author: Frank Holt, Justice. John A. Fogleman, Justice,

text:
    LITTLE ROCK UNIVERSITY et al and UNIVERSITY OF ARKANSAS et al v. The George W. DONAGHEY FOUNDATION et al and LITTLE ROCK SCHOOL DISTRICT et al
    5-5945
    485 S.W. 2d 230
    Opinion delivered July 17, 1972
    [Rehearing denied August 28, 1972.]

      Ray Trammell, for appellants.

      Robert V. Light, Smith Williams, Friday, Eldredge ir Clark, for appellees.
   Frank Holt, Justice.

This appeal is a sequel to other cases involving the interpretation of the provision of a charitable trust established in 1929 by Governor George W. Donaghey and his wife for the benefit of Little Rock Junior College, a private institution, and contingently, a public school or schools of the Little Rock school system. The history and trust provisions are set forth in Little Rock Junior College v. The Geo. W. Donaghey Foundation, 224 Ark. 895, 277 S. W. 2d 79 (1955). There the court held that the Trustees did not have the authority to withhold the trust’s profits from the private college merely because it expanded from a two-year junior college to a four-year school. The expansion did not alter the school’s identity or status as the primary beneficiary of the trust.

In Greene v. Thompson, 227 Ark. 1089, 305 S. W. 2d 136 (1957), we recognized that if the Directors of the Little Rock Public School District refused to continue to supervise the operation of the private college then the power of equity could be invoked to prevent a discontinuance of payment of the trust funds to the designated primary beneficiary of the trust.

In Donaghey Foundation v. LRU, 231 Ark. 748, 332 S. W. 2d 497 (1960), the Little Rock School Board’s officials had actively refused to continue supervising the operation of the college (then Little Rock University) and surrendered the directorship of the school to a private corporation. The trust’s provisions were again interpretated and this court held that the refusal of the School District to supervise the college would not prevent an innocent beneficiary from receiving the proceeds of the trust. Therefore, Little Rock University should continue as the primary beneficiary and the funds could not be diverted to the Little Rock Public School system, the contingent beneficiary, until there was “a change of circumstances.” In doing so, we observed that the primary purpose of the Donagheys, the settlors, was “in aiding the establishment of an institution of higher learning in this locality, designed primarily to accommodate prospective students from this area.”

In 1969 Little Rock University was merged by mutual agreement and a legislative act (Act 35 of Acts of Arkansas, 1969) with the University of Arkansas. The merger provides that the educational functions of the college are to be continued at the same location in Little Rock, using the same faculty, buildings, facilities and land. Subsequent to this merger, the Trustees of Donaghey Trust brought this action against Little Rock University and its Trustees, the Little Rock School District and its Board of Directors, the University of Arkansas and its Trustees, and the Donaghey heirs, seeking a declaratory judgment defining the Donaghey Trustees’ powers, duties, and obligations, and the respective rights of the parties. Specifically, the court was requested to determine:

“(1) May Foundation use net income to provide additional funds for the chair or chairs at UALR, in excess of appropriations made by State legislature, and to provide other supplemental services to said institution within sole discretion of trustees of Foundation?
(2) Is the merger by Act 390 such a change of circumstances that Foundation and its trustees have an obligation to pay net income to some public school or schools in City of Little Rock which are under supervision of Little Rock School District?
(3) In the event the Court should determine that plaintiff’s do not have authority to exercise discretion to apply the net proceeds of the trust for a chair or chairs or to provide other supplemental services to UALR as may be otherwise determined in the sole discretion of plaintiffs, may the plaintiff’s exercise the discretion granted to them in the said deed in trust executed by Donaghey and wife and pay net proceeds to a public school or schools in the city of Little Rock operated by or under the management or supervision of the Special School District of Little Rock?”

The Chancellor rendered a decree finding that the merger did not constitute “a change of circumstances” as envisioned by our decision in Donaghey Foundation v. LRU, supra; that UALR, governed by UA Board of Trustees, continues to be an eligible beneficiary of the trust; that the contingent beneficiary, also, continues as an eligible beneficiary; that the Trustees had no authority under the trust provisions to designate the proposed specific use of the trust funds by the beneficiary; that the Trustees have the discretionary authority to pay the trust income to a public school or schools of Little Rock rather than UALR; however, the Trustees could not arbitrarily or capriciously withdraw the benefits from UALR by designating the contingent beneficiary.

Appellants bring this appeal seeking a modification of that part of the decree which recognizes that the Donaghey Trustees may designate the contingent beneficiary where such designation is not arbitrary or capricious. Appellants contend, since no “change of circumstances” was found to exist, that, consistent with Donaghey Foundation v. LRU, supra, UALR is the only current primary beneficiary and is entitled to the unrestricted use of the trust funds. The appellee-Donaghey Trustees cross-appeal asserting that the lower court erred in refusing to permit them the authority to designate the proposed uses for which the funds could be expended once they are given to the beneficiary, UALR, which is the beneficiary the Donaghey Trustees expressly prefer. Appellee-Little Rock School District and its Board of Directors cross-appeal asserting that the merger of LRU with UA constituted a “change of circumstances” which renders UALR ineligible to receive further benefits from the Donaghey Trust; and, therefore, the Little Rock School District is presently the only eligible beneficiary. The Donaghey heirs do not appeal. Among these various contentions, we agree only with the assertion made by the Donaghey Trustees; namely, that they do have the authority to pay the trust funds to UALR and restrict the use of the funds as proposed by the Donaghey Trustees.

It appears that all of the parties are in agreement with the cardinal rule that in construing a trust instrument the intention of the settlor must be ascertained. The Donaghey Trust instrument provides in part:

“It is the object and purpose of this deed to convey the property herein described to the Trustees, their successors and assigns, for the purpose of creating a fund or foundation to be used for the sole and exclusive benefit of the present Little Rock Junior College, an institution of learning in said city, at the present time operated under the management of the Board of School Directors of the Special School District of Little Rock, Arkansas, investing said trustees with full discretion to select some other public school or schools in said city, operated by or under the management or supervision of the Board of School Directors of such Special School District of Little Rock and their successors in charge of the public schools in the said City of Little Rock in the event the present Little Rock Junior College or its successors should, at any time, cease to be operated by or under the supervision of the public school authorities in said city. ...”
“After paying all interest, principal, fixed charges, upkeep, insurance and all operating expenses maturing during any year, the Trustees may, annually (or more frequently if they deem best), pay over on January first of each year, all or such part of the net income from the said properties as they deem best; such payments shall be made to the proper public school authorities so that the same shall be applied for the maintenance and operation of said Little Rock Junior College or its successors or any other public school in said City of Little Rock, selected by the said Trustees in accordance with the authority heretofore expressed. In the event there should, at any time, be accumulations of net income under the terms hereof, the same may be expended for the purposes of this trust at such times and in such amounts as Trustees think best.”

The settlors intended that the Trustees would have the right to exercise broad discretion in performing their unpaid task in administering this trust fund. Further, in this respect, the trust provides:

“***and in every respect to deal with and handle and manage said properties as an individual could do, said Trustees or their successors to be guided and limited only by the exercise of their best judgment in the interest of the fund and foundation arid its objects and purposes.”

Manifestly, these carefully selected original Trustees and their successors, who reside in Little Rock, are given the authority to spend the accumulated net income of the trust funds for the purposes of the trust at such a time and in such amounts as the Trustees deem best. In Donaghey Foundation v. LRU, supra, we recognized and approved the Trustees’ discretionary authority, based upon their expressed desire, to continue payments to LRU as the primary beneficiary and that this school would be entitled to continue to receive future income from the trust funds “until such time as there is a change of circumstances which would require the Trustees to withdraw financial support from the university, i.e., the Trustees cannot capriciously or arbitrarily withdraw this aid.”

In the case at bar, it is the argument of the Donaghey Trustee? that the merger of the schools, LRU with UA, constitutes a change of circumstances; and, therefore, they now have the discretionary authority to continue payment of the trust funds to UALR only upon condition that the funds be expended only for a chair or chairs or other supplemental services in excess of all legislative appropriations for the maintenance and operation of UALR. We think the Trustees are correct. Until LRU’s dissolution it was a private institution and the successor to the orginal Little Rock Junior College. It is now a part of the University of Arkansas and a public institution. Legislative appropriation of public funds is now provided for its operation and maintenance. All of the assets of LRU were transferred to the UA and the school now is administered by the Board of Trustees of the UA. LRU’s Board of Trustees relinquished all control, responsibility, and supervision of LRU to the Trustees of the UA. Now that UALR is a public institution supported by legislative appropriation of public funds, we note that Act 390 of the Acts of Arkansas, 1969, appropriated a total of $7,199,404 for personal services and operating expenses of UALR for the period ending June 30, 1971. Of that appropriation regular salaries constitute $5,000,000 and $2,169,404 is provided for maintenance and general operation together with $30,000 for extra help. We agree with the Donaghey Trustees that Governor Donaghey and his wife did not visualize in 1929 that in 1971 the fledgling junior college endowed by them would be primarily maintained and supported as a state public institution. Certainly we cannot agree that these settlors intended that the trust funds, now approximately $90,000 annually, would be commingled with the public funds appropriated by the legislature for the maintenance and general operation of what is now a public institution without the settlors’ Trustees having the right to exercise some authority and discretion which was expressly vested in them as previously indicated.

Furthermore, it presently appears that UALR is attended by students from 42 other states and 57 students from 17 foreign countries. Approximately 1/3 of the enrollment for the academic year 1970-1971 were non-residents of Pulaski County, coming from 72 of the counties other than Pulaski. The original Trustees and their successors are Little Rock residents. Presently the management of UALR is conducted by the UA Board of Trustees and only one of them lives in Little Rock.

The appellants point out that the trust funds of approximately $90,000 are to be used exclusively at and for UALR and in addition to any appropriations made by our legislature for the maintenance and operation of UALR; however, as a practical matter, we observe that the legislature is not prevented from taking into account the amount and source of these trust funds in determining the financial needs of UALR.

We hold that a sufficient “change of circumstance” has occurred as envisioned in Donaghey Foundation v. LRU, supra; furthermore, courts of equity have the power to authorize and sancdon Trustees to deviate from the exact language of a charitable trust in order to preserve and accomplish the intention of the settlor and purposes of the trust. Anderson v. Ryland, 232 Ark. 335, 336 S. W. 2d 52 (1960); Rest., Trusts, § § § 167, 381, and 399; and 89 C.J.S. § 87 e (2).

In Donaghey Foundation v. LRU, supra, we recognized that the “prime objective in creating the [George W. Donaghey Foundation] was to aid the cause of higher education in Greater Little Rock.” There we approved the express wishes of the Trustees to continue payment of the trust funds to LRU as being well within the discretionary authority delegated to them by the terms of the trust. Likewise, in the case at bar, we are of the view that the Trustees’ express desire and intention to continue paying these funds to UALR as the primary beneficiary for the stated restricted purposes is well within the Trustees’ discretionary authority vested in them and conforms to the purposes of the trust and the intentions of the settlors. To that extent only the decree is modified.

Affirmed as modified.

Fogleman, J., dissenting.

John A. Fogleman, Justice,

dissenting. I do not agree that the trustees of the Donaghey Foundation have the authority to dictate or determine the uses to be made by the recipient of the income from the Donaghey Trust. It is not the function of the courts to write into the trust any terms not incorporated by its creators. Neither do the trustees have that authority, either by law or by the terms of the trust instrument. Greene v. Thompson, 227 Ark. 1089, 305 S.W. 2d 136. It is the responsibility of the trustees and the courts to see that the terms of the trust are carried out as nearly as possible. In order to say that the trustees may put conditions upon the use of funds paid over, it is necessary to engraft upon this trust instrument a term not to be found within its four corners.

I do not agree that a change of circumstances envisioned as a possibility in Donaghey Foundation v. Little Rock University, 231 Ark. 748, 332 S.W. 2d 497, has taken place. According to the language of that opinion, the change of circumstances must be such as would require the Donaghey trustees to withdraw financial support. While the court avoided defining the term “change of circumstances” because of the realization that many unforeseen situations might arise, the current developments do not approximate any of the examples given in that opinion, i.e., a permanent closing of the college, the relocation of the college some distance away, or other change of similar moment. Little Rock University has not been closed, either permanently or temporarily, it has not been relocated at all, and the merger is not of similar moment to a closing or relocation. The chancellor specifically found, upon the evidence before him, that there was no such change, and I agree.

A review of the terms of the trust is a necessary background to such a determination. Little Rock Junior College was the intended beneficiary of the trust. Its status as a private institution, if indeed a junior college operated by the board of directors of a public school district which used teachers of the district and was housed in a physical plant owned by it for public school purposes was then a private institution, was either not recognized or was considered insignificant by Governor and Mrs. Donaghey. See Donaghey Foundation v. Little Rock University, supra. The beneficiary was not designated as a private institution in the trust instrument. It was never called a private institution in this court until our decision in Donaghey Foundation v. Little Rock University, supra, at which time it was described in the Donaghey trust as “an institution of learning in said city.” As a matter of fact, it was not chartered as an eleemosynary corporation until some ten years after the death of Governor Donaghey. See Little Rock Junior College v. George W. Donaghey Foundation, 224 Ark. 895, 277 S.W. 2d 79. The Donaghey trustees were given discretion to select “some other public school[2] or schools in[3] said city ... in the event the present Little Rock Junior College or its successors[4] should at any time, cease to be operated by or under the supervision of the public school authorities in said city. . .Payments of income are to be made to proper public[5] school authorities. . . for the maintenance and operation of Little Rock Junior College or its successors[6] or any other public school in[7] said City of Little Rock.” Clearly the idea that the institution to be nurtured by the Donaghey trust be a public institution supported from the public treasury rather than a private one, so abhorrent to the majority, posed no fears to Governor and Mrs. Donaghey.

The trustees of the foundation were not given discretion except for specific purposes. For instance, in the management, control and direction of the property of the trust, they are limited only by the exercise of their best judgment in the interest of the fund and foundation and its objects and purposes. A similar discretion was granted with reference to the sale of trust property and investment of the net proceeds thereof. There is also broad discretion in the trustees to terminate the trust and to determine the times and amounts of payments to the beneficiary, matters which I will treat later.

I submit that the University of Arkansas at Little Rock is the successor of Little Rock Junior College and stands precisely in the position of Little Rock University. In Little Rock Junior College v. George W. Donaghey Foundation, supra, this court held that the incorporation of the school and its conversion from a junior college to a four-year college did not change the identity of the beneficiary. This pertinent language appears in that opinion by Mr. Justice Robinson:

***the mere fact that the school authorities decided to expand into a four year college in no way changes the identity of the school and does not make of it a school other than the one that the trust was set up to help. Little Rock Junior College is merely the name of the school; it is inconceivable that the settlors of the trust used the words in any other way. Loving the college as they did, it is unthinkable that they wanted to help it only if it remained limited in the educational advantages it had to offer, and did not want to give it any further aid if through their generosity the school was able to grow and become a great institution of learning. It is true the deed uses the words “the present Little Rock Junior College”. The deed provides: “It is the object and purpose of this deed to convey the property herein described to said trustees, their successors and assigns, for the purpose of creating a fund or foundation to be used for the sole and exclusive benefit of the present Little Rock Junior College”. But “the present Little Rock Junior College” is the very same school that wants to expand into a four year college, and by so expanding it does not become another school. When John Doe, a boy 15 years of age, grows up and becomes a man 21 years of age, he is still the same John Doe. It is suggested that the name of the school has now been changed to Donaghey College; in the future another school may adopt the name Little Rock Junior College. That is when the wording of the deed in trust “the present Little Rock Junior College” would come into play; the new school adopting that name would not be the present Little Rock Junior College.
* # *
Here the principal issue in dispute is the meaning in which the settlor of the trust used the words “the present Little Rock Junior College”. Were the words used as meaning a Junior College only, or were they used in the sense of meaning the name of the school endowed?

It does not seem to me that the status of UALR. the “resulting institution,” as the successor to LRU (the changed name of the institution once called Little Rock Junior College) or to Little Rock Junior College itself is subject to challenge. No recitation of facts in addition to those stated in the majority opinion and elsewhere in this opinion is necessary to answer any question that might exist. In any merger, the designated survivor is presumably the successor to the merged components. See, e.g., Ark. Stat. Ann. § 64-705 (Repl. 1966). The resultant or surviving corporation in a merger situation is the successor to a constitutent corporation. First National Bank of Birmingham v. Adams, 281 Ala. 404, 203 So. 2d 124 (1967). In Arlington Hotel Co. v. Rector, 124 Ark. 90, 186 S.W. 622, an important issue was whether the “new” Arlington Hotel Company was the successor to the “old” corporation bearing the same name. No merger was involved, but there is a great factual similarity to the situation before us insofar as LRU and UALR are concerned. The original Arlington Hotel Company leased the hotel property from the United States. It was chartered for a term of 20 years. Two years after the charter expired, the government demanded that the corporation furnish evidence of either a new charter or an extension of the old one. The “new” corporation was then organized with the same officers as the old one. The hotel operation was carried on by the officers of the first corporation during the interim between the expiration of the charter of the old company and the organization of the new one. The old company agreed to, and did, convey all its assets and property to the new company, and the new company agreed to assume all indebtedness of the old one, and to issue its paid up stock to the stockholders of the old company, share for share. Thereafter, a new lease of the hotel property was entered into, and the existing lease with the old company canceled. The question was whether the new company was liable upon a consent judgment against the old to make annual payments to one of its incorporators “as long as the Arlington Hotel Company, or its successors or assigns continued to occupy the Arlington Hotel site. It was held that the new company was the successor of the old.

Ordinarily the word “successors,” in the case of a corporation, means another corporation which, by a process of amalgamation, consolidation, or duly authorized legal succession, has become invested with the rights, and has assumed the burdens of the first corporation. Schmoele v. Atlantic City R. Co., 110 N.J. Eq. 597, 160 A. 524 (1932); Hanna v. Florence Iron Co. of Wisconsin, 222 N.Y. 290, 118 N.E. 629 (1918). UALR fits that definition. By the terms of the merger agreement it has certainly assumed the obligations of LRU and is invested with its rights. The constituent corporation lives as a component part of the surviving corporation insofar as the rights, franchises and privileges enjoyed by the constituent corporation are concerned. First National Bank of Birmingham v. Adams, supra.

The 15-year-old John Doe retained his identity when he reached maturity. I submit that he is still the same person in spite of his marriage.

In Greene v. Thompson, supra, we recognized that should the board of directors of the Little Rock School District refuse to operate or supervise the Little Rock Junior College (soon to become Little Rock Univeristy) the power of equity to prevent the loss of the foundation funds might be brought into play. That situation did come into existence. The charter of Little Rock University was amended to vest the management and administration of the corporation in a board of trustees if the board of directors of the Little Rock School District should refuse to operate or supervise the corporation. This board promptly declined to continue to operate the university. Still, this court held that Little Rock University, as the primary beneficiary of the Donaghey trust, should not be permitted to suffer the loss of support from that trust. I do not agree with the majority’s analysis of our decision in that case as an approval of the trustees' discretionary authority, based upon their expressed desire. The following is a portion of the chancery decree which was before the court and was unaffected by the modification made here:

"(a) The George W. Donaghey Foundation and its Trustees may not withhold from Little Rock University the income from The George W. Donaghey Trust because of the refusal of the Board of Directors of Little Rock School District to supervise or operate Little Rock University.”

Furthermore, I find no basis for saying that the idea of the use of tax funds for support and maintenance of the institution nurtured into maturity with the substantial aid of the Donaghey trust could have been a bugaboo which would have caused Governor and Mrs. Donaghey to have any qualms about support of the institution or to have thought that such an eventuality, either likely or unlikely, would cause their trustees to withdraw support from the institution. Their dream was not of the ready availability of higher education by a private institution. It was of the existence of such educational facilities in Little Rock. This idea seems to have been prevalent in the thinking of the court in all previous cases involving this trust, and I can perceive of no reason why it should be now abandoned or beclouded. In deciding that a four-year college could qualify as well as a two-year college this court said:

It is argued that Governor Donaghey was interested only in a junior college because he know of the trials and tribulations of those unable to obtain a higher education, and he wanted to make a junior college available to those unable to bear the expense of a full four year course and that he endowed a “junior college” as such and gave the trustees of the Donaehev Foundation the discretion of selecting some other school as a beneficiary of the trust in the event the Little Rock Junior College ceased to be a junior college. But it is shown conclusively by the writings of both the Governor and Mrs. Donaghey that it was their fondest hope that the Little Rock Junior College would grow into a four year school. Governor Donaghey wrote in his Autobiography: “* * * When the Donaghey Foundation Board meets, we have great plans for improving the property, and perhaps for constructing a building on the site where the burned theater stood. Shall our plans and dreams lead to a four year college, with a fine new plant of its own? The very thought makes me feel stronger and younger.” And the Governor wrote in his volume Home Spun Philosophy: “Then, whoever aids in the development of this human power, for any of the vocations of life, renders his community and State a forward service. That is the object of the establishment of the Donaghey Foundation. Today it is sponsoring the fortunes of Little Rock Junior College. This college is affording the young people of Greater Little Rock and the contiguous territory the opportunity of a two-year course in college work with the object of eventually making it four years.” (Emphasis mine.) Little Rock Junior College v. George W. Donaghey Foundation, supra.

Again,in Donaghey Foundation v. Little Rock University, supra, we said:

Unquestionably, and this is admitted by all parties, Governor Donaghey’s prime objective in creating the trust was to aid the cause of higher education in Greater Little Rock. This is well shown in his Autobiography and Flomespun Philosophy, which are discussed in Little Rock Junior College v. Geo. W. Donaghey Foundation, supra. A detailed discussion of his intent is therefore unnecessary, but we quote a few excerpts as a means of emphasizing the Governor’s strong views. From Homespun Philosophy:
“I wonder how many of our citizens have made an estimate of what higher education has cost Greater Little Rock during the last fifty years. That is to say, how much actual cash has been sent out of the city to pay for it, leaving oüt the questions of the thousands of poor boys and girls who are unable to foot the expense of going away from home to college. Suppose we say that Little Rock has, during the past fifty years, sent an average of 200 boys and girls a year away to college, which would seem to be a reasonable approximate. Then suppose we estimate that the cash outlay has been an average of a thousand dollars per annum. It is then but a simple calculation to find that the cost would amount to the stupendous sum of 10 millions of dollars, ten millions of dollars wasted on the winds of negligence; for the neglect of not building an institution of higher education at home and thereby having ten millions of dollars now invested in Little Rock in one of the best universities in all of the South. * * *
“Boys and girls educated at home not only are in the majority and stand together in molding the opinions of the State, but also are just about as well equipped for the affairs of life as those sent away to school. In other words, sending a child to Yale or Harvard or any other college does little more to educate him than sending him to a home institution. Textbooks and lectures by trained instructors can be studied and heard at one place as well as another.”

From the autobiography:

“After frequent consultations with the school authorities and trustees I was convinced that no greater field for educational development exists anywhere than can be found right here in Little Rock where hundreds of boys and girls after graduating from high school are unable to advance further through a course in college.”

The majority position on the meager contribution of the Donaghey trust to the overall operational expense and the commingling of the trust income with tax funds appropriated is not quite consistent with the history of the trust and litigation pertaining thereto. In Little Rock Junior College v. George W. Donaghey Foundation, supra, I find this interesting information:

At the time the trust was set up the Little Rock Junior College was a two year school. During the first years of the trust, due to a mortgage indebtedness on the property conveyed to the trust, only a comparatively small amount was paid to the college; but subsequent to 1939 payments increased. In 1950 the payment by the trust to the college was in the sum of $45,037.50, and in 1953 it was $75,050.

And in Donaghey Foundation v. Little Rock University, supra, this is added:

Originally, the Little Rock Junior College used the Little Rock Public School buildings at a time when those buildings were not being used for common school education. Teachers of the Little Rock public schools were used by the college. In other words, the operation of the college was a part-time operation, * * *■ The college itself has likewise steadily grown. From 421 students in 1929, the enrollment has increased to 1,485. Compared to a 1929-30 budget of $36,874.33, we find that the present budget calls for $543,276, of which the University is dependent upon the Foundation for $90,000.

This growth and the demand for greater educational facilities has simply continued and resulted in the merger of LRU into the University of Arkansas, because LRU was no longer able to cope with the demands made upon it. The General Assembly found and declared that the LRU board and that of the University of Arkansas jointly concluded “that imperative measures must be taken to satisfy the increasing demands for educational opportunity for the young people of Central Arkansas.” See Preamble to Act 35 of 1969.

The merger agreement recites as one of its bases the concern of the LRU board for providing “quality higher education and educational leadership suitable to the physical growth and to the economic and cultural development of Central Arkansas and of the State.” It also recited that “a plan had been agreed upon for the expansion of both institutions”; that the plan would bring to the Central Arkansas region the “benefits of a State University while retaining the loyal support and contributions so demonstrably evidenced in the creation and the rapid growth of LRU, leading thereby to the assured enrichment of the quality of the contribution LRU, in undergraduate fields, . . . [is] now making to the educational well being of the State of Arkansas as a whole and of Central Arkansas in particular”; that “it has been determined that it is to the best interests of the parties” to transfer assets “so that the institution of higher education now known as LRU will become a part of the University of Arkansas”; that the “ ‘resulting institution’ means LRU from and after the date of transfer and refers to a major campus of the University of Arkansas located at Little Rock, Arkansas”; that the name “University of Arkansas at Little Rock” will be assigned to the resulting institution, as “descriptive of its broad function, its location and the fact that it is a major campus of the University of Arkansas”; that “University of Arkansas shall conduct in the resulting institution. . . a program of undergraduate and graduate instruction, research and educational services, as dictated primarily by the needs of Central Arkansas . . .”

It can readily be seen that the mission of LRU and of the Donaghey trust is being carried out and enhanced by the appropriations made by the state. The argument that the Donaghey trustees would somehow be deprived of some discretion formerly vested in them simply has no support, because they never had the discretion to dictate how the contributions of the trust were spent by the recipient and there is no language in the trust instrument from which any such discretion can be inferred.

The most that can be said is that LRU, the resulting institution, will have the means of enlarging from a four-year college to one also offering graduate degrees, and that the final responsibility for administration will again be in the hands of public school trustees. There is no substantial difference in this transition and the developments which brought the institution from a junior college to a four-year one and transferred the administrative responsibilities from the public school directors to the directors of an eleemosynary corporation, except that the changes bring still more and better education to the area heretofore served by LRU.

The merger could not be accomplished on the basis originally desired by the boards of the two institutions, i.e., so that tuition at UALR would be no greater than that at other campuses. An amendment to the merger agreement was necessary. In that amendment the parties agreed that the appropriation made by the 1969 General Assembly was sufficient to permit the merger to become effective, “when taken together with the present financing of LRU, including the maintenance of student fees at or approximating their present level.” (Emphasis mine.) It was agreed that student tuition fees must remain at or near their existing level and gradually reduced as financial resources of the resulting institution, including state allocations in payment of its appropriations, become available in amounts sufficient to justify their reduction to the levels of other campuses. Withdrawal of the Donaghey Foundation support or its allocation to purposes specified by the Donaghey trustees will inevitably postpone this desired goal.

Worry about the legislature’s withholding funds because of this anticipated $90,000 income seems chimerical to me. Two factors make it too uncertain to be taken into consideration. First, the Donaghey trustees are to pay over all or such part of the net income from the properties as they deem best, and accumulations of income may be expended for trust purposes at such times and in such amounts as the trustees think best. Secondly, at any time after July 1, 1979, the trustees may, by unanimous vote expend all or any part of the principal and accumulated income for erecting or contributing to the erection of a permanent building or buildings to be devoted to the objects and purposes of the trust. Incidentally this latter possibility might enable a useful monument to the donors to be erected and thus give permanent identity to their contribution. It might well be that a tuition reduction will have been accomplished before this is done.

I cannot visualize Governor or Mrs. Donaghey’s becoming concerned about “their institution’s” drawing students from most of our counties, several states and even some foreign countries. I surmise that these facts are supposed to show a change in the character of the institution, but there is no showing that LRU, before merger, did not draw students from many counties, other states and even foreign countries. There is no indication that there was any tidal wave of students from outside Pulaski County upon announcement of the merger. This interesting bit of statistical information, I submit, is not indicative of any change of circumstances. Rather, it seems to demonstrate the need for such an institution, as Governor Donaghey envisioned, the excellence of the institution, the inability of LRU in its pre-merger status to continue to perform its mission, and the wisdom of the merger. A reading and rereading of the trust instruments, the facts stated and conclusions in our previous opinions convince me that Governor Donaghey was interested in having an excellent institution of higher learning in Little Rock, not for the benefit of Pulaski County students but for the benefit of the surrounding area. I find nothing to indicate any such provincialism in the thoughts of the Donagheys as is indicated by reference to enrollment data.

Since I feel that the preponderance of the evidence supports the chancellor’s finding that there was no change of circumstances and since I can find no discretion to be exercised by the Donaghey trustees in the matter of expenditures, I would affirm the decree on cross-appeal and reverse on appeal.

      -7]Emphasis mine.


source: Caselaw Access Project

author: Frank Holt, Justice.

license: Public Domain

text:
    RELIANCE INSURANCE COMPANY v. Ralph D. KINMAN
    5-5964
    483 S.W. 2d 166
    Opinion delivered July 17, 1972

      Rose, Barron, Nash, Williamson, Carroll & Clay, for appellant.

      McMath, Leatherman ir Woods, for appellees.
   Frank Holt, Justice.

Appellee suffered the loss of a foot in an accident. He was insured by the appellant to cover such a contingency. The appellant refused to pay the claim on the basis that appellee’s foot was not actually severed within the time limitation of 180 days. The trial court, sitting as a jury, found for the appellee and awarded $50,000, the full amount of the policy, plus a 12% statutory penalty, and an attorney’s fee. From that judgment comes this appeal.

For reversal the appellant contends that the “trial court erred in holding that the actual severance of appellee’s leg occurred on the day of the accident rather than 18 months later when appellee’s leg was actually severed from his body;” that the “trial court erred in holding that the injury suffered by [appellee] on December 6, 1967 entitled him to recover under the provisions of the insurance policy” issued by appellant; and, further, that the “trial court erred by failing to give effect to the plain wording of the insurance policy.” In other words, it is appellant’s contention that the trial court erred in interpreting the language of the insurance policy issued by appellant to appellee. We consolidate these contentions for discussion.

The pertinent provision of the insurance policy provides that in the event of the “loss” of a foot within 180 days following the date of the accidental injury, the appellant would pay $50,000 for the loss of the foot. The policy, also, provides that ‘“loss’ as above used shall mean, with reference to hand or foot, actual severance through or above the wrist or ankle joint. ...” The trial court found that the appellee-insured sustained a loss on December 6, 1967, at which time his left leg was substantially severed; and, further, that the amputation of his leg by a physician on June 9, 1969, was evidence of the severance that occurred on the date of the injury. As previously indicated the appellant asserts that the trial court was in error. The appellee, however, contends there is substantial evidence to support the court’s finding that the loss of appellee’s foot occurred on the day of the accident, inasmuch as appellee’s foot was substantially, or for all practical purposes, “severed at or above the ankle” on the day of the accident and the subsequent amputation was only evidence of the severance. Therefore, appellee is permitted to recover under the terms of the appellant’s policy.

Appellee suffered extensive bodily injuries in an automobile accident. These injuries consisted of a fractured mandible, a shattered left arm, fractured ribs, and a mangled left leg from which a 6” piece of the femur, a large leg bone, was completely separated. This piece was found in a ditch and taped to a splint when appellee was brought to the hospital. The leg muscles, tendons, deep, or major, veins were torn apart and the leg was connected to the body only by the sciatic nerve, and artery, some muscle tissue and skin. The wound was grossly contaminated with mud, sand, grass, blood and bits of clothing. Upon admission to the hospital, appellee suffered a heart attack; and the doctor thought he was dead. However, the doctor finally restored the heart beat. Other complications attended his injuries. The doctor did not then amputate his leg for fear that it would cause his death. Another episode occurred which could be termed as a cardiac arrest. His entire blood supply was completely replaced twice upon initial admission and several times during his four months initial hospitalization.

The treating doctor implanted the separated femur and reassembled the parts of appellee’s leg, nailing the bones back together, suturing the muscle tissues, ligaments, and skin in an effort to save the leg. He testified that he had never seen a segment of bone as large as this 6” femur be reestablished and regenerated. However, he felt it advisable to try to salvage the leg, with appellant’s approval, hoping it would not become infected or other complications occur. The usual reason for amputating a leg is due to inadequate blood or nerve supply or both. Normal color and temperature never returned to appellee’s leg. There was no strength in it and for all purposes he had no motor control of his foot during the period of treatment. These symptoms indicated the need of amputation, and they existed from the time of the injury.

The doctor further testified that it would take a year- and-a-half or two years for a fragment of bone as large as the one separated from appellee’s leg to eventually revitalize or regenerate, or perhaps longer if the healing process was handicapped by infection. Also, approximately a year-and-a-half is required for the sciatic nerve to heal as it, too, has slow regenerative powers.

On June 9, 1969, or about 18 months following the injury, being unable to control a severe infection, the doctor amputated appellee’s leg. The doctor testified that “medically, in retrospect, it was lost from the time of the initial injury. The reason we tried to retain it was hoping that the body had the power to regenerate the necessary components of this leg in order to salvage it. It did not. Therefore, we amputated it. . . ■. Medically, my opinion is that the leg was an untenable situation from the very onset, but that’s only in retrospect. Obviously, I tried to attempt to save it.”

The doctor further testified that “the leg was swollen and discolored, but as far as medical severance or amputation, it is what we would call an almost complete amputation or a near amputation and anything that was done was an attempt to salvage the leg.” Because of appellee’s weakened physical condition, it was medically inadvisable to amputate appellee’s leg; although he probably could have withstood the operation after about two weeks, but by this time a kidney complication existed. Efforts thereafter were directed toward the possible salvage of the leg, keeping in mind that barring infection it would take a year-and-a-half or two years to determine whether the effort would be successful. He testified that although he reimplanted the severed femur, it continued to exist “as a dead bone” and that it “never revitalized.” Although some sensation did return, the leg was red and cold at times, never had an adequate blood supply, or normal temperature and “for all intents and purposes” he had no motor control of his foot. As previously stated, the doctor was of the opinion that “[M] edically, in retrospect, it was lost from the time of the initial injury.”

The appellee, himself, testified that he never regained the use of his leg or had any motor control of it. Also, that following the accident he never had any feeling or sensation in his leg and that the color of his leg was never again normal. A witness, who accompanied appellee to the hospital, testified that appellee had a blood transfusion in route and before he left the scene of the accident and it appeared to him that only skin held the appellee’s leg onto his body.

When we review the evidence on appeal, as we must do, in the light most favorable to the appellee, there is substantial evidence to support the trial court’s finding that “under the terms of the policy, the loss occurred on December 6, 1967, and severance of the leg occurred on that date and that the amputation that occurred on June 9, 1969, was evidence of the severance that occurred on the prior date.” In Westenhover v. Life & Casualty Inc., Co. of Tenn., La. app. 27 So. 2d 391 (1946), the insurance company refused payment to the insured on the basis that the actual amputation of the leg occurred after the expiration of the 30 day. period of limitation. The insurance company relied upon the policy provision that “[N]o sum shall be payable for the loss of any member except for total and permanent severance at or above the ankle. . . . No payment will be made hereunder unless. . . . loss of the member, . . . occurs within thirty days from the date of the accident.” It was contended by the insured that this provision did not make payment dependent upon amputation or the total and permanent severance of his leg within thirty days of the date of the injury. To the contrary, the insurance company construed the term “loss” and “total and permanent severance” as being synonymous. In affirming a judgment for the insured and rejecting the contention of the insurer, the court said:

“The provision of the policy at issue does not restrict the meaning of the loss of a member to amputation. It simply restricts liability for payment for the loss of a member to those cases in which such loss has been evidenced by amputation. Nor does the policy require that amputation, total and permanent severance, take place within thirty days, but simply that the loss of the member shall occur within thirty days from the date of the accident. . . .
“The insured, under the terms of the policy under examination, cannot be penalized simply because his physicians attempted to prevent the necessity for amputation of his leg. The leg was ‘lost’ from and after the accident, therefore the requirement for the occurrence of loss within the thirty-day period was fully met, and the fact that the amputation was made sometime after the expiration of this period if of no importance....
"It appears plain to us that the loss of plaintiffs leg followed as the immediate result of the accident. The fact that severance of the member by amputation did not take place until more than two months later is beside the point.”

In Interstate Life & Accident Company v. Waters, 213 Miss. 265, 56 So. 2d 493 (1952), the doctor postponed amputation of the insured’s leg for three months because, of his physical condition. There the insurer contended that unless the loss the leg occurred within 30 days after the accident there was no liability under the policy. The insurer asserted that the words "loss of the member” in its policy meant “loss by severance” within thirty days from the date of the accident. The policy provided: “In every case referred to in this policy the loss of any member shall include only the loss by severance at or above the ankle or wrist joints.” In affirming a judgment for the insured, the court approved and applied the reasoning and logic Westenhover, supra-, also, the court quoted with approval from 44 C.J.S., Insurance, § 296, page 1163:

“A contract of insurance should be given a fair and reasonable construction and likewise, should be given a sensible construction, consonant with the apparent object and plain intention of the parties; a construction such as would be given the contract by an ordinary intelligent business man; and a practical and reasonable rather than a literal interpretation. The contract should not be given a strained, forced, unnatural, or unreasonable construction, or a construction which would extend or restrict the policy beyond what is fairly within its terms, or which would lead to an absurd conclusion, or render the policy nonsensical and ineffective.”

In Huff v. Vulcan Life and Accident Insurance Company, 281 Ala. 615, 206 So. 2d 861 (1968), the insured was sawing a tree when accidentally the saw cut the muscles and bone of an arm leaving only a part of the skin to connect the two portions of the arm. The doctor tried to salvage the arm sufficiencly to secure a “flesh hook”use of it which would serve better than a “metal hook.” The blood supply to the hand and a portion of the arm were restored; however, the insured could not move any fingers of his hand and had no feeling in any of his fingers except a slight sensation in one. The injured part of the arm did not unite and consequently it became necessary to amputate the lower forearm and hand more than 90 days (the time limitation) after the date of the accident. The issue was whether the insured had suffered a “loss” of his hand by “severance” on the date of the injury. The trial court directed a verdict for the insurer. In reversing, the Supreme Court of Alabama said:

“It will be noted that the only reason given by the learned trial judge for giving the charge was his construction of the word ‘severance’ as ‘an entire separation’ or a complete severance from the body or the upper arm. We agree that Webster’s New International Dictionary defines ‘sever,’ inter alia, as meaning ‘disunite,’ ‘dissociate,’ ‘to open,’ ‘to cut or break open or apart.’ But there is not the finality in every definition of the word severance as there is to the word ‘amputation.’”

The court cited with approval Westenhover, supra, and Waters, supra. See, also, Sneck v. Travellers’ Ins. Co. of Hartford, Conn., 88 Hun. 94, 34 N.Y. Supp. 545 (1895), and Beber v. Brotherhood of Railroad Trainmen, 75 Neb. 183, 106 N.W. 168 (1905).

In the latter case, the insurer contended that since the insured had a thumb and finger on an injured hand and a partially stiffened wrist joint that this did not constitute a physical separation as a wrist joint within the terms of the policy. The Supreme Court of Nebraska said:

“Now, the question to be determined is, what did the defendant company contract to insure against under the provisions of this by-law? Was it the severance of the entire loss of the use of the hand at or above the wrist joint? or was it the entire loss of the use of the hand at or above the wrist joint by physical separation? If the only risk assumed by defendant was the amputation of the whole hand, then the learned trial court was fully justified in directing a verdict for defendant; but, if a fair and liberal interpretation of the contract most favorable to the insured can make it a risk which includes the total loss of the use of the hand by severance, then the question as to whether such loss is established by the evidence is properly one for the triers of such facts.”

The court then held that it was a question of fact whether there was a total loss of use of the insured’s hand at or above the wrist joint, constituting a permanent separation within the terms of the policy.

The Supreme Court of Oregon in Moore v. Aetna Life Ins. Co., 75 Or. 47, 146 Pac. 151 (1915), aptly quoted:

“As indicated in the last authority cited, the attempts of the insurance companies to avoid this construction by so changing the policy that it reads, ‘loss by severance of feet or hands,’ has failed; the courts holding as before, that it is the loss of the use of the member which was the object of the contract.”

See, also, Crawford v. Lloyds London, 275 Cal. App. 2d 524, 80 Cal. Reptr. 70 (1969).

In the case at bar, there was evidence that the leg was mangled; 6” of the femur was separated from the leg and found in a ditch; the deep veins in the leg were torn off; the femoral vein was ruptured; in addition to a fragment of bone being “evulsed,” there was “evulsed” some of the soft tissue, muscle, skin and subcutaneous fat; the nerve supply was destroyed; a failure of motor control resulted with a permanent loss of normal temperature and color from an inadequate blood supply. The doctor testified that although he hoped for a miracle in trying to salvage the leg, in retrospect, medically “it was lost from the time of the initial injury” and that severance to him meant that the leg had lost its ability to regenerate. Although the appellee’s foot was not surgically amputated until June 9,1969, we reiterate, there is substantial evidence to support the finding of the trial court that appellee’s leg was actually severed at the time of the injury, resulting in the loss of its use.

As we understand the policy, the “loss” had to occur within 180 days and “loss” was defined as “actual severance.” A reasonable and sensible construction of the policy is that the insured sought insurance against the loss of his foot as a useful member of his body. Obviously, the additional safeguard which required “actual severance through or above the ankle joint” is to prevent fraudulent claims. In the case at bar, the appellee has lost the use of his leg by actual severance above the ankle joint. The ambiguity of the language used becomes apparent and discernible if the doctor was able to graft successfully the leg. Even though the language of the policy appears exact, we doubt appellant would have agreed to pay for the loss occasioned by a complete bodily severance followed by a successful graft of the leg. With logic, appellant could assert that there was no loss of use since the limb is restored to the body. The same logic should apply in reverse in construction of the policy as to intent of the parties; namely, that appellant shouldn’t be allowed to assert that the limb was not completely severed from the body when all that occurred after the injury was the pain willingly endured by the appellee during the time the doctor hoped to achieve a miracle. Had the miracle occurred certainly the appellant would have contended there was no liability.

The use of the policy term “actual severance” is clearly ambiguous. It may, as demonstrated above, be interpreted to mean “physical severance” in one instance and “functional severance” in another whichever appears to be most beneficial to appellant. Given such an ambiguity, it is axiomatic that the provision should be construed in favor of the insured since the appellant wrote the policy and selected its own terminology. This litigation may well be the result of policy language which was drafted long in advance of modern and more recent medical technology and skills.

In Huff v. Vulcan Life and Accident Insurance Co., supra, it was said:

“To force an insured to have a member amputated within a specific number of days in order to be indemnified for his loss, when his doctors are doing their best to save the member or a part of it is neither reasonable nor sensible to us, when it is clearly the loss and not a specified time of amputation that is covered by the policy.”

We are in accord with this rationale.

In our view the leg was “lost” from and after the injury. The requirement that the “loss” occurred from “actual severance” was fully met by the evidence when viewed most favorably to the appellee. The fact that the surgical amputation was made sometime after the period of time in which the loss occurred does not destroy or eliminate the policy coverage.

Appellant, also, contends for reversal that the trial court’s award of |10,000 as attorney fees is shockingly excessive. This is approximately 20% of the amount of the judgment, which included the statutory penalty. This appears to be a case of first impression in our jurisdiction; and in the circumstances, we cannot say that the award is excessive. However, this fee is adequate for both trial and appeal services.

Affirmed.

George Rose Smith and Fogleman, JJ., dissent.


author: Frank Holt Justice.

text:
    WASHINGTON NATIONAL INS. CO., v. Dwight S. MEEKS
    5-5972
    482 S.W. 2d 618
    Opinion delivered July 17 1972

      Streett <b Plunkett, for appellants.

      Brown, Compton ir Prewett, for appellee.
   Frank Holt Justice.

Appellee brought this action to enforce monthly payments of indemnity benefits provided for in a disability insurance policy issued to him by appellant. The policy provided for monthly payments in the amount of $1,000 per month with a maximum duration of 60 months so long as there is complete disability on the part of the insured due to injury or sickness to perform each and every duty pertaining to his occupation. Based upon a jury verdict, a judgment for the full amount of the insurance benefits plus a statutory penalty of 12% and a $7,500 attorney’s fee was entered in appellee’s favor. For reversal of the judgment appellant first contends that the evidence is insufficient to sustain a finding of total disability.

The policy application was signed by appellee on January 10, 1968, and appellant’s agent listed appellee’s occupation as “owner of building, commercial, rent houses.” Of February 22, 1968, appellee suffered a gunshot wound to his left foot. Subsequently, the wound developed gangrene and it became necessary to amputate the foot above the ankle. Appellant paid insurance benefits to appellee until September 30, 1968. At that time appellee became able to walk on an artificial limb without the aid of crutches, and appellant contended that appellee was no longer disabled and discontinued payments. Appellant argues on appeal that appellee’s business acumen and management abilities were not adversely affected by the injury. Therefore, as soon as he was “up and about,” he could carry on with his normal occupation.

According to appellee, at the time the accident occurred, he was building and improving houses and commercial buildings for lease or sale. In addition he and his wife owned commercial buildings, a motel, and an apartment building. He was able to do plumbing, painting, and general repairs to his property. This included walking, climbing, lifting, and carrying objects even when walking. There was nothing about his physical condition which disabled him before the accident. During the average working day, “there seemed to be something to do, either plumbing to repair, or a house to paint, or a roof to fix, or furniture to be moved. . . In my work it was necessary to climb almost every day. It’s necessary to climb a ladder to get on top of a building to repair a roof or replace a water cooler pump, or it’s necessary to climb steps to replace furniture. ...” There was “always climbing, carrying, putting on dolly such things as regrigerators and TVs” and bending and lifting all the time. If anything went wrong, he would repair it if he could. Usually the only repairs which he was unable to perform related to electrical maintenance. His back bothers him, and he has frequent pain as a result of the amputation. He often falls when walking. At the time of the trial, the appellee was wearing his third artificial leg. He demonstrated to the jury how it prevented him from performing past activities in his occupation.

Whether appellee’s injury rendered him completely disabled to perform his occupation is a question of fact for the jury. Franklin Life Ins. Co. v. Burgess, 219 Ark. 834, 245 S. W. 2d 210, (1952). In the case at bar, the court, without objection, instructed the jury that the term “total disability” in the policy “does not mean a state of absolute helplessness. But it means that if there was any substantial part of the material acts necessary to be done pertaining to his occupation that the insured could not perform in the usual and customary way, he would be disabled within the meaning of the policy.” When we consider the evidence and all reasonable inferences deducible therefrom in the light most favorable to the appellee, as we must do on appeal, we are of the view that there is substantial evidence to support the jury’s finding that the appellee’s injury disabled him to the extent he could not continue performing the substantial and material acts pertaining to his occupation in the usual and customary way. Lumbermens Mut. Ins. Co. v. Cooper, 245 Ark. 81, 431 S. W. 2d 256 (1968), Baldwin v. Wingfield, 191 Ark. 129, 85 S.W. 2d 689 (1935).

Appellant, also, asserts for reversal that the evidence is insufficient to support the amount of compensation awarded. Appellant relies upon the policy limitation provision which provides as abstracted:

“If the loss of time benefits shall exceed the monthly earnings for the period of two years immediately preceding a disability for which claim is made, which ever is the greater, Washington National will be liable only for such proportionate amount of such benefits under this as the amount of such monthly earnings or such average monthly earnings of the insured bears to the monthly benefits and for the return of such part of the premiums paid during such two years as shall exceed the pro rata amount of the premiums for the benefits actually paid hereunder; but this shall not operate to reduce the monthly benefits payable below the sum of $200.”

Appellee sought and was awarded $38,364.16, which included compensation at the rate of $1,000 per month on total disability, plus return of the premium. It is appellant’s contention that “there is no showing that appellee had earnings or average earnings of $1,000.00 per month during the two years immediately preceding his injury and that such is necessary to support the verdict rendered herein [based on total disability at $1,000.00 per month].” Appellee is the sole provider for his family. He derived his earnings from building and selling houses, rental income from commercial buildings and in the operation of a washateria and motel. He spent in excess of $12,000 per year for family necessities. Appellee paid a policy premium which assured him a $1,000. disability income.

According to appellee’s income tax returns, he had a gross income of $99,143.30 for the year 1966 and $97,811.-80 for 1967. During the year 1968 (the year of the accident), his gross income was $25,535.36. In 1969, his gross income was $16,468.34 and in 1970 $4,670.95. Appellee’s certified public accountant, who prepared the tax returns for these years, testified with respect to these tax returns for these years. He corroborated appellee’s testimony that he was earning in excess of $1,000 per month during the two years preceding his injury. As indicated, it is well established that on appeal in determining the sufficiency of the evidence, we consider only the appellee’s testimony or that which is most favorable to him. Baldwin v Wingfield, supra. We hold there is substantial evidence to support the jury’s finding on this issue of appellee’s earning.

Appellant, also, contends that the court erred in refusing its instruction which contained the exact language of the policy relative to the amount of payment due under the policy. Appellant avers that the two instructions given by the court did not contain two important issues: “[1] whether or not appellee was totally disabled and [2] what amount of relief was he entitled to under the policy.” We cannot agree. Suffice it to say that in reviewing the policy language we are of the view that the two pertinent instructions given by the court incorporated the essential elements which are contained in the policy and that the jury had a clear understanding of the issues presented.

Affirmed.


author: Carlton Harris, Chief Justice.

text:
    Charles H. Swafford, d/b/a SWAFFORD ICE CREAM COMPANY v. SEALTEST FOODS DIVISION OF NATIONAL DAIRY PRODUCTS CORPORATION
    5-5920
    483 S.W. 2d 202
    Opinion delivered July 24, 1972
    [Rehearing denied August 28, 1972.]

      Gannaway, Darrow & Hanshaw, for appellant.

      Smith, Williams, Friday, Eldredge ir Clark, for appellee.
   Carlton Harris, Chief Justice.

Appellant, Charles H. Swafford D/B/A Swafford Ice Cream Company, instituted suit against appellee, Sealtest Foods Division of National Dairy Products Corporation, hereafter called Sealtest, wherein he contended that he had served that company under an agreement entered into between the parties, as its distributor of ice cream products within its sales area in Arkansas from January I, 1967, to September 30, 1967; that appellee had agreed to pay him a 12% commission on the gross sales in the sales area, in addition to a 10% commission which he received as a sub-distributor, but had refused to do so; that he was due under the agreement the sum of $52,963.34 and judgment was sought in that amount, plus interest, from the September 30 date. Sealtest answered with a general denial and then counterclaimed m the amount of $9,002.96 which sum was alleged to be due appellee on appellant’s open account.. Subsequently, appellee also asserted that Swafford was estopped from relying on the contract as he had operated under the agreement without demand for the additional commission; also, it was asserted that the alleged agreement was void under the statute of frauds and for lack of mutuality. Thereafter, the case proceeded to trial, and the jury returned a verdict for appellant in the amount of $35,000, and found against appellee on its counterclaim. However, appellee filed a motion for judgment non obstante veredicto as to its counterclaim, and the court granted this motion. Likewise, the court denied interest to appellant on the recovery from September 30, 1967, allowing interest only from die date of the judgment. From that portion of the judgment granting appellee a judgment n.o.v. and from that portion denying interest prior to judgment appellant brings this appeal. Appellee cross appeals from that portion of the judgment entered against it. We first discuss the cross appeal wherein appellee asserts that its motion for directed verdict should have been granted because no legally binding contract was created as a matter of law.

There is no dispute but that the parties entered into an agreement for Swafford to take on extra duties commencing May 1, 1966, and this was supported by a written memorandum. William T. Nichols of Memphis, General Manager for Sealtest for the Memphis district, testified that the company did not feel that Harry Earhart, distributor for Sealtest in Arkansas, was spending as much time in selling as he should, and that Earhart owed the company something over $20,000. Earhart contacted Nichols, stating that he wanted to bring Swafford with him to discuss the matter, and at this meeting, Earhart suggested that Swafford take over the greater part of his duties as distributor and stated that he would split his commission with Swafford, the latter to draw 6% and the 6% which would go to Earhart would be given the company to apply on his account. Nichols said that this met with his approval but such agreement was to be in effect only until December 31, 1966; that thereafter Swafford would resume his duties strictly as sub-distributor and the company office would handle the sales contracts out of Memphis. Swafford’s testimony was in substantial agreement with Nichols’ testimony as to the arrangement through December 31, 1966, but he contended that he was then on the basis of an oral agreement, to take over entirely as distributor, performing all of the duties of a distributor and his version was supported by Earhart.

It is first argued that the contract was not binding because essential terms had been omitted. The fact that there was no definite time period fixed, and that there seems to have been no definite agreement as to paying rebates to customers, are inter alia mentioned. Several cases are cited by appellee in support of this argument. But we do not agree that these cases are in point for they either involved damages following an alleged breach of contract which occasioned loss of profits, a failure to recoup expenses incurred in anticipation of performance of a contract, or related to specific performance of a contract. Essentially the cases involve the inability to perform the unexecuted portion of a contract, while in the present litigation, the recovery sought is based upon the executed portion of the contract. Appellee argues that the agreement relied upon by appellant is vague and uncertain, but this does not necessarily mean that such a contract is a nullity, as the actions of the parties in carrying out the agreement can provide an index to the meaning of the contract. In Beasley v. Boren, 210 Ark. 608, 197 S W. 2d 287, this court said:

“The provision in the lease for its renewal was indefinite because it failed to fix the rental to be paid during the additional term. But, because a contract is uncertain in its terms, it does not necessarily follow that it is a nullity. The parties to a contract may, by their mutual actions in carrying it out, furnish an index to its meaning, which the language thereof fails to do. After all, the written instrument is but an evidence of what the signers thereof propose to bind themselves to do, and when, by their conduct in carrying out the agreement, both of the parties to the contract demonstrate an intention to heal an uncertainty in the contract, the courts will generally adopt this practical construction, [citing cases]”

The court then quotes with approval from 12 Am. Jur. 558 as follows:

“An uncertain agreement may be so supplemented by subsequent acts, agreements, or declarations of the parties as to make it certain and valid. The acts of practical construction placed upon a contract by the parties thereto are binding and may be resorted to relieve it from doubt and uncertainty. The objection of indefiniteness may be obviated by performance and acceptance of performance.”

The basic difference between the parties is that Swafford contends that under the agreement he was to act, and did act, as distributor while Sealtest contends that he only acted as a sub-distributor. Perhaps at this point it would be well to mention some of the duties of these two positions. According to Nichols, a distributor had total responsibility for ice cream sales for the state of Arkansas. This included selling, administration, seeing that the product was delivered, seeing about the rotation of products, and seeing that adequate flavors were stocked. He was responsible for both new accounts and old accounts. Nichols said that on the store level, the duties of a distributor and sub-distributor would be the same, the latter being responsible for the delivery of the merchandise and stocking of flavors. Earhart testified that his duties included maintaining good relations between the accounts and the company, and handling any kind of a problem that might arise. If a customer became dissatisfied with Sealtest products, he would call on that customer and if the customer wanted to change the account from one brand to another, it was the distributor’s job to convince him that the company would do the customer a better job, and that it was to the customer’s interest to remain with Sealtest products. With regard to sales, Earhart stated that he had to call on the accounts, and promote sales. As previously stated, appellee contends that after Earhart left its employment, there was no distributor, all the duties being handled by sub-distributors (of which Swafford was one), and sales were to be handled by the Memphis office, while Swafford contends that he handled both duties. Witnesses offered on behalf of appellant included Earhart, Darrell Maxwell, operator of a super market at Brinkley, Richard Leak, a grocer at Forrest City, James Hoyt, a grocer at Forrest City, W. J. Reed, who operates a super market at Pine Bluff, W. E. Steed, Jr., who operates a grocery at Pine Bluff, Jim Carruth, a grocery employee at Marianna, Johnny Ramsey, assistant grocery manager at Weingarten’s at North Little Rock, Paul Hannah, who drove a truck for Swafford for a time in 1966, and Ralph Roberts, with K-Mart Foods Store in Little Rock. Five witnesses testified on behalf of appellee, but four of these were employed or closely connected with Sealtest. Appellant’s witnesses all testified that his dudes apparently changed after they originally dealt with him. According to the testimony, when Swafford first began to call on them, he drove the ice cream truck himself and actually delivered the product; subsequently however, other drivers took over and delivered the product and Swafford would just call on them. Nearly all mentioned that originally, as a truck driver, he wore khaki work clothes, but that after he stopped driving the truck, and started making calls on these customers, he would be dressed in a business suit. Frequently, he would be checking on the man who had been doing the delivering. Some testified that he brought promotional materials by the stores and a large number of the witnesses definitely were of the view that Swafford had taken Earhart’s place as distributor. The President of the Razorback Store Group in Pine Bluff testified that Swafford was depended upon for promotion of the products and that he frequently made long distance calls to Swafford about promotional deals. There is no doubt from the evidence that Swafford handled different duties, mainly supervisory duties, which he did not handle while acting solely as a sub-distributor. Certainly, there was ample evidence, based on the actions of the parties, to submit to the jury the question of whether the parties were acting under a contract.

It is also asserted that the contract was void and unenforceable under the statute of frauds because of the fact that there was no agreement that the contract was to be performed within one year. See Ark. Stat. Ann. § 38-101 (Repl. 1962). While it is true that an oral contract for personal services in excess of one year is void, and that part performance will not remove such contract from the operation of the statute of frauds, it is also true that the employer will be liable for whatever service was rendered. In Bald Knob Special School District v. McDonald, 171 Ark. 72, 283 S.W. 22, this court said:

The question of liability under such a contract partially performed is the same as that of liability under a verbal contract for any other personal services, which is governed by the Statute of Frauds, and this court has held that partial performance of a contract for personal services does not take a verbal contract out of the operation of the Statute of Frauds except to the extent of imposing liability for that part which was performed, [citing cases]”

In the case now before us, Swafford is only contending for monies due him upon the executed portion of the agreement, i.e., from January 1, 1967, through September 30, 1967, and appellee’s contention is without merit.

It is also asserted in the alternative, that the parties were not bound to perform for any specified length of time; that Swafford could have ceased paying for the products, and that Sealtest could have ceased supplying the products, and that the agreement was therefore void for a lack of mutuality. Here again, appellee fails to take cognizance of the fact that this litigation is based upon the executed portion of the alleged contract. In International Shoe Company v. King, 186 Ark. 799, 56 S. W. 2d 171, this court said:

“Appellant also contends for a reversal of the judgment because, even though the contract was made with authority, it was not mutual, and therefore not binding on appellant. The argument is made that the contract did not attempt to bind appellee to buy shoes in any definite quantities for any definite length of time, and to buy them exclusively from appellant. Appellant requested two instructions, Nos. 5 and 6, on mutuality of contracts, which the court refused to give. The doctrine of mutuality of contracts is not applicable, in so far as same have been executed or operated under, [our emphasis] El Dorado Ice & Planing Mill v. Kinard, 96 Ark. 184, 131 S. W. 460; Weil v. Chicago Pneumatic Tool Company, 138 Ark. 534, 212 S. W. 313. It was not error to refuse instructions touching the question of the necessity of mutuality of contracts, same not being applicable to executed contracts [our emphasis].”

We come now to the question of whether interest should have been allowed from September 30, 1967, rather than from the date of judgment. Appellee argues that the claim was clearly for an unliquidated amount and there were too many uncertainties for the amount due to be readily ascertainable. It is mentioned that there was quite a bit of evidence about the paying of rebates and appellee states that under the asserted contract by Swafford, he was due to pay these rebates, but did not do so; it is pointed out that Sealtest, on the basis of an estimate, established the amount of rebates which it paid from January 1, 1967, through September 30, such rebates amounting to approximately $23,700.

We are unable to agree with Sealtest in its argument. It may well be that this amount of rebates was considered by the jury in reducing the amount sought in appellant’s complaint from $52,965.54 to $55,000, since the jury was instructed relative to rebates. Be that as it may, according to Sealtest, it knew what the rebates that it had paid amounted to, and it could have deducted this amount before tendering payment to Swafford. This is not a case wherein appellant demanded one sum and appellee countered with the offer of another sum; rather, Sealtest took the position that it did not owe Swafford any amount. In Norton v. Hickingbottom, 212 Ark. 581, 206 S.W. 2d 777, Hickingbottom, a building contractor, sued Norton and wife for amounts due him for alleged extra work involving alterations of a building contract. The complaint asserted that the value of the extra work was $792.75 and demand was made for that amount. A cross complaint was filed alleging that Hickingbottom had failed to substantially perform his contract. On trial, the jury returned a verdict for $547.69 and the court granted interest on that amount at the rate of 6% from the date of termination of the relationship between the parties. On appeal, it was contended that since the debt found to be due was not a liquidated demand, interest could not be had prior to a determination of the value of the services. This court did not agree with that argument, holding that, despite the fact that it was not asserted that the agreement was for a particular sum, the jury finding that Hickingbottom was entitled to $547.69 at the conclusion of the contract, meant that payment should have been made to him at that time and the court accordingly did not err in adding interest. In Loomis v. Loomis, 221 Ark. 745, 255 S. W. 2d 671, it was pointed out that the rule that interest is not allowed on unliquidated demands does not mean that the party seeking interest must in every instance know before the trial the exact amount he must pay if he loses. It is then stated:

“The rule applies principally to those cases in which the defendant is not in default for the reason that the extent of his liability can be determined only by litigation, as in a suit for personal injuries or for recovery upon quantum meruit, [citing cases]”

The court then cited the case of Rogers v. Yarnell, 51 Ark. 198, 10 S. W. 622, stating:

“There a mutual account between the parties had extended over a period of thirteen years before coming to an end in 1884. The account was so involved that a master was appointed to arrive at the net balance due either to the plaintiff or to the defendant. Judge Cock-rill carefully explained why interest is not allowed upon each item in such an account, but in remanding the case in 1888 we directed that the master determine the correct balance and allow interest on the balance so found from January 1, 1885. The latter date was evidently that on which the losing party could be said to be in default, although the amount of his liability was determined only after prolonged litigation.”

In the more recent case of Wright v. Rochner, 233 Ark. 50, 342 S. W. 2d 483, there were many conflicting contentions, various loans, advances, repayments, etc., over a period of two years, and as in the case before us, the question was whether there was substantial evidence to support the jury’s verdict. In addition, the question of awarding of interest by the trial court was appealed to this court. We stated:

“In entering the judgment the court below allowed the amount of the jury verdict and in addition thereto awarded interest from December 8, 1958, the date on which the last of the soy beans were sold by Wright to Rollison. Appellants question the right of the court to award interest from that date and argue that interest should run only from the date of judgment. The record is silent as to whether the jury in its verdict included interest as a part of the award and there was no instruction ordering them to do so. In the absence of a showing that interest was included in the jury verdict, we cannot say the court’s addition of interest was error. As we said above, there was substantial evidence on which the jury could base the verdict returned, [citing cases]. One who has had the use of another’s money may justly be required to pay interest from the time it lawfully should have been paid, [citing cases]”

According to the jury verdict, Sealtest had the use of $35,000, which really belonged to Swafford, from September 30, 1967, and under this finding, and our cases, Swafford was entitled to the legal return of interest on this money from that time. Accordingly, the court erred in refusing to award interest.

Finally, we proceed to discuss the judgment n.o.v. granted by the court. As has already been mentioned, Sealtest, following the institution of the complaint by Swafford, filed a counterclaim in the amount of $9,002.96, such amount alleged to be due on an open account. The jury found against Sealtest on this counterclaim, returning a judgment for appellant. The court however subsequently allowed the amount sought, and appellant contends that this was error. Proof on this point was far from satisfactory. To support its contention, Sealtest offered two exhibits and the testimony of John Gardner, who had been controller at the time of the events at issue. One of these exhibits was an open account described by Gardner as “acount receivable” statement. Gardner attempted to explain his knowledge of the correctness of the account at $9,002.96, by saying that ice cream is loaded out to the distributors or subdistributors on the basis of a load sheet. Each such sheet was then sent to the computer system and keypunched, and a charge which came back on a sheet formed the basis for charges to the distributor’s account. The witness said that he checked each load sheet against the statement, and thereby concluded that the balance stated was correct. No accounting was given by the witness for credits, except for Gardner’s explanation that he had with him certain delivery tickets which related to credits in some ambiguous way seeming to relate either to merchandise returned by a distributor’s customer or to credits to the distributor or subdistributor for deliveries acknowledged by these customers. No mention was made by Gardner of payments made by Swafford or of the accuracy of the loading tickets which formed the basis of the charges, though appellant denied owing the company.

These statements were certainly admissible as business records under Ark. Stat. Ann. § 28-928 (Repl. 1962), but they were in no sense of the word conclusive evidence of the correctness of the account under the statute. The circumstances of the making of these records had a bearing upon the weight to be given them by the jury, as did Gardner’s lack of personal knowledge of their accuracy. In addition, though Swafford had terminated his employment in September, Gardner said that he covered a period through November 8 to be sure appellant received credit for any ice cream that he had on hand; however, it does not appear that any credits were given after October 28, although charges were added through November 8. The other exhibit offered was a series of IBM sheets and various ledger sheets and this exhibit is completely confusing. There are 37 IBM sheets and a number of these show handwritten changes, i.e., in several instances the machine totals are scratched out and a different figure inserted by hand. Also, the IBM sheets do not begin until the week of June 3, approximately four months before Swafford terminated his employment, though it is contended in the counterclaim that the transactions creating the indebtedness covered a period of several years. The total amount due under the IBM sheets is $9,793.63 but there is a machine notation on the last sheet, as of December 28, “write off”. Unquestionably, the exhibits are confusing, and not in accord with each other. Appellant offered evidence of shortages in the ice cream purchased from Seal-test, but this was not reduced to the monetary value. Swafford’s testimony that, on numerous occasions during 1966 and 1967, the merchandise charged to him was not actually loaded out by Sealtest, that his complaints about this were ignored, that when he was driving a truck and picked up the merchandise himself there were frequent shortages varying from five to 50 gallons, and that he never received credit for any shortage, was not contradicted by any witness, even though the one to whom Swafford said he complained testified at the trial. J. M. Spencer, a driver for Swafford, testified that on one occasion there was a shortage of 90 gallons, and on others

from two to ten gallons. It was stipulated that Paul Hannah would give the same type of testimony as that given by Spencer.

Let it be borne in mind that the granting of a judgment n.o.v. is only proper where there is no substantial evidence to support the verdict. In other words, as pointed out in Spink v. Mourton, 235 Ark. 919, 362 S. W. 2d 665, the motion for judgment n.o.v. is properly denied unless it can be said that the trial court should have directed a verdict in favor of the party receiving the n.o.v. judgment. This court said:

“Now it is true that the trial judge might have granted a new trial if he found the verdict to be against the preponderance of the evidence. Bockman v. World Ins. Co., 222 Ark. 877, 263 S. W. 2d 486. But this case does not involve a motion for a new trial; instead, the request was for a judgment notwithstanding the verdict. Such a motion may be granted if there is no substantial evidence to support the verdict. Stanton v. Ark. Democrat Co., 194 Ark. 135, 106 S. W. 2d 584. In other words, as counsel for the Spinks rightly concedes in his brief, the motion for judgment n.o.v. was properly denied unless it can be said that the trial court should have directed a verdict in favor of the plaintiffs. That is the issue. Owing to the fact that the plaintiff has the burden of the proof — that is, the burden of persuading the jury that he is entitled to win the case — a directed verdict for the plaintiff is a rarity. As we said in Woodmen of the World Life Ins. Soc. v. Reese, 206 Ark. 530, 176 S. W. 2d 708: ‘A verdict upon an issue of fact should not be directed in favor of the party who has the burden of proof with respect thereto, unless such fact is admitted, or is established by the undisputed testimony of one or more disinterested[4b] conclusions from such testimony.”

Later in Beard v. Coggins, 249 Ark. 518, 459 S. W. 2d 791, we had this to say:

“Appellant insists that a judgment notwithstanding the verdict should have been granted. Such a judgment is appropriate only if it can be said that the trial court should have directed a verdict in favor of of the plaintiff (appellant), which is a rarity. Spink v. Mourton, 235 Ark. 919, 362 S.W. 2d 665 (1962). In testing the sufficiency of the evidence on a motion for a directed verdict the testimony and all reasonable inferences are viewed in the light most favorable to the party against whom the verdict is sought. Page v. Boyd-Bilt, Inc., 246 Ark. 352, 438 S. W. 2d 307 (1969). ***
###As to the substantiality of the evidence we cannot disturb the jury’s conclusion ‘unless we can say there is no reasonable probability in favor of appellee’s version, and then only after giving legitimate effect to the presumption in favor of the jury findings.’ McWilliams v. R & T Transport, Inc., 245 Ark. 882, 435 S.W. 2d 98 (1968).’’

■ Of course, Gardner’s testimony cannot be considered as uncontradicted, both because of his position with the company and because of his lack of personal knowledge, and thus appellee was not entitled to either a directed verdict or a judgment n.o.v. Apparently, because of the conflicts and inconsistencies, the jury placed no confidence in the exhibits offered, and we certainly cannot say that they were required to accept the accuracy of either exhibit. The accuracy of both could not have been accepted since they were incompatible. We conclude that the jury verdict should not have been disturbed, and the court erred in awarding the judgment n.o.v.

In accordance with what has been said, the judgment on direct appeal is reversed; the judgment on cross-appeal is affirmed; and the cause is remanded to the Pulaski Circuit Court with directions to enter a judgment consistent with this opinion.

It is so ordered.

       Appellant was required to purchase the dairy products from the Sealtest office in Memphis.

      . Swafford testified to paying some rebates but he did not furnish the amount.

      . Swafford testified that the store sales manager of the Memphis office, Wayne Parker, told him in April that the company was in process of going to IBM, and that it was quite a headache.

      .-4b.] Our emphasis.


author: George Rose Smith, Justice.

text:
    ARKANSAS STATE HIGHWAY COMMISSION v. Ezra METZ et ux
    5-6009
    482 S.W. 2d 802
    Opinion delivered July 24, 1972

      Thomas B. Keys and Phillip N. Gowan, for appellant.

      Douglas Bradley, for appellees.
   George Rose Smith, Justice.

The appellees, Ezra Metz and his wife, owned a 2.3-acre tract of land on which were situated a combined grocery store and service station, their own residence (attached to the store), and another residence occupied by Mrs. Metz’s grandmother. The property is at the intersection of two paved state highways, No. 18 and No. 135.

The highway commission brought this action to condemn .39 of an acre of the tract for highway purposes. The taking does not directly touch the improvements on the land, but it will adversely affect the access to the property and will reduce the parking area available for customers of the store and service station. The jury fixed the landowners’ compensation at $10,000. For reversal the commission argues that certain testimony of Metz and of his expert witness Van Natta should have been stricken.

Metz, the landowner, testified that he had lived on the property and operated the grocery and service station for two years. He said that he was familiar with property values in the area. He explained that before the condemnation three or four customers had been able to park on the property. After the taking only one customer will be able to stop, so that additional customers cannot come in until that one leaves. Metz relied in part upon one other sale of comparable property in the vicinity. That property, comprising a fraction of an acre having a single residence upon it, had sold for $17,000. Metz valued his own property at $50,000 before the taking and at $35,000 after the taking. On cross examination he said that he had considered the property as a whole and was unable to break his figures down as between the value of the property taken and the damage to the remainder.

The court was right in refusing to strike Metz’s value testimony. As Nichols points out, a landowner is generally held to be qualified to express his opinion about the value of his property. “He is deemed to have sufficient knowledge of the price paid, the rents or other income received, and the possibilities of the land for use, to have a reasonably good idea of what it is worth.” Nichols, Eminent Domain, § 18.4 [2] (3d ed., 1969).

Our cases so hold. We stated the basic rule in Jonesboro, L. C. & E. R.R. v. Ashabranner, 117 Ark. 317, 174 S.W. 548 (1915):

The plaintiff also testified, giving her opinion as to the extent of the injury to the land, and there was a motion made to exclude that testimony from the consideration of the jury. Much latitude and discretion is allowed in the trial court in permitting [a] witness to give opinion as to value of land and the extent of the depreciation thereof, for, after all, it is but the opinion of the witness. Plaintiff resided on the land and was familiar with the conditions, and we think the court was justified in allowing her to state her opinion of the extent of the injury to the land and the depreciation in the value thereof.

See also a more extended discussion in Ark. State Highway Commn. v. Muswick Cigar & Beverage Co., 231 Ark. 265, 329 S.W. 2d 173 (1959).

On the other hand, if the landowner is shown to have no knowledge about the value of the property, his opinion is not competent evidence. Ark. State Highway Commn. v. Darr, 246 Ark. 204, 437 S.W. 463 (1969). That, however, is certainly not the situation here. Metz had lived on the land and run the store and service station for two years. He explained how the loss of the parking area would affect the access of customers to the property. His opinion about the resulting depreciation in value was unquestionably competent.

There being no question of the elimination of an inadmissible element of compensation, we know of no authority holding that a witness must be able to subdivide his opinion into separate elements; Nor would such an allocation of the damages necessarily be of assistance to the jury. Here, for example, the commission’s expert witness Watson testified that the land taken was worth $1,200 and the damage to the remainder was $3,300. When, however, he was pressed on cross examination to explain how he arrived at the $3,500 figure, he said in substance that it was a judgment figure, based upon his experience and knowledge. The jury might readily have concluded that Metz, after two years of experience in operating the business on the property, was in a superior position to assess the depreciation in value resulting from the condemnation.

The appellant also insists that the following excerpts from Metz’s testimony show that he was merely stating the value of the property to him:

A. I just figured my property worth $50,000, as I say, because of my home and store.
Q. That is what it is worth to you?
A. Yes, sir, and I believe $15,000 damage to it, because I don’t believe it would be worth over $35,000 after the taking.
Q. That is your opinion, what it means to you?
A. Yes, sir.

We have held, it is true, that a landowner’s statement of what the property is worth to him is not substantial evidence. Ark. State Highway Commn. v. Perryman, 247 Ark. 120, 444 S.W. 2d 564 (1969). That statement simply means that a landowner who has no knowledge of market values cannot be permitted to say how much the land is worth to him, since that is not the measure of just compensation. In the case at bar Metz had demonstrated an adequate knowledge of market values. His affirmative answer to a loaded question did not cause that knowledge to disappear, nor was it the equivalent of a positive assertion that he knew nothing about the value of the property except what it was worth to him.

We find no merit in the appellant’s contention that the court should have stricken the expert witness Van Natta’s testimony that the value of the property taken was $4,000 an acre. Van Natta had been a real estate appraiser for forty years. He cited as a comparable sale a transaction in which a fractional acre had sold for $17,000. That property, however, had only a single residence upon it, instead of two residences and a commercial building. He also cited sales of purely residential property at from $3,000 to $3,500 an acre. It was evidently not possible to find an exactly comparable sale, involving a small tract with three buildings upon it. In fact, the commission’s own expert, Watson, stated that there were very few sales that were “very comparable.” Watson actually mentioned only two sales, neither of which had much similarity to the Metz land. The court did not abuse its discretion in sustaining the admissibility of Van Natta’s opinion.

Affirmed.