author: Carleton Harris, Chief Justice.

text:
    In The Matter Of: Dianna Lynn GIURBINO and Sandra Kay GIURBINO, Minors Betty Giurbino FORTIN v. Mr. and Mrs. George PARRISH and Mr. and Mrs. Mike REEVES
    75-17
    524 S.W. 2d 236
    Opinion delivered June 16, 1975

      R. H. Mills, for appellant.

      Walter R. Niblock, for appellees.
   Carleton Harris, Chief Justice.

This is an appeal by Betty Fortin from a judgment entered by the Washington County Circuit Court. Mrs. Fortin is the mother of Dianna Lynn Giurbino and Sandra Kay Giurbino, minors who were originally taken from her custody on August 21, 1969, and a temporary order was entered placing custody with Children’s Services of the State Department of Welfare. On September 18 the juvenile court found these children (and another not involved in the present litigation) to be dependent and neglected and Children’s Services was ordered to place Dianna Lynn with Mr. and Mrs. Mike Reeves of Springdale, and Sandra Kay with Mr. and Mrs. George Parrish of Springdale, the children to remain with these custodians (commonly called foster parents) until further orders. This order was signed by Vol B. Lester, County Judge of Washington County and Bob I. Mayes, Referee, Juvenile Court. On April 22, 1971, the two children were placed in the full and legal custody of Mr. and Mrs. Reeves and Mr. and Mrs. Parrish, respectively, the order being signed by Bob I. Mayes, Judge, Washington County Juvenile Court. On January 10, 1972, subsequent to a filing of a motion by Mrs. Fortin to set aside the April 22, 1971 orders, Mayes found that the April 22, 1971 orders were entered without proper notice having been served upon Mrs. Fortin; that this constituted a denial of her legal rights or due process and an order was entered on January 27, 1972, setting aside the April 22 orders and reinstating the September 18, 1969 order.

On February 9, 1972, Mrs. Fortin filed a petition, asserting that the original order (of September 18, 1969) was interlocutory in nature, alleged changed circumstances, and sought permanent custody of the children. On April 20, 1972, Mayes granted the petition and restored custody to Mrs. For-tin, but this order was summarily set aside because the attorney for appellees and appellees had not received notice.

On July 25, 1972, the custody of the little girls was again placed respectively with Mr. and Mrs. Reeves and Mr. and Mrs. Parrish. This order was signed by Vol B. Lester, Washington County Judge and Bob I. Mayes, Referee, Washington County Juvenile Court. From this order, appellant appealed to the Washington County Circuit Court. In that court, Mrs. Fortin filed a motion to quash, set aside, and hold for naught all orders entered by the referee, asserting that the appointment of the referee was contrary to the Constitution of Arkansas, and that any order entered by him was without force and effect and unconstitutional; that Ark. Stat. Ann. §§ 45-202.1 and 45-202.2 (Supp. 1973) were unconstitutional and that delegation of judicial duties of the county judge to a referee is contrary to Article 7, Sections 28 and 29 of the Arkansas Constitution. This motion was subsequently denied, the court holding that it was untimely filed on all orders previously issued by the Washington County Juvenile Court except as to the July 25, 1972 order; further, that that order recited proper jurisdictional facts on its face and there were no facts before the court indicating improper jurisdiction. Thereafter, on May 24, 1974, the court conducted a de novo trial on the question of whether the juvenile court order of July 25, 1972 should be set aside, the court hearing numerous witnesses. Following the conclusion of the trial, the following pertinent findings were made:

“1. That the Court has jurisdiction of the parties and subject matter.
2. That the Order of the Juvenile Court of Washington County, dated July 25, 1972, is valid and proper.
3. That Betty Giurbino Fortin is the natural mother of Sandra Kay Giurbino and Dianna Lynn Giurbino.
4. That in addition to the consideration of neglect and/or delinquency, the best interest and welfare of the children should also be considered in awarding their custody. (Boatwright vs. Pulaski County Juvenile Court, 250 Ark. 138.)
5. That Act 404 of 1969 authorizing County Court to appoint a Referee to hear juvenile cases involving neglected and/or delinquent is constitutional.
6. That Act 215 of 1911, as amended by Act 420 of 1917 of the Statutes of Arkansas conferring jurisdiction on the County Court of juveniles is constitutional (Ex Parte King, 141 Ark. 213).
7. That the Order of the Washington County Court dated August 1, 1969, appointing Bob I. Mayes as Referee for the Juvenile Court of Washington County, Arkansas, under provisions of Act 404 of the Acts of Arkansas for 1969 is valid and proper.”

Thereupon, the court vested custody of Sandra Kay Giurbino in appellees Parrish and the custody of Dianna Lynn in appellees Reeves until further orders of the Juvenile Court of Washington County. From the judgment so entered, appellant brings this appeal. For reversal, several points are asserted, which we proceed to discuss, some being related and discussed together.

It is first contended that all orders entered by the referee are unconstitutional and without force and effect for the reason that Ark. Stat. Ann. (Supp. 1973) §§ 45-202.1 and 45-202.2 are an unconstitutional delegation of judicial power, violating Article 7, §§ 28 and 29 of the Arkansas Constitution. This point, of course, raises a constitutional question, but we have said many times that this court will not decide constitutional questions unless such a decision is necessary to a determination of the pending case. See McLeod, Commissioner of Revenues v. J. E. Dilworth Co. and Reichman-Crosby Co., 205 Ark. 780, 171 S.W. 2d 62, and Holt v. Howard, 206 Ark. 337, 175 S.W. 2d 384, and cases cited therein. Since we are of the view that the constitutional question is not vital to a determination of this litigation, we refrain from making such a determination, as same would be dicta. However, it is necessary that we preliminarily, to a degree, discuss the contention in order to make evident this fact. Appellant first calls attention to Article 7, Section 28 of the Arkansas Constitution of 1874 and emphasizes the last sentence reading, “The county court shall be held by one judge, except in cases otherwise herein provided,” and the case of Nixon v. Allen, 150 Ark. 244, 234 S.W. 45, is cited in support of that assertion. We agree that the constitutional section so provides, and that the case so holds. Appellant’s purpose in citing this provision is that it is contended that Ark. Stat. Ann. § 45-202.1 and § 45-202.2 (Supp. 1973) create a new court to pass on juvenile cases. With this assertion, as hereinafter discussed, we do not agree.

Let it first be said that the General Assembly of 1911 passed Act 215, inter alia, creating juvenile courts, defining dependent, neglected and delinquent children, and vesting jurisdiction in the county courts (§§ 45-201 — 45-206). An attack was made upon this act as being unconstitutional, the argument being that the legislature had created a new court which it had no authority to do under Article 7, Section 1, Arkansas Constitution. In Ex Parte King, 141 Ark. 213, 217 S.W. 465, the act was upheld, this court stating:

“The key note for the construction of this act to determine whether or not it was the purpose of the Legislature to create an independent tribunal with separate powers is found in the second and third sections. The second section confers upon the ‘county courts original jurisdiction in all cases coming within the terms of this act.’ The third section, while designating the court as the ‘Juvenile Court’ and its record as the ‘Juvenile Record,’ expressly declares that this is done ‘for convenience.’
“Construing the act as a whole, we have reached the conclusion that it was not the purpose of the Legislature to create an independent tribunal and to confer upon it judicial powers. The act, therefore, does not offend against article 7, section 1, of our Constitution, which provides that, ‘The judicial power of the State shall be vested in one Supreme Court; in the circuit courts; in county and probate courts, and in justices of the peace.’
“In 7 R.C.L., p. 981, sec. 9, it is said: ‘In most of the jurisdictions in which juvenile court legislation has been enacted, separate and distinct courts have not, however been provided for, but the jurisdiction of the regular courts has been enlarged to cover the matters embraced in the legislation.’ The judicial power conferred by this act, as we construe it, is vested in the county courts.”

The sections here under attack, enacted by the General Assembly as Act 404 of 1969, read as follows:

“45-202.1. Power to appoint referee. — The Judge of the Juvenile Court in each county is hereby given power to appoint a referee who shall have power to hear and pass on all Juvenile cases of girls, and of boys, up to the age of eighteen (18).
“45-202.2. Appeals from referee’s decisions. —Appeals may be taken to the Judge of the Juvenile Court from the decisions of the referee as a matter of right by causing the papers to be lodged with the Judge of the Juvenile Court and within ten (10) days after the decision is made, upon demand, the clerk in charge of the Juvenile Court matters shall at once transmit the same to the Judge of the Juvenile Court.”

The attack upon these sections is twofold, viz-, that the county judge is permitted to delegate his judicial function in violation of Article 7, Section 28 (heretofore quoted), and Section 29 of our State Constitution. It is also argued that the statutes mentioned amount to, in effect, the creation of a new court. From appellant’s brief:

“The Legislature may create a new Court not mentioned or established by the Arkansas Constitution; however, the Legislature may not alter, change, limit, or divide a constitutionally established Court unless the authority to do so is clearly established in the Constitution.”

We do not agree with appellant’s argument. As pointed out in Ex Parte King, supra, no other court was created. The county Court (for convenience, called juvenile court) was simply given the authority to determine cases involving dependent, neglected and delinquent children. Here, in the case before us, likewise, no new court was created; rather, the judge of the juvenile court (county judge) was only given power to appoint a referee to pass on all juvenile cases. The emergency clause of Act 404 of 1969 sets out the purpose in enacting the legislation as follows:

“It is hereby found and determined by the General Assembly of the State of Arkansas that because of the increasing number of youthful offenders that a referee would be an invaluable aid to the speedy administration of justice in the various counties of this State; and that this Act is immediately necessary to permit the appointment of a juvenile court referee in each county in the State.”

Now, there would seem to be but little doubt that the appointment of a referee for the purpose of aiding the juvenile judge by making recommendations for a disposition of particular cases, much in the same manner as a master in chancery, would be entirely valid; in fact, there is no attack on such a function. But appellant says that the powers given in the sections under discussion to the referee are the powers of a court and that Mayes acted in that capacity, in violation of the constitutional sections heretofore mentioned.

Even if we should agree with this contention, nonetheless, we are definitely of the opinion that Mayes was a de facto judge and this premise is based upon the cases of Howell v. Howell and Stevens v. Stevens, 213 Ark. 298, 208 S.W. 2d 22, and Pope v. Pope, 213 Ark. 321, 210 S.W. 2d 319. In 1947, the General Assembly passed Act 42 which divided the chancery court of the first chancery circuit into two divisions, to be known as the first division and second division of the first chancery circuit. The act further provided that the chancellor then in office would be the chancellor of the first division and that the chancellor of the second division would be the “present master in chancery of the chancery court of Pulaski County, who shall hold said office until January 1, 1949. At the general election in November, 1948, there shall be elected a chancellor for said second division of the chancery court, who shall take office January 1, 1949. ***.” The master in chancery was Mrs. Ruth Hale. Thereafter, Judge Hale granted various divorce decrees and her authority was attacked in the cases just cited. The contention was that, though the General Assembly had the authority to create the second division, it had no authority to name the éhancellor of that division, this being a function of the Executive Department (Governor). By a four to two (one justice being away) vote in Howell v. Howell and Stevens v. Stevens, supra, we held that the act was unconstitutional since only the Governor had the constitutional authority to make this appointment, and further held that Mrs. Hale was not a de facto officer, stating:

“In the absence of election to office (however defectively the election may have been held) one may claim to be a de facto officer by virtue of appointment only in the event the appointing power had authority or apparent authority to make the designation. If the agency lacked the actual or ostensible authority to appoint in any circumstance, its appointee cannot be considered a de facto officer. This is true because the attempt would not be the proper exercise of an existing power, but an effort to exercise a non-existent power.”

It was then pointed out that where there is no de jure office, there can be no de facto judge. From the opinion:

“ ‘The question is quite different where there is no de jure office, ... for the foundation of the proceeding must be ... a lawfully created court, or there is a total want of jurisdiction in the court itself to hear and determine the case, and this jurisdictional infirmity will annul any proceedings therein on mere suggestion to the proper court. It would be beyond all precedent to term the judge presiding in a court which is not a court at all a de. facto judge.’
“And, for the same reason, one appointed to an office that does exist, but not appointed under form of law, would not be a de facto officer.”

In strongly worded dissents, two members of the court disagreed, stating that, in their view, Mrs. Hale was a defacto judge, and that her acts could not be questioned in the cases presented. It was pointed out, that in the view of the dissenters, a valid, legal, de jure court had been created, and that Mrs. Hale was a de facto judge. Justice Ed McFaddin, citing 46 C.J. 1057, stated:

“One who holds an office under an appointment or election giving color of title may be a de facto officer, although the appointment or election is irregular, or invalid, or although he has been appointed by an authority not competent under the law to make the appointment, and even though his title is derived from an unconstitutional statute.”

Still further,

“The principle is that the acts of an officer de facto are binding upon the public as though done by one in office de jure, and that his right to the office cannot be questioned except in a direct proceeding to which he is a party, is well settled and is not new in this court. Moore, as Adm’r. v. Turner, 43 Ark. 243; Pearce v. Edington, 38 Ark. 150; Kaufman v. Stone, 25 Ark. 336; Caldwell v. Bell & Graham, 3 Ark. 419; S.C., 6 id., 227; Hildreth’s Heirs v. McIntire’s Devisees, 1 J. J. Marsh, 206, 19 Am. Dec., 61, and note.”

Justice McHaney, in his dissent, stated, in quoting Vol. 43 Am. Jur. p. 224, § 470, the following:

“The de facto doctrine was ingrafted upon the law as a matter of policy and necessity, to protect the interests of the public and individuals involved in the official acts of persons exercising the duty of an officer without actually being one in strict point of law. It was seen that it would be unreasonable to require the public to inquire on all occasions into the title of an officer, or compel him to show title, especially since the public has neither the time nor opportunity to investigate the title of the incumbent. The doctrine rests on the principle of protection to the interests of the public and third parties, not to protect or vindicate the acts or rights of the particular de facto officer or the claims or rights of rival claimants to the particular office. The law validates acts of de facto officers as to the public and third persons on the ground that, although not officers de jure, they are, in virtue of the particular circumstances, officers in fact whose acts public policy requires should be considered valid.
“Judicial as well as ministerial officers may be officers de facto, within the rule, hereafter considered, that the acts of a de facto officer are valid as to the public and third persons.”

Without going further into either the majority opinion or the dissents, some three months later, in Pope v. Pope, 213 Ark. 321, 210 S.W. 2d 319, Justice Frank Smith, whose vote had helped make the opinions in the cases of Howell v. Howell, and Stevens v. Stevens, supra, stated that he had receded from that view, and that he was of the opinion that the dissenters were correct; that there was a dejure office and that Judge Hale was a chancellor de facto. Accordingly, the law is as stated in the dissents in the cases cited.

In the case before us, the office of juvenile judge (so called for convenience) is certainly a de jure office, validity of such being upheld in Ex Parte King, supra. Mr. Mayes received the appointment under a legislative act from an authority authorized to make the appointment which certainly had the effect of “color of title”, and under the authority cited by Justice McFaddin^ was a de facto officer even though his “title” (if it should be so found) was derived from an unconstitutional statute.

Actually, whatever the status of Mayes, Mrs. Fortin certainly was not, in any event, deprived of any right, for she received a completely de novo hearing by the circuit court, which heard numerous witnesses, and rendered its judgment on the basis of the evidence heard by the judge thereof. For that matter, the only reason that the case was not fully heard by the county judge himself was because appellant by-passed a hearing in that court in order to reach the circuit court at an earlier date.

It is urged that the mother and two minor children have been denied due process of law as required by the United States Constitution and Arkanaas Constitution, in that each has the fundamental right to the society of each other, and the State cannot interfere with such right unless it is proven by clear and convincing evidence that the parent is unfit. In connection with this point, it is also asserted that the question of the best interest of the child cannot be raised until the unfitness of the natural mother is established; also, it is pointed out that the circuit court made no finding that the children were either dependent, neglected, or delinquent at the time of the de novo trial in circuit court. As to this last, such a finding could hardly have been made, for the children had been living for approximately five years with the foster parents and, according to the evidence, were being well taken care of. The original order of the juvenile court found that these children were dependent and neglected; this order was not appealed. The July 25, 1972 order (here on appeal) sets out that Mrs. Fortin does not seek to have the judgment of September 18, 1969 set aside on the ground “that the said minor children were not dependent or neglected children at the date of that judgment, but rather on the ground that the situation of petitioner has so changed since that date of judgment as to merit or justify the returning of the children to her custody ***.” The present situation of appellant is, of course, intertwined with the question of the best interests of the children, and in Boatwright v. Pulaski County Juvenile Court, 250 Ark. 138, 464 S.W. 2d 600, we pointed out that a principal concern is “the best interest and welfare of the child.” In that case, a minor child was adjudged by the Pulaski County Juvenile Court to be a dependent and neglected child, and custody was removed from the mother and the boy placed in the custody of Jim Fisher, Operator of Shawnee Valley Boys Ranch near Harrison. Three years later, after the mother had regained her health and had obtained a steady job, she petitioned that the boy be returned to her custody. The petition was denied, and the circuit court affirmed. On appeal, we affirmed, stating, “Of course it is a universal rule of law that the paramount consideration in awarding custody of minor children is the best interest and welfare of the child. With that rule of law as a guide we examine the evidence. ” [Our emphasis].

In Boatwright, supra, we mentioned that the mother was not as unstable as in 1966 when she relinquished custody of her son. Here, too, it may be stated that Mrs. Fortin is in much better condition, both financially and healthwise, than in 1969. According to Mrs. Fortin, she was sick in 1969, and had a nervous breakdown, but she stated that she presently is in good health; that she was without funds and unable to care for the children in 1969, but such condition no longer exists. Harlan Mounce, a brother of appellant, said that Fortin had been one of his employees and the two formed a partnership in masonry work; he testified that from March 26,1973 to the same date in 1974, the two netted about $6,000 each from their work. According to Mrs. Fortin, appellant and her husband are purchasing a two-story frame house in Springdale, with eight rooms and two and one-half baths.

Mrs. Fortin testified that she had married Mr. Fortin in March of 1969 and that after the court entered its order taking the custody of the children from her, she and her husband went to South Dakota, where Mr. Fortin took a job on a ranch. They returned to Arkansas in January of 1970. After the juvenile court had entered the order of July 25, 1972 (here on appeal), an order for visitation rights for appellant was obtained, and on the occasion of one of these visits, she, without permission of court or appellees, took the children to South Dakota to the home of her mother-in-law. This occurred in August, 1972, and the children were enrolled in school there, but remained only a short time. Mr. and Mrs. Reeves and Mrs. Parrish went to South Dakota, presented the court order and the children were released to them and returned to Arkansas. Testimony was offered on behalf of appellant by relatives of her husband in South Dakota as to her care of the girls and their apparent affection for her. Also, Don Reed of Brentford, South Dakota, the school bus driver during the period from August 27 to September 7 when the little girls were attending school there, testified that they were well-dressed, an opinion concurred in by Quentin C. Miles, Superintendent of Schools for the District, who added that they were also well-mannered. Erma Parmeter and Ruby Holenbeck, residents of Ashton, South Dakota, testified by deposition that the girls were always well-dressed and well-mannered and were not neglected by their Mother. Eileen Francoli of Ashton, according to her deposition, a “homemaker and bar owner” stated that the children were clean, “hair was always combed”, and she had “never seen a Fortin child who was dirty.” Charlotte Sutton, a witness on behalf of appellant, who had formerly lived in apartments owned by Parrish, testified that this appellee and his wife fussed and argued quite a bit.

Mr. and Mrs. Reeves and Mr. and Mrs. Parrish testified as to the care given the children, and several residents of Springdale also testified as to the church activities of the appellees and the fact that the little girls were neatly dressed and well-behaved. Mr. Reeves testified that on several occasions, Mr. Fortin had followed him and his wife, making threats and telling them if they didn’t leave the children alone, something was going to happen to Mr. Reeves. He mentioned a particular occasion when Fortin told him to get out of his car, evidently challenging him to fight, stating that the latter was extremely dirty and had been drinking. At this point, the record reflects that Fortin, sitting in the courtroom, called out, “You are a liar.” According to Reeves, they were followed on about four different occasions, and he mentioned that once, Fortin passed him three or four times and stopped on the highway so that Reeves had to pull around to get by.

As far as personal conduct is concerned, Mrs. Fortin stated that her drinking ceased in 1972 and that she had not been arrested for drinking or related offenses since October, 1971. She was unable to say how many times she had been arrested or convicted in the Springdale Municipal Court prior to that time. Of course, it is noticeable that Mr. and Mrs. Fortin had been married for approximately six months before the children were ever taken from her, and according to Mrs. Fortin, her husband had a job waiting for him in South Dakota at that time. Testimony that bears significance is that of Sandra Kay, 12 years of age, and the oldest of the two girls. Sandra Kay testified that she was in the fifth grade, making good grades. She said that she first went to live with the Parrishes when she was six years old and had been with them most of the time since; that she wanted to live with them and did not desire to move. The little girl said that she attended church every Sunday morning, Sunday evening, as well as on Wednesday night. She testified relative to being taken to South Dakota by her Mother and said that she knew her Mother drank “By the smell on her breath.” With reference to when it was time to go to bed, Sandra said:

“They would lock us up, with this little thing over the door. They put the rug cleaning thing over the door; it’s made like a piano and has strings on it, and they put it over the door.”

According to the witness, she and her sister were unable to remove this object and she said that they were kept in their room by this method when Mr. and Mrs. Fortin “wanted to talk or drink.” Sandra stated that she was happy when appellees came to South Dakota to get them, and that she had no desire to tell her Mother “good-bye” on that occasion; that she had no present desire to visit with her Mother or Stepfather, and in fact, did not want to see her Mother any more.

Child custody cases are always difficult, and particularly so where the choice is between a parent and persons who have had custody of a child for a long number of years and ties of love and affection have been established. We are not unmindful of the rights of a natural parent, and it does appear that this mother has earnestly endeavored to have the children returned to her custody. It, of course, likewise appears that Mrs. Fortin, in earlier years, was somewhat unstable, and whether she has demonstrated a change in her habits for a sufficient period of time was a matter for the trial court to determine. The acts of Mr. Fortin, heretofore enumerated, of course, were not conducive to a favorable finding in behalf of appellant, and, as pointed out, the evidence of Sandra Kay was important. All in all, we are unable to say that there was no substantial evidence to support the findings of the circuit judge; for that matter, under present circumstances, we could not say that his findings were even against the preponderance of the evidence.

Affirmed.

       Attention here should be directed to Rule 9 (b) “Statement of the Case” which provides that an appellant’s abstract and brief shall begin with a concise statement of the case, ordinarily not to exceed two pages in length. The present statement of the case comprises 17 printed pages and necessarily involves a great many matters that have no proper place in the Statement of the Case.

       Petitioner was divorced from her husband, Phillip Giurbino, before any of these proceedings commenced, and married Jim Fortin in March, 1969.

      “The county courts shall have exclusive original jurisdiction in all matters relating to county taxes, roads, bridges, ferries, paupers, bastardy, vagrants, the apprenticeship of minors, the disbursement of money for county purposes, and in every other case that may be necessary to the internal improvement and local concerns of the respective counties. The county court shall be held by one judge, except in cases otherwise herein provided.”

      § §--45-203 and 204 were amended by the General Assembly in 1965, and § 45-201 was amended in 1973, but these amendments made no changes that are pertinent to this litigation.

      “§ 29. The judge of the county court shall be elected by the qualified electors of the county for the term of two years. He shall be at least twenty-five years of age, a citizen of the United States, a man of upright character, of good business education and a resident of the State for two years before his election, and a resident of the county at the time of his election and during his continuance in office.”

       Justice Miliwee joined in this dissent.

       This Justice had originally been absent, but participated on rehearing.

      The children were picked up by appellee at the school and taken directly to Arkansas.


source: Caselaw Access Project

author: J. Fred Jones, Justice.

license: Public Domain

text:
    Gerald D. FOWLER, d/b/a OZARK HILLS REALTY v. ARKANSAS REAL ESTATE COMMISSION
    75-24
    524 S.W. 2d 230
    Opinion delivered June 16, 1975

      Mart Vehik, for appellant.

      Jim Guy Tucker, Atty. Gen., by: Bill D. Etler, Asst. Atty. Gen., for appellee.
   J. Fred Jones, Justice.

The appellant Gerald D. Fowler, a real estate broker doing business as Ozark Hills Realty, brings this appeal from a judgment of the Pulaski County Circuit Court sustaining an order of the Arkansas Real Estate Commission suspending the appellant’s broker license for a period of six months because of unprofessional conduct, and misrepresentations, in violation of Ark. Stat. Ann. § 71-1307 (a), (c), (h) and (j) (Repl. 1957). The pertinent portions of the statute provide as follows:

“The Commission may upon its own motion . . . suspend or revoke any license issued under the provisions of this Act [§§ 71-1301 — 71-1311]; at any time. . . the licensee in performing or attempting to perform any of the acts mentioned herein is deemed to be guilty of:
(a) Making any substantial misrepresentation, or
* * *
(c) Pursuing a continued and flagrant course of misrepresentation or making of false promises through agents or salesmen or advertising or otherwise, or
* * *
(h) Being unworthy or incompetent to act as a real estate broker or salesman in such manner as to safeguard the interests of the public, or
* * *
(j) Any other conduct whether of the same or a different character from that hereinbefore specified which constitutes improper, fraudulent or dishonest dealing.”

From the uncontradicted testimony, including, that of the appellant, the facts appear as follows: In February, 1973, the appellant entered into a purchase contract with Mr. and Mrs. Farwell for the purchase of about 365 acres of land in Carroll County. He made a downpayment on the property and went into possession of it. He had about 100 acres of the land adjacent to the highway platted or surveyed off into five acre plots and designated this area as “Zion Hills’ Acres.” He formed a corporation as “Zion Hill Corporation.” He then began attempting to sell the plots and did sell one plot to a Mr. DeNegri for approximately $5,000 cash and attempted to transfer title by use of a “Bill of Sale” form designated for use in the transfer of title to personal property rather than by a deed form designated for the transfer of title to real property. After Mr. DeNegri consulted an attorney, the Farwells executed a warranty deed transferring title direct to DeNegri who obtained a quitclaim deed from the appellant. The bill of sale was witnessed on March 6, 1973, and the warranty deed was dated March 13, 1973.

The appellant passed examination for a realtor’s license on January 9, 1973, and his license was issued on March 14, 1973. No improvements whatever were made on the land by the appellant but he began an advertising campaign through brochures mailed to prospective purchasers in other states. One such brochure was mailed to Victor I. Lypke on May 15, 1973, and it recited in part as follows:

“a distinctive new retirement and resort community —
ZION HILLS’ ACRES
developed by - ZION HILL CORPORATION of Eureka Springs, Arkansas - Rt. #2 - Box 730 72632 ZION HILL CORPORATION is making available FIVE ACRE MINI-PLANTATIONS and MINI-RANCH HOMESITES for ‘COUNTRY LIVING AT ITS’ BEST’
—with improvements and services—
OZARK HILLS REALTY — offers through exclusive listings these FIVE ACRE MINI-PLANTATIONS and MINI-RANCH HOMESITES — Also only through Ozark Hills Realty we have any size location of Zion Hills’ Acres, from V2 Acre lots (1 Vi acre-2 acre) to 5 Acre Mini-Plantations — Homesites CASH OR TERMS AVAILABLE * * *”

Mr. Victor I. Lypka was one of several persons who responded to the appellant’s advertisements and the appellant followed up with letters to Mr. Lypka. One such letter to Mr. Lypka was dated April 14, 1973, and read in part as follows:

“This is to acknowledge receipt of your note requesting information concerning Zion Hills’ Acres. We are sure that you saw our ad in the Eureka Springs paper. The ad read, ''Vi acre in the beautiful Ozarks for $100.00 with water, electricity, and paved roads. UNBELIEVEABLE? But possible through and in an introductory investment plan. We will do just that by your investment in Zion Hills’ Acres.’ The second page of this letter will explain that investment plan in detail. This will give the person investing his money a 10% to 15% per year return in the form of a Vi acre lot in the beautiful Ozarks with utilities.
Zion Hills’ Acres is a new development in the Ozarks, a short distance from Tablerock Lake, one of the nation’s most popular lakes and top bass lake of the nation. Zion Hills’ Acres is choice land for the person who likes country living at its best.
Zion Hill Corporation must limit this investment offer to the first 10 persons taking advantage of the offer.”
An undated letter to Mr. Lypka read in part as follows:
“We have listed for sale a development in the Ozarks known as Zion Hills’ Acres. This development known as Zion Hills’ Acres is nestled in and surround[ed] by mountains on the nearby edge of Tablerock Lake. The development is along Arkansas state highway #23, just 8 miles north of Eureka Springs, Ark.
* * *
This development has been subdivided into 5 acre tracts and are now available for those looking for their location in the Ozarks. The developer, Zion Hill Corporation, is improving each tract of land by running water, electricity, and paved roads to each one. Telephone service is available to each tract.
Zion Hill Corporation has asked our sales firm to extend a special offer to the first 10 persons interested in purchasing a 5 acre tract. This offer is for a limited number in this way — by that person purchasing a 5 acre tract on an investment opportunity for cash and then letting our real estate firm subdivide your 5 acre tract into smaller lots, leaving you a Vz acre lot to keep for your own. As we sell your lots, we will pay to you all of the money that you have paid for the whole 5 acres except $100.00. If you choose, you may keep the whole 5 acres. We will sign a contract with you on this plan.
What does this mean for you — it means that you can get a Vz acre lot in the Ozarks with water, electricity and paved roads for only $100.00 cost. We will sign a contract with you to resell your lots and pay back your total cost-less $100.00 that you paid for your 5 acre tract. All that we ask is that you simply take advantage of this offer by contacting us and looking into it further. What you will gain is a Vz acre lot in the beautiful Ozarks, valued at $2,500 and up with utilities for only $100.00 by investing in Zion Hills’ Acres. You have this oportunity by contacting us immediately.”

Under date of July 20, 1973, the appellant caused to be published in the Carroll County Tribune an advertisement reading in part as follows:

“Farms Ranches
Businesses Lake Properties Plus
a distinctive new retirement and resort community—
ZION HILL CORPORATION is making available five acre MINI-PLANTATIONS and MINI-RANCH HOMESITES for ‘COUNTRY LIVING AT ITS’ BEST’ — with improvements and services— PAVED ROADS — PRIVATELY OWNED WATER WELLS — ELECTRICITY — TELEPHONE SERVICE — L. P. GAS — RECREATIONAL AREA — SENSIBLE AND PROTECTIVE RESTRICTIONS
OZARK HILLS REALTY”

On appeal to this court the appellant relies on the following points for reversal:

“A. The Circuit Court of Pulaski County erred in finding the Arkansas Real Estate Commission’s actions against Appellant were not in violation of Arkansas Statutory provisions and procedures relating to the activities of real estate brokers. Appellant did not receive proper notice of the charges brought against him.
B. The Circuit Court of Pulaski County erred in upholding the Arkansas Real Estate Commission’s findings of fact and conclusions of law, as said findings and conclusions did not meet the requirements of Section 5-710 (b), Arkansas Statutes.
C. The Circuit Court of Pulaski County, Arkansas erred in finding that there was substantial evidence of record to support the decision of the Arkansas Real Estate Commission and that said decision did not constitute an attempt to discriminate against Appellant.”

In support of his first assignment the appellant argues that he did not receive proper notice of the charges brought against him by the Arkansas Real Estate Commission as required by two sections of the Administrative Procedure Act, Ark. Stat. Ann. §§ 5-708 and 5-712 (Supp. 1973), the pertinent provisions of which are as follows:

“§ 5-708. Administrative adjudication. — In every case of adjudication:
(a) All parties shall be afforded an opportunity for hearing after reasonable notice.
(b) The notice shall include:
0) A statement of the time, place, and nature of the hearing;
(2) A statement of the legal authority and jurisdiction under which the hearing is to be held;
(3) A short and plain statement of the matters of fact and law asserted.
§ 5-712. Licenses. — (c) No revocation, suspension, annulment, or withdrawal of any license is lawful unless, prior to the institution of agency proceedings, the agency gave notice by mail to the licensee of facts or conduct warranting the intended action, and the licensee was given an opportunity to show compliance with all lawful requirements for the retention of the license. ...”

The crux of appellant’s argument is that the appelleeCommission’s order and notice of hearing charged him with engaging in certain real estate broker’s activities before he had a valid Arkansas license, but that he was found to have violated § 71-1307 (a), (c), (h) and (j), supra, a statute which prohibits certain conduct by holders of Arkansas real estate broker licenses. Therefore, the appellant argues, the order and notice did not provide him with the true basis of the proceedings against him, which he needed to adequately defend himself. The order and notice of hearing is set out in appellant’s brief as follows:

“The Arkansas Real Estate Commission, on its own motion, has determined that there is sufficient evidence to charge Gerald D. Fowler d/b/a Ozark Hills Realty, a licensed real estate broker in the State of Arkansas, with violation of the following sections of the Real Estate Licensing Law and Commission regulations: Ark. Stat. Ann. §§ 71-1301, 71-1307 (a), (b), (c), (d), (e), (h), (j) and Regulations Nos. 39, 41, 42, and 43. These charges are based upon the following facts and allegations:
1. By an instrument entitled ‘Bill of Sale’ and dated March 6, 1973, Gerald D. Fowler and Peggy Sue Fowler purported to sell certain real estate in Carroll County, Arkansas, to Albert DeNegri. Said instrument by its specific language is intended to convey only ‘personal property’ and is incapable of conveying interest in realty-
2. Although Gerald D. Fowler represented to Albert DeNegri that the realty sought to be conveyed by the Bill of Sale was owned by Gerald D. Fowler and Peggy Sue Fowler, the realty was in fact owned by Ola Farwell and Maye Farwell.
3. In advertising property known as ‘Zion Hills’ Acres,’ Gerald D. Fowler utilized ‘blind ads.’ He represented that prospective purchasers could buy a Vi acre lot for $100.00 without revealing the prerequisite of a $10,-000.00 investment.
4. Gerald D. Fowler performed the foregoing acts, and others, before he held a valid Arkansas license as a real estate broker.
The Arkansas Real Estate Commission has determined that it should conduct a hearing to determine whether the real estate broker’s license issued to Gerald D. Fowler d/b/a Ozark Hills Realty should be revoked or suspended.
Under and pursuant to the provisions of Act 434 of Acts of Arkansas of 1967 and Ark. Stat. Ann. § 71-1308, notice is hereby given that a formal hearing regarding the charges and allegations set out herein will be held in the office of the Commission, 1311 West Second Street, Little Rock, Arkansas, at 11:00 a.m., on Monday, July 9, 1973. Gerald D. Fowler may be heard in person or by counsel and may offer such witnesses, affidavits, documentary evidence and/or depositions in defense of the above charges as he may reasonably desire.

ORDER AND NOTICE OF HEARING (AMENDED)

Paragraph 3 is amended as follows:

3. In advertising property known as ‘Zion Hills’ Acres,’ Gerald D. Fowler utilized ‘blind ads.’ He represented that prospective purchasers could buy a Vz acre lot for $100.00 without revealing the prerequisite of a $10,-000.00 investment. Said advertisements also falsely represented ‘Zion Hills’ Acres’ had the following improvements and services: paved roads, privately owned water wells, electricity, telephone service, recreational area.
A formal hearing regarding the charges and allegations set out herein will be held ... at 3:30 p.m. on Monday, September 10, 1973.”

We find no merit in the appellant’s contention. The first paragraph of the order and notice set out the statutes appellant was accused of violating and § 71-1307, supra, was included. The rest of the order set out the transactions in which the violation allegedly occurred. Furthermore, the appellant’s testimony and the exhibits which he submitted at the hearing indicate that he was prepared to answer the charges against him. In NLRB v. Mackay Radio & T. Co., 304 U. S. 333 (1937), the United States Supreme Court was confronted with a similar situation in which an employer was found guilty of an unfair labor practice which it contended was not within the issues of the violation charged. The charge alleged that the employer discriminated against five men by its refusal to rehire them, but the employer was found guilty of discrimination in discharging the men. In that case the court said:

“While the respondent was entitled to know the basis of the complaint against it, and to explain its conduct, in an effort to meet that complaint, we find from the record that it understood the issue and was afforded full opportunity to justify the action of its officers as innocent rather than discriminatory.”

The appellant next argues that the Real Estate Commission’s findings of fact and conclusions of law were improperly stated under the Administrative Procedure Act because they were neither expressed in statutory language or accompanied by a statement of facts supporting the findings. As a result, the appellant argues, a reviewing court has no way of knowing what specific facts the Commission relied upon in ordering the suspension of appellant’s license and therefore, cannot properly find whether the Commission’s conclusions were based upon substantial evidence. Appellant cites Ark. Sav. & L. Ass’n Bd. v. Central Ark. Sav. & L. Ass’n, 256 Ark. 846, 510 S.W. 2d 872 (1974), and First State Bldg. & L. Ass’n v. Ark. S. & L. Bd., 257 Ark. 599, 518 S.W. 2d 507 (1975), in support of this argument.'In the first place Ark. Stat. Ann. § 5-710 (b) (Supp. 1973) does not require findings of fact to be couched in statutory language as appellant contends. The statute, as already pointed out, says:

“In every case of adjudication, a final decision or order shall be in writing or stated in the record. A final decision shall include findings of fact and conclusions of law, separately stated. Findings of fact, if set forth in statutory language, shall be accompanied by a concise and explicit statement of the underlying facts supporting the findings. . .” (Emphasis added).

The two cases relied on by the appellant turned on the failure of the administrative agency to set out the underlying facts. In First State Bldg. & L. Ass’n v. Ark. S. & L. Bd., supra, and the recent case of First Fed S. & L. Assoc. v. Ark. S. & L. Assoc. Bd., 257 Ark. 985, 521 S.W. 2d 542 (1975), we found the administrative agency decisions in violation of § 5-710 (b) because the findings of fact only paraphrased statutory language and did not state the underlying facts. The Real Estate Commission did set out its findings of fact in the case at bar and certainly the record supports its findings.

As to his third assignment of error, the appellant first contends that the Real Estate Commission’s decision cannot be supported because the statute under which it was reached, § 71-1307, only applies to activities of real estate licensees, and that at the time of the alleged wrongful acts the appellant was not so licensed. It is true that the unprofessional behavior alleged in the transaction with Albert DeNegri occurred before the appellant actually received his license on March 14, 1973. But even if the appellant were correct in his contention as to that transaction, the alleged acts in misrepresenting the price, services and improvement on the property clearly occurred after the license was issued to the appellant.

The appellant testified that he used the bill of sale form in the DeNegri transaction simply because he did not have an “Offer and Acceptance” form. He readily admitted there were no streets, water wells or utility lines on the property. He said utility lines ran along the highway adjacent to the property and that he intended to be personally responsible for building streets and drilling wells if, when, and as he sold the plots. He first testified that he had entered into a contract for the construction of streets but then admitted that he had not.

In support of his contention that there was no substantial evidence to support the findings and decision of the Commission, the appellant argues that there were two possible interpretations of the advertisements concerning services to and improvements on the property. One, that they were presently installed and available, and two, that they would be installed and made available in the future. The advertisements and letters, supra, on their face certainly would lead one to believe that service facilities and improvements therein set out, were already in place and ready for use.

The judgment is affirmed.


author: Conley Byrd, Justice.

text:
    Maurice SMITH et al v. Thomas Nelson SCOTT and Mary T. SCOTT
    75-40
    525 S.W. 2d 667
    Opinion delivered June 16, 1975
    [Rehearing denied September 2, 1975.]

      Thomas B. Keys and Kenneth Brock, for appellants.

      Hardin, Jesson & Dawson, for appellees.
   Conley Byrd, Justice.

The issues in this case were before us in Ark. State Highway Comm. v. Scott, 238 Ark. 883, 385 S.W. 2d 636 (1965), wherein we held that the chancellor erred in sustaining a demurrer to the Commission’s evidence. Thereafter, that case became dormant without any further proceedings, order or judgment and the papers have been lost. When the Commission subsequently proposed to reconstruct Highway 71, adjacent to the Scotts’ lands, the latter brought this action to enjoin the Commission from entering upon the 23 foot strip in dispute until compensation was paid or secured. In defense to the Scotts’ petition for an injunction, the Commission set up its rights under a 1927 County Court Condemnation Order and a 1952 County Court Condemnation Order. No service of process was issued upon either order. The trial court after a hearing found the issues in favor of the Scotts and for reversal the Commission contends:

“POINT I. The trial court erred in finding that the 1927 County Court Order was ambiguous, inaccurate and incomplete and therefore was inadequate to condemn the land in controversy.
POINT II. The trial court erred in finding that the 1927 County Court Order nor any actions taken pursuant thereto were sufficient to give notice to the appellees or their predecessor in title.
POINT III. The trial court erred in finding that the Appellees had no notice of the 1952 County Court Order.”

The record shows that in 1927, Highway 71, as it goes by Scotts’ property, was put on a new location. In answer to interrogatories the Commission states that the centerline of the paved slab does not denote the centerline of the right-of-way claimed. The 1927 County Court Order described the new location of Highway 71 as follows:

“Beginning at station 55 plus 10 which point is the corner for Sections 20, 21, 29 and 28, Township 8 North, Range 32 West, being on the South corporation line of the City of Fort Smith, thence South 0 degrees — 10 minutes East 990 — 0’ to station 65 plus 00; thence South 0 degrees — 8 minutes East 800.0’ to Sta. 73 plus 00; thence South 0 degrees — 47 minutes West 925.1 ’ to Sta. 81 plus 25.1; thence South 0 degrees — 07 minutes West for a distance of 1398.34’ to Sta. 95 plus 23.44; thence around 10 degree curve to the left for a distance of 593.0’ to Sta. 101 plus 16.44; thence South 59 degrees — 11 minutes East for 1029.18; thence around a 10 degree curve to the left for a distance of 305.33’ to Sta. 115 plus 13.95, which point is on the Township line between Township 7 North and Township 8 North; thence South 89 degrees — 58 minutes East for a distance of500.35’to Sta. 120 plus 14.3 back, 114plus 06.9 ahead; thence North 89 degrees — 58 minutes East for 1562.6’; thence to the right along a 6 degree curve for 245’ to a point 35’ from said Township line to the center line of State Highway No. 71.
The right-of-way widths required for the alignment as hereinabove described being as follows:
Station to Station Lineal feet Width to left of Center Line Width to right of Center Line Total width feet
55 plus 10-121 plus 79 121 plus 79 equals 6669 35 35 70
66 plus 69-112 plus 09 4540 35 35 70
112 plus 09-115 plus 14 305 35
115 plus 14 equals 109 plus-125 plus 00 1593 45 All that part lying 35’ to right of center line and in Twp. 8 North Range 32 West 45
125 plus 00-129 plus 69.5 469.5 35 35
129 plus 69.5-132 plus 15 All that part lying to the left and 35’ from center line in Twp. 8 North Range 32 West.”

The record shows that the 1927 County Court Order was based upon Job No. 404. Thereafter, Federal Aid was obtained and the construction was done under Job No. 468.

James Mickle, a consulting Civil Engineer, testified for the Scotts that in attempting to plat the 1927 County Court Order from the point of beginning, he found a 5000 foot error. When he attempted to plat the description in reverse order he found a 31.4 foot error. There was also a 31.4 foot error between the 1927 County Court Order and the construction plans for Job No. 468. Upon platting both the 1927 County Court Order and the 1952 County Court Order, Mickle found that the centerline for the 1927 County Court Order was 29.43 feet North and East of the Centerline of the 1952 County Court Order at the point closest to Scott’s property. On cross-examination Mickle, as abstracted by the Commission testified as follows:

“The first column in this Court Order is 55 plus 10 which also appears on the first page and it sa,ys 55 plus 10-121 plus 79. The second line 121 plus 79 equals 6669 feet which is obviously the distance from 55 plus 10 to 121 plus 79. Okay, the next column then says without any equation 66 plus 69 to 112 plus 09 is 4540 feet. It never does say that station 121 plus 79 equals 66 plus 69, although perhaps this is what they intended it to be. The point of curvature as listed on page one is 95 plus 23.44 and the point of curvature on page two is not listed. It just tells you the width of the right of way between different stations, but it never does tell you where the point of curvature is. I think that we totaled the distances between the total length as listed on page one of the County Court Order and the total length as listed on page two. We probably found out that there was an apparent discrepancy which may have been able to have been explained by the stationing. But it does not give the point of curvature of the curve in question so there is no way that you could determine coming from the north and running south where that point of curvature was from this Court Order. The point of curvature that I think you have been referring to is at station 95 plus 23.44. The 10 degree curve referred to in the County Court Order is at station 95 plus 23.44.”

Appellee, Thomas Nelson Scott, testified that he knew nothing about the 1952 condemnation order. He readily admitted that the highway was widened three feet next to his property but testified that he agreed with a representative of the Highway Department that the Commission could enter and extend the highway 36 inches on his side and the Highway representative in consideration thereof agreed to shoot and seal the space between his concrete and the pavement with surface material to keep down dirt and chug holes.

Scott’s testimony was corroborated by Cecil Dunn, the Skelly Oil Company Distributor at the time. Mr. Dunn had some contact with representatives at the same time relative to the location of some signs. The replacement of the signs at that time corresponds with the Scotts’ present contention with reference to the location of the Highway 71 right-of-way.

Billy F. Prince, a surveyor for the Commission for 23 years, testified that he had no trouble locating the centerline of the 1927 County Court Order. He admitted that the description contained a 5000 foot error if you started at the beginning and that there was a 30 foot error if you surveyed the description backward. However, it developed on cross-examination that in doing his surveying he had a copy of the 1952 construction plans, Job No. 4371, a copy of the plans for Job No. 468 and a copy of the 1927 order but in making his survey he started from and stopped at two reference points on the Job No. 468 plans where bridges had been installed.

David Kit Carson, an engineer for the Highway Commission, testified that he was able to plot the 1927 County Court Order description. In comparing the centerline of the roadway as called for in the 1927 order with the 1952 order, there was a 31 foot error on the south end and a 5200 foot error on the North end. However, he found that the errors were corrected when reference was made to the construction plans.

POINT I. Ordinarily a property owner has no trouble in determining the actual location of a right-of-way when it is placed upon a new location. See Arkansas State Highway Commission v. Staples, 239 Ark. 290, 389 S.W. 2d 432 (1965), where the new location was cut through the woods. Here the taking was in an open field and the taking was under Job No. 404, whereas the actual construction was done sometime later under Job No. 468. Even the plans for Job No. 468 were drawn after the 1927 condemnation order. Two respectable engineers testified — one testifying that the 1927 order could be accurately plotted even though it contained two obvious errors and the other testifying that you could not plot the description from the starting point because of the 5000 feet error and that there was a 31.4 feet error when plotting the description backwards. We have searched the record to ascertain why one of the engineers should be believed over the other engineer and we have found nothing in the record or the briefs that would be convincing as to the accuracy of the testimony of either engineer. Under such circumstances we ordinarily defer to the judgment of the trial judge who had the advantage of seeing and hearing the witnesses. Consequently, we cannot say that the trial court erred when it found “that the 1927 County Court Order is ambiguous, inaccurate, and incomplete and therefore was inadequate to condemn any strip of land south and west of the slab as it now exists, and which is owned and claimed by [Scott].”

POINT II. Ordinarily an entry upon land is coterminous with one’s title. Here however, the Commission’s 1927 title is so defective that we cannot determine that it covers the area in dispute. There is nothing in the record to show an actual entry upon the disputed area — in fact the proof is rather clear that there was no entry upon the disputed area under the 1927 order. Consequently, we cannot say that the trial court was in error in finding that “the said 1927 County Court Order nor any actions pursuant thereto were sufficient to give notice to the plaintiffs or their predecessors in title or a reasonable opportunity to seek compensation for the taking contemplated by the [Commission] herein.”

POINT III. So far as this record shows the 1952 construction, was done within the 70 feet right-of-way obtained by the 1927 order. The Commission does not contend that the 70 feet taking in the 1952 County Court Order covers any area not covered in the 1927 order. While this circumstances leaves one to wonder why the 1952 order was entered without service of process, we can certainly understand why a property owner such as the Scotts would not know of its existence. Thus the question of whether the Commission entered under the 1952 County Court Order in making the three feet extension in 1952 or as Scott claimed by permission for their mutual benefit would turn upon an issue of credibility. We cannot say under this record that the Chancellor’s findings are contrary to a preponderance of the evidence.

Affirmed.

Harris, C.J., dissents.


author: Frank Holt, Justice.

text:
    Arthur HAYES et al v. WARD ICE CREAM COMPANY, Inc.
    75-1
    523 S.W. 2d 923
    Opinion delivered June 16, 1975
    [Rehearing denied July 7, 1975.]

      Herrn Northcutt, for appellants.

      Harper, Young & Smith, for appellee.
   Frank Holt, Justice.

This case involves a dispute over the correct contribution to be made by appellee as an employer to the unemployment fund. The chancellor held there was substantial compliance by appellee with the statutory requirements. The sole issue on appeal is whether the chancellor erred in finding that the appellee complied with the notice provisions of Ark. Stat. Ann. § 81-1108 (e) (Repl. 1960). The case was submitted on a stipulation of facts. Therefore, the question involves the application of law to these undisputed facts.

For many years the Ward Ice Industries; a partnership, operated an ice cream business at Fort Smith and other places. As a result of a suit to dissolve the partnership, a commissioner sold the Fort Smith business to several members of the Ward family, who incorporated as Ward Ice Cream Company, Inc., which is the appellee. The change of ownership was effective June 1, 1970. The parties further stipulated that the appellee, the successor corporation, acquired and continued to operate a segregable and identifiable portion of the business of its predecessor. The predecessor, at the time of the transfer, was assessed and paying contributions, payroll taxes, etc., under tfye act to the appellants at the rate of .3% of its payroll. Appellee continued to report and pay taxes at the same rate of its predecessor. Appellants claim that appellee failed to comply with the provisions of the act in effect at that time by failing to make a proper application, which appellants assert is mandatory. Therefore, appellants treated appellee as a new employer with no past experience of unemployment claims. In March, 1971, appellants assessed contributions at a rate of 2.7% of the payroll for the preceding three quarters.

§ 81-1108 (e) reads in pertinent part:

[A]ny employing unit which acquires the organization **** and substantially all of the assets thereof, of any employer, **** and who intends to continue such organization **** shall assume for the purpose of determining the contribution rate of such employing unit **** the position of such employer with respect to such employer’s separate account, actual contributions and benefit experience, annual payrolls, payment of contributions, interest and penalty, and otherwise as if no change with respect to such separate account **** had occurred. ****
The segregable and identifiable portion of the predecessor’s separate account shall be transferred by the Commissioner to such acquiring successor employing unit only if the successor employing unit shall make written application to the Commissioner for transfer of said experience of such predecessor employer which is attributable to the part acquired by the successor, which application must be filed with the Commissioner not later than thirty (30) days after the date of transfer. Said application shall be supported by all information furnished by the applicant as required by the rules and regulations of the Commissioner, ****.

It is agreed that on June 5, 1970, or four days after appellee became the successor employer, appellee mailed to the appellant, the Employment Security Division, its form entitled “Report to Determine Liability,” which was signed by the president of the successor firm. This report, which is not abstracted by appellants, informs the appellant ESD in writing of the change in business form and ownership. The appellee, in answer to a question on the form, specifically indicated that it desired to elect coverage. Appellants did not respond until June 29, 1970, or two days before the expiration of the thirty day statutory period, which is interposed by appellants. Then appellants’ response was a letter enclosing a form, ESD-Ark-236, which is entitled “Employer’s Change of Ownership and/or Termination of Account Report.” The response was actually addressed to a member of the predecessor firm although the successor firm’s name, address, date of acquisition, the predecessor firm’s name and the names of the principal officers of the appellee successor firm were reflected on the form. As stated, this form was mailed to the appellants by the appellee on June 5 clearly indicating a successor ownership and desire to elect coverage. However, upon receipt of the response by appellee, it promptly returned the requested form on July 2 or within only two days following expiration of the thirty day period.

Appellants argue that although these forms were furnished, appellee did not file the “must” application requesting a transfer of the predecessor’s experience rating. In the circumstances, we agree as found by the chancellor. Appellants do not favor us with any form, pursuant to any rules and regulations, that would contain information not included in the two forms furnished by appellee. As indicated, it is agreed that the appellee is a segregable and identifiable portion of the predecessor business. The statute specifically provides for the right of a successor business, as here, to have the benefit of the experience rating of its predecessor.

Affirmed.


text:
    S. M. COOK, on behalf of himself and all other taxpayers of Chicot County v. James R. “Red” BURCHFIELD, County Judge of Chicot County
    75-36
    523 S.W. 2d 925
    Opinion delivered June 16, 1975

      Holloway & Haddock, for appellants.

      Reinberger, Eilbott, Smith & Staten, for appellee.
   Frank Holt, Justice.

This case involves the payment of $90,000 for 97 Vz acres of land by the Chicot County Court with federal revenue sharing funds. Appellants, as taxpayers, brought suit in chancery court against the county judge, appellee, for an order declaring the quorum court appropriation illegal and void and, consequently, the expenditure therefrom for the land purchase was invalid. Appellants contend on appeal that the chancellor erred by failing to accept jurisdiction and by not voiding the appropriation and the resulting expenditure of the federal funds by the appellee. The chancellor was correct.

In December, 1972, Chicot County received $204,000 in revenue sharing funds. The quorum court met January 2, 1973, and authorized the expenditure of the funds within the “priority expenditures” listed by 31 U.S.C.A. § 1222 (A). Approximately three months later, the appellee, sitting as the county court, approved payment from the federal revenue sharing funds, as appropriated, for the property which was then deeded to the county. There is expert testimony that the value of the land is at least $1,000 per acre and there is no allegation or assertion of fraud. The “basic thrust” of appellants’ argument is that the quorum court’s appropriation was void; consequently, the expenditure from the appropriation for the “real property was necessarily void.” Appellants urge that the transaction should be rescinded and cancelled. The seller, however, is not a party to the action.

Appellants rely heavily upon Mackey v. McDonald, 255 Ark. 978, 504 S.W. 2d 726 (1974), and the cases cited therein as authority for their contention that the chancery court has jurisdiction in this taxpayers’ action since it relates to illegal exactions which are impermissible by Ark. Const. (1874), Art. 16, § 13. We do not agree with the appellants that Mackey and the cases cited therein, which are thoroughly discussed, are applicable in the case at bar. Typically, in Mackey the injunction proceeding was against the proper officials to prevent the alleged misapplication or expenditure of public funds based upon the contention that the appropriation in issue was improper and constituted an illegal exaction of tax funds. In the case at bar, the action is brought against the appellee only after the expenditure for a claim which was approved by the appellee in his judicial capacity as the county court. There is no fraud alleged or in any manner shown in the allowance and payment of the claim. In Ark. Association of County Judges v. Green, 232 Ark. 438, 338 S.W. 2d 672 (1960), we aptly said:

“We agree with appellant that the Chancery Court had no jurisdiction to order repayment of claims already allowed. In the absence of fraud (and we think no fraud was shown here) the remedy was by appeal to the Circuit Court. See Art. 7 § 33 Constitution, Ark. Stats. § 27-2001, and Jones v. Capers, 231 Ark. 870, 333 S.W. 2d 242.

See also Monroe County v. Brown, 118 Ark. 524, 177 S.W. 40 (1915).

In the case at bar, it necessarily follows that appellants’ proper remedy was by appeal to the circuit court from the county court’s allowance and payment of the claim.

Affirmed.


author: George Rose Smith, Justice.

text:
    David Eugene ROGERS v. STATE of Arkansas
    CR 75-24
    524 S.W. 2d 227
    Opinion delivered June 23, 1975

      Gene Worsham, for appellant.

      Jim Guy Tucker, Atty. Gen., by: Robert A. Newcomb, Asst. Atty. Gen., for appellee.
   George Rose Smith, Justice.

The jury found the appellant Rogers guilty of having delivered a controlled substance and fixed his punishment at a $4,000 fine and imprisonment for eight years. The State’s proof showed that on February 5, 1974, Rogers sold a pound of marihuana to an undercover agent, Officer Walters, for $135. Rogers’ present attorney, who did not represent him in the trial court, argues three points for reversal.

First, the statutory definition of marihuana contains an exception excluding certain parts of the plant, such as the mature stalks. Ark. Stat. Ann. § 82-2601 (n) (Supp. 1973). It is contended that Rogers was entitled to a directed verdict of not guilty, because the State failed to prove that the marihuana assertedly sold to Officer Walters did not consist solely of the excepted parts of the plant. The statute itself — being a Uniform Act — answers that contention by expressly providing that it is not necessary for the State to negate any exemption or exception, in the information or at trial, the burden of proof being upon the person claiming the exemption or exception. Section 82-2630; Smith v. United States, 269 F. 2d 217 (D.C. Cir. 1959), cert. den. 361 U.S. 865 (1959); Garner v. State, 258 Ark. 321, 524 S.W. 2d 223, also decided today.

Secondly, it is insisted that the court erred in allowing the package of marihuana to be introduced in evidence, because a positive chain of possession was not established. We find no error. Officer Walters testified that after buying the marihuana on February 5 he took it to the Little Rock police headquarters and stored it in the narcotics safe. Before storing it he put his initials and the date on a piece of paper. He then put that piece of paper and the marihuana in a plastic bag, which he sealed with a heat-sealing machine. He explained that the machine “wasn’t working too proper at that time and I may have added a staple to it.” He also attached police department property tag No. 1101 to the bag, writing his initials on the tag. Two days later Officer Bullerwell took the package, bearing tag No. 1101, from the safe and delivered it to Don Wise, a chemist at the State Department of Health. Wise, after testing the substance and finding it to be marihuana, put the package in a vault, where it remained until he brought it to court on the day of trial. Wise identified the package as the one he received on February 7. Walters, Bullerwell, and Wise all testified.

The appellant, in insisting that the package was not admissible, relies upon several asserted uncertainties in the State’s testimony. Although Officer Walters, testifying more than six months after he sealed the bag, said that he “may have added a staple” to the heat seal, there were no staple marks on the bag. The slip of paper described by Officer Walters was not in the bag when it was offered in evidence. Upon that point the chemist, Wise, testified:

Q. Were there any markings inside the plastic bag?

A. Í made note of no markings. I do not know whether

there was or not. I don’t recall.

Officer Walters identified his handwriting on tag No. 1101, but it was partly in ink and partly in pencil, because “the pen went bad.” When the officer was asked on cross-examination if he was identifying the tag, his answer was: “Yes, sir. I couldn’t swear that this is — but it was — ” At that point the witness was interrupted by defense counsel and did not finish whatever he started to say.

Despite some uncertainties in the State’s testimony, the trial court properly admitted the package into evidence. Officer Walters testified that he put tag No. 1101 on the package, that he initialed it, and that the initialed tag was on the package when it was offered in evidence. The intervening chain of custody was established. Thus there was a prima facie showing of admissibility. The appellant relies upon Fight v. State, 254 Ark. 927, 497 S.W. 2d 262 (1973), but in that case there were somewhat similar deficiencies in the State’s proof. In upholding the trial court’s action in allowing the introduction of the evidence we said: “The court held the evidence admissible, but told the members of the jury .that it was up to them to decide whether Officer Langston eventually placed in the mails the same substance that was given to him.” In the case at bar the minor uncertainties in the proof were matters to be argued by counsel and to be considered by the jury, but they did not render the package inadmissible as a matter of law.

Finally, it is insisted that the trial judge was wrong in giving the following instruction at the State’s request:

The defendant is charged with the offense of delivering a controlled substance, to-wit: Marijuana. Act 590 of 1971, as amended, makes it unlawful for any person to deliver Marijuana, a controlled substance, as defined within the Act.

“Deliver” is defined as follows: “Deliver” or “delivery” means actual, constructive or attempted transfer from one person to another of a controlled substance in exchange for money or anything of value, whether or not there is an agency relationship.

Defense counsel, however, made only a general objection to the instruction, which is insufficient to preserve any point for appellate review. Rule 13, Uniform Rules for Circuit and Chancery Courts, Ark. Stat. Ann., Vol. 3A, Supp. 1973, p. 126.

Despite the absence of any objection it is argued, upon the authority of United States v. Clark, 475 F. 2d 240 (2d Cir. 1973), that a defendant’s constitutional right to a fair and impartial trial requires the judge to give correct instructions upon his own motion, regardless of the action of counsel. The Clark case, however, is readily distinguishable from this one, owing to substantial differences between the federal procedure and our state procedure.

In Clark the trial judge extemporaneously gave oral instructions that were in some respects incomplete, incomprehensible, and wrong. The Court of Appeals, after reversing the judgment upon another point, held that the instructions were so deficient and defective as to amount to “plain error . . . affecting substantial rights” within the meaning of Rule 52(b) of the Federal Rules of Criminal Practice. That rule provides that plain errors or defects affecting substantial rights may be noticed by an appellate court although they were not brought to the attention of the trial court. We have no such rule in Arkansas. On the contrary, our Uniform Rule 13, supra, requires that objections to instructions be specific, to the end that new trials will not be required for errors that might have been corrected had they been brought to the attention of the trial court.

Affirmed.


text:
    Jerry Edward AUSTIN v. STATE of Arkansas
    CR 75-41
    524 S.W. 2d 622
    Opinion delivered June 23, 1975

      Vincent E. Skillman Jr, Skillman, Durrett & Davis, for appellant.

      Jim Guy Tucker, Atty. Gen., by: Gary Isbell, Asst. Atty. Gen., for appellee.
   George Rose Smith, Justice.

This is a petition for post-conviction relief under Criminal Procedure Rule 1. The petitioner was convicted of first degree murder in September, 1972. He now alleges that extensive pretrial publicity about the case deprived him of his constitutional right to a fair trial. The trial judge, after a hearing, denied the petition. We uphold his decision.

Some fourteen months elapsed between the filing of the information in 1971 and the trial in 1972. It is shown by the petitioner’s proof that during that interval four different “detective magazines” published illustrated articles, of a sensational nature, purporting to narrate facts about the crime. There is no proof that any of the magazines had a substantial circulation in Crittenden county or that any member of the trial jury every read any of the articles. There was also introduced a front-page article that appeared in a Memphis newspaper, the Press-Scimitar, on the day of the petitioner’s, arrest, but we find nothing in the article at odds with restrained and accurate reporting.

The petitioner’s argument rests essentially upon the Supreme Court’s decision in Sheppard v. Maxwell, 384 U.S. 333 (1966), but there is no similarity between that case and this one. The facts in the Sheppard case showed that the accused was examined for more than five hours, without counsel, in a televised inquest, that newspapers published the names and addresses of prospective jurors, who received letters and telephone calls about the case, that newsmen took over almost the entire courtroom, that the jurors had access to all news media, that pretrial publicity included incriminating matter not introduced at the trial, that the trial judge took no effective measures either to curb the massive publicity or to control the conduct of the trial, and other circumstances that we need not detail.

We perceive no resemblance between the Sheppard case and the case at hand. The isolated publicity that attended the petitioner’s arrest and subsequent trial was in no respect comparable to the reporting of the Sheppard case. The record before us includes the voir dire proceeding by which the prospective jurors were questioned and eventually accepted by counsel. In our opinion the record is devoid of proof that the pretrial publicity attending the petitioner’s trial violated in any respect his undoubted constitutional right to a fair and impartial trial.

Affirmed.

Fogleman, J., not participating.


author: Lyle Brown, Justice. J. Fred Jones, Justice,

text:
    Kenny GARNER v. STATE of Arkansas
    CR 75-30
    524 S.W. 2d 223
    Opinion delivered June 23, 1975

      McDaniel & McDaniel, for appellant.

      Jim Guy Tucker, Atty. Gen., by: Gary Isbell, Asst. Atty. Gen., for appellee.
   Lyle Brown, Justice.

Appellant Kenny Garner was charged with two counts of selling marihuana and the counts were consolidated for trial. Undercover agents Jackson and Hill testified appellant, along with co-defendant Diane Garner, sold them each a “lid” of marihuana for $15 each on June 11, 1974. The undisputed evidence showed that Officer Walker met the undercover agents and received the contraband and, along with Officer Silvey, delivered the substance to Mr. Wise of the State Health Department laboratory for analysis. Mr. Wise testified the substance contained “marihuana, C.S.L.” There was no testimony on behalf of either appellant or his co-defendant.

Appellant advances three points for reversal and additional facts will be supplied when those facts are necessary to a determination of the issue in question.

Appellant contends that since Officer Silvey was unable to identify the State’s Exhibits One and Two by his initials, the State failed to establish a proper chain of custody of the evidence. The point has no merit. Even without Officer Silvey’s testimony, there is testimony showing each transfer of the evidence from the time it was purchased from appellant until it was introduced in the evidence. The envelopes were clearly marked with unique numbers which matched the numbers on the receipts from the State laboratory. Very much in point is the case of Fight v. State, 254 Ark. 927, 497 S.W. 2d 262 (1973). There the appellant alleged the proper chain of custody had not been established because one of the officers who had handled the evidence did not testify. We said: “We do not agree. Both Officer Hartman and Detective Reather again took the stand and testified that the Fight envelope bore the markings placed by them, and Mrs. Van Dusen stated that it was sealed when delivered to her; she opened the envelope on the end and it was still sealed at the flap at the time of the trial. The record does not reflect why Sergeant Langston did not testify but we think under the circumstances herein, that the evidence was admissible. According to the testimony of the officers, the envelope, clearly identifiable since they had placed notations upon it, was the same in which the tablet containing LSD had been placed, and Mrs. Van Dusen likewise identified this envelope as being the one from which the tablet was taken. The purpose of the chain of identification is to prevent the introduction of evidence which is not authentic. The fact that the envelope was delivered to Mrs. Van Dusen by the Health Department official in charge of the mail is not really argued, only mentioned, and certainly there is no suggestion that either this official or Sergeant Langston had tampered with the envelope.”

The appellant next contends that because the State failed to show that the substance introduced in evidence as “Marihuana, Cannabus sativa L.” did not fall within the exemption provision of Ark. Stat. Ann. § 82-2601 (n) (Supp. 1973) the State failed to prove the appellant sold a controlled substance. The contention is without merit. Ark. Stat. Ann. § 82-2601 (n) (Supp. 1973) reads:

“ ‘Marihuana’ means all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds or resin. It does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination. ”

Appellant’s contention is answered by statute, Ark. Stat. Ann. § 82-2630 (Supp. 1973), It reads:

“(a) It is not necessary for the State to negate any exemption or exception in this Act [§§ 82-2601 — 82-2638] in any complaint, information, indictment or other pleading or in any trial, hearing, or other proceeding under this Act. The burden of proof of any exemption or exception is upon the person claiming it.”

The final point, and one which requires reversal of the case, concerns an extended colloquy between the court and counsel over the testimony of Larry Jackson and Paula Bailey. A thorough understanding of the point requires that we quote at length the described colloquy. A witness for the State, Larry Jackson, was cross-examined without objection as follows:

“Q. I am going to ask you some rather relatively specific questions. Did you, in late July, 1974, at Crawford’s Trailer Park where James Burdette lived, sell two joints of marijuana to Paula Bailey for the sum of $1.00?
A. No, sir.
Q. You deny that?
A. Yes, sir.”

The State called one Paula Bailey in its case-in-chief and counsel for appellant objected on the basis that the name of the witness was not on the information and was not furnished pursuant to a motion to produce names of witnesses which previously had been granted. The appellant further objected as to the relevancy of the expected testimony if the testimony to be elicited was to prove that Larry Jackson had not sold Paula Bailey two joints of marijuana.

The Court allowed the witness to testify and the record reflects:

“Q. Has Larry Jackson ever sold two joints of marijuana to you?
A. No, sir.
Q. All right, nothing further.
BY MR. McDANIEL: Your Honor, again we object. That is totally irrelevant testimony of this witness. We move that it be stricken and the jury (told) to disregard it.
BY MR. PEARSON: If the Court please, upon the cross-examination of Mr. Jackson, by Mr. McDaniel, Larry Jackson was asked on cross-examination if it was not true that he sold two joints of marijuana to one Paula Bailey and this is pertinent to show the good faith of the cross-examination and that there is no basis for any impeachment of this witness.
BY THE COURT: The objection will be overruled.
BY MR. McDANIEL: May I further object on the basis that though we asked a question of Mr. Jackson we were bound by his answer and could not bring in contradictory proof regardless what his answer would have been. We were bound by his answer.
BY THE COURT: The objection will be overruled. You inquire.

CROSS-EXAMINATION BY MR. McDANIEL:

BY MR. McDANIEL: Your Honor, might the record reflect that though we are examining, we have no intention of waiving our objection and ask that it be a continuing for all the testimony of this witness.
BY THE COURT: You want to object to the testimony you elicit from the witness?
BY MR. McDANIEL: No, Your Honor, I want the record to reflect that we object to this witness being allowed to testify in any respect in this trial.
BY THE COURT: I don’t see how you can object to the testimony that you are going to elicit from the witness, yourself.
BY MR. McDANIEL: Your Honor, I am objecting to the relevancy of it. Since this Court has allowed this witness to testify on direct examination, I am asking for the opportunity to cross-examine this witness without having, this Court having considered our original objection made.
BY THE COURT: All right, the objection will be sustained then, the testimony of this witness stricken from the record. The jury told to disregard it. You, may stand aside.
BY MR. McDANIEL: At this time we move for a mistrial.
BY THE COURT: Be denied. I thought you said you wanted the jury admonished.
BY MR. McDANIEL: I do want the jury admonished. I do not think the admonishment is enough and I ask for a mistrial.
BY THE COURT: Well, that is not what you said.
BY MR. McDANIEL: I am asking for it now, if Your Honor please.
BY THE COURT: Well, you just go ahead and examine the witness then. You need to make up your mind what you want.
BY MR. McDANIEL: Tour Honor, I would like to have a mistrial.
BY MR. PEARSON: The evidence does stay in I take it.
BY THE COURT: Tes sir. All of the last portion of the Court’s ruling be stricken from the record. You may examine now, if you have any desire to do so.
BY MR. McDANIEL: Your Honor, I would like for the Court’s ruling to remain in the record.
BY THE COURT: No, they have been stricken from the record because we are proceeding with the testimony of the witness.
BY MR. McDANIEL: Do I understand that the Court is not going to leave his ruling in the record. The record will not reflect the proceedings —
BY THE COURT: No, I am just withdrawing them because of your desire, Mr. McDaniel, to examine the witness, I am going to let you do it.
BY MR. McDANIEL: No, Your Honor, I don’t desire to examine this witness except for the fact that the Court has allowed her to testify on direct examination.
BY THE COURT: I’m not going to argue with you about the ruling. I have made the ruling. Now, you can abide by it or ask any question you want or have a seat. Any way you want to handle that.
BY MR. McDANIEL: Note our exceptions. (Emphasis added).”

In the first place the testimony of Paula Bailey was inadmissible. Whether Jackson sold marihuana to Paula Bailey was a collateral matter and Jackson’s testimony thereon should have ended the matter. Nevertheless, in the absence of the extended argument just reproduced we might hold the admission of the testimony to have been harmless error. However, the recounted colloquy places undue emphasis on the inadmissible testimony. The inconsistent rulings of the court and the chastisement of defense counsel, we fear, overly impressed thejury with Paula’s testimony. At least we cannot say it was harmless error; in such event it becomes our duty to say it was prejudicial.

Reversed and remanded.

Jones, J., dissenting.

J. Fred Jones, Justice,

dissenting. I respectfully dissent from the majority opinion in this case. I agree that the extended colloquy concerning the admissibility of Paula Bailey’s testimony may have overly impressed thejury with its importance; but, I base my dissent on the unusual premise of what I perceive a rule of evidence should be in this state, rather than a disagreement with the majority as to what the rule is as established by precedent.

As I perceive the primary object of any criminal trial, it is to get at the truth of the matter as to guilt or innocence of the accused in a fair and impartial manner without prejudice to the accused or prejudice to the state. Of couse, under the established rules of evidence, a defendant, or a witness for the prosecution, may be crosr-examined on collateral matters under the theory of testing his credibility. It is quite true that the side doing the questioning is bound by the answer given, but the facts of the binding force are only cognizable on appeal.

It is- my opinion that the attorneys in a criminal trial should either be restricted in cross-examination under the guise of testing the credibility of a defendant or witness, especially in the area of questions pertaining to specific criminal acts involving specific individuals at a specific time and place, or else they should take the chance of having the answer corroborated by the testimony of the other person involved in the question.

In far too many instances, on the theory of testing the credibility of a defendant or witness, the prosecuting attorney or defense counsel will glance at what appears to be a “rap sheet” or some other record and then ask such question as was asked the witness in the case at bar: “Did you, in late July, 1974, at Crawford’s Trailer Park where James Burdette lived, sell two joints of marijuana to Paula Bailey for the sum of $1.00?” The attorney, in asking a question like this, is not restricted to the one incident but in “testing the credibility” of the defendant or witness, may go on and on until the trial court calls a halt to such questioning.

As already stated, the jury is concerned with the facts of the case and is not concerned with the rules of evidence. It is my opinion that such procedure, without further proof than the bare “yes” or “no” answer, is bound to destroy, or at least reflect on, the credibility of the testimony in the eyes of the jury, rather than lest the credibility for the benefit and purpose of the attorneys at the trial.

This is an area in the rules of evidence that I feel should have the attention of the bench and bar, and that is the primary reason for my dissent in this case. The trial court is in a position to determine what questions are asked in good faith in testing the credibility of a witness and, while I am of the opinion such determination should be made by the trial judge at a conference in chambers rather than in the presence of the jury, I would affirm the judgment in this case.


author: John A. Fogleman, Justice.

text:
    ARKANSAS NATIONAL BANK v. CLEBURNE COUNTY BANK
    75-19
    525 S.W. 2d 82
    Opinion delivered June 23, 1975

      Reed & Blackburn, for appellant.

      Olmslead & Choate, for appellee.
   John A. Fogleman, Justice.

Robert M. Edwards was formerly employed by Dr. Wayne H. Smith of Heber Springs, Arkansas, as a physician’s assistant. In July and October, 1973, Edwards borrowed money from Cleburne County Bank and Arkansas National Bank, respectively, $2500 from each institution, executing a promissory note and security agreement as a part of each transaction. Each bank filed for record its financing statement or security agreement covering the same property of Edwards. Edwards failed to make payments to either bank. This appeal is from the holding of the chancery court that the security interest of Cleburne County Bank had priority over that of Arkansas National Bank, entitling Cleburne County Bank to priority with respect to the proceeds of the sale of Edwards’ property being held in the registry of the court.

The single point for reversal urged by Arkansas National Bank relates to its contention raised in the trial court that the security agreement with Cleburne County Bank had been materially altered and was therefore void, or, in the alternative, should be restricted to those items included when it was originally written. The evidence on behalf of appellant was circumstantial. In attempting to prove a circumstance supporting its contention, appellant called as a witness an attorney, Hoyt Thomas, whose client was Edwards’ employer, Dr. Smith, who had previously been dismissed as a party defendant in the action. Thomas refused to give testimony with respect to information he had received from certain third parties (Mr. Johnson, president of Cleburne County Bank and Mr. Hensley, president of Arkansas National Bank) in the course of his representation of Dr. Smith; testimony that in December 1973, Thomas went to Cleburne County Bank and secured a copy of that bank’s security agreement, which copy would be relevant to the alteration issue; and testimony concerning discussions Thomas had with appellant’s attorney relative to the alteration issue. Thomas refused to testify on the ground that to do so would violate the attorney-client privilege, based on his relationship to Dr. Smith. The trial court sustained Thomas’ refusal to testify, saying that Thomas could not be compelled to divulge anything from his files pertaining to the case without permission of Dr. Smith, which was refused. None of the subjects above mentioned fall within the ambit of the attorney-client privilege, and the trial court’s ruling to the contrary was error.

The attorney-client privilege extends to any communication made to the attorney by his client in that relation, or his advice thereon. Ark. Stat. Ann. § 28-601 (Supp. 1973). Put more succinctly, the privilege covers communications between attorney and client; that is, statements of each to the other. Norton v. Norton, 227 Ark. 799, 302 S.W. 2d 78. The privilege is designed to secure subjective freedom of mind for the client in seeking legal advice, and has no concern with other persons’ freedom of mind or with the attorney’s desire for secrecy in the conduct of his client’s business; therefore, it is not sufficient for the attorney, in invoking the privilege, to state that the information came somehow to him while acting for the client, nor that it came from some particular third person for the client’s benefit. 8 Wigmore on Evidence (McHaughton Revision) 619, § 2317. The purpose of the rule and the necessity for its limitation have been clearly recognized in Arkansas and we have not extended the privilege to communications between the attorney and third parties in the course of the attorney’s representation of his client. See Vittitow v. Burnett, 112 Ark. 277, 165 S.W. 625; Morgan v. Wells, 242 Ark. 499, 415 S.W. 2d 323; Ehlers v. Rose, 182 Ark. 131, 30 S.W. 2d 849; Kilgo v. Continental Casualty Co., 140 Ark. 336, 215 S.W. 689.

Neither information acquired by the attorney not communicated or confided to him by his client or by an agent of his client, nor acts done by the attorney, nor facts coming to his knowledge by being done in his presence, are covered by the privilege even though any of these take place during the course of his acting as attorney. United States v. Goldfarb, 328 F. 2d 280 (6 Cir., 1964); King v. Ashley, 179 NY 281, 72 NE 106 (1904); In Re Long v. Siebrect, 187 NYS 150, 196 App. Div. 74 (1921); People v. Smith, 13 Cal. App. 3d 897, 91 Cal. Rptr. 786 (1970); State v. Olwell, 64 Wash. 2d 828, 394 P. 2d 681 (1964); 97 C.J.S. 800, Witnesses § 283 d. An attorney may be required to produce papers belonging to his client where the knowledge of their existence is accessible to others or to the public, or if, as here, the client might be compelled to produce them. Cranston v. Stewart, 184 Kan. 99, 334 P. 2d 337 (1959); Pearson v. Roder, 39 Okl. 105, 134 P. 421 (1913).

It is probable that Mr. Thomas, the attorney-witness in this case, confused the attorney-client privilege with the rule applied in some jurisdictions that the attorney’s work product is not subject to discovery. The two rules and the principles upon which they are based, while susceptible to confusion, are separate and distinct. See 8 Wigmore on Evidence (McNaughton Revision) 620, § 2318. It has been held, however, that an attorney’s information, taken from witnesses while acting for his client in anticipation of litigation, as well as briefs, communications and other writings prepared by counsel for his own use in prosecuting his client’s case, are not protected from discovery by the attorney-client privilege. Hickman v. Taylor, 329 U.S. 495, 67 S. Ct. 385, 91 L. Ed. 451 (1947); Dupree v. Better Way, 86 So. 2d 425 (Fla. 1956); In Re Dalton's Estate, 346 Mich. 613, 78 S.W. 2d 266 (1956).

Ordinarily, we decide appealed chancery cases here on trial de novo when the record is fully developed and we can plainly see what the rights and equities of the parties are. Fulwider v. Woods, 249 Ark. 776, 461 S.W. 2d 581. Rushton v. First National Bank, 244 Ark. 503, 426 S.W. 2d 378. We do remand such cases when action in the chancery court has prevented the case from being fully developed. Fulwider v. Woods, supra. See also, Sears v. Scott, 210 Ark. 392, 197 S.W. 2d 33. In this case, the testimony attempted to be elicited by appellant’s counsel, and excluded by the chancellor, was especially critical, as appellant was forced to rely wholly on circumstantial evidence to sustain his position that the financing statement had been materially altered. The only indication we have of what the evidence on this issue would be is appellant’s attorney’s proffer, but much depends on the credibility to be given to the witnesses and the weight accorded their testimony, and the cold written record is not sufficient in this respect. In addition, we can only surmise what cross-examination might reveal and appellee might have evidence in rebuttal. For these reasons, we must vacate the decree and remand the case for further proceedings consistent with this opinion.

The decree is reversed and the case is remanded.