as trustee. In addition he pledged as collateral security 10,500 shares of Berry Petroleum Company capital stock and 140 shares of Magnolia Broadcasting Company capital stock.

20. After Dr. Rushton had parted with the 10,500 shares of Berry Petroleum stock and 140 shares of Magnolia Broadcasting stock, W. A. Eckert, Jr., the bank’s attorney, suggested to Dr. Rushton that he should employ his own counsel.

21. From the time Mr. Blewster was dismissed from the bank until Dr. Rushton made his collateral pledge with the bank, all transactions between the bank and Dr. Rushton were handled by T. A. Monroe and W. A. Eckert, Jr., usually together.

CONTROVERTED FACTS

W. C. Blewster on direct examination testified that Dr. Rushton became trustee in the transaction leading up to and involved in this lawsuit because he, as president of First National Bank, asked him to act as trustee; that in attempting to keep Numark going he was trying to prevent First National Bank from having a substantial loss,- that this transaction was for the bank’s benefit and at Ms suggestion, and it was not his intention for Dr. Rushton to be personally liable; and that up until this Numark transaction First National Bank liad never sustained large losses and everything was going well until the ARA ran out of money and he was forced to resign. Mr. Blewster stated that First National Bank had had other trusteeships to work out situations like this one and they had never been questioned by the bank examiners.

Dr. Rushton testified that when it became apparent that Odyssey was not going to make a go of the trailer business, he told the board of directors that the best thing to do was to shut it down and let it fold up. Mr. Blewster then suggested that Mr. Drew, manager of Odyssey, take a look at the Magnolia Wood Products property and see if business could be continued with a merger of the two companies. The bank had taken a loss in both companies and Mr. Blewster did not want to see that happen. At Mr. Blewster’s suggestion, Mr. Drew decided that perhaps he could put the two companies together, go into wood products manufacturing and pull the situation out of the fire. Dr. Rushton stated that he could not attend the meeting after the merger because of surgery, and that when he called Mr. Blewster to see what they had decided, he found that they had elected Mm president. He reluctantly accepted the office at Mr. Blewster’s request. Mr. Blewster told him that through Hamilton Moses^ they were going to arrange an ARA loan; that Mr. Blewster wanted him to act as trustee to make loans to this new company so the bank could get its money back from the ARA loan. Dr. Rushton stated that his position as trustee was explained at a meeting of the bank’s board of directors; that the bank had asked him to act as trustee for it so the bank could arrange for him to pay off its indebtedness on notes it was about to lose; that this was the same arrangement the bank had used before with Mr. Shanehouse and Mr. Varner and one or two others who had served in the same capacity as had Dr. Rushton; that all the time endeavors were being made to secure an ARA loan and that while he himself had nothing to do with it, he knew it was being done because the bank had helped in filling out the forms.

"With respect to the February 25, 1965, collateral pledge (see item 20 above) Dr. Rushton testified.

After Mr. W. C. Blewster had resigned, I put up my stock in Magnolia Broadcasting Company and the rest of the stock I had in Berry Petroleum Company to secure the $97,000 mortgage. I did not receive any money or consideration for the warranty deed to Numark Manufacturing. The reason I put up this security for the trustee mortgage in 1963 was that T. A. Monroe called me to come to the Bank. I went down there and Mr. Eckert told me I was in serious trouble. He said that W. C. Blewster was going to the penitentiary and I might be going with him. He said I had better clear my name at the First National Bank; that I was part of the whole thing. He asked me what I did with the money, and I said I never got any of the money, and he said the money is somewhere and you might be investigated by the Federal Government and you will lose everything you have; your home and clinic and everything, and I thought I was doing the right thing. I followed the advice of the Bank’s attorney and put up this security. I was subsequently advised by legal counsel that I did not have to do that. I put up my stock in Magnolia Broadcasting Company and about 10,500 shares of Berry Petroleum. This was after the blowup at the Bank. I did not put up any security in 1961 when I signed the Odyssey note. The Magnolia Broadcasting Company stock and the Berry Petroleum stock was typed on that note without my consent, and I did not know it was on there.

I was coerced into putting up the security on the Bank note. Mr. Eckert was acting as my legal advisor while he was acting as legal advisor for the Bank. I was not paying him any fee. We had been close friends for 10 or 15 years and I had no reason not to trust him.

Mr. T. A. Monroe testified:

In some ways, the whole board of directors had been derelict in their duty but in other ways they did not fail because they did not know some of the 'things that were going on. . . I did not tell Dr. Rushton in the executive meetings between myself, Mr. Eckert and Dr. Rushton that his activities were in violation of federal law and he was in serious trouble. I did not hear Mr. Eckert tell him that. I might have gone out of the meetings or been called out. I don’t know. But Mr. Eckert was advising Dr. Rushton on his legal liability ... We told him if he put up securities it would be his free and voluntary act. .. We merely asked him to secure the loan to prevent, him from being embarrassed before the board of directors. We wanted the securities brought in but I don’t think we mentioned voluntary. . . It was more just appealing to him to help us get his loan straight. We did not tell him it would be his free and voluntary act.

Later Mr. Monroe testified:

I don’t recall saying to Dr. Rushton “what did you do with that money” a number of times. It did come up on one or two occasions. I didn’t emphasize. A statement like that might carry its own emphasis. I told Dr. Rush-ton tlie FBI was investigating the bank, bnt if he put up property and securities, it would take the heat off. I don’t think Dr. Rushton was threatened to the extent of being intimidated.

“Q. When was the first time you heard Doctor Rushton state to anyone in your presence that he was acting as trustee for the First National Bank of Magnolia, in taking this Numark property?
A. That was in our first meeting with him.
Q. That was in your first meeting with Doctor Rushton?
A. Yes sir.
Q. When Mr. Laney asked you this question on direct examination, every time he asked you this question you answered ‘no.’ You had heard him tell other people in your presence that he was acting as trustee for the bank, had you not?
A. Yes sir, but not in a Board Meeting. Mr. Lan-ey asked me if I had heard him say that in a Board Meeting.
Q. Then all of your answers of ‘no’ pertained only to Board Meetings, Mr. Monroe?
A. Yes sir.
Q. Mr. Laney told you that he was going to ask those questions and would put in the word ‘Board Meetings’?
A. Yes, but I knew he would have to ask that.”

Following Mr. Monroe’s testimony, W. A. Eckert was called as a witness to testify for defendant. At the time he was called, counsel for Dr. Rushton made the following' objection:

“I want to object to Mr. Eckert testifying. He has sat here during the entire testimony and we asked for the rule on the witnesses and he did not leave the Courtroom, Your Honor.”

The court overruled this objection and thereupon Mr. Eckert testified that he was at several conferences with Dr. Rushton over a period of time from December 1964 to February 1965 and the first time he ever heard about Dr. Rushton claiming he had been authorized to act as agent or trustee for the bank was when the complaint was filed in the instant suit; and that no one had ever coerced anyone in his presence in connection with the Dr. Rushton affairs. Mr. Eckert stated that he had regularly attended the bank’s board meetings and had never heard any discussion at any of them that the bank liad agreed to hold Dr. Rushton harmless in connection ivitli his endorsement of papers or notes for Numark.

Following direct examination of Mr. Eckert, counsel for Dr. Rushton refused to cross-examine him and made the following motion:

“Your Honor, we ask that the testimony of this witness be stricken from the record. By his own testimony, he has admitted that he is Counsel for the bank and, therefore, he is ineligible to testify. He was a known witness and he was allowed to remain in the Courtroom. Mr. Rogers was announced to be the representative of the defendant bank, Your Honor, not Mr. Eckert.”

Appellant’s argument with reference to the rule is as follows:

“At the beginning of this case the plaintiff asked ‘the rule’ on the witnesses. The defendant announced that the president of the bank, Mr. Rogers, would be the representative of the defendant corporation who was permitted to remain in the court room. Counsel for Dr.. Rushton pointed out that Mr. W. A. Eckert was sitting at the counsel’s table and that Mr. Eckert had participated in a number of these transactions and would undoubtedly be called as a witness. Counsel for the bank announced that Mr. Eckert would participate as an attorney and would not be called as a witness.”
* * *
“We recognize that the trial court has a great deal of discretion in applying the rule but that discretion is not without limitation. When it is called to the attention of the Court and counsel that an obvious witness is in the courtroom and specific objection is made to that witness, it is an abuse of discretion for the trial court to permit that witness to participate in the trial of the case and then take the witness stand and testify.”

Appellee in its argument states the matter as follows:

“It is true this case was conducted under ‘the rule.’ This did not exclude Mr. Eckert who was an attorney of record for the Appellee. He had every right to be present and it was his duty to be there having been the bank’s attorney through all the- years during which the involved transactions occurred. The actual trial of the case was conducted by other counsel.
“As we see it the only question which could possibly be involved is whether Mr. Eckert’s testifying was proper under Canon 19 of the Canons of Professional Ethics. This Canon reads:
‘When a lawyer is a witness for his client, except as to merely formal matters, such as the attestation or custody of an instrument and the like he should leave the trial of the case to other counsel. Except when essential to the ends of justice, a lawyer should avoid testifying in Court in behalf of his client. ’
“In the opinion of bank’s counsel conducting the trial it was ‘essential to the ends of justice’ that Mr. Eckert testify and he was called as a witness. If trial counsel was in error in his appraisal of what was ‘essential to the ends of justice’ then he is subject to criticism but we fail to see anything else involved. ’ ’

CONCLUSION

The participation of counsel and his partners in a case in which one of them is a witness is dealt with at length in Formal Opinion 220 of the American Bar Association’s “Opinions of the Committee on Professional Ethics.” As there pointed out, it puts counsel in the position of both advocate and witness, one of which requires the lawyer to be partisan and the other of which requires him to be factual. It thus robs the trial of that appearance of fairness which should characterize every court hearing. Morgan v. Roberts, 38 Ill. 65 (1865); Gajewski v. United States, 321 F. 2d 261 (1963).

Ark. Stat. Ann. § 28-702 (Repl. 1962) provides, “If either party requires it, the judge may exclude from the courtroom any witness of the adverse party, not at the time under examination, so that he may not hear the testimony of the other witness.” In construing this statute, Arkansas Motor Coaches, Ltd. v. Williams, 196 Ark. 48, 116 S. W. 2d 585 (1938) and Oakes v. State, 135 Ark. 221, 205 S. W. 305 (1918), we have consistently held that it is within the discretion of the trial court to permit a lawyer to testify in a case even though the rule has been invoked. The above cases, however, do not show the situation that developed in this case. Here the record conclusively establishes that Mr. Eckert was one of only three key witnesses in this lawsuit from the beginning. Nor can we agree with appellee that it became necessary to the ends of justice during the trial for Mr. Eckert to testify. Rather, it appears that the bank took a calculated risk that Dr. Rushton could not make out a case.

Upon both grounds we hold that the trial court abused its discretion in permitting Mr. Eckert to testify, for Dr. Rushton’s whole lawsuit depended upon the credibility of the testimony of Dr. Rushton, T. A. Monroe and W. A. Eckert during the meetings held from December to February.

Usually chancery cases such as this are tried de novo in this court but in such instances we have the benefit of a complete record. Here it is obvious that the bank would like to have the testimony of Mr. Eckert. Furthermore, according to Dr. Rushton’s reply brief, he would like to have the opportunity to show that the bank lias taken Dr. Rushton’s position in a lawsuit against U. S. Fidelity & Guaranty Company in the U. S. District Court for the Eastern District of Arkansas, Western Division. Thus we find that we are in much the same position as that involved in Cline v. Miller, 239 Ark. 104, 387 S. W. 2d 609 (1965). Therefore, we are reversing and remanding the case for a complete new trial unprejudiced by any findings heretofore made.

Reversed and remanded.

ADDENDUM FORMAL OPINION 220

(July 12, 1941)

CANONS INTERPRETED: PROFESSIONAL ETHICS 6, 19

The opinion of the committee was stated by Mr. Drinker, Messrs. Miller, Phillips, Brown, and Jackson concurring, Mr. Houghton and Mr. Brand dissent.

A former member of this Committee has questioned the soundness of certain generalizations in our Opinions 33, 50, and 185 relating to the conduct by a lawyer of litigation in which one of his partners has been or may be a material witness, and has propounded to us the following specific questions:

A member of a law firm has represented a decedent in connection with a gift subject to federal gift tax, having drawn all the papers, calculated and paid the tax, and given an opinion to his client that the gift was proper and not made in contemplation of death. The lawyer also represented the decedent in connection with the drafting of his Will, and was expected by the decedent to represent his estate, which the Executor and the family of the decedent also desired.

After the client’s death, the attorney and his firm are retained to represent the estate. Subsequently, claim is made by the Federal Government that the gift was made in contemplation of death, and a tax is assessed. The attorney who represented the decedent is a necessary witness to defend the gift.

Is it unethical for his partner to continue to represent the estate in opposing the claim of the Federal Government?

In cases involving the question as to whether one member of a firm may represent a client in a case where his partner is a necessary witness, should a distinction be drawn between:

(a) Cases where the lawyer must take a position adverse to that supported by his partner as a witness, and cases where the lawyer supports his partner’s testimony?

(b) Cases in which the partner is required to testify in connection with matters concerning his professional duties, as distinguished from cases involving testimony relative to other matters?

Is not the problem involving participation by a lawyer in litigation where his partner is a necessary witness, one which should not be covered by a general rule of ethics, but by a more flexible provision such as would involve the addition to Canon 19 of the following paragraph!

“It is improper for an attorney to act as counsel in a matter as to which he or his partner has testified or will be required to testify, except by special permission of the tribunal in which he is to appear as counsel.”

Canon 19 provides as follows:

“When a lawyer is a witness for his client, except as to merely formal matters, such as the attestation or custody of an instrument and the like, he should leave the trial of the case to other counsel. Except when essential to the ends of justice, a lawyer should avoid testifying in court in behalf of his client.”

In Opinion 33 we held that where a law firm had represented an imbecile in procuring relief for her by reason of her imbecility, it was unethical for any member of the firm subsequently to accept employment involving the assertion that she was not an imbecile. We there said that

The relations of partners in a law firm are so close that the firm, and all the members thereof, are barred from accepting any employment, that any one member of the firm is prohibited from taking.

In Opinion 50, without stating the facts of the case before us, we referred to Court decisions condemning generally, as a breach of the rules of professional conduct, the acceptance of employment by a lawyer who knows that he will be a material witness for his client, or his testifying, where already, employed, “except in those rare cases where, from some unforeseen event occurring in the progress of a trial, his testimony becomes indispensable to prevent an injustice.”

We further said that, even though his zeal as a lawyer might not influence his testimony as a witness, the public might suspect that it would, — a situation which the lawyer should avoid. After referring to the principle of Opinion 33 that a lawyer is precluded from accepting or continuing in a case in which any of his partners could not properly be employed, we stated broadly that a lawyer may not properly accept a case in which he has reason to believe that he or any of his partners will be a material witness and must ordinarily withdraw if and when, in the course of the proceedings, such becomes apparent.

In Opinion 185 we held, referring to Opinions 33 and 50, that it was improper for a lawyer to accept employment in a case where it would be his duty to attack the essential testimony to be given by his partner on behalf of the other side.

On February 10, 1941, the Committee on Professional Guidance of the Philadelphia Bar Association rendered an opinion on facts substantially similar to those involved in the case now submitted to this Committee. The Philadelphia Committee discussed our Canon 19 and our Opinions 33, 50, and 185. While expressing high regard for our Opinions, the Philadelphia Committee declined to follow the statements in Opinion 50 whereby a lawyer is broadly precluded from accepting or continuing employment in a ease in which his partner has been or will be a material ydtness. The Philadelphia Committee agrees with the conclusions in our Opinions 33 and 185 that a lawyer may not assume or continue a position adverse 'to that for which his partner has been or will be a witness, and agrees that a lawyer should not himself conduct a litigation in which he himself must be a witness, unless the ends of justice clearly require it. The Philadelphia Committee constructs Canon 19 as not, on its face, precluding the “other counsel” from being a member of the partnership with which the witness is affiliated. It holds, however,

We are unable to agree with the reasoning which attaches any impropriety to the participation of a lawyer as a witness and his partner as trial counsel in a matter where the partners have represented the client from the outset and where they are not engaged upon opposing or conflicting sides of the controversy.
This committee is also of the opinion that the opposing counsel and trial judge should be advised as to the status of the partner as a witness.

The Philadelphia Committee further holds that, in cases in which a partner appears as a witness, it would be improper for the lawyer to conduct the case for a contingent fee.

With the decisions in Opinions 33 and 185, where the lawyer would have been required to attack his own testimony or that of his partner, we are still in entire aceord. To accept or continue such employment would necessarily place the lawyer in the inconsistent position condemned by Canon 6.

We are also in accord with the position that where a lawyer will necessarily be a material witness as to matters not relating to his professional duties, he should not, in the first instance, accept employment in the case.

The Committee as at present constituted is of opinion, however, that a distinction may often properly be drawn in cases where a partner’s testimony relates to matters occurring in the course of his professional duties, and also in cases where the lawyer has long and intimate familiarity with the details of the matter in litigation, so that his withdrawal will necessarily deprive his client of knowledge and experience of peculiar and irreplaceable value.

We therefore consider both unwarranted and unwise the broad generalizations in Opinions 33, 50 and 185 to the effect that a lawyer may never properly accept employment where his partner is likely to be a witness and that he must withdraw from a case when snch probability develops.

The question frequently arises in connection with cases like that here propounded. In such cases the lawyer for the decedent has prepared all the papers, knew the decedent, and knew exactly why he did what he did. His firm, however, naturally represents the decedent’s estate, which properly relies on them to sustain the gift. By reason of their knowledge of the decedent’s affairs they are peculiarly qualified to do so, and unless they can d#o so the estate will be deprived of their valuable services.

In such cases there does not appear to be any impropriety in the lawyer who drew the papers and knew the testator testifying to the facts surrounding the execution of the deed of gift, and in his partner representing the estate to sustain it. The possibility of the witness moulding his testimony in order to secure a higher fee for his firm is more than balanced by the injustice to the client of depriving the latter either of a necessary witness or of a specially qualified lawyer. The possible interest of the witness would merely affect his credibility. While it is true that such a situation might require the lawyer for the estate to argue the veracity of his partner, this would be equally the case where the witness was his friend or his near relation. Actually, if the partner of the witness withdrew from the case and asked one of his colleagues at the bar to take his place, the latter would be not less assiduous in standing up for the witness’ reputation as would the latter’s partner.

We do not construe the words “other counsel” in Canon 19 as necessarily excluding a partner of the lawyer who must become a witness.

In our opinion, therefore', it cannot properly be said in every case that a lawyer may not properly appear in a caso where his partner' could not: hut that each case should depend on its own facts.

Like many other problems arising in the course of professional employment, this involves questions of good taste as well as of ethics, its solution depending largely on the surrounding circumstances, in the light of which each case must be resolved, within the limits above outlined, by the lawyer, with, of course, full disclosure to opposing counsel and to the tribunal.

MR. HOUGHTON,

dissenting:

From certain statements and conclusions in the opinion of the majority of the committee, I respectfully dissent.

I do not agree that the criticized statements contained in Opinions 33, 50, and 185 relating to the conducting of litigation by a lawyer in which one of his partners has been or may be a material witness, are wrong or should be departed from. Neither do I agree that it is proper for one partner to be a witness and another the advocate in a trial even in cases where the lawyer acting as a witness lias long and detailed familiarity with the details of the matter in litigation, so that his withdrawal may necessarily deprive his client of knowledge and experience of irreplaceable value.

I am firmly of the opinion that no lawyer should be both witness and advocate, excepting under those circumstances recognized or permitted by existing Canons, and I am further of the opinion that the existing Canons should not be amended to justify the conclusion reached by the majority opinion.

If we start with the premise that it is improper for a lawyer to be both a witness and an advocate in a contested ease, then it is my firm opinion that his law partner should likewise be barred from so doing. The functions of a witness and an advocate should not be carried out by the same person. The function of a witness is to tell the facts as he recalls them in answer to questions. The function of an advocate is that of a partisan.

Cation 19 provides in effect that, except as to formal matters, when a lawyer is a witness for liis client, he should leave the trial of the case for other counsel. This Canon has been construed in committee Opinions 33, 50, and 185, to prohibit one partner from acting as a witness and another partner as an advocate in a contested case. The Canon itself is merely a crystallization of recognized views of the bar prevailing for many years.

In the case of Roys v. First National Bank, 183 Wis. 10, where the court had under consideration the matter of the. propriety of an attorney in a case appearing as a witness to contested facts, the court called attention to Canon 19 and stated:

This rule is not to be allowed simply because the American Bar Association has adopted it, but with better reason because it states ethical considerations that must appeal to every lawyer as sound. A lawyer has a retainer — as a witness lie is not entitled to such. He will find it hard to disassociate his relation to his client as a lawyer and his relation to the party as a witness. This case bears witness of that fact.

The soundness of the Canon is evidenced by many opinions of various courts. Lord Campbell, in his Lives of the Chancellors, in relating the fact that the solicitor general who was conducting the prosecution against Sir Thomas More, offered himself as a witness for the Crown, said that he did it to his eternal disgrace, and to the eternal disgrace of the court which permitted such an outrage on decency. Stones v. Byron, 4 Dowl. & L. 393, Note.

In the case of Alger v. Merritt, 16 Iowa 121, the Iowa court held that no attorney having a just coneeption of his true and proper position will willingly unite the character of counsel and witness in the same case, stating in effect that experience has shown that those who, on repeated occasions, allow themselves to be thus used, are certain to feel most keenly the consequences of their indiscretion, and that such testimony might even he excluded, not because the source of proof is regarded as unreliable, but because public policy and the integrity and welfare of the profession dictate that no one should be at the same time both advocate and witness for his client.

In the case of Grindle v. Grindle, 240 Ill. 148, 88 N. E. 473, the court condemned the conduct of an attorney who had assumed the double burden of acting as solicitor in a ease and furnishing the evidence necessary to success.

In an early Pennsylvania case, Frear v. Drinker, 8 Pa. 520, the court said it was a highly indecent practice for an attorney to examine witnesses, address a jury and give evidence to contradict the witnesses.

Many courts have held that it is the duty of an attorney to withdraw from the case as soon as he learns that there is a necessity for him to be a witness therein.

I believe that it is the unanimous opinion of the Bar and courts passing on this question that it is improper for an attorney to be both witness and counsel in a contested case.

Is the practice to be condemned any less because a partner of the attorney witness is the advocate in the case?

In Opinion 33, rendered March- 2, 1931, it is stated:

. . . The relations of partners in a law firm are so close that the firm, and all the members thereof, are barred from accepting any employment, that any one member of the firm is prohibited from taking.

The reason for the ruling was because of the close relationships of the partners in a law firm.

In Opinion 50, rendered December 14, 1931, it is stated:

... As the lawyer cannot properly accept employment in any matter in which he knows he will be a material witness for the party seeking to employ him, his partner cannot properly accept employment from that party. Likewise, anything which requires a lawyer to withdraw from a case requires that his partners withdraw.

It is my opinion that the functions of a witness and an advocate should not be carried out by the same party, nor by different members of the same firm. A law partnership is in reality an entity. The members are bound by a partnership agreement. Any act of the one binds the partnership. I believe that the same reasons that bar one member of a firm from acting as a witness and counsel in the samo case apply to all the partners as well. The witness, being a member of the firm, shares in the monetary rewards of his partners who are the advocates, and he, being a member of the firm, is lawyer and advocate. On the other hand, if one of the partners is a witness, the same firm is acting in dual capacity of witness and advocate.

The majority opinion attempts to justify such conduct in case a judge permits it.

This to my mind does not An any way affect the propriety of the act of counsel.

I do not believe the practice is made proper by consent or permission of the trial judge. The function of the judge should be limited to passing on whether the circumstances of the particular case bring it within the exceptions of the Canons.

It may he, as pointed out in the majority opinion, that it might he desirable from a standpoint of the successful conduct of the case that one member of the firm act as witness and another as the advocate in cases where the partners have represented the client from the outset and have knowledge and experience gained from the relationship of attorney and client. These facts, in my opinion, do not alter or affect in any degree the reasons for the prohibitions of the Canon. The partners must elect whether they are to be in the case as witnesses or as advocates. Election really should be reserved for the client. If he elects to have his attorney act as his witness, he gets the full benefit of the attorney’s knowledge of the facts. I do not believe that the client would suffer any hardship in most cases, because he is required to obtain a new advocate. In any event, the proper administration of justice should not be affected by the zeal of an advocate or his partner who insists on having the members of one firm act in the repugnant capacity of witness and advocate.

For the foregoing reasons, I respectfully dissent.

MR. BRAND,

dissenting:

The sole question involved is whether a partner of a lawyer-witness is included in the words “other counsel” appearing in Canon 19.

It is clearly the intent of the Canon that the lawyer who must become a material witness for a client should not conduct the. trial. The justification for this important rule of professional conduct applies with equal force to a partner of the lawyer-witness.

The statement in Opinion 33 that

The relations of partners in a law firm are so close that the firm, and all the members thereof, are barred from accepting any employment, that any one member of the firm is prohibited from taking.

is sound.

       For brevity, we have used appellant’s abstract of Dr. Rush-ton’s and Mr. Monroe’s testimony on this point.

       Formal Opinion 220 is attached hereto as an addendum.


source: Caselaw Access Project

author: Gr. David Walker, Special Justice.

license: Public Domain

text:
    CITY OF LITTLE ROCK et al v. SUNRAY DX OIL COMPANY
    5-4238
    425 S. W. 2d 722
    Opinion delivered April 1, 1968

      Perry V. Whitmore, A. F. Mouse, Lester & Shults, and Bose, Meeh, Mouse, Barron, Nash & Williamson, for appellant.

      Darrell Dover and Mouse, Holmes & Jewell, for appellee.
   Gr. David Walker, Special Justice.

The issue in this case is the correct zoning classification of property situated at the Northeast Corner of the intersection of Kavanaugli and Oak Streets in Little Rock ¡which was formerly the homestead of two prominent Little Rock citizens, the late Mr. & Mrs. J. F. Loughborough. Appellants contend that the property is properly classified as “D”, Apartment, and appellee contends that the proper designation is “F”, Commercial.

At the outset it should be pointed out that this is not a rczoning case. All parties acknowledge that the original zoning of the property in question has not been legally changed. The question for determination is how the property was originally zoned.

The difficulty arises out of the manner in which the various classifications were depicted upon the “District Map” which was adopted in the original Zoning Ordinance of the City of Little Rock in 1937. The respective classifications were established only by being shown on this map in different colors, which were apparently placed on the map with an ordinary crayon. It would appear that the best judgment was not used in choosing the contrasting colors because, to some eyes at least, there appears to be a minimum of difference between the shadings of the different classifications. The passage of time has rendered this difference more difficult to distinguish.

On June 19, 1937, the original Zoning Ordinance of the City of Little Rock was published in the Arkansas Gazette together with a reproduction of the District Map. Since the colors could not be reproduced in the newspaper print, the zoning classifications were shown by cross hatching or different slantings of lines on the published map. On this published map the zoning of the property in question was shown as “D”, Apartment District.

In 1950 the City of Little Rock adopted Ordinance 8489 which recited:

“Whei;eas, the original Zoning Map of the City of Little Rock has become worn and unusable, and
“Whereas, the City has purchased three copies of the Bagley map of the City of Little Rock upon which the zoning of all property has been designated, which zoning has been verified by the Planning Commission,
* * * “The three copies of the Bagley map now owned by the City of Little Rock and upon which has been transcribed the present zoning of all property and land within the City of Little Rock are hereby approved and adopted as the official Zoning Map of the City.”

The Bagley map so adopted consists of two books in which various tracts or portions of the City are shown as separate sheets which can be removed or redrawn as zoning changes take place. The Bagley map showed the property in question as “F”, Commercial District.

In 1964 this property was placed upon the market and the appellee, Sunray DX Oil Company, became interested in purchasing it as a filling station site. It inquired of Mr. Henry M. DeNoble, Director of the Department of Community Development of the City of Little Rock, which is the department in charge of zoning matters, as to the correct classification of the property and on August 24, 1964, Mr. DeNoble wrote a letter to appellee advising that the property was zoned “F”, Commercial District. After receipt of this letter appel-lee immediately consummated purchase of the property.

Shortly thereafter appellee applied for a building-permit to commence construction of the proposed filling station. This application was denied on the sole ground that the property was zoned “D”, Apartment District, and use for filling station was prohibited. It is stipulated that the application for building permit was otherwise proper and the permit should have been issued if the property was classified “F”, Commercial District, being a proper use under that classification.

It appears that after his letter of August 24, 1964, Mr. DeNoble made some investigation of the matter and decided that the Bagley map was incorrect and thereupon undertook to revise the map to set forth his determination. This was done after appellee’s purchase and apparently without any knowledge of or notice to appellee. In oral argument it was admitted that Mr. De-Noble had authority to make such changes only in the event of action by the zoning authority and that his attempted revision of the map was unauthorized.

When the building permit was refused, appellee instituted the present suit praying a mandatory injunction directing the City and its agents to issue the building permit and restraining the City and its agents from interfering with appellee’s use for the property for the construction and maintenance of a filling station. Numerous property owners with residences in the vicinity of the property intervened in opposition to appellee’s petition. The Chancellor ruled in favor of appellee and issued the injunction as prayed. This appeal followed.

The Bagley map was never filed with the recorder of Pulaski County nor was there ever any notice or hearing of any change in the original classification of the property. These matters are immaterial, however, because appellee does not contend that the Ordinance of 1950 adopting the Bagley map was a change in the original zoning of the property. It is appellee’s contention that the property was always zoned “F”, Commercial and that the Bagley map and the Ordinance adopting it are merely a verification of that fact.

It is fundamental that the Chancellor ’s findings will not be set aside on appeal unless against the preponderance of the evidence, and it is incumbent upon appellants to establish that the findings of the lower Court were erroneous. High v. Bailey, 203 Ark. 461, 157 S. W. 2d 203; Woods v. Spann, 190 Ark. 1085, 82 S. W. 2d 850 and cases there cited. We are not convinced that the Chancellor’s findings were erroneous.

Appellants first argue that an inspection of the original District Map will reveal that the color designation of the Loughborough property corresponds with that of “D”, Apartment District. It may be observed that acuity of color vision is not one of the constitutional or statutory qualifications for a Supreme Court Justice. However, even among those members of the Court who profess accurate color perception there is a difference of opinion as to the interpretation of the faded colors of the original District Map. It might well be argued that in such a case we should not substitute our color vision for that of the Chancellor. -

Moreover, even if the colors presently are apparently those designated for “D”, Apartment, it does not follow that they were always such. A witness, Arthur Mills, a real estate man who was an Alderman in the City of Little Rock at the time of the passage of the Ordinance adopting the Bagley map as the official zoning map and who had served on the Planning Commission, testified that at the time the Bagley maps were adopted in 1950 he was familiar with the property in question and knew that it was designated “F”, Commercial, both on the original District Map and on the Bagley map. He had a business interest in the vicinity which impressed the matter on him. He was not contradicted or impeached.

The Bagley map, adopted by an Ordinance, which recites that the zoning therein reflected had been verified by the Planning Commission, is most persuasive that this was the classification set forth in the original Ordinance. In the view which we take of this case, it is not necessary to pass upon the argument advanced by appellee on this point to the effect that the findings so made are conclusive upon the Court but, to say the least, such findings are presumptively correct and highly persuasive on the Court. See 37 Am. Jur., Mvmoipal Corporations, Section 177, p. 812. The Ordinance of 1950 contained a finding that the original Ordinance, then thirteen years old, “has become worn and unusable” and further that the Bagley map “zoning has been verified by the Planning Commission”. It would not seem that the original map has become any more reliable in the seventeen years which have passed since it was found to be worn and unusable. Fortunately the Bagley map was prepared in such manner that the classification would not fade.

Appellants argue the map published in the Arkansas Gazette at the time of the adoption of the original Ordinance as evidence that the original map showed this to be “D”, Apartment property. In the first place the published map was not the original map but a copy of it and there is no showing by whom or by what authority the copy was made. Obviously there was an error either in this published copy or in the Bagley map. Three copies of the Bagley map were prepared and verified. It should be noted that the Loughborough property involved in this suit is a corner tract and was the only part of the block which was alleged to have been zoned as “F”, Commercial, the rest of the block being unquestionably “D”, Apartment. It would appear logical that it would be more likely that an error would be made in the preparation of the published map by failing to note the small tract which was classified “F” than in the three Bagley maps, which would have required a conscious addition of a small tract to a block otherwise entirely in the “D” class. To have made such a change on the Bagley maps required a deliberate act, whereas in the preparation of. the published map it would have been quite easy to have overlooked the small tract differently classified, particularly in view of the slight differentiation in coloring; hence, we believe it more likely that the Bagley map was the correct interpretation of the original map.

These views make it unnecessary to consider other points argued in able briefs of counsel.

The Decree of the Court below is correct and is affirmed.

Harris, O. J. and Jokes, J., dissent.

George Rose Smith, Ward and FoglemaN, JJ., not participating.

Special Justices Louis Ramsay and J. S. Brooks join in this opinion.


author: Carleton Harris, Chief Justice.

text:
    BANK OF DARDANELLE, Dardanelle, Arkansas v. BIBLER BROTHERS et al
    5-4537
    426 S. W. 2d 152
    Opinion delivered April 8, 1968

      James K. Young, for appellant.

      Laws & Schulze, for appellee.
   Carleton Harris, Chief Justice.

In May, 1955, Charles Joe Elliott purchased a 32-foot Lufkin semitrailer in Springfield, Missouri, from Fruehauf. From September 20, 1956, through February 3, 1960, Elliott borrowed money from appellant, Bank of Dardanelle, and executed several chattel mortgages, including, along with other personal property, this trailer as collateral. Elliott died in May, 1960, at which time he was still indebted to the bank. Appellant learned that Bibler Brothers, appellee herein, had possession of the trailer, and made demand for same. However, appellee claimed ownership of the trailer and appellant instituted suit. On trial, the court dismissed the bank’s complaint for want of equity and, from the decree so entered, comes this appeal.

The evidence reflects that Elliott had been employed by appellee for a long number of years, and that, at the time the trailer was purchased, Bibler Brothers furnished the money in the amount of $420.00 to enable Elliott to make the down payment. Title remained in Fruehauf until August 5, 1957, at which time, title was transferred to Bibler Brothers by Elliott. Testimony on behalf of appellee was to the effect that the title transfer was made to secure debts owed appellee by Elliott, monies having been paid to him, or on his behalf, over a period of several years. According to the evidence, Elliott was still, at the time of his death, indebted to Bibler Brothers in excess of $3,000.00 (and the Chancellor so found). Further testimony was offered that appellee had no knowledge of the bank’s claim until after Elliott’s death.

As earlier stated, Elliott gave a chattel mortgage to the bank (.including this trailer) on September 20, 1956, and five subsequent chattel mortgages likewise included the trailer. Mr. Robert Holland, cashier of the bank, testified that Elliott was indebted to the institution in the amount of $2,920.00 at the time of his death, and Holland stated that he specifically remembered that part of the money lent to Elliott was to enable the latter to pay off the indebtedness on the trailer. Holland said that the mortgages were filed in the office of the Pope County Circuit Clerk, but no copies were filed with the Motor Vehicle Division of the State Revenue Department. He also stated that he was aware of the fact that Bibler Brothers held title to the trailer, this information being shown on the pink slip submitted by Elliott (in order that the bank might obtain the serial number of the trailer). Holland testified that the reason given by Elliott for the title being in Bibler Brothers was that this was necessary in order to comply with I.C.C. regulations. The witness said that he “checked with another lumber man who hauls to various states,” to verify the procedure. Holland did not seek to ascertain from Bib-ler Brothers the reason for the trailer being in the name of appellee.

The failure to comply with Ark. .Stat. Ann. § 75-160 (Supp. 1967) and § 75-161 (Repl. 1957) is controlling in this litigation. Provisions are as follows:

“(a) No conditional sale contract, conditional lease, chattel mortgage, or other lien or encumbrance or title retention instrument upon a registered vehicle, other than a lien dependent upon possession, is valid as against the creditors of an owner acquiring a lien hy levy or attachment or subsequent purchasers or encumbrances with or without notice until the requirements of this article [§§ 75-160, 75-161] have been complied with.
“ (¡b) There shall be deposited with the department [Revenue Department] a copy of the instrument creating and evidencing such lien or encumbrance, which instrument is executed in the manner required by the laws of this State with an attached or indorsed certificate of a notary public stating that the same is a true and correct copy of the original and accompanied by the certificate of title last issued for such vehicle.”
* # * #
“ (a) Such filing and the issuance of a new certificate of title as provided in this article [§§ 75-160, 75-161]"shall constitute constructive notice of all liens and encumbrances against the vehicle described therein to creditors of the owners, to subsequent purchasers and encumbrancers except such liens as may be authorized by law dependent upon possession. * * *
“(b) The method provided in this article [§§ 75-160, 75-161] of giving* constructive notice of a lien or encumbrance upon a registered vehicle shall be exclusive except as to liens dependent upon possession and any said lien or encumbrance or title retention instrument filed as herein provided and any documents evidencing the same are hereby exempted from the provisions-of law which otherwise require or relate to the recording or filing of instruments creating or evidencing title retention or other liens or encumbrances upon vehicles of a type subject to registration hereunder.”

In West, Sheriff v. General Contract Purchase Corporation, 221 Ark. 33, 252 S. W. 2d 405, we pointed out that this statutory method of giving* notice is exclusive, and we mentioned that there was no longer any necessity for the documents to be recorded. This holding was reiterated in Francis v. Thomas, 232 Ark. 547, 338 S. W. 2d 933.

While the mortgage was good, as between the parties (Elliott and the bank), Anderson v. First Jacksonville Bank, 243 Ark. 977, 423 S. W. 2d 273, there was no notice of the encumbrance to third parties. The fact that appellant filed these mortgages with the Circuit Clerk is of no benefit whatsoever to the bank. Under the statutes, and our cases, herein cited, no notice was given to Bibler that appellant had any sort of claim on the trailer.

Appellant argues that the evidence was insufficient to sustain the Chancellor’s holding that Elliott was indebted to Bibler Brother's. While the proof, in many instances, is not bolstered by documentary evidence, we think it entirely sufficient to justify the Chancellor in reaching his conclusions.

It is several times mentioned by appellant that the title to the Lufkin trailer was placed in Bibler Brothers simply because of I.C.C. regulations. However, we are never advised as to the regulations allegedly involved, nor is there any evidence that this was the reason, other than Mr. Holland’s statement that Elliott so told him.

Other matters are argued, but we do not consider them pertinent to a decision in this case.

Affirmed.


author: George Rose Smith, Justice.

text:
    W. R. TALLEY v. ARKANSAS-BEST FREIGHT SYSTEM, INC.
    5-4544
    426 S. W. 2d 164
    Opinion delivered April 8, 1968

      Spears & Sloan, for appellant.

      Harper, Young, Durden & Smith, for appellee.
   George Rose Smith, Justice.

This is an action brought by the appellant, W. R. Talley, for personal injuries and property damage sustained in a highway collision involving four vehicles, all headed north. At the close of Talley’s proof the court directed a verdict in favor of the appellee, Arkansas-Best Freight System, Inc. For reversal Talley contends that his proof raised questions of fact for the jury.

Talley has brought up only his own testimony and that of a State police officer who reached the scene about ten minutes after the accident happened. As the officer’s testimony added nothing of significance to Talley’s own account, our statement of the facts is taken from .Talley’s version of the occurrence.-

The accident happened at about 11:30 p.m. on a two-lane one-way overpass that is part of Interstate Highway 55 in Crittenden county. Basically, the accident was caused by the negligence of Charlie Sims, who had stopped his car in the righthand lane of traffic on the overpass, with his lights turned off.

The Arkansas-Best Freight truck, with Talley behind it, was approaching the overpass from the south, in the righthand lane, at about 50' or 55 miles an hour. The speed limit was 70. Talley, preparing to pass, pulled over into the lefthand lane and was trailing the truck in that position when the two vehicles entered the overpass.

After the truck passed the crest of the rise its headlights came downward and revealed the stationary Sims car. The truckdriver swerved to his left and succeeded in merely scraping the left rear part of the Sims car as he went past it. The truckdriver at once started to return to the righthand lane, but when he came to a stop his truck was still angling across the center line of the overpass, leaving the lefthand lane partly blocked.

Talley, too, had seen the Sims car when it appeared in the truck’s headlights. He at once hit his brakes and succeeded in bringing his car to a stop about ten feet behind the ABF truck, without there having been any contact between the two. A few seconds later a fourth vehicle, also coming from the south, skidded into the rear end of Talley’s car and knocked it against the ABF truck and the lefthand side of the overpass, causing the injuries to Talley and his car.

Talley charges the ABF driver with negligence in three particulars, but each charge may be answered in a few words.

First, Talley asserts that the truckdriver was traveling at an excessive speed. There are two flaws in this contention. One, there is no proof that the truckdriver’s speed was excessive. Two, there was no causal connection between the speed of the vehicles and the ensuing collision between Talley’s car and the fourth vehicle involved in the accident.

Secondly, Tally asserts that the ABF driver changed lanes without signaling his intention to do so. Even so, that omission was not the proximate cause of Talley’s injuries. In fact, Talley testified that if the driver had given a lane-changing signal, “I would still have hit my brakes just as I did.” He went on to say that in his opinion the truckdriver did all he could to avoid the accident.

Thirdly, Talley asserts that the truckdriver was negligent in stopping his truck in such a manner as to obstruct the highway. The trouble is that Talley’s complaint contained no such allegation of negligence, nor was there any request that the pleadings be amended to conform to the proof. Thus that issue was not before the court when it granted ABF’s motion for a directed verdict.

Affirmed.

Fogleman, J,, disqualified.

Byrd, J., concurs.


text:
    J. Ernie GASKIN v. STATE of Arkansas
    5301
    426 S. W. 2d 407
    Opinion delivered April 8, 1968

      Harold Hall, for appellant.

      Joe Purcell, Attorney General; Don Langston, Asst. Atty. Gen., for appellee.
   George Rose Smith, Justice.

Fourteen separate in-formations were filed against the appellant, J. Ernie Gaskin, charging* that he had violated § 7 of the Arkansas Securities Act, Ark. Stat. Ann. § 67-1241 (Repl. 1966), by selling Americana Motor Inns corporate stock to certain residents of Lee county with knowledge that the securities had not been registered as required by the Act. Upon trial the jury found Gaskin guilty of every offense charged and fixed his punishment for each offénse at a fine of $1,000. and imprisonment for one year. This appeal is from a judgment entered on the verdict.

We need not detail the State’s proof. Gaskin was the president of a company that was a registered dealer in securities. He did not deny that his salesmen had made the asserted sales of Americana stock to the purchasers who testified for the State. His defense was that the stock did not have to be registered, because he had obtained an exemption under § 14 (b) (9) of the Act, which exempts (upon certain conditions) “any transaction pursuant to an offer directed by the offeror to not more than twenty-five (25) persons.” Ark. Stat. Ann. § 67-1248 (b) (9). That subsection goes on to provide that the Securities Commissioner may by rule or order further condition the exemption.

The State, in presenting its case in chief, attempted to anticipate and rebut Gaskin’s expected defense by proving that he had not complied with the Commissioner’s rules governing what we may call the 25-offerees exemption. The Commissioner, called as a witness for the State, testified that his department had adopted a rule requiring an applicant for that particular exemption to file a list of the names of the 25 proposed of-ferees “so we will know who they are.” It was then shown that the names of the fourteen purchasers referred to in the informations against Gaskin were not included in the list of 25 names that Gaskin had filed in obtaining the exemption for Americana corporate stock. Upon that proof the State contended below, and contends here, that Gaskin was guilty as charged.

We cannot sustain that argument. Section 21 (a) of the Act (§ 67-1255 [a]) provides that a violation of the statute is a felony punishable by a fine of not more than $5,000 or by imprisonment for not more than three years, or by both. By contrast, § 21 (b) (§ 67-1255 [b]) provides that a violation of any authorized rule or. order of the Commissioner is a misdemeanor punishable by a fine of not more than $500 or by imprisonment for not more than six months, or by both.

Gaskin was charged and convicted under the felony provisions of the Act, but the proof does not support the conviction. The statute, being penal, must be construed strictly. It simply provides an exemption with respect to an offer of securities directed to not more than 25 persons (with other conditions not now relevant). It is plain enough that the statute, when read without reference to the Commissioner’s implementing rule, was not violated by the sale of Americana stock to only fourteen persons.

Under our practice, when the evidence does not support the jury’s verdict of guilty with respect to the offense charged, but does support a finding of guilty with respect to a lesser included offense, we may reduce the judgment accordingly unless the Attorney General elects to take a new trial. Green v. State, 91 Ark. 562, 121 S. W. 949 (1909). Here, however, even if it can be said that the proof establishes Gaskin’s commission of a misdemeanor (or fourteen misdemeanors), that offense is not included within the felony with which he was charged. “To be an included offense, all the elements of the lesser offense must be contained in the greater offense — the greater containing certain elements not contained in the lesser.” Beck v. State, Ind., 149 N. E. 2d 695 (1958). See also Wharton’s Criminal Law, § 33 (12th Ed. 1932); Moreland v. State, 125 Ark. 24, 188 S. W. 1, L.R.A. 1917A, 140 (1916); State v. Nichols, 38 Ark. 550 (1882).

The statutory definition of the 25-offerees exemption contains no requirement whatever that a list of names be filed with the Commissioner. That substantive step may well have been a proper implementation of the statute under the Commissioner’s rule-making power, but the evidence to establish a violation of the Commissioner’s rule must unquestionably encompass an element (the offer of the securities to a person not named on the list) not included within the felony denounced by the statute. Hence we cannot properly reduce the felony convictions to misdemeanors.

The judgment is reversed, and, since the State may be able to prove that the securities were actually offered to more than 25 persons, the cause is remanded for a new trial.

BbowN, J., not participating.


author: Paul Ward, Justice. Lyle Brown, Justice,

text:
    Hershel ABBOTT v. C. H. LEAVELL & CO. et al
    5-4493
    426 S. W. 2d 166
    Opinion delivered April 8, 1968

      McMath. Leatherman, Woods & Yowngdahl and John P. Sizemore, for appellant.

      Bridges, Young, Matthews & Davis, for appellees.
   Paul Ward, Justice.

This is a Workmen’s Compensation casev The Commission adjudged Hershel Abbott (appellant) to have received a 30% permanent- disability to his body as a whole. On appeal to circuit court the award was reduced to 20%, hence this appeal. The case arose out of the facts presently mentioned.

On November 4, 1964 appellant suffered a com-pensable injury while in the employment of C. H. Leav-ell & Company (appellee). While working with a piece of construction machinery it came in contact with a power line, causing injury to his back and left foot. Appellee paid medical and disability benefits until a hearing was held.

Seeking a reversal of the circuit court, appellant makes only one contention, viz:

‘ ‘ There is substantial evidence to support the award of the Workmen’s Compensation Commission.”

It is conceded of course that the word “evidence”, as used above, means evidence or testimony which the Commission had a right to consider.

It must also be conceded that, if appellant is correct, the trial court erred in reducing the percentage of disability. In Arkansas Workmen’s Compensation v. Sandy, 217 Ark. 821 (p. 826), 233 S. W. 2d 382, there appears this statement:

“On tli© whole case, there is substantial evidence to support the Commission’s finding of fact, and the Circuit Court erred in setting aside the order of the Commission.”

In the recent case of Bradley County et al v. Samuel Adams, 243 Ark. 487, 420 S. W. 2d 900, the rule was emphasized in these words:

“We have held, in cases too numerous to mention, that it is not our province to decide contested issues of fact in compensation cases, that it is the responsibility of the Commission to draw inferences when the testimony is open to more than a single interpretation, and that the Commission’s findings have the force of a jury verdict.”

Therefore we now proceed to examine the testimony relative to appellant’s disability.

Appellant was employed by appellee for one year and three days before he was injured. His principal duties were to drive a motor crane, grease it, and look after an air compressor. His pay was $2,675 per hour. After being hospitalized and treated he returned to work for two months before the job ivas finished, and his employment was terminated. Shortly thereafter he found a similar job with the Continental Engineering Co., and is now receiving $2.80 per hour. It is not disputed that appellant received an injury to liis back and to the lower part of his left leg and particularly to his left foot,- necessitating the amputation of the big toe and the toe next to it. He is now wearing a special shoe on the injured foot.

Five doctors examined appellant, and their testimony was presented to the Commission. Since there is no contention here that appellant is not entitled to an award of 20% and since the sole issue here is whether there is substantial evidence to support the Commission’s award of 30%, we set out only the results of the doctors’ findings. One doctor fixed appellant’s permanent partial disability at 5%, one at 35% and the others ranged from 10% to 17%.

We first point out that appellee correctly (at page 5 of its brief) agrees that the above percentages fixed by the doctors “were made on the basis of physical impairments only and did not purport to consider claimant’s wage loss disability”, although they made it clear he should be able to return to gainful employment in his former occupation.

After all the testimony had been presented the Commission made the following findings:

“The preponderance of the medical evidence is that the claimant’s anatomical impairment is in the neighborhood of 15 to 18 percent to the body as a whole.” (Emphasis supplied.)
“Based upon the entire record, the Commission concludes that claimant’s wage earning capacity has, nevertheless, been diminished and that by combining claimant’s anatomical impairment and hi3 probable loss in wage earning capacity, his permanent partial disability to the body as a whole is 30 percent.” (Emphasis supplied.)

It is our conclusion that the record contains testimony which the Commission had a right to consider and which constitutes substantial evidence to support its finding of a 30% disability. Portions of that testimony are mentioned and discussed below.

(a) Attention is called to the fact that one doctor evaluated appellant’s disability at 35 %. Certainly it must be conceded that medical evaluation is not an exact science, with no chance for error. This case demonstrates the verity of that conclusion, since no two doctors agreed on the percentage. It is also verified by nearly every case of this kind which reaches this Court. Who then, other than the Commission, has the duty of evaluating such testimony, who is in a better position to do so, and on whom do the statutes impose that responsibility? The answer is too obvious for comment. True, the appellate courts have the last say, as a matter of law, what constitutes “substantial” evidence.

(b) This Court has many times held that certain testimony, other than medical, can be considered in this kind of case. See: Glass v. Edens, 233 Ark. 786, 346 S. W. 2d 685; Wilson & Co., Inc. v. Christman, 244 Ark. 132, 424 S. W. 2d 863; Ark. Best Freight v. Brooks, 244 Ark. 191, 424 S. W. 2d 377, and; Jones Furniture Mfg. Co. v. Evans, 244 Ark. 242, 424 S. W. 2d 880. In the Glass case, in construing Ark. Stats. Ann. § 81-1313 ,(d), (Repl. 1960), we said it “. . . does not mean merely functional disability but includes, in varying degrees in each instance, loss of use of the body to earn substantial wages”. In that case we also said it was error to consider only medical evidence, but that the Commission should also consider the claimant’s “age, experience, education, and other matters affecting wage loss”. The Wilson case approved the Glass decision, and; there, we also said that the Commission has never been limited to medical evidence only in arriving at permanent partial disability of a claimant, but that it should consider all competent evidence relating to his incapacity to earn the same wages he was receiving at the time of his injury.

Appellee’s contentions for an affirmance of the circuit court, as we understand them, are: one, the Commission could consider only the medical testimony; two, the undisputed proof shows appellant was, at the time )f the hearing, receiving 12% cents per hour more than he was receiving before the injury. For reasons previously stated, we find no merit in the first contention, and, for reasons presently stated, we find no merit in the other contention.

Appellee’s contention here is largely, if not entirely, based on Ark. Stat. Ann. § 81-1302 (e) (Repl. 1960) which reads:

“ ‘Disability’ means incapacity because of injury to earn, in the same or any other employment, the wages which the employee was receiving at the time of the injury.” (Emphasis supplied.)

We do not, for two reasons, agree with appellee’s interpretation of the above section, as applied to the facts in this case.

(1) Construing the above statute in the light most favorable to appellant, as we must, it is emphasized: because appellant is making as much money now as he did before does not necessarily mean he has the “capacity” to earn that much. There is undisputed evidence from which the 'Commission could well have found, as it did, that appellant did not have such “capacity”. One, before the injury appellant was a “driver” and an “oiler”, whereas now he can no longer function as a “driver”. Two, his present job is that of an “oiler” but he cannot do that job without assistance from his fellow workers.

There is another feature of this case which appellee apparently would exclude but which we think the Commission had a right to consider. It is the position of ap-. pellee that the requirement of the statute is met if appellant is now making as much money as he did before without any regard for how long he will be able to do so. We think this is a too narrow construction, and would place a great handicap on a claimant. The testimony shows that he has become exceedingly emotional and is in continuous fear of losing his job. Whereas he was a strong, healthy man before and never showed any emotionality, now he cries almost every day when he reaches home, and, at the least provocation, he often cries on the job.

We think the Commission had a right to consider all this evidence, and that it constitutes substantial evidence.

Reversed.

Harris, C. J., disqualified.

BrowN & FoglemaN, JJ., concur.

Lyle Brown, Justice,

concurring. I concur with the result of the majority; however, I think important facts were omitted that are vital to an understanding of the case. The claimant suffered a compensable injury on November 4, 1964. The injury occurred when the construction crane the appellant was operating’ came in contact with a power line and he sustained electrical shock and burns. The claimant worked as ah oiler and operator for a year and three days. His duties included driving a crane, greasing, and lociking after an air compressor, although most of his experience was as an oiler, rather than as an oiler and operator, the latter being a higher paying job.

Oiling consists of operating a grease gun, checking the oil, keeping the machinery clean, and keeping fuel in it. The testimony as to claimant’s incapacity is derived from the claimant and two co-workers. In substance it established the following. As a result of the loss of the big toe and the toe next to it, claimant could no longer walk properly. He sustained a fracture of the back that further impaired his mobility. Finally, his nerves no longer can handle the pressures of more demanding jobs such as operator, thereby reducing’ his ability to move up to a higher paying position.

As far as the physical work involved in oiling is concerned, it is generally not considered strenuous. However, it requires a great amount of climbing and contortions in order to reach all parts of the machine. Since the injury the claimant has been unable to perform his tasks without the aid of his fellow workers. The grease used comes in five-gallon cans which he is unable to carry. The operators bring it and set it on the machine for him. He has to keep treads cleared of mud. Most oilers have to shovel it, but because of his back injury he cannot. He uses a hoe and must go down the tracks and push the mud off. When the tracks get real muddy some of his co-workers help clean. Before the accident claimant could climb up the boom, and would grease all the jibs and gantries. The company does not permit him to do that now. The operator does the climbing although it is an oiler’s responsibility. The claimant concluded, “And if I didn’t have help, I couldn’t make it there. Because I couldn’t do what they ask the man.”

On claimant’s first job, after recovering from the injury, he went back to work; “he [foreman] found out that I couldn’t do the work and I stayed there two months or something near two months and he laid me off. Because I couldn’t keep the track rig clean and go up on the gantry and grease it. I happened to catch . . . an operator out of El Dorado, Kansas, and he didn’t want to help do anything but his job and, therefore, I didn’t make it.” The claimant testified he gets a job by going over to the union hall and the business agent sends him out to a job. “Whether I get the job depends on whether or not I can handle it.”

Under Ark. Stat. Ann. § 81-1302(e) (Repl. 1960), “ ‘Disability’ means incapacity because of injury to earn, in the same or any other employment, the wages which the employee was receiving at the time of the injury.” (Emphasis supplied.)

It is admitted that the claimant is earning more than he was when he was injured. Whether that prevents recovery for wage-loss, as distinguished from the medical disability, must be decided.

Three terms used in the statute must be understood. Those terms are incapacity, earn, and wages. Wages is defined by statute. Ark. Stat, Ann. § 81-1302 (h) (Repl. 1960). Webster’s Second Unabridged Dictionary defines incapacity as ‘ ‘ Quality or state of being incapable; lack of physical or intellectual power . . . it defines earn as “To merit or deserve, as by labor or service. .

Compensation is paid to those suffering a com-pensable disability. In order to give the term disability substance and meaning it is keyed to the capacity to earn wage®. Larson, Workmen’s Compensation Law, 57.22 and 57.34 discusses the problem similar to the case at bar. “If the employee, as often happens, returns to his former work for the same employer after his injury, or is offered it, at a wage at least as high as before, there is a strong presumption against loss of earning capacity. . . . Wages paid an injured employee out of sympathy, or in consideration of his long service with the employer, clearly do not reflect his actual earning capacity, and, for purposes of determining permanent disability are to be discounted accordingly. The same is true if the injured man’s friends help him to hold his job by doing much of his work for him, or if he manages to continue only by delegating his more onerous tasks to a helper.”

The testimony of the medical and lay witnesses substantiates the fact that he is partially incapacitated. That alone does not necessarily affect his ability to earn; however, the additional testimony to the effect that the claimant can only hold his current position if his fellow employees do some of his more onerous tasks indicates that he is not earning his wages within the meaning of the statute.

“The ultimate objective of the disability test is, by discounting these variables, to determine the wage that would have been paid in the open labor market under normal employment conditions to claimant as injured, taking wage levels, hours of work, and claimant’s age and state- of training as of exactly the same period}used for calculating actual wages earned before the injury. Only by the elimination of all variables except the injury itself can a reasonably accurate estimate be made of the impairment of earning capacity to be attributed to that injury.” Larson, Workmen’s Compensation Law, % 57.21.

The Commission here found that the anatomical loss was from 15 to 18 per cent “and that by combining-claimant’s anatomical impairment and his probable loss in wage earning capacity, his permanent partial .disability to the body as a whole is 30- per cent.” (Emphasis supplied.) In construing the statute liberally in favor of the claimant it is reasonable to assume that the legislature intended the word “earn” in its usual sense otherwise the word ‘ ‘ receive ’ ’ could have been used and would have removed any ambiguity.

I also agree that the claimant is entitled to recover now for future loss of probable earnings based on the incapacity suffered. The reason is that a period of employment representative of future capacity to earn is generally unascertainable. Conversely, the claimant cannot wait out the remainder of his life to see what his wage loss ultimately may be. “The only possible solution is to make the best possible estimate of future impairment of earnings, on the strength not only of actual post-injury earnings but of any other available clues.” Larson, Workmen’s Compensation Law, % 57.21. This I think is exactly what the Commission has done.

FoglemaN, J., joins in the concurrence.


author: Lyle Brown, Justice.

text:
    YELLOW CAB COMPANY et al v. Betty DOSSETT
    5-4491
    426 S. W. 2d 792
    Opinion delivered April 8, 1968
    [Rehearing denied May 13, 1968.]

      Bose, Meek, House, Barron, Nash & Williamson, for appellants.

      McMath, Leaiherman, Woods & Yoimgdahl, for ap-pellee.
   Lyle Brown, Justice.

Plaintiff-appellee was injured when she alighted from appellant Yellow Cab’s vehicle and was struck by an oncoming car. Prom a judgment against it, Yellow Cab appeals. The North Little Rock Transportation Co., Inc., joins in the appeal because of the possibility that it might, in a subsequent proceeding, be held liable. Appellants insist there was no substantial evidence of causative negligence on the part of any cab driver; that the court erred in its instructions; that liability insurance was injected into the trial; and that appellants’ motion for a trial on the grounds of newly discovered evidence should have been granted.

Betty Dossett, twenty-two years of age and a working girl, lived a short distance from the apartment of her friend, Bonnie Pockrus, a telephone operator. Both were unmarried. On the night of the accident in December, the girls had planned to meet at Bonnie’s apartment at 111 West Thirteenth Street in Little Rock. Bonnie’s workday ended at around 9:00 p.m., and the television show which they were to watch started at 10:15 p.m. Here is a summary of the pertinent incidents as related by appellee:

She lived only four and a half blocks from Bonnie’s apartment but because of the lateness of the hour and a misting rain she called Yellow Cab; when she entered the cab she gave the driver the address of her destination; when the driver arrived at 111 West Thirteenth he stopped the cab in front of the address but on the opposite side of the street; (the cab entered West Thirteenth headed west and his right side of the street was opposite the apartment); as they turned into Thirteenth Street she handed him a one dollar bill; he was due to give her twenty-five cents in change and she reminded him of it; when he stopped the cab, Betty pointed to the apartment and said, “I want out at the house across the street over there in the U shape . . be was mad about the change and “he just sat there”; she finally concluded that he was not going to move until she alighted; cars were parked on the side of the street where the cab stopped; the cab was in the left half of his driving lane next to the white center line; she got out of the cab in a misting rain and bareheaded; she walked out from behind the Yellow Cab and was struck by an automobile operated by one Gary Elder, who was headed in the opposite direction; her vision of Elder’s car was somewhat obstructed by the Yellow Cab and an advertising sign on the back of it. (Elder was joined as a defendant and the jury returned a verdict in his favor.)

Appellants’ Point I: There was no substantial evidence of negligence on the part of any cab company which was a proximate cause of plaintiff's injury. Appellants’ argument is devoted to the theory that the cab driver’s responsibility had ended because Miss Dossett had alighted at a safe place, thereby assuming the status of a pedestrian.

Whether a particular point is a safe place for a passenger to alight is a relative matter which must be viewed in light of the particular circumstances. It is generally a jury question. Capitol Transit Co. v. Burris, 224 Ark. 755, 276 S. W. 2d 56 (1955). Plaintiff’s evidence must have convinced the jury that the cab driver discharged Miss Dossett at a place which was likely to subject her to risk of injury and coerced her into alighting at that point. In addition to our previous summary of Miss Dossett’s testimony there was this evidence: The driver could easily have taken a route which would have placed .him on the proper side of the street when the destination was reached; there was a vacant space next to the curb and immediately in front of the apartment; the driver could have turned into an alley which ran alongside the apartment and discharged Miss Dossett on the sidewalk; and the driver witnessed the striking of Miss Dossett and drove away, evidencing complete disregard for her welfare. Appellee testified that she took the cab such a short distance because she did not want to he out on the streets at night.

The cab driver had an unescorted girl as a passenger; the hour was late; she engaged a cab for a relatively short distance to take her to a spécific address; there was evidence of misting rain; trees and shrubs are abundant in the apartment block; several old buildings are evident; at one end of the block is a liquor store; and no street lights are shown in the center of the block, the situs of the apartment. Under those circumstances, and in view of her expressions of concern to the ca'b driver, it should have been evident that the girl might attempt the shortest route rather than walk a half block to one of the corners, cross the street, and walk another half block to her destination.

The cab driver owed the highest degree of care, consistent with practical operation, to afford appellee a safe place to alight. Arkansas Power & Light Co. v. Hughes, 189 Ark. 1015, 76 S. W. 2d 53 (1934); Checker Cab & Baggage Co. v. Harrison, 191 Ark. 564, 87 S. W. 2d 32 (1935). In the face of that duty it is not unreasonable to say that he created a situation which stimulated appel-lee to attempt to cross the street. If that be true, then the initial proximate causation continues. Hill v. Wil son, 216 Ark. 179, 224 S. W. 2d 797 (1949); 2 Restatement of Torts 2d § 443. Any negligence on her part wonld, nnder onr comparative negligence law (and under which this case-was submitted), diminish or bar her recovery, depending on her degree of negligence. See Restatement, supra, % 443 c.

Appellants’ Point II. The Instructions of the Court were erroneous. Yellow Cab offered this modification of AMI 1701:

“At the time of the occurrence in question, Yellow Cab Company was a common carrier. A common carriér is not an insurer of the passenger’s safety, but it has a duty to its passengers to use the highest degree of care consistent with the type of conveyance used and the practical operation of its business. While this duty on the part of a carrier requires it to furnish to- its passengers a safe place to alight, no further duty is owed by the carrier after a passenger has alighted at a safe place or after a reasonable time and opportunity to reach a position of safety. Thereafter, the passenger assumes the status of a pedestrian,-and is subject to all of the duties and obligations imposed upon pedestrians.” (Emphasis added.)

AMI 1701 was given but without the modification shown in italics. The refusal to give the instruction as modified was not error. The modified instruction contained the same error as the cab company’s proffered instruction in Checker Cab & Baggage Co. v. Harrison, supra. Checker Cab’s proffered instruction 11 (which was refused) would have told the jury that if Checker “transported the plaintiff with safety to the gate in front of his home and discharged him upon the highway in safety, its duty to him was performed, and thenceforth the plaintiff, Harrison, was a mere traveler upon the highway. . .”

The amended portion of AMI 1701, in essence, would tell the jury the same thing as qnoted from Checker Cab. Of the proffered instruction 11 this court said:

“It will he noted that appellant’s request number 11 absolved it from all liability when the passengers were dischaiged from the cab, irrespective of the place of discharge or the conditions surrounding it. We do not understand this to be the law.”

The safety requirements surrounding the discharge of a cab passenger in a public street are to be found in Checker Cab. Exercising the highest degree of care consistent with practical operation, the driver should not discharge the passenger at a point where reasonable foresight would dictate the passenger might be injured. All circumstances at the moment which would be evaluated by a competent driver should be considered. The phrase in the amended instruction, “no further duty is owed by the carrier after a passenger has alighted at a safe place,” certainly does not embody the recited requirements.

Within the format of AMI 601 the trial court inserted a city ordinance which requires cab drivers, when possible, to discharge passengers at the sidewalk or at the extreme right side of the street. The jury was told that a violation of the recited ordinance would not necessarily be negligence, only evidence of negligence. Contrary to appellants’ contention, we perceive no er-. ror in giving that instruction. Whether.it was possible to discharge Miss Dossett near the sidewalk crossing the alley, or in a vacant place near the curb on the apartment side of the street, and whether the driver’s failure to so act constituted a proximate cause, were .questions for the jury.

Appellants’ Point III. The Court erred in refusing to- grant a mistrial when counsel for Gary Elder delib erately mjected the existence of liability insurance for the taxicab as an issue in the case although he knew that no such liability insurance existed. Mr. Fred Andres, president of Yellow Cab Company, testified. The main purpose of his testimony was to establish Yellow Cab’s contention that none of its vehicles was transporting Miss Dossett on the night of the accident. Counsel for co-defendant Gary Elder cross-examined Andres. In that examination counsel produced a deposition given by Andres. There Andres had stated that on the morning after the accident he received knowledge of the incident from the night manager’s report. Shortly thereafter he sent a report to the insurance company. Counsel for Yellow Cab moved for a mistrial because of the reference to insurance. The motion was overruled and Gary Elder’s counsel continued to read from the deposition which contained additional reference to correspondence with a liability carrier. The court admonished the jury that the only purposes for which those references could be considered would be in relation to credibility of the witness and the identity of the cab involved in the accident.

We find no error. Insurance was not injected into the ease by appellee. It was mentioned by co-defendant’s counsel and in good faith in an effort to show that the identity of the driver and of the particular cab involved was known to Yellow Cab the day after the accident. On direct examination, Andres indicated the contrary to be true. We cannot say the court abused its discretion. A latter portion of the deposition, in which Andres asserted the non-existence of liability insurance, was not read by Elder’s counsel. Counsel for Yellow Cab asserts that failure as error. Yellow Cab’s counsel did not offer to read that portion of the deposition. He asked the court to instruct the jury as to the absence of liability insurance, and the court properly refused. ^

Appellants ’ Point IY: The court erred in denying appellants' motion for new trial based on newly discov ered evidence. In a matter of days after the trial, Yellow Cab and North Little Rock Transportation Co. (the latter operated Dixie cabs) moved for a new trial. The reason here pertinent was as follows:

“The movants have discovered new evidence which they could not, with reasonable diligence, have discovered and produced at the trial. Subsequent to the trial, one Dewey "Worthey, a taxicab driver, reported that he had read the newspaper report of the jury verdict and that he remembered the incident and that the taxicab out of which Miss Dossett alighted had been driven by one Richard John Laske who was driving Dixie cab No. 24 . . .”

Most of the essential rules for the consideration of a motion for new trial are succinctly stated in Halbrook v. Halbrook, 232 Ark. 850, 341 S. W. 2d 29 (1960). Summarizing, the trial court has broad discretion; these motions are not favored by the courts; the court should be convinced that injustice has been done; the new evidence is not cumulative; the proof was not discoverable through due diligence; and the additional testimony would probably change the result.

"We have carefully weighed the evidence on Point IV in light of Halbrook and conclude the trial court’s ruling should not be disturbed. We are particularly persuaded by the testimony of Mr. Andres, president of both companies, and his own employees. Andres conceded that on the morning after the accident he knew the identity of the driver; Dewey Worthey, a cab driver employed by Andres, testified he learned the driver’s identity, having talked with the driver on the night following the accident ; and that the incident was discussed by the driver at a cafe table in the presence of some five cab drivers, all employed by Andres. A radio dispatcher testified the driver of Betty Dossett’s cab called in when the accident happened and asked for instructions. The dispatcher said he reported to the night manager, who made up a report on the accident. That report was made available to Andres, who in turn made a report to an insurance carrier.

Suit was filed July 6, 1965. From that time until the date of the trial, appellants had twenty months in which to ferret out the “missing” evidence. It is not unreasonable to conclude that due diligence would have revealed the evidence in ample time for the trial.

Affirmed.