text:
    Edward D. BRISCOE, Jr. v. NATIONAL UNION FIRE INSURANCE CO. of Pittsburgh, Pa.
    5-5143
    451 S. W. 2d 205
    Opinion delivered March 9, 1970

      Smith, Williams, Friday ér Bowen; By: George Pike, Jr,, for appellant.

      Teague, Bramhall & Davis, for appellee.
   J. Fred Jones, Justice.

Edward D. Briscoe, Jr. sued National Union Fire Insurance Company of Pittsburgh, Pennsylvania in the Pulaski County Circuit to recover on a fire loss insurance policy issued to Briscoe by National. The court found that Briscoe had no insurable interest in the property at the time of the fire and had sustained no loss under the policy. Judgment was rendered for National and on appeal to this court Briscoe relies on the following point:

“Mr. Briscoe had an insurable interest in the property at the time of the fire.”

The record reveals that on November 30, 1967, Mr. Briscoe was working for the Guardian Company, a local real estate and loan corporation, as loan officer and appraiser. A Mr. Stigall was also employed by the Guardian Company as a real estate agent or salesman. Mr. O’Ouinn had listed his apartment building with the Guardian Company for sale and most of his dealings with Guardian were through Stigall. On November 30, 1967, Mr. Briscoe made an offer, through the Guardian Company, to purchase the O’Quinn property for $25,000. The pertinent sections, 2, 3 and 9 of the written offer are as follows:

“2. The Buyer will pay $25,000.00 for the property, $12,000.00 in cash and the balance of $13,000.00 as follows: 2nd mortgage loan of a 15 years duration with interest rate of 6Wo per annum and with payments of $113.25 per month, with the Buyer having option to pay the said 2nd mortgage in advance of maturity date without a penalty; subject to the Buyer obtaining a 1st mortgage loan on the subject property.
3. Special conditions: Subject to the Buyer giving the Seller a 1st mortgage loan of $25,000.00 with interest rate of 6Vz% per annum, with payments of $400.00 per month to suffice security to the Seller until the Buyer has had a reasonable time to secure the aforesaid 1st morgage loan, with a maximum time limit for the Buyer to obtain the 1st mtg. loan not to exceed 45 days from the date of the said $25,000.00 1st mortgage loan; also subject to in the event the Buyer cannot obtain the $12,000.00 cash item mentioned in paragraph No. 2 of this offer and acceptance by or before the said 45 days limit aforesaid mentioned, the Buyer will deed the subject property back to the Seller without a foreclosure suit in court or cause the Seller any legal action whatsoever to reclaim the subject property.
9. Buyer certifies that he has inspected the property and he is not relying upon any warranties, representations or statements of the Agent or Seller as to age or physical condition of improvements. The risk of loss or damage to the property by fire or other casualty occurring up to the time of transfer of title on the closing date is assumed by Seller.” (Emphasis supplied).

This offer was accepted by O’Quinn on December 1, 1967, and on December 2, 1967, O’Quinn executed a warranty deed transferring title in the property to Briscoe. Both Briscoe and O’Quinn testified that Briscoe executed a mortgage to O’Quinn for the full agreed purchase price of $25,000, but that mortgage was misplaced and never recorded. The deed to Briscoe was filed for record on December 8, 1967. Briscoe and O’Quinn agree that Briscoe never did actually own any interest in the property except an option to purchase as set out in the offer and acceptance. They both agree that Briscoe took the naked legal title under the warranty deed as a mere convenience and for the sole purpose of attempting to obtain a loan of $12,000 with which to pay the agreed down payment on the purchase price of the property.

On December 27, 1967, Briscoe obtained a fire insurance policy in the amount of $20,000 on the apartment building involved in this case, and the policy contained memorandum information as follows:

“[The Company has insured Briscoe] ... to the extent of the actual cash value of the property at the time of loss, but not exceeding the amount which it would cost to repair or replace the property with material of like kind and quality within a reasonable time after such loss, without allowance for any increased cost of repair or reconstruction by reason of any ordinance or law regulating construction or repair, and without compensation for loss resulting from interruption of business or manufacture, nor in any event for more than the interest of the insured, against all DIRECT LOSS BY FIRE...”

The policy provided options available to National in the settlement of any loss, as follows:

“It shall be optional with this Company to take all, or any part, of the property at the agreed or appraised value, and also to repair, rebuild or replace the property destroyed or damaged with other of like kind and quality within a reasonable time, on giving notice of its intention so to do within thirty days after the receipt of the proof of loss herein required.”

Mr. O’Quinn carried his own fire insurance on the property under a policy issued to him by a different company. On February 7, 1968, the apartment building was damaged by fire in the stipulated amount of $4,-306.65. Mr. O’Quinn repaired the damage and was paid the full amount of the cost of repairs by his own insurance company. Mr. Briscoe filed claim against National for the amount of the fire damage. The claim was denied by National and Briscoe sued for $4,306.65 damage; for statutory penalty, attorney’s fees and court cost. In rendering judgment for National, the trial court found as follows:

“The Court concludes that Mr. Briscoe had no insurable interest in the property as of the date of the fire; that his option to purchase same had expired and that Mr. O’Quinn’s letter written subsequently can only be treated as a new offer which was not accepted by Mr. Briscoe. It is further found that Mr. Briscoe really suffered no financial loss in this transaction and that as of the time of the loss, he had no exposure.”

National contends that Mr. Briscoe only had a 45 day option to purchase the property from O’Quinn; that the option had expired at the time of the fire and that Briscoe’s insurable interest, if he ever had any, expired with the option.

Briscoe contends that he was unable to obtain a loan on the property within the limited period of 45 days because an old mortgage, which had been paid but never satisfied of record, constituted a cloud on title requiring additional time for clearing. Briscoe contended that this time was extended, or its limitation waived, by letter from O’Quinn dated January 22, as follows:

“While waiting to get a reply from you in regard to the wall furnace that went out beyond repair at 823, West 45th. St. and broken down stuidio couchses [sic] at 4504 and 4508, Marion St. all in North Little Rock, Ark. through Mr. O. R. Stigall, which seemed all too long, our very good renter at 823, West 45th. St. moved out on this account. Most likely the others would have moved. We placed orders for the above items and called Mr. Stigall and reported on them.
Mr. Stigall then told us that you had returned from your trip and had aproved [sic] of the furnace but hoped we could repair the couches. We found out that the couches were beyond repairs before we called Mr. Stigall the first time. All the above items mentioned above were reported to me after our offer and your acceptance and we will expect remittance to us in the amount of Two Hundred Twenty Six & No/100 Dollars $226.00, plus any future major repairs that may come up before the deal is completed.
When the final papers are drawn up I want to use Mr. Homer Tanner to draew-up [sic] my part. If you want to use Beach Abstract on yours that is O. K. I would still want Mr. Tanner to examine and aprove [sic] them. Or if you wish we can both use Mr. Tanner and split the cost. I’m hopeful it can be all completed soon. I regret this delay is caused by this clearance at the Courthouse is takeing [sic] so much time but I believe it is well on the way now since the conference at Mr. Tanner’s office late Friday P.M.
In regard to your loan, I am hopeful you will be able to borrow Fifteen or Sixteen Thousand Dollars instead of Twelve Thousand Dollars on the property for your down payment. If you borrow over Twelve Thousand Dollars I will expect to get it as the down payment thereby reducing your Mortgage by the amount over and above the Twelve Thousand Dollars.
I will report any news I get on the release at the Court House to you or Mr. Stigall in case you are out of town.”

National points out that the 45 days had expired when this letter was written and contends that at most, the letter amounted to no more than a new offer which was never accepted. In any event, on February 14, 1968, Mr. O’Quinn wrote to Briscoe as follows:

“Your maxemum [sic] time for buyer to obtane [sic] first mortgage loan, 45, days according offer and acceptance on Lots 11 8c 12, Block 6, Holeads Addition to the CITY of North Little Rock, Arkansas has expired, therefor I am requesting you to deed the property back to me according to the agreement as stated in the offer and acceptance.
Your compliance with this reuest [sic] at once will be appreciat [sic] and will close the deal between us.”

Although we are of the opinion that the trial court’s finding as to lack of insurable interest was sustained by substantial evidence, we shall not weigh and discúss in detail the evidence offered pro and con as to insurable interest at the time of fire, for we conclude that the judgment must be affirmed because Mr. Briscoe suffered no damage or loss because of the fire.

Under Briscoe’s agreement with O’Quinn the risk of loss or damage to the property by fire or other casualty occurring up to the time of transfer of title on the closing date, was assumed by O’Quinn. Briscoe’s policy was limited to the “amount which it would cost to repair the property with material of like kind and quality . . . nor in any event for more than the interest of the insured.” Mr. Briscoe testified that he made some effort, without success, to obtain a loan of $12,000 on the property from Commonwealth Federal Savings & Loan Association. He testified that he never did obtain a commitment for a loan, and never did request one, because he had discovered in his chain of title the old mortgage on the property which had been paid but never satisfied of record. We are not impressed with Briscoe’s contention that such unsatisfied mortgage record constituted such cloud on the title as to have prevented Briscoe from obtaining at least a commitment for the loan of $12,000 on this property if he really intended to borrow only $12,000 on the property within his option period of 45 days. Mr. Briscoe was bound to have known of the 45 day limitation on procuring a loan. He had a deed to the property and although the offer and acceptance recites $100 check as earnest money, and although the deed recites $10 cash and other good and valuable consideration, there is no evidence that Briscoe was ever out anything in connection with the matter. There is no evidence of an attempt to extend the option time before its expiration and Briscoe testified that he was out nothing except the premium he paid on the insurance policy.

There is no question that under the terms of the insurance contract, as between Briscoe and National, it was contemplated that Briscoe was the actual and sole owner of the property. Briscoe testified that he must have told Mr. Gazette (the insurance agent) that he was the sole owner of the property. Mr. Briscoe did not own the property at all when he applied for and procured the insurance, he only had 45 days in which to borrow money with which to make a down payment in the purchase of the property.

As between Briscoe and National, an insurable interest in Briscoe conflicts with the options as to settlement reserved in favor of National, by the terms of the policy under the facts of this case. National could not have taken the property at its appraised value, regardless of the extent of damage, because O’Quinn actually owned the property. National could not have repaired, rebuilt or replaced the destroyed or damaged property with other materials of like kind and quality within a reasonable time, because O’Quinn owned this property and had already repaired the damage as was his duty under his agreement with Briscoe.

We are of the opinion that there is substantial evidence to support the trial court’s finding that Briscoe had no insurable interest in this property at the time of loss, and certainly there is substantial evidence that Briscoe suffered no damage or loss because of the fire.

The judgment is affirmed.


source: Caselaw Access Project

author: J. Fred Jones, Justice.

license: Public Domain

text:
    James E. WILKS v. A. O. LANGLEY, Adm’r et al
    5-5184
    451 S. W. 2d 209
    Opinion delivered March 9, 1970

      Sloan ir Sloan, for appellant.

      T. A. French and Kirsch, Cathey & Brown, for appellees.
   J. Fred Jones, Justice.

Mr. and Mrs. I. B. Langley died intestate and without issue as a result of injuries sustained in an .automobile accident on December 12, 1968. Mrs. Langley was killed instantly and Mr. Langley died a few days later. A. O. Langley, a brother of the decedent, filed a petition in probate court for the appointment of a personal- representative and letters of administration were issued to him. James E. Wilks also filed a petition in the probate court alleging that I. ‘ B. Langley agreed to adopt him and to all intents and purposes did adopt him. He alleged that he is the legally adopted son' and sole surviving heir, of the Langleys, and) prayed that he be declared the legally adopted child of I. B. Langley and Hattie Langley and entitled to inherit the entire estate of both decedents.

Wilks alleged in his'petition, and contended in his argument, that if there was' no formal adoption, that there had been “virtual adoption” and that a “virtual adoption” has the same legal effect as statutory adoption. Wilks contended that if there was no “virtual adoption” then the cause should be transferred to chancery court for the specific performance of the alleged agreement; to adopt him. The matter was transferred to chancery court where Wilks’ petition was dismissed for want of equity. On appeal to this court he relies on the following points for reversal:

“The court should have found there was an agreement for adoption and failure to so find is against the preponderance of the testimony; contrary to the law and the proof herein.
The court erred in failing to find there was a virtual adoption and this court should establish the doctrine of virtual adoption and hold that the testimony in this case is sufficient to establish that James Eddie Wilks was virtually adopted by Mr. and Mrs. I. B. Langley.”

We find no merit in the appellant’s first point. There is simply no proof in the record that the Langleys ever entered into an <enforceable agreement to adopt the appellant. The appellant was the second of twelve children born to Mr. and Mrs. Sterling Wilks. He went to live with the Langleys when he was about two years of age. The evidence indicates that the Langleys reared him as if he were their own son, but the record falls far short of evidence supporting an enforceable agreement by the Langleys to adopt the appellant.

Sterling Wilks, the father of the appellant, testified that when Mr. Langley first took the appellant, Langley stated that he would just like to keep. Eddie all the time, and that he, Wilks, agreed.

“Q. . . . after Mr. Langley came the second time and got Eddie did you and him ever have any other discussions about what disposition would finally, be made about the custody of Eddie?
A. No, other than any time anything was ever said he would continue on, he wanted to take him and feed him and clothe him and educate him.
Q. Did he say anything about adopting him?
A. We continued on talking quite awhile and he made the remark to take the boy and keep him, clothe him and educate him and I said: ‘After all you have all got a child, a boy, now you have one you can do a better part by him, go ahead and keep him.’
Q. Did he say anything about adopting him?
A. He mentioned about adopting him, yes.
Q. What did he say about it?
A. He just wanted to know about adopting the child. I don’t know anything about papers being fixed up, so far as I know, so far as he was concerned he could go ahead and keep him.”

Mrs. Alice Wilks, the mother of the appellant, testified that Mr. Langley came to their house when the appellant was quite young and picked him up and said: “I love this boy, why don’t you give him to me.”

“Q. . . . was there ever any conversation between you and Mr. Langley about how long they have Eddie or whether they would adopt him or anything of that kind?
A. Mr. Langley said that at one time ‘I would like to take this boy and raise him.’ Said, ‘I love him and I can give him things.’ I said: ‘I know you can give him things I would never be able to.’
Q. Did he say anything else?
A. That’s all I can remember he said right then.
Q. Did you have any other conversation about them keeping him?
A. Well, they have asked me several times to adopt him, you know, take him and raise him.
Q. Mrs. Wilks . . . tell the court about the last conversation that was had with Mr. Langley about the adoption?
A. Him and Mrs. Langley came out to our house one time, we lived on the Lempkin place, and Mr. Langley came out in the yard and him and Lemp [Mr. Wilks] went out figuring around and they came back in and he says, ‘this is my boy, I love him, he is my boy.’
Q. What else did he say?
A. He says we are going to take him home with us.
Q. Did he say anything else?
A. I don’t remember anything else. We was all in ther laughing and talking.
Q. Tell the court whether or not he said anything about he was going to take him and adopt him?
A. Well, he would have, yes.
Q. Did he?
A. He wanted to adopt him.
Q. Did he agree to?
A. Yes.”

Mrs. Lena James, who had lived near Mr. and Mrs. Wilks, and who was 87 years of age, testified that she remembers very distinctly hearing Mr. Langley state: “I don’t want to adopt Eddie until he is more mature so it would be pleasing to all.” She says this occurred when Eddie was about 12 years of age.

The appellant testified that he was born on November 24, 1939, and that he was first taken to the Langley home When he was about one year old. He says he remembers being taken to the Langley home but that he was about five years of age before he knew that the Langleys were not his natural parents.

Under date of May 11, 1969, Mr. and Mrs. Sterling Wilks signed a written statement that Mr. Langley mentioned a few times that they might adopt appellant but that it never got beyond* discussion; that the Langleys never did ask them to sign any papers, and that they never did ask or demand that the Langleys adopt the appellant; that the Langleys never did promise to adopt the appellant even though the subject was mentioned a few times. We are of the opinion that the chancellor’s finding that there was no agreement for adoption is not against the preponderance of the evidence.

As to appellant’s second point, inheritance under the theory of “virtual adoption” is unknown to the law of Arkansas. Ark. Stat. Ann. §§ 56-101 through 56-120 (Repl. 1957 and Supp. 1969) set out the only method of adoption in Arkansas. It is by force of § 56-109 that an adopted child inherits at all from adoptive parents in Arkansas, and that section reads as follows:

“(a) Upon the entry of the final decree of adoption the natural parents of a child shall be divested of all legal rights and obligations due from them to the child or from the child to them; except that if the petitioner be married to the natural father or mother of the child, then said natural parent shall not be divested of any rights or obligations, but both the natural parent and the adopting parent shall have all the rights and be subject to all the obligations with reference to such child that natural parents have or are subject to under the laws of this State.
(b) The adopting parents shall have every legal right in respect to obedience on the part of the child, and such adopting parents, their heirs and next of kin shall have the right of inheritance and distribution of the real and personal estate of the child or its decedants [descendants] and the right of recovery for the death of the child by wrongful act, as if the child had been born to the parents in legal wedlock; except that the right of inheritance and distribution shall not extend to any ancestral estate, real or personal, which shall have come to the child or its descendants through the natural parents of such child.
(c) The person adopted shall have every legal right, privilege and obligation and relation in respect to education, maintenance and the rights of inheritance to real estate or the distribution of personal estate on the death of the adopting parents as if born to them in legal wedlock.
(d) Nothing in this act [§§ 56-101 — 56-113, 56-115 —56-120] shall be construed as debarring a legally adopted person from inheriting property from its natural parents or other kin.”

There is ample proof in the record that the Langleys treated and reared the appellant as they would have their own son, and that the appellant treated them as a son should treat his parents. But, whatever commendable virtues may have prompted the mutual respect, admiration and appreciation the appellant and the Langleys had and demonstrated for each other, such attitudes and treatment did not arise from a legal duty owed under the statutes of Arkansas or under an enforceable promise to adopt.

It may well be conceded in this case that the Langleys gave to the appellant far more than they were legally obligated to give, or he was legally entitled to demand. It may also be conceded that the appellant reciprocated with the love, respect and devotion a dutiful son should show and feel toward his parents, but such affection and treatment does not create property rights not endorsed by statute in this state. The appellant was made beneficiary of a savings and loan account in the amount of $22,752.73, and there is no reason appearing in the record why the Langleys could not have, or would not have, carried out the rather simple statutory adoption procedures if they had desired and intended that the appellant should inherit from them as their only child and sole surviving heir at law. Such relationship is not created in Arkansas by mere amiable association or even by desire and intention. Had the Langleys desired and intended that the appellant should share in their property to a greater extent than the savings and loan account they provided for him, they could have accomplished this by will, as well as by adoption.

This case is similar to Stanley v. Wacaster, 206 Ark. 872, 178 S. W. 2d 50, where suit was brought to enforce a contract of adoption, and there too, the petition was dismissed because the testimony failed to show an enforceable agreement to adopt.

The case of Thomas, Adm’x v. Costello, 226 Ark. 669, 292 S. W. 2d 267, involved a so-called equitable adoption, and in that case we said:

“The evidence reveals that appellee was never adopted by Mrs. C. C. (Barry) Costello, in the manner as provided by statute, Sections 56-101 to 56-120, inclusive, Ark. Stats. 1947. Mrs. Costello reared and held the appellee out as her natural son. However, no evidence was introduced to prove that Mrs. Costello ever agreed to adopt appellee. Our court has many times held that in an attempt to prove a contract to adopt a person, the burden of proof rests with the person claiming the benefit of an alleged contract for adoption, to establish it by clear, cogent and convincing evidence. Stanley v. Wacaster, Administrator, 206 Ark. 872, 178 S. W. 2d 50; O’Connor v. Patton, 171 Ark. 626, 286 S. W. 822.
The Chancery Court is without authority to declare appellee an heir of Mrs. C. C. (Barry) Costello, by equitable adoption. This court held in Cooper v. Bradford, 196 Ark. 327, 117 S. W. 2d 719 that: ‘The mere contract to adopt is not sufficient of itself to make a child a legal heir of the promisor, because the right to take as heir exists only by operation of the law.’ ”

As pointed out in O’Connor v. Patton, 171 Ark. 626, 286 S. W. 822:

“The mere contract to adopt is not sufficient of itself to make the child a legal heir of the promisor, because the right to take as heir exists only by operation of law. The child takes in these cases by virtue of the contract and by way of damages or specific performance. An agreement to adopt does not prevent the person making the agreement from disposing by will of all his property to other persons than the child to be adopted; but an agreement, either express or implied, to give the adopted child a certain portion of the adoptive parent’s property will be enforced. 1 C. J., p. 1377, § 21 (b).”

In Minetree v. Minetree, 181 Ark. 111, 26 S. W. 2d 101, the petitioner attempted to claim a share in an estate as-an adopted pretermitted child. The chancellor held that the adoption was bad because the petition therefor failed to set out the particular district in Mississippi County in which it was filed. In affirming the decree of the chancellor, we said:

“The right of inheritance as such is conferred in our State upon a stranger in blood only by pursuing the special statutory proceeding for adoption.”

In the case of Cooper v. Bradford, 196 Ark. 327, 117 S. W. 2d 719, Bradford reared Cooper from babyhood and died intestate. Cooper first claimed the Bradford estate in probate court as an adopted child, but later moved in chancery court to enforce an alleged agreement to adopt. Witnesses testified that Bradford had said that he had adopted Cooper and that his estate would go to Cooper. About as many testified that Bradford told them he had never adopted Cooper and that he had done for him all he intended to. The chancellor found against Cooper and in affirming the chancellor, this court said:

“One who seeks to recover under an alleged contract to adopt has the burden of establishing the contract by' clear and convincing evidence. The rule is stated in 1 C. J., p. 1379, § 28, as follows:
‘The burden is on the person claiming the benefit of an alleged contract for adoption to establish it by clear, cogent and convincing evidence.’ ”

The evidence in the case at bar did not measure up to the test laid down in the above cases and the decree of the chancellor must be affirmed.

Affirmed.


author: Conley Byrd, Justice. John A. Fogleman, Justice,

text:
    Cleveland CARTER et al v. RYBYRN FORD SALES, INC.
    5-5146
    451 S. W. 2d 199
    Opinion delivered March 9, 1970

      Tiner <h Henry for appellants.

      Rice Van Ausdall and Edward S. Maddox, for appellee.
   Conley Byrd, Justice.

Appellee Ryburn Ford Sales, Inc., brought this action against appellants Cleveland Carter and Anthony Carter to recover a deficiency of $845.31 arising out of the repossession and sale of a 1968 Ford truck. Appellants answered denying each material allegation and counterclaimed for damages of $400, alleging that Ryburn Ford Sales, Inc. had held a private sale and had purchased at their owp private sale in violation of Ark. Stat. Ann. § 85-9-504 (Add. 1961). After the conclusion of the evidence' appellants, through their attorneys, Tiner and Henry, and appellee through its attorney, Mr. Van Ausdall, made the following motions:

“MR. HENRY: At this time defendants would renew their motion for a directed verdict, but reserving at all times the right to submit this matter to a jury for a decision if the motion is not granted.
MR. TINER: Let the record show that the defendants, in addition to asking for a motion for a directed verdict at this time, have offered to the Court other instructions which the defendants would like for the Court to give in the event the directed verdict is not granted.
MR. VAN AUSDALL: At this time the plaintiff, Ryburn Ford, moves the Court for a directed verdict in favor of the plaintiff for the reason that it is undisputed that the contract was entered into; is not otherwise invalid; all requirements of law pertaining to notice and sale were complied with, and that there is no issue to submit to the jury; and for the further reason that the defendants have moved for a directed verdict also, and it now resolves itself into a matter to be disposed of by the Court.”

After the court granted appellee’s motion for directed verdict and entered judgment against appellants for $845.31, appellants had the record show that the following instructions were offered:

“DEFENDANTS’ REQUESTED INSTRUCTION NO. 1:
A secured party may not buy the collateral at private sale if the collateral is of a type not customarily sold on a regular market or is a subject of widely distributed standard of price quotation. If you find from the evidence presented that the plaintiff purchased the vehicle in question at a private sale, you must find for the defendant.
“DEFENDANTS’ REQUESTED INSTRUCTION NO. 2:
If you find that the disposition of the collateral has occurred and the plaintiff has failed to comply with the requirements of the Uniform Commercial Code then the defendant is entitled to recover from the plaintiff any loss caused by a failure to comply with the Uniform Commercial Code.”

On appeal appellants contend that it was error to direct a verdict upon the unsupported testimony of interested witnesses and to refuse to direct a verdict for appellants. Appellee argues that the cause was properly decided by the court because both sides asked for a directed verdict and that in such cases it is entirely proper for the trial court to withdraw the matter from the jury and to decide the issue. Appellee further contends that the court was correct in directing a verdict for it and in refusing a directed verdict for appellants.

The record shows that Mr. Frank C. Ryburn, executive vice'president and general manager of Ryburn Ford Sales, a Jonesboro corporation, has had many years experience in automobile sales. On July 25, 1968, appellants bought a 1968 truck and grain bed for $4,-529.00. After a $500 down payment there remained a total time price of $4,569.30, payable in three annual installments of $1,523.10. The contract was assigned to Ford Motor Credit Co. and upon default was repurchased by Ryburn Ford Sales for $4,245.31. After repurchase Mr. Ryburn promptly notified appellants the truck would be sold on March 6, 1969. On March 6, Mr. Ryburn called several dealers who were not interested in buying the vehicle. He then called together four of his salesmen and asked, “What amount would you be willing to let this be placed on your books for, for sale at a profit?’’ The highest bid he received from his salesman was $3,300. He says that he thought the truck was worth $3,400 and that is what he placed it on the books for and credited the contract. After the truck was placed on his books, a $530 hydraulic hoist was installed on the truck and $25 spent to transfer the warranty. Thereafter the truck was sold to another purchaser for $4,450. He estimates that after overhead he made a profit of $5.50. Other testimony by Mr. Ry-burn shows that he used an NADA book with published data or information giving some indication of what vehicles are worth and that because of the particularly low mileage on this vehicle he paid $500 in excess of what the book showed.

Appellee also called W. W. Bryant, Jr., an employee of Ryburn Ford Sales, who testified that he bid the vehicle in for $3,300, which he considered the wholesale price. That a fair retail price of the vehicle at that time was $3,995. He testified that in the automobile business the NADA book is used as a guide to the factory average delivered price and loan value of a vehicle. On cross-examination the witness admitted that Mr. Ryburn bought the automobile back in for the company and he understood it was bought back for $3,300.

Appellant Cleveland Carter testified that the value of the vehicle at the time of the sale was $4,400.

As we understand the record and the appropriate law, appellants, by moving for a directed verdict while reserving their right to submit the issue to a jury in the event the directed verdict should be overruled, did not waive their right to have any disputed questions of fact submitted to the jury. In Pacific Mutual Life Ins. Co. v. Carter, 92 Ark. 378, 123 S. W. 384, 124 S. W. 764 (1909), we held:

“The appellant did not waive the right to have any disputed questions of fact submitted to the jury. The bill of exceptions show that appellant presented other prayers for instructions after its prayer for peremptory verdict. There is no waiver in such cases. See note to Love v. Scatcherd, 77 C. C. A. 1, where numerous authorities are collated.”

In Gee v. Hatley, 114 Ark. 376, 170 S. W. 72 (1914), we held:

“(1) To authorize the court to withdraw from the consideration and determination of the jury the questions of fact involved in the litigation, it is essential that, at the conclusion of all the evidence in the case, the plaintiff and defendant should each request the court to direct a verdict, and this request must not be accompanied by any request for instructions to the jury which would require the jury to determine any controverted question of fact.”

In Gill v. Burks, 207 Ark. 329, 180 S. W. 2d 578 (1944), it was stated:

“It has been repeatedly held that though both parties request peremptory instructions, yet where one requested another instruction submitting the issue to the jury he will not be deemed to have waived his right to have the issue decided by the jury.”

In 55 Am. Jur. Trial § 544 (1945), the same principle is stated:

“It is generally conceded that the rule that a simultaneous motion by both parties for a directed verdict operates as a waiver of submission of any question of fact to the jury does not apply where a contrary intention is manifest, or where the denial of the motion is followed by an immediate request for submission of the facts to the jury....”

Also see Aetna Ins. Co. Inv. v. Warren Adm’x, 231 Ark. 405, 329 S. W. 2d 536 (1959), and the numerous causes cited in 16A Ark. Digest, Trials, Key No. 177.

As we view the evidence neither party was entitled to a directed verdict as a matter of law. The Uniform Commercial Code, Ark. Stat. Ann. § 85-9-504 (Add. 1961), provides:

“(1) A secured party after default may sell, lease or otherwise dispose of any or all of the collateral in its then condition or following any commercially reasonable preparation or processing. Any sale of goods is subject to the Article on Sales (Article 2 [§§ 85-2-101 — 85-2-725]) ....
(3) Disposition of the collateral may be by public or private proceedings and may be made by way of one or more contracts. Sale or other disposition may be as a unit or in parcels and at any time and place and on any terms but every aspect of the disposition including the method, manner, time, place and terms must be commercially reasonable. Unless collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, reasonable notification of the time and place of any public sale or reasonable notification of the time after which any private sale or other intended disposition is to be made shall be sent by the secured party to the debtor, and except in the case of consumer goods to any other person who has a security interest in the collateral and who has duly filed a financing statement indexed in the name of the debtor in this state or who is known by the secured party to have a security interest in the collateral. The secured party may buy at any public sale and if the collateral is of a type customarily sold in a recognized market or is of a type which is the subject of widely distributed standard price quotations he may buy at private sale.”

Section 85-9-507 of the Uniform Commercial Code provides that if a secured party is not proceeding in accordance with the Article on Secured Transactions in disposing of the property, the debtor has a right to recover from the secured party any loss caused by a failure to comply with the provisions of the Code.

Appellee readily recognizes our opinion in Norton v. National Bank of Commerce, 240 Ark. 143, 398 S. W. 2d 538 (1966), where we held that a used automobile did not come within the term “a type customarily sold on a recognized market” for purposes of holding a sale without notice. However, appellee suggests that the last sentence of § 85-9-504(3) permits the secured party to purchase at a private sale when the collateral is of a type “which is the subject of widely distributed standard price quotations.” Upon this .basis it contends that the NADA book is a widely distributed standard price quotation. With this we do not agree, for the undisputed proof furnished by appellee’s own witnesses is that the book is merely a guide to the price of a vehicle of that year, make and model in an average condition. Consequently we hold that a secured party is not complying with the Commercial Code when he purchases a used automobile at his own private sale.

Since the disposition of the collateral by appellee was not in accordance with the Article on Secured Transactions (Ark. Stat. Ann. §§ 85-9-501 — 85-9-507), the burden of proof was upon appellee as plaintiff to prove the amount of any alleged deficiency owing as a result of the appellants’ breach of the purchase contract, Norton v. National Bank of Commerce, supra. Under that condition appellee is not in a position to argue that the testimony of its general manager, Mr. Ryburn, and its employee, Mr. Bryant, stands uncontradicted as to the amount of the damage.

We held in the Norton case that a secured party’s failure to comply with the provisions of the Uniform Commercial Code with references to disposition of the collateral did not ipso facto relieve the debtor from his obligation for any deficiency. In view of this holding it also follows that appellants were not entitled to a directed verdict as a matter of law.

Reversed and remanded.

Harris, C. J. and Fogleman, J., dissent.

John A. Fogleman, Justice,

dissenting. I am in accord with what I believe to be the position of the majority as to the effect of requests by both parties for a directed verdict. I am not in accord with the application of the rule made in the majority opinion.

It has been made quite clear by the decisions of this court that, when each litigant asks for an instructed verdict in his favor, and no other instruction is requested by either side, they, in effect, agree that the issue may be decided by the court; and its ruling, having the same effect as the verdict of a jury, will be permitted to stand if there is substantial evidence to support it. National Garages v. Barry, 217 Ark. 593, 232 S. W. 2d 655. Submission or withdrawal of fact questions is then discretionary with the trial judge, but, if withdrawn, his judgment has the same effect as if the issues had been decided by the jury. Holloway v. Parker, 197 Ark. 209, 122 S. W. 2d 563, 119 A. L. R. 1359.

This rule is of no practical effect if the majority’s application is correct. Any party but asking any instruction, however erroneous or abstract, could avoid this rule. I do not believe that this is intended.

An examination of the two requested instructions clearly indicates to me that appellants did not present requests that required the submission of any issue. Requested instruction No. 1 was a binding instruction to return a verdict for appellant, because Frank Ryburn, the responsible officer of appellee, himself removed any doubt about the sale having been a private one. Surely, the majority does not mean to say that requested instructions that would inevitably result in a verdict for the party asking them are “other instructions.” There are many different forms of requests by which an instructed verdict may be sought. Where each requested instruction is, in effect, a peremptory instruction, the rule applies. Upson v. Robison, 179 Ark. 600, 17 S. W. 2d 305.

The instruction that appellant was entitled to recover any loss caused by a failure to comply with the Uniform Commercial Code would have submitted no issue to the jury. No provision or requirement of this comprehensive’ code is mentioned or set out. I cannot understand, and I doubt that the average juror could understand what, if any, issue he was to decide. To say the least, it is ambiguous, indefinite and uncertain. An indefinite instruction is not a proper instruction. Laster v. Raper, 173 Ark. 1181, 294 S. W. 994. The giving of an instruction so broad and unqualified as to mislead the jury is erroneous. Bertrand v. Byrd, 5 Ark. 651; Armistead v. Brooke, 18 Ark. 521. An in-instruction embracing matters and explanations not responsive to the pleadings or evidence so as to obscure the issue is error. Taylor v. Martin, 151 Ark. 200, 235 S. W. 411. It is also error to give an instruction so uncertain that standards and measures of the duty of á party are left to determination by the jury, although they are fixed by law. Little Rock Ry. & Electric Co. v. Goerner, 80 Ark. 158, 95 S. W. 1007, 7 L. R. A. (n.s.) 97, 10 Ann. Cas. 273.

The purpose of an instruction to the jury is to define the law applicable to the issues of fact in a particular case and to furnish a guide to assist in reaching a verdict. Hearn v. East Texas Motor Freight Lines, 219 Ark. 297, 241 S. W. 2d 259; J. C. Engleman, Inc. v. Briscoe, 172 Ark. 1088, 291 S. W. 795. This second requested instruction certainly would have performed none of these functions. It was abstract in that, if it submitted any issue to the jury, it was so comprehensive as to submit issues not raised' by the pleadings or evidence. Harkrider v. Cox, 230 Ark. 155, 321 S. W. 2d 226. There are literally dozens of commercial code requirements. Clearly, this instruction was so abstract that it would have left the determination of both law and facts to the jury and so general as to leave the jury to apply its own devices to the testimony, and should not have been given. See Wisconsin & Arkansas Lumber Co. v. McCloud, 168 Ark. 352, 270 S. W. 599. It was so deficient in this respect as to amount to no instruction. I submit that these two requests did not render improper the trial court’s proceeding to determine the issues.

In Interstate Business Men’s Acc. Assn. v. Sanderson, 144 Ark. 271, 222 S. W. 51, it was held that one who sought a peremptory instruction did not waive his right to a jury trial when he requested a correct instruction which would have submitted a fact issue to the jury. I submit that the holding in that case, in effect, applies the rule properly. The request for an instruction relied upon to take the case out of the operation of the rule must be both timely and sufficient. See Annot., 68 A. L. R. 2d 300, 305,1 (1959). There is no question but what the requests were timely. See Gill v. Burks, 207 Ark. 329, 180 S. W. 2d 578. They were neither sufficient nor proper.

I do not agree with the conclusion that a secured party does not comply with the requirements of the Uniform Commercial Code as a matter of law when he purchases a used automobile at his own private sale, nor do I agree that the disposition of the collateral here was not in compliance with Ark. Stat. Ann. § 85-9-501 et seq. (Add. 1961) as a matter of law. I think that a question of fact was involved and that the judgment rendered resolved those questions of fact.

A review of Ark. Stat. Ann. §§ 85-9-501 through 9-507 (Add. 1961) shows clearly that there was no intention to require a public sale for disposition of collateral. Comment 1 to § 85-9-504 indicates that the only restriction upon the sale of collateral by a secured party is that it be commercially reasonable. Section 85-9-507(2) states specifically that sales in the usual manner in a recognized market or at a price current in that market at the time or otherwise in conformity with reasonable commercial practices among dealers in the type of property sold are, as a matter of law, sales made in a reasonably commercial manner, but does not limit such sales to those three alternatives. See Comment 1, § 85-9-504. The only limitation upon the sale is that it be in good faith and in a commercially reasonable manner. Comments 1 & 2, § 85-9-507. The code specifically provides that the sale may be public or private and at any time or place and on any terms commercially reasonable. § 85-9-504(8). Purchase by the. secured party at private sale is permissible if the col- ’ lateral is of a type customarily sold on a recognized market or is the subject of widely distributed price quotations. We have held that used automobiles are not the type of collateral sold on a recognized market! Norton v. National Bank of Commerce, 240 Ark. 143, 398 S. W. 2d 538. Yet I do not see how it can be said, as a matter of law, that there is not a widely distributed' standard price quotation for used cars. It seems more in keeping with the recognized purpose of the commercial code to eliminate “red tape” in such dispositions of collateral to say that there is a question of fact as to whether there is a “widely distributed standard' price quotation.”

Mr. W. W. Bryant, Jr., a man of wide experience, in the automobile business since 1936 and who has. served as an appraiser of automobiles for 19 years, testified on this point. He stated that the NADA manual is a widely distributed guide or index used as a guide by all automobile dealers, banks and finance companies. According to him, it shows not only the factory average delivered price and loan value for each series in the truck line, but also the retail value and wholesale value. He stated that this manual is also used by insurance companies for replacement purposes and as “a unit symbol” on cars and trucks. ,/

Even though the circuit judge “directed a verdict,” the sole question for our determination is whether there was substantial evidence to support the judgment, Strange v. Planters Gin Co., 142 Ark. 100, 218 S. W. 188; Casteel v. Lee Williams Theatres, Inc., 221 Ark. 935, 256 S. W. 2d 732. I submit that the testimony of Bryant constitutes substantial evidence. His testimony could well be taken to show that there was a widely distributed standard price quotation for the type 6f collateral involved here. I do not think that we could say that this book was or was not a widely distributed standard price quotation as a matter of law.

The evidence indicates that the dealer realized a profit of $5.00 on his resale of the truck and that his private sale bid was $500 more than the price listed in the NADA manual. This result could well be more favorable to a defaulting buyer than the usual ceremonial public sale, where the seller can usually bid without competition.

I would affirm the judgment.

Harris, C. J., joins in this dissent.

        Shore v. Coats, 29 S. D. 603, 137 N. W. 402 (1912), it was said that the -request must be reasonable and proper.


author: Dale L. Bumpers, Special Justice. John A. Fogleman, Justice,

text:
    Odell SMITH et al v. William A. BEALL
    5-5036
    451 S. W. 2d 195
    Opinion delivered March 9, 1970

      Theodore L. Lamb and H. Clay Robinson, for appellant.

      Herrod ¿r Cole, for appellee.
   Dale L. Bumpers, Special Justice.

This cause was submitted to the lower court without a jury on a number of agreed Stipulations and Exhibits. The essential facts were that the Appellee, William A. Beall, had been a member of the Teamsters Union since 1941, and was covered under a Pension Plan operated by Appellants. On February 1, 1964, the Pension Plan was amended to provide for disability payments of $100.00 per month to any employee member who thereafter became totally and permanently disabled.

Both parties agree that if Appellee became totally and permanently disabled after February 1, 1964, he is entitled to the disability benefits under the Plan, but that if he became totally and permanently disabled prior to February 1, 1964, he is not so entitled.

On September 9, 1963, Appellee became dizzy, blacked out and was carried to the doctor’s office. On September 12, 1963, Dr. John Adametz, a Little Rock Neurosurgeon, performed a Pallidotomy on the right side of his brain. He was discharged on September 19, 1963. He re-entered the hospital on January 15, 1964, and on January 16, 1964, a Pallidotomy was performed on the left side of his brain. He was discharged from the hospital on January 24, 1964.

On September 9, 1964, Dr. Adametz filled out an attending physician’s report for Appellants and answered a question as follows:

“When in your opinion may claimant be expected to do any kind of work?
Total and permanent disability since 6-64.”

Exhibit No. 6 to the Stipulations is a statement from Dr. Adametz as follows:

“December 8, 1965
TO WHOM IT MAY CONCERN:
Re: William A. Beall
This is to verify that the above named patient was declared totally and permanently disabled by me for the first time on September 9, 1964. This was in a report to the Central States Pension Fund Insurance Company on that date.
At no time have I ever declared Mr. Beall totally and permanently disabled to the Social Security Board. My only report to them concerning this patient was dated March 31, 1964, at which time I indicated that I expected a slow improvement in his condition following his surgery, a Pallidotomy for his Parkinson’s disease.
Very truly yours,
John H. Adametz, M.D.”

On June 2, 1964, Appellee was awarded Social Security, .effective as of April, 1964.

Stipulation No. 8 was as follows:
“8. Parties hereto agree and stipulate that if the plaintiff is entitled to recover upon his amended complaint and based on Ark. Stats. 50-705 that he hás a life expectancy of 29 years and that as so stated in the booklet he is entitled to $100.00 per month for life that he would be entitled to a '..judgment of $34,200.00, plus 12% penalty and attorney fees according to Ark. Stats. 66-3238.”

Stipulation No. 9 between the parties stated:

“It is further stipulated and agreed that if plaintiff, William A. Beall, was brought to the stand to testify that his testimony would reveal that on the 9th day of September, 1963, he became dizzy, blacked-out and was carried to the doctor’s office and after that date he has not been gainfully employed by Jones Truck Lines or any other employer.

The lower court found that Appellee became totally and permanently disabled after February 1, 1964, was therefore covered under the Pension Plan, and rendered judgment in favor of Appellee for (1) $4,900.00, representing the number of payments at $100.00 per month Appellee was entitled to as of the date of judgment, “plus 5% additional sums” of $245.00, (2) 12% penalty of $617.40, (3) $16,912.80, which is $29,300.00 reduced to its present .value based on a 25 year life expectancy and a 5% investment, (4) 12% penalty on $16,912.80, amounting to $2,029.54, and (5) an attorney fee of $3,000.00. Appellants appeal from the adverse judgment and Appellee cross-appeals from that part of the judgment reducing the $29,300.00 to its present value. The record does not resolve the discrepancy in Appellee’s life expectancy, set at 29 years in the Stipulation, and 25 years in the judgment.

For reversal, Appellant argues that since Appellee was confined to his home from September 10, 1963, and never returned to work, that he was totally and permanently disabled as of that date, and since that date is prior to February 1, 1964, Appellee is not covered under the Plan.

The argument is persuasive, but the record does not corroborate the argument. On the contrary, the record indicates that Appellee became totally and permanently disabled September, 1964. The fact that Appellee was confined to his home from September, 1963, and did not return to work after this date is not conclusive evidence of Appellee’s total and permanent disability as of that date. The record does not reflect that Appellee was both totally and permanently disabled prior to June, 1964. Dr. Adametz apparently told the Social Security Board on March 31, 1964, that he expected Appellee’s condition to slowly improve.

The Pension Plan defined total and permanent disability as follows:

“Disability shall be deemed to be total and permanent whenever the employee is totally disabled by bodily injury or disease and will be permanently, continuously and wholly prevented thereby for life from engaging in any occupation and performing any work for wage or profit. . . .” ■

The attending physician 'is certainly in the most knowledgeable position to determine when the Appellee was both totally and permanently disabled. If we concede that Appellee was totally disabled from September, 1963, when he was first confined to his home, the evidence still justifies the lower court’s finding that he was not permanently disabled until June or September, 1964. By the terms of the policy, both conditions must be met.

Appellant cites cases where we have held that the existence of disability fixes liability and not the proof thereof. Missouri State Life Insurance Company v. Case, 189 Ark. 223, 71 S. W. 2d 199, Aetna Life Insurance Company v. Davis, 187 Ark. 398, 60 S. W. 2d 912. Nevertheless, there is substantial evidence to uphold the lower court’s finding that total and permanent disability occurred after February 1, 1964, and the holding should therefore not be disturbed. Wallis v. Stubblefield, 216 Ark. 119, 225 S. W. 2d 322, Hurst v. Flippin School District No. 26, 228 Ark. 1151, 312 S. W. 2d 915.

We are unable to find any law or reason for the lower Court’s award of $255.00, representing “5% additional sums” on the award of $4,900.00. The judgment must therefore be modified to eliminate this item.

The Appellant’s contention that Appellee is not entitled to a penalty and reasonable attorney fee because the judgment, as reduced, was not the precise amount sued for, is without merit. The judgment was for the exact amount stiuplated between the parties, and was reduced to present value as a matter of law. This reduction would not preclude an award of a reasonable fee. The stipulation was an agreement between the parties agreeing on the amount plaintiff was entitled to receive, if the Court found plaintiff’s disability to be covered under the plan. We can see no distinction between a stipulation between parties agreeing to the amount the plaintiff is entitled to receive, if anything, and an amendment to conform to the proof after all the proof has been adduced. In the latter instance, we have held that a penalty and attorney fee should be allowed. Old American Life Insurance Company v. McKenzie, 240 Ark. 984, 403 S. W. (2d) 94.

Had appellant confessed judgment to a lesser amount than sued for, then the penalty and attorney fee would not be allowed. Armco Steel Corp. v. Ford Const. Co., 237 Ark. 272, 372 S. W. (2d) 630. However, appellant agreed to the amount appellee should receive if covered but denied the coverage.

Ark. Stats. Ann. 66-3238 & .66-3239 are penal and must be strictly construed. State Farm Mut. Automobile Ins. Co. v. Pennington, 215 Fed. Supp. 784. But we are not willing to say that the reduction of future loss to present value constitutes a failure to obtain judgment for the full amount, where the full amount is agreed to between the parties. ,

The Appellee strongly argues that the lower court erred in reducing judgment for future payments to their present value. Stipulation No. 8 was a stipulation as to the total amount Appellee was entitled to receive if the lower court found that he was covered under the plan. This amount included future payments. The court’s judgment is based on the stipulation. However, a stipulation of fact cannot change the law, and as a matter of law, recovery of future payments must be reduced to their present value, based on life expectancy. Metropolitan Life Insurance Co. v. Harper, 189 Ark. 170, 70 S. W. (2d) 1042.

The Appellee has requested an additional attorney fee for services rendered in this appeal and we believe he should be, and is hereby, awarded an additional fee of $2,000.00.

Affirmed as modified on direct appeal and affirmed as to the cross-appeal.

Byrd, J., disqualified.

Fogleman, J., concurs in part and dissents in part.

John A. Fogleman, Justice,

concurring in part and dissenting in part. I concur in the affirmance, but not the modification of the judgment. The 5% "additional sums” were allowed by the court on $4,900 representing 49 payments at $100 per month to which appellants had become entitled as of the date of the judgment. Appellants say that appellee was not entitled to this $245 in interest. They argue simply that there is no basis in law or fact for this allowance. Yet appellee was entitled to interest on each payment from the date it became due. United Fidelity Life Insurance Co. v. Dempsey, 193 Ark. 204, 98 S. W. 2d 943; Mutual Life of New York v. Holder, 194 Ark. 128, 105 S. W. 2d 865. The first installment was due December 1, 1964. The judgment was entered on January 7, 1969. Interest on the first installment at 6% per annum would have amounted to $24.62. Each succeeding installment would have borne interest in an amount decreasing at the rate of $0.50 each. It can clearly be seen that the amount of interest to which appellee was entitled far exceeded the $245 allowed. The fact that the trial court gave the wrong reason for this allowance does not make the judgment erroneous. I would affirm the judgment.


author: Carleton Harris, Chief Justice.

text:
    Jonathan P. SHERMER et al v. Billy R. HAYNES et al
    5-5190
    451 S. W. 2d 445
    Opinion delivered March 16, 1970
    [Rehearing denied April 13, 1970.]

      Edgar E. Bethell, for appellants.

      Sam Sexton, Jr., for appellees.
   Carleton Harris, Chief Justice.

The issue in this case is the construction of a restrictive covenant contained in a subdivision plat limiting use to “residential purposes only.” Appellees, owners of various lots in Rockwood Terrace Addition, located within the city of Fort Smith, instituted suit against Jonathan P. Shermer, appellant herein, and owner of three lots in said addition, seeking an injunction prohibiting Shermer from making any use of the property he owned in Rockwood Terrace, other than a use for single family residential purposes. Appellant answered, setting out that he proposed to build an apartment building for residential use, and he asked that the court interpret the language of the restrictive covenants, and enter a declaratory judgment determining that he was entitled to build an apartment structure upon the property. In response to the prayer for declaratory judgment, appellees stated that such issue was moot for the reason that the court had already entered a declaratory judgment on the identical issue which Shermer sought to have relitigated; that the issue was res judicata.

On trial, the court stated that it was considering the record in Case No. 5551, styled J. P. Shermer, et al v. Billy Haynes, et al, the plat and Bill of Assurance of Rockwood Terrace subdivision, the zoning ordinances of the city of Fort Smith, the proposed plans for a 36-unit apartment project which Shermer proposed to construct on the three lots that he owned, and the testimony of the parties. The court held that the principal issue, i. e., the use to which Lots 10, 11 and 12 might be put by Shermer, had been decided in Case No. 5551 adversely to Shermer, and the issue was thus res judicata. The court further held that the plat and Bill of Assurance of Rockwood Terrace, when considered in the entirety, made manifest an intent to restrict the use of the lots in the said subdivision to a single residence per lot. The court further found that appellees would suffer irreparable harm and injury if Shermer were permitted to construct the 36-unit apartment project in Rockwood Terrace. Shermer was enjoined and restrained from constructing or attempting to construct the apartment, and his prayer for a declaratory judgment was dismissed. From the decree entered in accordance with these findings, appellant brings this appeal. For reversal, it is first urged that the court erred in holding that the restrictive covenants limited development to single family residences as distinguished from other residential uses. It is then asserted that the court erred in holding that appellant was barred by the plea of res judicata.

We first discuss the second contention, and in doing so, it will be necessary to review the earlier suit. In June of 1968, Shermer and wife filed a complaint (Case No. 5551) setting out their ownership of the previously mentioned lots in Rockwood Terrace, and reciting that the board of commissioners of the city of Fort Smith had passed an ordinance which zoned the property as C-4, a classification that would permit the use of the property for commercial purposes. The complaint then asserted:

“* * * Despite the property being zoned C-4, the above plat was filed of record on November 27, 1962, establishing a restriction to the effect that said property shall be used exclusively for residential purposes. Said restriction is therefore .null and void.”

Shermer prayed that the court issue its decree construing the restriction oh appellees’ property, declaring said restriction invalid and unenforceable. In the alternative, it was prayed for judgment declaring that “the erection of a C-4 (commercial) building” was not prohibited by any restriction as to the use of said premise. The lot owners in Rockwood Terrace answered, pleading that the restrictive convenants provided “all lots shall be used for residential purposes only,” and asking that the complaint be dismissed. The court found that the property had been zoned commercial, or C-4, before the plat for Rockwood Terrace, with its restrictive covenants, had been filed; however, the court stated:

“* * # In this instance, certainly residential is a higher standard than commercial and it must be assumed, from the action taken within its discretion, that the Board recognized the same in this instance by approving the plat with the restrictive covenants. * # #

"* # * The City Government was certainly empowered so to do and has acted within its discretion in this regard. Citizens, in reliance upon this action, have entered into contracts and undertakings between themselves and others, including lending institutions not parties to this action; so that now to say that it was a slip, or a mistake, and that the original C-4 commercial zoning applies, or takes precedence over the plat with restrictive covenants, under all of the circumstances of this case would be not only inequitable, but unjust and an abridgement of contracts, as well as undue hardship to those concerned, directly and indirectly, in this particular case.”

The court held that the restrictive covenants “are hereby declared to be valid and enforceable and declared valid and enforceable as to all of the 33 lots in said Rockwood Terrace Addition to the City of Fort Smith, Arkansas, and plaintiffs are directed to pay the cost of this action.”

We do not agree that the decree in Case No. 5551 barred appellant from seeking a construction of the term, “residential purposes only” in the instant litigation. What is the test in determining a plea of res judicata? In Hastings v. Rose Courts, Inc., 237 Ark. 426, 373 S. W. 2d 583, this court, quoting from an earlier case, said:

“ ‘The test in determining the plea of res judicata is not alone whether the matters presented in the subsequent suit were litigated in a former suij: between the same parties, but whether such matters were necessarily within the issue and might have been litigated in the former suit.’ The test is not whether the matters in the second suit were actually litigated in the former suit between the parties, but whether such matters were necessarily within the issues and might have been litigated in the former suit.”

We also quoted language from the United States Supreme Court decision in Russell v. Place, 94 U. S. 606, as follows:

“It is undoubtedly settled law that a judgment of a court of competent jurisdiction upon a question directly involved in one suit is conclusive as to that question in another suit between the same parties. But to give this operation to the judgment it must appear either upon the face of the record, or be shown by extrinsic evidence, that the precise question was raised and determined in the former suit. If there be any uncertainty on this head in the record — as, for example, if it appear that several distinct matters may have been litigated, upon one or more of which the judgment may have passed, without indicating which of them was thus litigated, and upon which the .judgment was rendered,— the whole subject-matter of the action will be at large, and open to a new contention, unless this uncertainty be removed by extrinsic evidence showing the precise point involved and determined. ***”

We agree with appellant that the issue in No. 5551 was whether the zoning ordinance or the restrictive covenants controlled permissible uses — not what residential use could be made of the property. It was not necessary to define “residential purposes only” — nor to determine whether the phrase meant single family residences or multiple residences. In fact, appellant was seeking to place a commercial building on the premises. The court simply held that the restrictive covenants were binding, rather than the zoning ordinance, and this was the only matter adjudicated.

Relative to the first contention, let it be remembered that courts do not favor restrictions upon the utilization of land, and if a particular mode of utilization is excluded, the exclusion must. clearly appear. Moore v. Adams, 200 Ark. 810, 141 S. W. 2d 46. In 14 A. L. R. 2d, there is an annotation upon the subject, “Multiple Residence as Violation of Restrictive Covenant.” At Page 1881, we find:

“Restrictions which, without more, merely limit the use of the property to ‘residence’ or ‘dwelling’ purposes have generally been held not to have the effect of forbidding the erection or maintenance of multiple dwellings, the courts taking the view that such terms were directed only at the type of use to be made of the property, and not at the number of families which might make such use. However, the Michigan courts have consistently given a narrower meaning to the word ‘dwelling,’ holding that it connoted a single-family residence.”

At Page 1403, we find:

“Another common group of restrictions frequently relied upon to exclude multiple dwellings are those built about the terms ‘residence’ or ‘residential purposes.’ It is the weight of authority that such a restriction, in and of itself, does not prohibit use of the land for the various types of multiple dwellings, the courts frequently remarking that the effect of the term is only to limit the use of the property to living as distinguished from business or commercial uses.”

Again, at Page 1404:

“The courts have consistently held that a restriction of property to ‘residence’ or ‘residential’ purposes does not, in the absence of some further qualification, ban the erection or maintenance of apartment houses upon the property, so long as the structures are not to be used for other than residential purposes.

It is evident that the exclusion language presently before us is rather general, the type which the courts have almost uniformly held does not restrict to single family residences. This too is commented on in the annotation at Page 1409, as follows:

“Although the courts are in substantial agreement that a restriction to ‘residence’ purposes, standing alone, does not prohibit multiple dwellings, this unanimity disappears when the modifying terms ‘a,’ ‘one,’ or ‘a single’ is prefixed to the word 'residence.’

The intent to restrict the use of Rockwood Terrace to single family residences could have been clearly and unambiguously shown.

Appellees point out that one of the restrictive covenants in the present case requires that “all residences are to have a minimum of 1,200 square feet of living area, exclusive of carports, garages or porches.” This is the strongest circumstance, if it may be so classed, to support the argument of the appellees, since the plans for the apartment house only call for 520 square feet in a particular unit. Still, there will be considerably more than 1,200 square feet of living area in the apartment building, and there is nothing in the clause which calls for 1,200 square feet “in each unit,” or “each single residence.” We, of course, are not permitted to supply the missing words.

From what has been said, it is apparent that the trial court erred in its findings. The decree is reversed, and the cause remanded for the entry of a decree consistent with this opinion.

It is so ordered.

      A plat of Rockwood Terrace was introduced into evidence, the reverse side containing the Bill of Assurance.

      Under C-4, many uses were permitted, including multi-family apartments; however, Shermer was only seeking, in the litigation, the right to construct a commercial building.

        Timmons v. Brannan, 225 Ark. 220, 280 S. W. 2d 393.

      Even then, as pointed out in the annotation at Page 1381:
      “There is a wide split of authority as to whether the restriction to ‘one,’ ‘a’ or ‘a single’ residence, dwelling, house, 01 building, will effectively exclude multiples, and considerable authority may be found for either view.”
      It is then pointed out that, when the adjective, “private,” to the general terms, “dwelling” and "residence,” is added, it appears that the majority of the courts are agreed that an intent to restrict the use to single-family dwellings is sufficiently shown; also, “one-family” residences or dwellings have generally been held to exclude multiples.


author: George Rose Smith, Justice.

text:
    Jones PIGUE, Ex’r v. Lena Pigue GROOMS
    5-5205
    451 S. W. 2d 181
    Opinion delivered March 16, 1970

      Kirsch, Cathey ir Brown, for appellant.

      L. V. Rhine, for appellee.
   George Rose Smith, Justice.

The decedent, R. W. Pigue, died testate on January 28, 1969, owning 431 acres of farm land. Pigue’s will divided the land into five parcels, varying in size from 71 to 120 acres, which were left as separate devises to four of the decedent’s surviving children and to the issue of a deceased child. A sixth child received a gift of urban property only.

Before his death Pigue had rented all the farm lands to Carlton Smith for $6,000, evidenced by a promissory note due in November. The appellant, as executor of the will, filed a petition in the probate proceeding asking that he be directed to collect, the rent note when it came due and to distribute its proceeds among the devisees of the farm land in proportion to the assessed valuation of the various tracts. That proposal was approved by all the devisees except the appellee, a daughter of the testator, who questioned the probate court’s jurisdiction in the matter and also resisted the petition on its merits. After a hearing the probate court found that the granting of the petition would actually be for the best interest of the estate and the devisees, but the court concluded that it had no jurisdiction in the matter. This appeal by the executor is from the ensuing order of dismissal.

Preliminarily, the appellee has filed a motion to dismiss the appeal as being moot, because during the pendency of the appeal the probate court entered an order partly closing the estate and directing the executor to release the lands to the various devisees. That order, however, expressly recited that it was without prejudice to the present appeal; so we find no merit in the suggestion that the case is moot.

We turn first to the jurisdictional question. At common law rent which did not become payable until after the death of the lessor did not pass to his personal representative. Instead, such rent was treated as real estate and descended at once to the heirs or devisees. Dean v. Stuckey, 234 Ark. 1103, 356 S. W. 2d 622 (1962). Hence, before the passage of our Probate Code the rental note now in question would not have been an asset in the hands of the executor, for it is conceded that neither the real estate nor the note is needed for the payment of debts.

The Probate Code, however, enlarged the probate court’s jurisdiction over the decedent’s real property. The Code, as amended in 1961, provides that “when and as long as the court finds it . . . for the benefit of the estate, the personal representative may collect rents and earnings” from the decedent’s real property. Ark. Stat. Ann. § 62-2401 (Supp. 1969). Thus the probate court had jurisdiction to direct the executor to collect and distribute the proceeds of the rental note if that course would be for the benefit of the estate. See Doss v. Taylor, 244 Ark. 252, 424 S. W. 2d 541 (1968).

We think that the executor’s request that the probate court take jurisdiction over the note was demonstrably for the benefit of the estate. The various devisees of the farm lands were scattered geographically within and without the state of Arkansas. Smith, the tenant, would naturally demand the surrender of the note when he paid it. But if the executor had turned the note over to one or more of the devisees, as the appellee insists he should have done, their inability to agree among themselves upon the distribution of its proceeds would have led to difficulties both in the collection of the debt and in the division of the money. Eventually a bill of interpleader or other litigation would probably have been necessary. The pertinent language in the Probate Code was evidently intended to enable the probate court to settle such questions, at minimum expense, in the pending administration proceeding, to which all the interested devisees are* already parties. We therefore hold that the probate court erred in refusing to take jurisdiction of the appellant’s petition.

On the merits we agree with the probate court’s conclusion that, in view of the proof adduced at the hearing, a distribution of the rent in proportion to the assessed valuation of the several parcels is proper in this instance. The annual rent was payable for the use of the 431 acres as a whole, without allocation to the five separate parcels, which differ in acreage, in percentage of cultivation, and in their improvements. The executor testified that he and his attorney worked out the apportionment by assessed values as an equitable solution to the problem. The devisees were notified by letter of the proposal; all except the appellee were satisfied with it.

At the hearing the appellee testified that she wanted to let Smith, the tenant, suggest the allocation of the rent, because he was familiar with the crops grown on the various tracts. Smith, .however, was not called as a witness, nor was any attempt made to show what his allocation would have been. It is obviously possible that he might have awarded the appellee a smaller amount than she would receive under the executor’s proposal, in which case the appellee has. not been prejudiced. At the hearing both sides had an opportunity to develop their contentions as they saw fit. Upon the proof adduced, we cannot say that the trial court’s announced approval of the executor’s method of distribution is against the weight of the evidence.

At the trial there were also two minor controversies about the payment of taxes on the farm lands and about the collection of a small insurance claim arising from windstorm damage to the improvements on the tract devised to the appellee. Both those matters appear to have been resolved to the satisfaction of the litigants and need not be discussed.

The trial court’s dismissal of the executor’s petition for want of jurisdiction is- reversed, and the cause is remanded for further proceedings consistent with this opinion.


author: Lyle Brown, Justice.

text:
    R. C. SMITH v. STATE of Arkansas
    5469
    451 S. W. 2d 744
    Opinion delivered March 16, 1970
    [Rehearing denied April 20, 1970.]

      E. V. Trimble, for appellant.

      Joe Purcell, Attorney General; Don Langston, Asst. Atty. Gen., for appellee.
   Lyle Brown, Justice.

This is an appeal by R. C. Smith from a robbery conviction. No brief was filed by appellant. The motion for new trial alleges that the verdict is contrary to the law and the evidence, that the conviction is in violation of the equal protection and due process clauses of the State and Federal Constitutions, and that he was convicted without positive identification, and without corroborative testimony. In accordance with our Rule 11, the Attorney General has abstracted the record and properly briefed those assignments of error which may appear to be beneficial to appellant.

The prosecuting witness and the accused were the only witnesses. Waydeen Cochran testified that in January 1968 she operated a grocery store in Little Rock; that R. C. Smith forced her at gunpoint to open her cash register, from which Smith took between seven hundred and eight hundred dollars; and that within approximately one hour the police confronted her with Smith and she made positive identification.

R. C. Smith testified on direct examination that he was acquainted by sight with the prosecuting witness; that he knew the location of her store; and that he positively did not rob her. On cross-examination it was brought out that he did, on the day in question, enter the store to make a purchase; that he parked his car in front of the store and left the motor running; that as he left by way of the front door a policeman stopped him and after brief questioning apparently took him to the station. Further investigation revealed that he had on his person some $200 in cash and a pistol. Appellant asserted that the. money consisted of salary he had just drawn and that he had recently bought the pistol for his own protection because "I had been robbed two or three times.”

In our summary of the testimony we have not omitted any evidence which would shed light on the* points listed by appellant in his motion for new trial. The evidence is sufficient to support the verdict and to meet the test of our robbery statute. No evidence was offered which would even imply that any constitutional rights were violated. From the summarized evidence it is apparent that the assertion that the accused was not properly identified is without merit. The defense of lack of corroboration is likewise of no benefit to appellant because Waydeen Cochran was not an accomplice.

Affirmed.


author: John A. Fogleman, Justice.

text:
    Lloyd A. ROBERTSON et al v. Harry C. BERRY et al
    5-5187
    451 S. W. 2d 184
    Opinion delivered March 16, 1970

      Smith, Williams, Friday ir Bowen, for appellants.

      Phil Dixon and Phillip Lyon, for appellees.
   John A. Fogleman, Justice.

Appellants own three adjoining lots in Plaza Terrace Addidon to Little Rock. The Pierces own one on which they live and the Robertsons own two. The dwelling house of the Pierces is located on their lot in the extreme northeast corner of the subdivision at the intersection of Markham and McKinley Streets. The Robertson lots also face on West Markham. The subdivision is bounded by West Markham Street on the north and McKinley Street on the east. It consists of 33 lots, only two of which (those owned by the Robertsons) are vacant.

A bill of assurance for the subdivision was filed by its owners on March 26, 1958, while' it was still outside the city limits. Restrictive covenants provide that all lots and building sites in the addition be used for residential lots only. The covenants run with the land and are binding at least until the year 2000. The owners of 51% of the front footage of all lots in the addition may revoke, alter or amend any of these covenants, conditions or restrictions.

Appellees are owners of most of the other 30 lots in the subdivision, only four of which have any frontage on Markham. The rear of three of appellees’ lots is on McKinley. This street runs alongside another of their lots.

Appellants brought this action to cancel the covenant restricting the use of their property on the ground that the restriction was no longer useful or beneficial for the purposes intended so that an unjust confiscation of their property resulted. The chancellor denied the relief sought, holding that appellants had failed to meet their burden of proof. He found that the testimony showed that cancellation of the restrictive covenants would reduce the value, and otherwise adversely affect the use, of appellees’ property for residential purposes. This appeal from that decree is based upon a contention that the evidence preponderates in favor of appellants and that we should grant the relief on trial de novo. We are unable to agree, however, that the chancellor’s findings are clearly against the preponderance of the evidence. Thus, we affirm the decree.

Appellants rely upon our decisions in City of Little Rock v. Joyner, 212 Ark. 508, 206 S. W. 2d 446, and Storthz v. Midland Hills Land Company, 192 Ark. 273, 90 S. W. 2d 772. They particularly emphasize the following language from the Joyner case:

“. . . [E]quity will and shquld entertain a bill which has the purpose of cancelling a restrictive covenant in a deed as a cloud upon title wherein it is alleged that the conditions surrounding the property have so changed as to utterly destroy its value for the purpose for which the restriction was promulgated to prevent, and that this change of conditions is due to no fault on the part of the petitioner and will work no irreparable injury to others.
‘Stated another way, equity should entertain jurisdiction to cancel a restrictive covenant in a deed where it would be oppressive and inequitable to give the restriction effect as where the enforcement would have no other result than to harass or injure the one without accomplishing the purposes for which originally made.’”

Appellants offered evidence which tended strongly to show that their property had depreciated in value as a result of commercial developments in adjacent areas to an extent unforeseen by anyone at the time of the filing of the bill of assurance. The following facts were stipulated:

Markham is located upon a right-of-way 60 feet wide. From McKinley Street west, it was being widened to four lanes, its width to the east of the property. In December 1968 the daily traffic volume on Markham had reached 15,000 to 16,000 vehicles per day, with a peak volume of approximately 3,100 vehicles between 4:00 and 6:00 p.m. and of 1,500 between 7:00 and 9:00 a.m. It is one of four major traffic arteries feeding western Little Rock, but has a somewhat lower traffic volume than the other three. The traffic rate is expected to increase at the rate of approximately 6% per year. A traffic light was to be placed at the Markham-McKinley intersection within the succeeding few months. The intersection ranks eleventh in the city in frequency of automobile accidents. On days when traffic is especially heavy a policeman is on duty at the intersection directing traffic a,t 9:00 a.m. West Markham is brightly lighted by mercury vapor lights from University Avenue east of the addition for some distance to the west, well beyond this addition.

The street lights are mounted upon large steel poles about 40 feet high, one of which is about two feet west of Pierce’s driveway and another 100 to 150 feet west. A Shell service station was built just across McKinley street from appellants’ property in 1968. A greenhouse just west of the addition is a non-conforming commercial property. It was in existence before the addition was platted or the bill of assurance filed. Hughes Street is the first street west of the addition. The property southeast of the Markham-Hughes intersection is still an undeveloped wooded tract, zoned for apartments. The area north of Markham and west of McKinley is all zoned for family residential use. The property immediately across Markham is a very high type residential area and there are residences across the street from appellants’ three lots.

There are no vacant houses in Plaza Terrace Addition. The addition is a neighborhood of nice, neat, well maintained homes, with neat, orderly, well kept lawns, with every indication of pride in the neighborhood.

Pierce purchased his lot in 1961. Robertson bought one lot on February 24, 1959, and the other on January 25, 1961, both for residential purposes. Pierce moved onto his lot to be closer to town and the stores. Markham Street was described as a typical farm-to-market road 24 feet wide in early 1958. Curbs and gutters were added when Plaza Terrace and Plaza Heights, the addition immediately across Markham, were developed. In 1961 the street was only 28 feet wide, but it has been subsequently widened twice. McKinley Street, now an entrance to the large Mall Shopping Center, was then only a wagon road. The land immediately to the east of McKinley was residential. The Mall Shopping Center is now located between McKinley and University Avenue, only a short distance east and south of the Pierce property.

According to Robertson when he bought his first lot a service station was northeast of the McKinley-Markham intersection, and between McKinley and University, the Plaza Towers Apartments, the Fausett Plaza Building at the corner of Markham and University and a drive-in restaurant were in existence. He testified that Park Plaza Shopping Center had been constructed across Markham, in the next block to the east, except for additions made in the past tour years. A school four blocks to the south has been eliminated and the property is now part of a shopping center. University Avenue, 1,524 feet east of Plaza Terrace Addition, was not four lanes wide. The Georgetown Apartment just across the street forming the south boundary of the subdivision had not then been built. A few houses had been built in the addition.

Pierce’s driveway is only a few feet from, and parallel to McKinley. He complained that some motorists enter the driveway rather than the street and that he has trouble driving out of his driveway during peak traffic hours. He also testified that no lights are ever needed in his house at night because of the brightness of the street lights and .of the lights in the shopping centers.

Neither the Pierces nor the Robertsons have ever listed their respective properties with a real estate agent for sale, nor have they made any effort to sell them. Neither Pierce nor Robertson professes to know whether his property could be sold for residential purposes or the price it might bring. Each gave Shell Oil Company an option, never exercised. Pierce’s property for which he paid $22,500 would have brought $75,000. Robertson gave an option to lease, but he felt that he could obtain more money from the oil company than he could for residential purposes.

The president of a savings and loan association, which usually loaned 80% of the cost of house and lot on desirable residential property, would be unwilling to lend more than 50% for residential construction on. appellants’ lots. Although he did not consider that the property was now suited for residential purposes, he stated that its value had not been destroyed for those purposes. He admitted that his company relied ori restrictive covenants.

A real estate agent found a change in the market for houses on Markham during the last three years, because of traffic volume, so that a longer period of time was required to find a purchaser for them than was necessary in other locations. While it was her opinion that appellants’ property had depreciated in value from 35% to 50%, she would not be surprised to learn that a recognized loan company would make an 80% loan for residences on the Robertson lots. She had sold two homes in the subdivision and would expect the buyers to be able to rely upon the restrictions in the bill of assurance.

Appellants called as a witness Russell McLean, a contractor and professional appraiser, who has been acquainted with the area for 50 years, very closely since 1950. This witness related the history of the remarkable development making University Avenue, near its Markham crossing, known as the “miracle mile” and the intersection one of the most important commercially in Arkansas. He considered everything between the addition and University, both north and south of Markham, as commercial, and Park Plaza and the Mall two of the state’s largest shopping centers. He was of the opinion that appellants were suffering from bad planning because of frontage on Markham, and that their lots were undesirable for residential purposes because of the two large shopping centers, and the lack of a buffer between commercial and residential use. He also expressed the opinion that the property in the subdivision had reached its peak insofar as residential use is concerned, as all subdivisions tend to do when the last lot is developed. He felt that the property must seek a higher level to increase in value. The three lots in particular and the entire subdivision to the extent appellants’ property did not serve ás a buffer were said by him to be süffering from economic obsolescence brought on by surrounding developments. He opined that a house built on Robertson’s property would sell for only about one-half of its cost because of the lights, noise and traffic, some of which continues 24 hours per day. He thought that commercial use of appellants’ property would not harm the remaining property any more than it is already injured by commercial use across McKinley.

The testimony of C. V. Barnes, a real estate counselor, was of the same tenor as that of McLean. He stated that the purpose of protective covenants is- to assure the purchasers within a subdivision of the similarity of character of the improvements placed therein, but not to guarantee stabilization of value. In his opinion, removal of the restrictions would tend to offset the decrease in value of property in the addition suffered by reason of the development of adjacent property. He admitted that the four abutting lots would be affected by commercial use of appellants’ property to an extent dependent upon the particular use to which the three lots were put. He felt that the Pierce residence could be sold for some price lower than that identical residential property in the interior of the subdivision would bring. He thought that it would be difficult to sell the Robertson lots for residential purposes, but acknowledged that they would have some value for that purpose. 'He classified the neighborhood as being permanent as any, but not as permanent in residential character as a, subdivision not surrounded by what he called “higher use.” It was his opinion that the owners of all the property in the subdivision would receive more for their money by removal of the restrictions to permit development.of the property for these “higher uses.”-

Appellees produced testimony tending to show that they had purchased lots in the subdivision, as late as August, 1968, in reliance upon the restrictive covenant, and that in many instances the restriction, was the deciding factor in choice of location. Proximity of certain schools, a church and the shopping centers was also considered a desirable factor by certain lbt owners. The owner of the adjoining lot on Markham had built a home in December, 1956. He did not look upon his home as an investment, but hoped to live there the rest of his life. He is a service station operator who felt that such an operation is not a .desirable neighbor for residential property. The owner of one of the lots adjoining appellants’ on the south was of the opinion that certain commercial uses of appellants’ property (such as a service station) created hazards from automobiles, gasoline, etc. because of a downward slope away from Markham. Some witnesses characterized the subdivision as stable, and emphasized the fact that there had been few changes in ownership or occupancy.

Appellees also offered the testimony of Sam Reynolds, a real estate broker. He described Plaza Terrace Addition as an extremely stable neighborhood of homes in an appraisal range from the high twenty to low thirty thousands. He found 15 of the original owners still living in the subdivision, and á turnover smaller than found in the usual subdivision. He valued the Robertson lots at $3,500 each for residential purposes, and the Pierce residence at from $23,000 to $26,000. He predicted an immediate and accelerating decline in values of the remaining lots if appellants’ property was used for purposes other than residential. He foresaw apprehension on the part of owners and misgivings by prospective purchasers affecting the whole subdivision if the restrictions were lifted, even for the three lots only. He admitted that the lots along McKinley and those facing the Georgetown Apartments had suffered some depreciation in value and that appellants’ property was not as desirable for residential property as it had been. He felt that the interior lots were more desirable although he believed that they would undergo some depreciation in value. He saw tendencies toward stabilization of values and neighborhood characteristics resulting from bills of assurance. He found that the entire subdivision had a potential for a highly valuable commercial use 15 to 20 years hence but had discarded the idea of attempting to acquire the ownership as one block at present.

The manager of the mortgage loan department of a savings and loan association testified that appellants’ lots had value for residential purposes and that he would make an 80% loan for residential construction on either of the two vacant lots to a borrower with a good credit rating and a steady income, or a 90% loan to certain preferred borrowers.

Henry M. deNoble, former Director of Community Development and later Director of Planning and Traffic for the City of Little Rock, diagnosed removal of the restrictive covenant on the three' lots as cancer-like. It was his opinion that the remainder of the subdivision would lose its residential character. He gave examples of other predominantly residential areas in Little Rock through which traffic volumes were at least as great as that passing appellants’ lots. He considered the subdivision well planned and still desirable as a residential area. McKinley Street seemed to him to be an adequate buffer between the residential and commercial areas.

Whatever may be said about the impairment of the value of appellants’ property for residential purposes, there is evidence that its value for residential purposes has not been destroyed. There is impressive evidence from which it could reasonably be found that removal of the restrictive covenant would materially injure appellees, who acquired their property in reliance thereon. After carefully weighing the evidence, we cannot say that conditions have so changed since the filing of the bill of assurance as to make the covenants useless in securing the benefits to purchasers sought to be protected thereby. To say the least, we cannot say that the chancellor weighed the evidence incorrectly.

The decree is affirmed.

      C. V. Barnes testified that this service station was not built until early 1960.

      A Texaco service station now occupies this site.

      C. V. Barnes testified that these apartments were built in 1963 and 1964.