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

text:
    CONSTITUTION LIFE INSURANCE CO. v. M. D. THOMPSON & SON, INC., A Corporation
    5-5622
    475 S.W. 2d 165
    Opinion delivered January 17, 1972

      Hodges, Hodges ér Hodges, for appellant.

      Pickens, Pickens &r Boyce, for appellee.
   Conley Byrd, Justice.

The issue on this appeal is when appellant Constitution Life Insurance Company became liable on a $10,000 substandard risk life insurance contract between it and Vance M. Thompson. Appellee M. D. Thompson & Son, Inc., is the beneficiary. The trial court held that appellant was liable from the date Vance Thompson accepted appellant’s counteroffer and paid the premium. On appeal appellant contends that it is not liable because Thompson died before the policy was issued.

Buddy Hackett, appellant’s soliciting agent, testified that Vance Thompson carried a substantial amount of term life insurance that was either terminated or reduced in half upon reaching age 70. Application was made to Buddy Hackett for $100,000 term life insurance. Hackett, through Harry Grimes, appellant’s general agent, determined that Thompson’s request for the insurance should be made to appellant in two $50,000 applications. The first $50,000 application was approved and a policy was issued. The second $50,000 application was made within a matter of days after issuance of the first policy and with the understanding of all parties that appellant would have to shop the application for reinsurance. Hackett received a telephone call about noon on March 14th from Jerry Weiner, the director of appellant’s substandard division of life sales. In answer to a question as to what Jerry Weiner told him, Hackett testified:

“He said, ‘On that Thompson case, we can’t go $50,000,’ and that was the $50,000 policy that we applied for; he said, ‘We will go $10,000.’ And I said, ‘Well, give me a policy number so I can call Mr. Thompson and put it in force.’ And he said, ‘I don’t have the policy number. I will have Jean call you back.’ And I said, ‘Well, what do you think about some additional coverage on Mr. Thompson at a later date?’ And he said, ‘Well, that’s all that the Company that we participate with wants at this time. You can give us another try at it in about six months.’ ”

Within an hour, Jean Gorski, the assistant director of life sales, called and gave Hackett the policy number and the semiannual premium amount. Hackett thereafter called Thompson who agreed to accept the $10,000 coverage and mailed a cashier’s check for the premium to Hackett on which the policy number was stated. Hackett delivered the premium to Harry Grimes on Saturday the 15 th. Thompson was killed in a car accident on Sunday the 16th.

Harry Grimes verified that he had received the cashier’s check for the premium on the 15th. When he learned of Thompson’s death, he notified appellant and received instructions to return the policy upon receipt by him because the policy was not issued until the 17th and thus not in force. He also returned the cashier’s check for the premium to the personal representative of Thompson’s estate, as directed by appellant.

Jean Gorski testified that she was the assistant to the Director of Life Sales in the Agency Department of Constitution Life. She relayed the information to Hackett giving the policy number and the semiannual premium. The $50,000 application was changed to $10,000 and all the signatures blocked out as it would be necessary to obtain new signatures. The policy was not issued until the 17th and was mailed by her on the 18th. On cross-examination Jean Gorski testified that at the time she gave Hackett the policy number and the premium amount all judgments had been made and appellant had agreed to issue the policy.

Virjean Helmer, the assistant manager of Bankers Life & Casualty, one of the many insurance companies owned by John McArthur, testified that she handled all of the clerical procedures that take part in the issuance of some 4000 policies a day for seven companies which included appellant. From the records kept in her office she verified that the policy was ready for issue on March 14, that on that date Gorski had given the “table rate 5” to the broker, Mr. Hackett, and that the policy was issued on March 17 “C. O. D., out for signature.” On cross-examination she testified that áppellant decided to issue the policy on the 14th and the only thing to be done thereafter was mechanical.

For reversal of the judgment holding that the policy was in effect on the date of Thompson’s death, appellant relies upon Dove v. Arkansas National Life Insurance Company, 238 Ark. 1033, 386 S. W. 2d 495 (1965), and Employers Protective Life Assurance Company v. Gatlin, 246 Ark. 244, 437 S. W. 2d 811 (1969). In the Dove case both the application and the binder receipt upon which the insured relied provided that the insurance would become effective from the date of approval by the Company’s authorized agents. Since the applicant died before such approval there was no insurance. In the Gatlin case, Gatlin made application to a soliciting agent for hospitalization insurance on an application that provided that the insurance policy would not be effective until the policy was issued. Notwithstanding that the soliciting agent told him it would be effective from the date of the receipt for the premium, we held that the soliciting agent had no authority to waive the terms of the application and that no insurance was in effect until the policy was issued.

We find that neither Dove nor Gatlin is controlling here. As we view the record Thompson made an application upon a form prepared by appellant for $50,000 insurance. This application provided that the contract or policy applied for would not be effective until it was issued by the company and duly executed by the company’s president and secretary. However appellant did not accept Thompson’s offer but tendered an oral counteroffer to issue a $10,000 policy that could be placed into effect upon the payment of the semiannual premium. Appellant’s counteroffer was accepted by Thompson and the premium was promptly paid to appellant’s general agent. Hackett’s testimony relative to the oral counteroffer and its acceptance is not only uncontradicted but substantiated by appellant’s own records. In American Casualty Co. v. Rightor, 212 Ark. 779, 207 S. W. 2d 736 (1948), we pointed out that oral contracts entered into by duly authorized agents acting in the apparent or ostensible scope of their authority are binding on the insurance company.

To avoid the oral agreement, appellant contends that Hackett was no more than a soliciting agent; that Thompson did not consent to the issuance of the policy in writing as required by Ark. Stat. Ann. § 66-3206 (Repl. 1966); and that by Ark. Stat. Ann. § 66-3219 (Repl. 1966), temporary life insurance is prohibited. We find no merit in any of the arguments.

In the first place Hackett made no representations except those authorized by personnel in appellant’s home office. Thus there is no reliance upon the representation of a soliciting agent but upon the representations of appellant’s home office personnel.

The proof shows that not only did Vance Thompson make the original application in writing for a $50,-000 policy but that he consented to the issuance of the $10,000 policy by writing his personal check to the Bank of McCrory for the cashier’s check upon which he caused the policy number to be noted and the cashier’s check mailed to the agent. The writing of his personal check alone would appear to be a sufficient consent in writing to comply with Ark. Stat. Ann. § 66-3206 (Repl. 1966).

Appellant’s third argument is that temporary life insurance or a binder therefor is prohibited by Ark. Stat. Ann. § 66-3219. However this statute specifically provides that it shall not apply to life insurance. Appellant points to no other statute prohibiting oral contracts for insurance. Our perusal shows Ark. Stat. Ann. § 66-3212 with reference to contents of policies in general; Ark. Stat. Ann. § 66-3215 requiring officers or attorney-in-fact to execute policies; Ark. Stat. Ann. § 66-3220 requiring prompt delivery of policies after issuance; and Ark. Stat. Ann. § 66-3305 requiring an entire contract clause. Couch on Insurance 2d § 14:11 with reference to such^. statutes states:

“Some courts find in standard policy laws or in statutes which require a full expression of the terms of the contract in the policy a requirement of a writing for a contract of insurance. Other authorities, however, interpret a statute regulating the content of a policy, prescribing a standard form of policy, providing for the filing of copies of policies with the insurance department, providing that the application and all other papers affecting the contract be attached thereto and that the entire contract be expressed in the policy, or regulating the manner of executing an insurance policy, including the requirements of a countersignature, as applying only to a policy which was in fact written and as not invalidating an oral contract to insure or of insurance, especially where the statute is affirmative in terms and contains no negative provisions prohibiting oral contracts of insurance. For example, a statute that insurance companies can make valid policies of insurance only by having them signed by the president and countersigned by the secretary does not prohibit the making of a valid oral agreement to insure. Some authority takes the position that a statute which provides for the signing of policies by designated officers of the insurance company, while applicable generally in accord with its salutary purpose of preventing fraud, does not have application to preclude the making of a valid oral contract of insurance which is intended to be effective only until a formal policy may be issued.”

We can find nothing in our statutes that would invalidate an oral contract such as is here involved for life insurance. Had the General Assembly intended to invalidate oral contracts for life insurance it could have done so in simple language.

Appellant also argues that under the parol evidence rule Hackett’s testimony was hearsay and therefore not admissible. Appellant cites no authority and we know of no authority that prohibits a witness to an oral contract from testifying about the agreements reached.

Appellant raises a number of other issues, some having to do with the competency or incompetency of evidence, but in view of the uncontradicted evidence as to the consummation of the oral contract, the trial court’s rulings thereon, even if erroneous, would become harmless.

Finally appellant contends that the trial court erred in rejecting its counterclaim for the premium. The record shows that the cashier’s check for the premium was returned to a co-executor of the estate and that the co-executor was holding the check for appellant and was at all times ready and willing to deliver the same to appellant. Under the record we can find no error in the trial court’s refusal to grant a money judgment by way of setoff against the amount sued for.

Affirmed together with an additional attorney’s fee of $1,000.

Brown and Fogleman, JJ., dissent.

John A. Fogleman, Justice,

dissenting. I respectfully dissent. While there are other matters involved on this appeal that I think call for a reversal and while I do not agree with other statements in the majority opinion, I will direct my remarks to one point only, because the majority opinion turns entirely upon that point. That is its reliance upon an oral agreement for insuring the life of the deceased. If the majority opinion properly interprets and applies the pertinent section of the Arkansas Insurance Code, then the drafters wasted words when they said that the section should not apply to life insurance. The pertinent section reads:

66-3219. Binders. — (1) Binders or other contracts for temporary insurance may be made orally or in writing, and shall be deemed to include all the usual terms of the policy as to which the binder was given together with such applicable indorsements as are designated in the binder, except as superseded by the clear and express terms of the binder.
(2) No binder shall be valid beyond the issuance of the policy with respect to which it was given or beyond ninety (90) days from its effective date, whichever period is the shorter.
(3) If the policy has not been issued a binder may be extended or renewed beyond such ninety (90) days with the written approval of the Commissioner, or in accordance with such rules and regulations relative thereto as the Commissioner may promulgate.
(4) This section shall not apply to life or disability insurances. [Acts 1959, No. 148, § 286, p. 418.]

This act contains 698 sections, not counting subsections. It specifically repealed virtually every Arkansas statute on the subject of insurance. It further contained the usual general repealer as to laws in conflict. Section 1 states: “This act constitutes the Arkansas Insurance Code.” There was no savings clause.

If there was any doubt about the intention of the legislature to make this code the governing law relating to insurance in Arkansas, the title to the act will quickly dispel any such thought. It reads:

ACT 148
AN ACT to Provide a Comprehensive Revision, Consolidation and Classification of the Laws of the State of Arkansas Relating to Insurance and to the Insurance Business; to Regulate the Incorporation, Formation, and Corporate Affairs of Domestic Insurance Companies, Societies, and Associations, and the Admission of Foreign and Alien Insurance Companies, Societies, and Associations; to Provide their Rights, Powers and Immunities, and to Prescribe the Conditions on Which Insurance Companies, Societies, and Associations Organized, Existing, or Authorized under this Act may Exercise their Powers; to Provide the Rights, Powers and Immunities and to Prescribe the Conditions on which Other Persons, Firms, Corporations and Associations Engaged in an Insurance Business may Exercise their Powers; to Provide for Service of Process on Unauthorized Insurers and the Conditions for Defense of Actions Brought Against Them in this State; to Provide for Certain Powers, Rights, Obligations, and Consequences as to Insurers and Others Relative to Insurance Contracts and Matters Arising from Such Contracts; to Provide for the Imposition of Licenses and Fees and for the Disposition Thereof; to Provide for the Imposition of a Privilege Tax upon Foreign and Alien Insurance Com-panies and Associations and for the Allocation Thereof; to Provide for the Imposition of a Privilege Tax upon Surplus Lines Brokers; to Provide for the Imposition of a Tax with Respect to Independently Procured Insurance Coverages; to Provide for the Departmental Supervision and Regulation of the Insurance Business Within or Relative to this State; to Provide Penalties for the Violation of this Act; Fixing Effective Date of Act; to Repeal Certain Acts, and for Other Purposes.

Whenever there is a general codification of the law on any specific subject, that code supersedes any existing law. This was the obvious purpose of this code. The text authority cited by the majority should not be applied to the Arkansas statutes, because the whole subject of binders or other contracts for temporary insurance is covered by Ark. Stat. Ann. § 66-3219 (Repl. 1966). Certainly the majority is not holding that a permanent contract for life insurance is not required to be in writing, and certainly that result could not be proper if not even a binder or a contract for temporary life insurance is permitted. I submit that the majority has, in effect,' stricken § 286(4) from the act.

For the reasons stated, I would reverse the judgment.

I am authorized to state that Brown, J., joins in this dissent.

      See, 2 Sutherland, Statutory Construction, Third Edition, (1943), 254 et seq., §§ 3708, 3712; 50 Am. Jur. 559, Statutes, § 554; 82 C. J. S. 496 et seq., §§ 292, 293; Chrisman v. Carney, 33 Ark. 316. The South Carolina Supreme Court spoke of the effect of its Insurance Code in Independence Ins. Co. v. Independent Life & Acci. I. Co., 218 S. C. 22, 61 S. E. 2d 399 (1950). The title and first sentence of the act and the express repeal section were similar to our act. It said: •
      It is manifest that by the Act of 1947 the legislature intended to wipe the slate clean of insurance laws and enact a complete code upon the subject.
      '# # #
      It is well settled by our decisions that the code as adopted is the general law and the omissions are lost.


source: Caselaw Access Project

author: Conley Byrd, Justice.

license: Public Domain

text:
    Gene PRICE v. Daisy Dean HARRIS
    5-5699
    475 S.W. 2d 162
    Opinion delivered January 17, 1972

      Ball ir Gillman and Womack & Lineberger, for appellant.

      Paul Jamason, for appellee.
   Conley Byrd, Justice.

Following a fire loss on appellant Gene Price’s premises, appellee Daisy Dean Harris, the holder of a vendor’s lien and a named insured as her interest appeared, claims that she was entitled to have the fire insurance proceeds applied to her indebtedness. The trial court agreed with appellee and for reversal appellant contends:

“I. The lower court erred in awarding the insurance proceeds to Mrs. Harris, the mortgagee.
II. Alternatively, the lower court erred in awarding more than four thousand eight hundred dollars ($4,800.00) of the insurance proceeds to Mrs. Harris.
III. If Mrs. Harris is entitled to any of the insurance proceeds, such proceeds should be applied as advance payments on the promissory note so as to interrupt the schedule of payments to the extent of the proceeds and the lower court erred in holding otherwise.”

On November 5, 1962, appellee and her late husband conveyed the premises to L. A. Hinson and wife, retaining a vendor’s lien to secure an indebtedness of $16,500.00, payable in annual installments of $1,000 including interest. That conveyance contained a clause requiring “the vendee to keep all buildings insured at all times with Co-Insurance clause. . .” On January 21, 1968, the Hinsons conveyed to Gene Price. The deed to Price provided:

“The purchaser herein agrees to assume in all its respects a certain Vendor’s lien, the balance of which is $15,532.94, payable to J. A. Harris and Daisy Dean Harris and reflected in Deed recorded in Book 581 at page 467. ..”

Pursuant to that agreement appellant obtained four policies totaling $8,000. Typical of the policies is the one issued by Maryland Casualty Company which provided as follows:

“Name Insured: Gene Price and Daisy Dean Harris (holder of vendor’s lien) as their respective interests appear.”

The policies contained rebuilding clauses which provided, inter alia, that the company would pay only 60% of the amount of the insurance, unless the insured elected to rebuild and spent to replace the destroyed building an amount equalling or exceeding the amount of the loss. Admittedly appellant elected to rebuild, and the value of the new house greatly exceeds that of the destroyed dwelling.

Point No. 1. Here appellant makes a number of arguments. The first is that the term Co-Insurance is not synonymous with Mortgagee Insurance. Second, that even if Price’s predecessor in title was required by a covenant in his deed to insure the premises for the benefit of Mrs. Harris, such a covenant is deemed personal, does not run with the land and would not be binding on appellant. These arguments are without merit. As the trial court pointed out, the parties obviously treated the agreement as a mortgagee clause and appellant through the assumption agreement in his deed cannot now contend that he is not bound by the covenant in the conveyance from Harris to Hinson.

Additional arguments under appellant’s point number 1 are that because of the rebuilding, Mrs. Harris has suffered no loss of security and that the ends of justice will be best served if Mr. Price can apply the insurance proceeds toward the cost of reconstruction. Also, that Mrs. Harris by her failure to file a claim for the proceeds until after the house was partially rebuilt is estopped on her part to receive the proceeds.

Because of our previous holdings that a stipulation that property should be insured for the benefit of the mortgagee constitutes an appropriation in advance of the insurance money to the satisfaction of the mortgage indebtedness, Bonahm v. Johnson, 98 Ark. 459, 136 S. W. 191 (1911), appellant is not entitled to relief under these contentions.

Point No. 2. Appellant, without the citation of any authority, here argues that Mrs. Harris’s appropriation should be limited to $4,800.00, the amount that would have been paid under the policies had Price not rebuilt. Here again as we understand our former decisions, and the law of other states in general, agreements such as those contained in the conveyances here involved constitute an appropriation in advance of all the insurance monies payable under the policy. Since such appropriation is subject to contract negotiation between the parties, we are not inclined to apply an equitable apportionment that the parties did not bargain for in advance.

Point No. 3. Finally appellant argues that if he cannot have the benefits of the proceeds applied toward rebuilding he should at least be permitted to dictate how the proceeds should be applied to the note. In this connection he wishes to apply the proceeds to discharge the unmatured installments as they fall due. In Coley v Green, 232 Ark. 289, 335 S. W. 2d 720 (1960) we held contrary to appellant’s contention. For that reason the contention is without merit.

We have not overlooked appellant’s reliance on Crone v. Johnson, 240 Ark. 1029, 403 S. W. 2d 738 (1966), where this court by ordering funds in court used to pay current installments as they fell due, prevented an inequitable acceleration of debt. However, Crone rests on Johnson v. Guaranty Bank & Trust Co., 177 Ark. 770, 9 S. W. 2d 3 (1928), wherein it was said:

“The stipulation for accelerating the time of payment of the whole debt may be waived by the mortgagee, especially when it is made to depend upon his option. A court of equity will also relieve against the effect of such provision, where the default of the debtor is the result of accident or mistake, or when it is procured by the fraud or other inequitable conduct of the creditor himself.”

Affirmed.


author: Frank Holt, Justice. Carleton Harris Chief Justice,

text:
    Andy DOYLE v. Randall WILLIAMS, Judge
    5-5694
    475 S.W. 2d 170
    Opinion delivered January 17, 1972

      Highsmith, Harkey ir Walmsley, by: Allyn C. Tatum, for petitioner.

      Ray Thornton, Attorney General; Mike Wilson, Deputy Atty. Gen. and John D. Bridgforth, Asst. Atty. Gen., for respondent.
   Frank Holt, Justice.

The only issue before us relates to the venue of a cause of action which was brought by an agency of the State of Arkansas against the petitioner, Andy Doyle, seeking a declaratory judgment construing a lease between the State and the petitioner.

The Arkansas Department of Correction leased to petitioner Doyle approximately 3,300 acres of farm land with an assigned rice allotment of 600 acres. Subsequent to the execution of this lease the United States Department of Agriculture reduced the total rice allotment for all the state penitentiary farm lands. The Department of Correction took the position that petitioner’s rice acreage allotment should be proportionately reduced under their lease agreement. Upon the refusal of the petitioner to agree with this interpretation of the lease and to proportionately reduce his rice acreage, the Department of Correction, through the Attorney General, filed an action seeking a declaratory judgment construing the lease in its favor. The petitioner is a resident of Jackson County and contends that the suit for interpretation of the lease should be brought by the State in the county of his residence pursuant to Ark. Stat. Ann. § 34-201 (Repl. 1962) and not in Jefferson County where the land lies. The respondent court held that the declaratory judgment action involved an interest in land and, therefore, § 27-601 requires that the action must be brought in the county where the land is situated. Thereupon the petitioner filed in this court a petition for writ of prohibition seeking an order to prevent the Jefferson Circuit Court, the respondent, from proceeding further in this action.

The pertinent part of § 27-601 provides: “Actions for the following causes must be brought in the county in which the subject of the action, or some part thereof, is situated, * * * First. For the recovery of real property, or of an estate or interest therein.”

In its complaint the plaintiff [Arkansas State Department of Correction] sought a declaratory judgment interpreting the rice acreage under the terms of a lease agreement between it, the landlord, and petitioner, the tenant. No other relief was asked in the complaint. Since this controversy pertains only to the interpretation of a leasehold, we hold that, for venue purposes, it does not involve the recovery of an interest in real property. See Jones v. Brinkman, 200 Ark. 583, 139 S. W. 2d 686 (1940): Edwards v. Bernstein, 21 S. W. 2d 133 (Ky. 1929); 56 Am. Jur., Venue, § 13.

It follows that venue, in the case at bar, is controlled by § 34-201 which requires that this action be brought by the State in the county where petitioner resides.

Writ granted.

Harris, C. J., and Brown, J., dissent.

Carleton Harris Chief Justice,

dissenting. I disagree with the conclusion reached by the majority and am firmly of the opinion that the venue of this action is controlled by Ark. Stat. Ann. § 27-601 (Repl. 1962) which, inter alia, provides that actions for the recovery of real property, or of an estate or interest therein, must be brought in the county in which the land is located.

My disagreement is based on the fact that it has been definitely determined that an acreage allotment is made to the farm and therefore runs with the land. In McClung v. Thompson, 401 F. 2d 253 (1968), a case arising in Arkansas, the United States Court of Appeals for the Eighth Circuit stated:

“It is our view that a rice allotment runs with the land, is a part of it, and cannot effectively be transferred by one person to another, nor can it be transferred to other land except by complying with the procedural requirements of the regulations, which was not done in this case. * # * *

Likewise, the regulations provide that crop allotments are made to the land and not to the individual farmer. Certain states are designated as ‘producer states’ and other as ‘farm states.’ Arkansas is classified as a ‘farm state.’ 7 C. F. R. § 730.1511 (m). This means that ‘farm rice allotments are determined on the basis of past production of rice on the farm and the rice allotments previously established for the farm in lieu of past production of rice by the producer and the allotments previously established for the producer. # * * *

Federal and state courts are in accord in holding that acreage allotments under the Agricultural Adjustment Act and the applicable regulations run with the land and that such allotments cannot be affected by bargains between individual farm owners. Hart v. Hassel, 250 F. Supp. 893, 897 (E. D. N. C. 1966); Williamson v. Holland, 232 F. Supp. 479, 483 (E. D. N. C. 1963); Luke v. Review Committee, 155 F. Supp. 719, 723 (W. D. La. 1957); Allen v. Benson, 192 So. 2d 622 (La. App. 1966); Duncan v. Black, 324 S. W. 2d 483, 485 (Mo. App. 1959); Mace v. Berry, 225 S. C. 160, 81 S. E. 2d 276 (1954); Lee v. Berry, 219 S. C. 346, 65 S. E. 2d 257 (1951).”

Since the allotment is an interest in land, and since the land affected is located in Jefferson County, I agree entirely with the Jefferson County Circuit Court that Jefferson County is the proper county for venue.

I therefore respectfully dissent.

I am authorized to state that Brown, J., joins in this dissent.

      My emphasis.


author: PER CURIAM

text:
    In the Matter of Supreme Court License Fees
    5-5882
    483 S.W. 2d 174
    Opinion delivered January 19, 1972
   PER CURIAM

On November 15, 1971, this Court entered the following order with respect to the annual license fees paid by attorneys:

Effective January 1, 1972, the Supreme Court license fees shall be, and are hereby, increased from $2.00 per year to $17.00 per calendar year. Fees will be payable between January 1 and March 1, after which a $1.00 penalty attaches. The Court finds that the increased fees will be necessary to support the estab- . lishment of a full-time office of executive secretary to the Committee on Professional Conduct, that office being required for the effective enforcement of our rules of professional conduct.

On December 16 Mr. Kenneth C. Coffelt, a member of the bar of this court, filed a petition and memorandum brief asking that the above order be stayed, vacated, and set aside for the following reasons:

1. The Court does not have the authority to make and enforce the order in question.

2. The amount of the fee is larger than is needed.

3. The order is contrary to the Contract and Due Process Clauses of the Federal and State Constitutions.

4. The order should not take effect until it has been approved by a vote of a majority of the licensed attorneys, in a poll to be taken by mail under the supervision of the Court.

We find no merit in the petition. The first, third, and fourth points have to do with the Court’s constitutional authority and may be discussed together.

In 1928 the people of Arkansas adopted Constitutional Amendment 28, consisting of ,a single sentence: “The Supreme Court shall make rules regulating the practice of law and the professional conduct of attorneys at law.” The language of the Amendment is mandatory, affirmatively imposing upon this Court the duty of making and enforcing rules governing the practice of law and the conduct of lawyers. The duty necessarily extends to the enforcement of the rules as well as to their promulgation, for without enforcement the purpose of the Amendment would fail.

The suggestion that the annual license fee can be levied only by the General Assembly, or by this Court with the approval of the practicing attorneys, is without merit. The judiciary is a coordinate branch of the State government, of equal dignity with the legislative and executive departments. Under the Constitution this Court has general superintending control over the judicial branch of the government. Article 7, Section 4. Practicing attorneys are officers of the courts, for whose professional conduct this Court has been explicitly made responsible by Amendment 28. That responsibility could not be effectively discharged if it were dependent upon action to be taken by the General Assembly or by the attorneys whose professional conduct is to be regulated. Under familiar constitutional principles, the imposition of the duty of regulation upon the Court carries with it by necessary implication the power to take whatever measures are essential and appropriate to the performance of the duty.

The petitioner’s fourth assertion, that an annual fee of $17.00 is higher than it need be, is a conclusion stated without supporting facts and apparently without investigation. This Court’s Committee on Professional Conduct, formerly called the Bar Rules Committee, has enforced the Court’s rules of professional conduct for the past thirty years, following the adoption of Amendment 28. As the spheres of public and private activity touched upon by the practice of law have expanded, the problems of discipline have undergone a corresponding expansion. In 1971, for example, the Committee received 67 written complaints, under oath, and 90 requests for personal interviews, among 350 inquiries of all kinds. Even though very few of the complaints were eventually found to be well founded, fairness to the public and to the bar required that each complaint be carefully investigated. Such investigations involve the interviewing of witnesses throughout the state, with attendant expense.

Last year the Committee, whose members serve without compensation, reached the conclusion that it had become necessary to employ a full-time professionally qualified executive secretary, who would be an employee of the committee. At the Court’s request the Committee submitted a proposed budget for the first year, a copy of which is attached as an appendix to this opinion. Representatives of the Committee discussed the budget in detail with the justices. The $15.00 increase in the annual license fee was considered to be a reasonable measure for adequately financing the executive secretary’s office and activities. In harmony with the Court’s practice during the past thirty years, the annual license fee is subject to change from time to time, to the end that income and expenses be kept in balance with one another.

The petitioner’s allied motion, suggesting that the members of the court are disqualified to perform the very duties imposed upon them by Amendment 28, does not warrant discussion.

The petition is denied.

[APPENDIX]

OPERATING BUDGET 1972

Salary — Executive Secretary

(General Counsel) $15,000

Salary — Secretarial 5,000

Travel — Staff(l) 1,200

Office Expense—

Telephone(6) 800

Postage, Sationery, etc. 400

Rent(5) 1,200

Committee Member Expense R eimbursement(2) 840

Court Reporter — Services(3) 1,800

Fees — Attorneys for disciplinary suits and special investigations^) 2,000

$28,240

(1) Travel assumes mileage on auto, some meals and very little overnight hotel on theory that most trips will be in State.

(2) Assumes four regular and two special meetings at $20.00 average per member per meeting.

(3) Based on estimate of Court Reporter for six meetings of five hours each.

(4) Assumes three suits per year and minor part time investigation assistance.

(5) Temporary — while space next to Bar Association offices available in Donaghey Building.

(6) Estimate of Southwestern Bell Telephone Company for one line ($300 base charge plus $500 long distance).

      Budget does not include necessary capital expenditures for office furniture, typewriter, files, dictating equipment, et cetera. $10,000 from the Falk Foundation Grant would be available for these expenditures with a substantial amount left over for preliminary operating expenditures and/or surplus in the event of budget overrun.
      In 1970 there were 2461 licensed attorneys which netted only $4,922 in license fees. This is approximately $23,500 less than the first year’s budget. Subsequent years budgets would likely increase because of (a) inflation and (b) increased activities.


author: Carleton Harris, Chief Justice.

text:
    Joda NELSON and FIRST NATIONAL INSURANCE AGENCY, INC. v. GLENS FALLS INSURANCE COMPANY
    5-5704
    475 S.W. 2d 690
    Opinion delivered January 24, 1972
    [Rehearing denied February 28, 1972]

      Kemp ir Whitmore, for appellants.

      Arnold ir Arnold; By Richard S. Arnold and G. William Lavender, for appellee.
   Carleton Harris, Chief Justice.

The real parties in interest in this litigation are Firemen’s Fund Insurance Company and First National Insurance Agency, Inc., of Nashville, Arkansas, these companies having paid a claim to Joda Nelson because of damage to a catering van. Under subrogation rights, suit was instituted in the name of Nelson against Glens Falls Insurance Company, who had previously carried the coverage on the van. The facts leading up to this litigation are set out in the first four paragraphs of a comprehensive and well written opinion filed by the Circuit Court of Howard County, as follows:

"1. The Plaintiff, Joda Nelson, operates a catering service and restaurant in Nashville, Arkansas. On or about July 13, 1968, a motor vehicle owned by Plaintiff and used in his business was damaged in an accident. The amount of the damage has been agreed upon, for purpose of this action, as $2,640.44.

2. Up until May 17, 1968, the Defendant Glens Falls Insurance Company, acting through its general agent, the Third-Party Defendant First National Insurance Agency, Inc., of Nashville, had insured Mr. Nelson’s motor vehicle under Policy No. A82-18-52. This policy, had it been in effect at the time of the above-mentioned accident, would have covered the damages occasioned thereby.

3. Glens Falls had first insured Mr. Nelson’s motor vehicles on May 17, 1966. The insurance was for one year. It was renewed for a second year on May 17, 1967, but on May 17, 1968, the insurance policy was not renewed. It is undisputed that there was no actual written policy in effect at the time of the subject accident.

4. Plaintiff’s claim is based upon an alleged oral agreement by First National Insurance Agency, Inc., through its manager, Jay Toland, to renew his insurance policy with Glens Falls. It is claimed that First National Insurance Agency, Inc., as a general agent for Glens Falls, had authority to renew insurance policies and to agree to renew insurance policies, and that Glens Falls is liable on First National’s promise to renew.”

On trial, the court, sitting as a jury, found for appellee, Glens Falls, and dismissed the complaint. From the judgment so entered, appellants bring this appeal.

The proof reflected that First National Insurance Agency, Inc. was agent for some five insurance ompanies, and had issued several insurance policies insuring Nelson’s properties. These policies had been issued with Glens Falls since May 17, 1966, and the agency had collected the premiums on the policies by having them deducted from Nelson’s account in the First National Bank, rather than receiving the premiums directly from the insured. The premiums were worked out on a 12 months basis and a draft was drawn on Nelson each month as a matter of keeping his account current and his insurance in force. When the policy covering the catering van became due, the agency, through inadvertence, failed to renew same. Mr. Jay Toland, secretary and general manager of the agency, testified that Nelson had been a customer for fifteen years and that the original policy with Glens Falls became effective in May of 1966. He said that in April of 1968, when a renewal policy would normally have been written, there was a severe hail storm in Nashville; that the company was in the midst of reporting storm losses, and simply neglected to renew the Nelson policy; that the agency did not become aware of this fact until the time of the loss in July.

Mr. Toland was very frank and candid in his testimony, and simply stated that it was an oversight on the part of the agency. He said that, because of this oversight, the Glens Falls policy had not been renewed. He also stated that, except for the oversight, the agency would have renewed the policy with appellee company since it was the practice of this appellant to continue a policy of insurance with the same company rather than change it to another company (unless the company carrying the insurance rejected it). Mr. Toland testified that the agency represented four other companies and when an insurance policy expired, it was under no obligation to renew the policy with the same company; that the insurance could have been placed with another company of the same general character. According to the witness, his agency carried an “errors and omissions” policy with Firemen’s Fund as a protection against this sort of mistake, such policy being a $1,000.00 deductible, and Nelson had been fully paid, with Firemen’s Fund paying him $1,640.44, and the agency paying the other $1,000.00. Mr. Toland admitted that it was the obligation of the agency under the agreement with Glens Falls to notify the latter of renewals, and he agreed that it is important in the insurance business for an insurance company to be notified when policies are renewed in order that a company may know of its liabilities. He further said that Nelson desired no particular company to carry his insurance and that, in fact, from time to time, his insurance had been placed with other companies.

The proof further reflected that it is the custom, in the insurance business, if an error is made on the part of an agent, for the agent to correct such error, and this was the reason for the buying of “errors and omissions” insurance.

By deposition, Nelson testified that he simply had an understanding with Jay Toland that his insurance would be continued, or renewed, from time to time when it became necessary; that it made no difference to him what insurance company had the coverage; that it was Toland’s privilege to give the business to any company he desired, and that it would have made no difference to him if the coverage had been given to some other company. In other words, he simply was looking to Toland to take care of his insurance.

As authority for its position, appellants rely upon the Minnesota case of Julian v. Spring Lake Park Agency, 166 N. W. 2d 355. We do not consider that case authority for this particular set of facts, and it does not deal with renewals. Let it be remembered that Nelson was not expecting coverage from any particular company; he was paid for his loss, and he has no complaint. Probably the most pertinent fact is that, as an independent agent, First National Insurance Agency had the perfect right to place this coverage with one of several companies, and Nelson’s properties had, at times in the past been insured with other companies; in fact, the record reflects that this coverage had only been held by Glens Falls for a period of two years before it expired. Of course, if appellant is right in its contention, there is no need for an independent agency to carry “errors and omissions” insurance.

There was certainly substantial evidence to support the court’s findings that “The neglect and omission that caused Mr. Nelson to be without coverage was that of First National Insurance Agency, Inc., and not that of Glens Falls Insurance Company”.

Affirmed.

      Glens Falls sought judgment over against First National as a third party defendant in the event judgment was rendered against appellee on plaintiff’s complaint.


author: Lyle Brown, Justice.

text:
    MISSOURI PACIFIC RAILROAD COMPANY v. Charles W. LIGHT, Judge of Craighead County Circuit Court
    5-5726
    475 S.W. 2d 513
    Opinion delivered January 24, 1972

      William J. Smith and Joe D. Bell, for petitioner.

      Frierson, Walker, Snellgrove ir Laser, for respondent.
   Lyle Brown, Justice.

Petitioner, Missouri Pacific Railroad Company, seeks a writ of prohibition, contending that jurisdiction does not lie with the Craighead County Circuit Court to try the case of Gerald E. Lamb and Wheeler Brick Company v. Missouri Pacific Railroad Company and St. Louis-San Francisco Railway Company. Petitioner contends that Pulaski County Circuit Court has jurisdiction because petitioner first filed a suit in that county arising out of the same accident.

There was a collision between petitioner’s train and Wheeler’s truck driven by Lamb. That incident occurred at one of petitioner’s crossings in Lawrence County. Petitioner railroad filed an action in Pulaski County for damages to its equipment. Shortly thereafter, Lamb and Wheeler Brick filed an action in the Craighead Circuit Court. Lamb is a resident of that county and Wheeler Brick is a domestic corporation with its principal office in the same county. Missouri Pacific filed a motion to dismiss the suit in Craighead County, contending that jurisdiction was in the Pulaski Circuit Court. Petitioner contends that under the provisions of the venue statute, Ark. Stat. Ann. § 27-611 (Repl. 1962), it is a resident of Pulaski County and therefore is entitled to maintain the suit in that county. Petitioner is a Missouri corporation authorized and qualified to do business in Arkansas. Its immediate headquarters for Arkansas operations is in Pulaski County, Arkansas. The cited section authorizes an action for damages to personal property by negligence to be brought in the county where the accident occurred or in the county where the owner of the property resided at the time.

The identical question was before us in the recent case of Missouri Pacific R. Rd. Co. v. Fox, 251 Ark. 247, 472 S. W. 2d 726 (1971). There we held that a foreign corporation does not acquire residence for venue purposes under the cited statute.

Petition denied.


text:
    Leon FIELDS et al v. CITY OF LITTLE ROCK et al
    5-5797
    475 S.W. 2d 509
    Opinion delivered January 24, 1972

      Warren & Bullion, for appellants.

      Kemp & Whitmore, for appellees.
   Lyle Brown, Justice.

This is a zoning case. Appellants, Leon P. Fields and Tom O’Donoghue unsuccessfully sought a change from A-single family, to E-apartment classification to permit the construction of a highrise apartment. The change was denied by the city planning commission and by the city board of directors. On appeal to the chancery court the denial of change in classification was sustained. Appellants here contend (a) that the decision of the lower court was contrary to a preponderance of the evidence, and (b) that the trial court erroneously applied the law governing the case.

The subject property consists of a tract of sixteen lots in Bellevue Addition in Little Rock. It is bounded on the south by X Street. Immediately south of X Street the property is zoned E-apartment, limited. Most of that tract is vacant except for a six-unit, two-story apartment building and a residence. Continuing south to Cantrell Road and for some 200 feet the property is F-commercial. On that tract are located an animal clinic and a nursery. Foxcroft Road leaves Cantrell Road and runs north along the west side of appellants’ property. On the west side of Foxcroft Road the property is zoned F-commercial and is not yet developed. Northwest and adjacent to appellants’ property is a tract 100 x 150 feet which is zoned D-apartment. Presently thereon is located a small office building, non-conforming.

The other two sides of subject property are bounded by residential additions. On the east side is Wilton Heights Addition and on the north side is Foxcroft Addition. There are 113 homesites constructed or under construction in Foxcroft. Those homes range in values from $30,000 to $100,000. A recreational club, known as the Racquet Club, is located in Foxcroft and very near the subject property. Swimming and outdoor tennis constitute a considerable portion of the recreation at the club. There are approximately 45 homes in Wilton Heights and as best we can discover it is completely developed. Those homes range in value from $15,000 to $30,000. Both additions are described as being attractive, well-kept, and relatively quiet.

The record is voluminous, consisting of three volumes. We see no reason for attempting an abstract of the testimony of each and every witness. The problem can better be approached, and with brevity and clarity, by listing the categories of major contentions made by the city and the intervening adjacent homeowners, together with the responses thereto made by appellants. Those categories are (1) noise, (2) traffic and density of use, (3) property values, and (4) privacy.

(1) Noise. Paul J. Mooser was called by the city in opposition to the rezoning. He operates as a realtor, a land developer, and an appraiser. The noise level around apartments, as distinguished from residences, so he said, is one of the main features that depreciate the nearby residences. He referred to the high concentration of vehicles, which he said in this case could be as high as 280 units. He listed such noise makers as car doors slamming, engines starting, noise from motorcycles, spinning wheels, the dropping of bottles and cans, and the people coming and going, “talking and laughing and shouting or hollering.” The home of Helen Littleton is adjacent to the subject property. She anticipated noise coming from the many deliveries coming to the apartment, the extra people and the traffic which would be increased. Witness E. F. Brueggeman, an architect with many years experience, testifying for appellant, discounted the noise factor. Other than the starting of automobiles he was not aware of anything that would create any unusual outside noise. The planned recreational facilities would not, he said, create any more noise than the facilities at the Racquet Club.

(2) Traffic and Density of Use. Don R. Venhaus testified against the rezoning. He is a specialist in the field of community development and planning. The planning commission, for which he helped evaluate the subject property, recommended that the application for E classification be denied. “It was our judgment that E allowed too high a level or too high a density of use on the property in this location, and the characteristics of the land use around it.” He anticipated that in addition to the traffic created by 200 residents themselves would be visitors and service vehicles coming and going. He referred to a traffic count on Foxcroft — 2,024 vehicles for a twenty-four hour period — which he considered already heavy for a residential street twenty-seven feet in width. Witness Mooser agreed that the density of vehicles from a highrise apartment would put a heavy burden on Foxcroft Road. Four of the homeowners related their experiences in getting out on Cantrell Road and expressed alarm over the anticipated increase in traffic.

Lloyd Pearce, for seventeen years a realtor and appraiser, is concededly an expert in those fields. He said he experienced no problem in entering Cantrell from Foxcroft. In fact he said the width of streets had very little to do with traffic safety. Witness Leon Fields, with considerable experience in real estate investments, also minimized the traffic problem. He said he had observed traffic conditions along Foxcroft Drive dozens of times and had never seen a traffic problem at Foxcroft and Cantrell. Appellants’ witness, Brueggeman, compared the traffic to be generated by the new apartment to the traffic in and out of Riviera Apartments, a twelve-story highrise. He said the traffic is spread out over the day and would average eight or ten cars an hour. “There are many people there that don’t leave the apartment for three-four days at a time.”

3. Property Values. Witness Paul Mooser said: “I have formed an opinion that the development of subject property as a highrise apartment would be detrimental to the homes that are constructed in the area; especially those that are immediately adjacent. Normally this type of thing will affect the value from ten to twenty percent.” A majority of the property owners who intervened and testified expressed fears of devaluation of their properties. On the other hand the experts who testified for the appellants were firmly of the opinion that the presence of the apartment would not depreciate the value of neighboring properties. Moreover, they opined that the presence of the structure would in fact be beneficial to the neighbors in Foxcroft and Wilton Heights in that it would serve as a buffer between the residences and the commercial area to the west of the highrise.

4. Privacy. Two of the intervening homeowners insisted that no amount of screening and shrubbing could protect them in their privacy from the prying eyes of their fifteen-story neighbors. On the other hand there was evidence that the higher stories not shielded by screening and shrubs would actually look down upon the roofs of the neighboring homes. The homeowners retort that they will not be protected in their customary outdoor living.

In addition to the four areas of controversy recited we should add that the proposed apartment would, according to appellants’ proof, be of the luxury type, screened and landscaped in an effort to minimize noise, and a central entrance supervised so as to keep out trespassers. It should be pointed out that the appellánts are asking for rezoning so they can sell at the highest possible price. The proposed purchaser or purchasers are undisclosed. The point is that these appellants would have no interest in the type of development. In describing the construction and operation the appellants are going on the assumption that it will be developed as a first class highrise apartment.

It is the duty of the chancellor to determine whether the zoning authorities acted arbitrarily. If the chancellor’s findings in that respect are supported by a preponderance of the evidence, we affirm. City of Little Rock v. Andres, 237 Ark. 658, 375 S. W. 2d 370 (1964). As can be seen from the evidence we have abstracted, as well as a separate volume of exhibits, all major points in issue were controverted. The primary responsibility for resolving the weight and credibility of the evidence lies with the chancellor. We are unable to say that his conclusions were contrary to the greater weight of the evidence.

The second point for reversal is the assertion that the trial court erroneously applied the law to this case. Appellants rely on two cases which they hold are authority for the proposition that when property sought to be rezoned is situated in an established commercial district, the right to rezoning becomes vested. They cite Little Rock v. Pfeifer, 169 Ark. 1027, 277 S. W. 883 (1925), and Little Rock v. Parker, 241 Ark. 381, 407 S. W. 2d 921 (1966). In the Pfeifer case the immediate neighborhood in which a new business building was sought to be constructed was saturated with businesses; so much so that this court said that the area had become a business district. We held that the old residences would have to give way to the expansion of the established business area. Also, appellants concede that a strict and literal interpretation of the language in Pfeifer is no longer appropriate since our decision in Parker. (Also, see Act 186 of 1957 which upgraded zoning legislation). Now with respect to the holding in Parker, appellants say: “If we understand the holding in Parker it is that the city could not prevent that property from being zoned commercially, but that as quiet business was a commercial use, the limitation thereto was not arbitrary.”

In the first place the subject property is not situated in an established commercial district, as was the situation in Pfeifer. It is bounded on the east and north by the two residential districts we have described. On the south side, X Street serves as a buffer for any further development of F-commercial. On the west, Foxcroft Road lies between the subject property and the undeveloped commercial area, and that street is a natural barrier to further encroachment of F-commercial. It is our conclusion that the trial court did not misapply the law.

Finally, we would point out that when the homes were built in Foxcroft and Wilton Heights, the subject property was zoned as presently, A. Therefore the builders were entitled to consider that factor. Also, we would point out that “rezoning cannot be justified solely on the ground that it is necessary to put a particular piece of property to its most remunerative use.” Tate v. Malvern, 246 Ark. 316, 438 S. W. 2d 52 (1969).

Affirmed.

Holt, J., not participating.

Byrd, J., concurs.


author: John A. Fogleman, Justice.

text:
    Milton G. ROBINSON and William C. DAVISS v. Lucille K. CHAMPION
    5-5627
    475 S.W. 2d 677
    Opinion delivered January 24, 1972
    [Rehearing denied February 28, 1972.]

      Robinson & Daviss, pro se.

      Theodore L. Lamb, for appellee.
   John A. Fogleman, Justice.

This appeal involves a decree rendered in a suit by appellee to recover alleged excessive attorneys’ fees paid appellants as her attorneys in a divorce case. The court rendered judgment against each of the appellants in the sum of $7,250. The present action was filed nearly three years after the termination of the employment. She alleged that appellant Daviss had been paid $5,700 by her husband pursuant to court order, $7,250 by a receiver appointed in the divorce case pursuant to court order and $15,575 she paid him. She alleged that appellant Robinson had been paid the same amounts except that the amount paid by her former husband under court order was only $5,600. She contended that the fees exacted from her were excessive and that she had paid them because of undue influence of the appellants and their overreaching and imposition on the attorney-client relationship. The conduct upon which she relied was the alleged representation by the attorneys to her that she was required to make these payments in order to receive property distributions of $40,000 in March 1966 and $80,000 in October 1966. She paid appellants $5,000 each in March 1966 and $10,000 each in October 1966.

Appellants not only resisted appellee’s claim but filed a counterclaim in which they alleged that they were entitled to additional fees of $12,500. There is no issue presently involved as to the amounts of compensation charged against the defendant in the divorce case, Dr. Walton T. Champion.

Among the pertinent considerations in determining the reasonableness of attorney’s fees not specifically fixed by contract, as is the case here, are: the attorney’s judgment, learning, ability, skill, experience, professional standing and advice, Bockman v. Rorex, 212 Ark. 948, 208 S. W. 2d 991; St. Louis-San Francisco Ry. Co. v. Hurst, 198 Ark. 546, 129 S. W. 2d 970, 122 A. L. R. 965; Rachels v. Garrett, 153 Ark. 343, 240 S. W. 1071: Turner v. Turner, 219 Ark. 259, 243 S. W. 2d 22; the relationship between the parties, Rachels v. Garrett, supra; the amount or importance of the subject matter of the case, Rachels v. Garrett, supra; St. Louis-San Francisco Ry. Co. v. Hurst, supra; Turner v. Turner, supra; the nature, extent and difficulty of services in research, collection, estimation and mental array of evidence and anticipation of defenses and means of meeting them, and considering the case, receiving confidential information and giving confidential advice before any pleadings are filed or other visible step is taken, St. Louis-San Francisco Ry. Co. v. Hurst, supra; Bockman v. Rorex, supra; Files v. Fuller, 44 Ark. 273; the preparation of pleadings, Files v. Fuller, supra; the proceedings actually taken and the nature and extent of the,litigation, Rachels v. Garrett, supra; St. Louis-San Francisco Ry. Co. v. Hurst, supra; the time and labor devoted to the client’s cause, St. Louis-San Francisco Ry. Co. v. Hurst, supra; Rachels v. Garrett, supra; Turner v. Turner, supra; the difficulties presented in the course of the litigation, St. Louis-San Francisco Ry. Co. v. Hurst, supra; the results obtained, Turner v. Turner, supra; St. Louis-San Francisco Ry. Co. v. Hurst, supra; Bradshaw v. Bank of Little Rock, 76 Ark. 501, 89 S. W. 316; and many other factors beside the time visibly employed, St. Louis-San Francisco Ry. Co. v. Hurst, supra; Bockman v. Rorex, supra. In making these determinations, both the trial court’s and this court’s own experience and knowledge of the character of such services may be used as a guide. Rachels v. Garrett, supra; Aetna Life Ins. Co. v. Heiden, 184 Ark. 291, 42 S. W. 2d 392; Whetstone v. Travis, 223 Ark. 856, 269 S. W. 2d 320. Considerable weight is to be given to the opinion of the judge before whom the proceedings are conducted. Marlin v. Marsh & Marsh, 189 Ark. 1157, 76 S. W. 2d 965; Whetstone v. Travis, supra. When we give due consideration to the extensive record before us and to the factors to be considered we find that the fees allowed and paid to appellants were adequate for the services they performed, but that they were not excessive or unreasonable and that appellee is not entitled to recover any of the fees paid to them. Consequently the decree of the chancellor is reversed.

The voluminous record in the divorce case and in the incidental receivership was made a part of the record in this proceeding and was considered by the chancellor who heard this case on assignment, who was not the same chancellor who had heard all of the proceedings in the divorce case and the receivership.

The parties to the divorce case were both medical doctors practicing in Stuttgart. They were first separated sometime in 1958 when a divorce suit was filed by appellee in which she was represented by appellant Robinson A reconciliation was effected, and they lived together until June 1, 1961. Appellee first employed appellant Daviss in February or March, 1962. He arranged a temporary agreement about child custody and visitation and testified that he spent considerable time in trying to effect a reconciliation, in accordance with his client’s wishes. Daviss testified that he spent many hours and held many conferences before he terminated his attempts on May 9, 1962, and filed a suit for divorce.

Daviss said that, after attorney Virgil Moncrief filed an answer for Dr. Walton Champion, he spent many hours conferring with this attorney before determining that the suit would have to be tried. At this point Dr. Walton Champion employed Mr. George E. Pike who represented him throughout the further proceedings in the case. Appellee said that she was then afraid that she was going to lose the case, so she employed the appellant Robinson in August 1962 with the approval of Daviss.

According to Chancellor Dawson before whom the case was tried, the trial consumed 10 days, which were not consecutive but ranged from September 12 to November 1. At the time of the filing of the divorce suit, appellee alleged that her husband had contributed nothing to her support or that of their four young children since the separation except for payment of utility bills- and maturing installments on the mortgage on the family residence which she and the children were occupying. The first step in the proceedings was a hearing which resulted in appellee being awarded custody of the minor children, possession of the family residence, $300 per month for support of herself and die children and $100 attorneys’ fees, all pendente lite.

After the trial, the chancery court found that appellee was entitled to a divorce, although she was not without fault, reaffirmed the award of child custody and possession of the residence along with the household furnishings and equipment, allowed an additional $1,200 to apply on her attorneys’ fees, awarded $350 per month for child support, out of which she was to pay the maturing family residence mortgage installments, awarded her one-third of Dr. Champion’s personal property, one-third of his real estate for life, dissolved an estate by the entirety in rental residential property owned by the parties, required the husband to account for all property disposed of by him since the beginning of the action, enjoined him from disposing of or encumbering any property and appointed a commissioner to sell all of the defendant’s real and personal property if the parties had not reached an acceptable agreement on the property distribution within 90 days of September 1, 1963. All costs were assessed against the husband. The entry of a formal decree was withheld until April of 1963, apparently with the approval of the court, while unsuccessful negotiations to arrive at a settlement on the distribution of property were being conducted by appellants and attorney Pike.

There can be no doubt that the divorce proceeding was acrimoniously contested and many charges and countercharges of infidelity and indiscreet conduct were aired, along with other bitter complaints. The parties also seemed to have constantly bickered over the children’s visitation with their father, his tardiness in returning them to the mother’s custody and their resulting absence from school. The husband unsuccessfully appealed to this court. See Champion v. Champion, 238 Ark. 87, 378 S. W. 2d 648, decided May 11, 1964. Although the appeal seemed to be general, when the appellant’s brief was filed here, he only asserted error in that part of the decree ordering a sale of the property. Meanwhile, he had applied to the chancery court for relief, asserting that he could not pay child support until the property division was accomplished, and that he could not conduct farming operations on the lands owned by him unless the appellee signed a $70,000 mortgage. When the court would not compel her to do so, the parties filed a joint petition asking for the appointment of a receiver for the defendant’s property alleging that there was danger of losing about 3,000 acres of farmland by foreclosure of a $130,000 mortgage.

The court appointed John Gunnell, the clerk of the court, as receiver, finding that the equities of both the parties and their children in approximately 4,000 acres of land in Lee, Arkansas, Monroe and Prairie Counties, the homestead and residential rental property in Stuttgart were in imminent danger unless the farm operation loan could be secured.

Subsequently, but still during the pendency of his appeal, Dr. Walton Champion applied to the chancery court for a modification of its decree, alleging that his request for the appointment of a receiver was necessitated by appellee’s failure to sign mortgages for loans to him to produce crops in 1963 and that he was unable to make a property division because of the large amount of indebtedness against the property. This petition was denied when heard. There was a reduction in the indebtedness in 1963, and the receivership was continued in 1964 and 1965 upon joint petition of the parties. During the course of the receivership it developed that Dr. Walton Champion had entered into leases with his tenants after the court’s decision in the divorce case was rendered but before the decree was actually entered and the receiver appointed. The term of these leases extended to December 31, 1966. When contention arose with reference to the propriety of these leases, the tenants intervened, but the matter was finally settled by stipulation that the contracts be terminated on December 31, 1965, and the tenants were given 30 days within which to submit offers for the purchase of the Lee County lands, and the leases were ultimately canceled by the court.

Appellee had some assets and had some income from the practice of medicine over the years, and will have income in the future. She was earning about $20,-000 per year at the time of this trial. She owned a residential rental house on which there was a mortgage de:bt of approximately $2,800 payable in monthly installments of $47.50 and from which she had rental income of $55 per month. Although she admitted that her husband had given her $9,000 from the proceeds of sale of a farm in 1958, she said that she only had $200 in a savings account and $100 in a checking account. Her husband claimed that she had several thousand dollars hidden at home.

During the course of the trial there was introduced on behalf of appellants a financial statement prepared by Walton Champion dated April 18, 1962, showing assets of $967,628.86, liabilities of $216,143.87 and a net worth of $751,484.99. He claimed that he had “puffed up” the values in order to try to obtain a loan to pay debts and an IRS lien, and that he was on the verge of bankruptcy and unable to pay his bills. A federal IRS lien against both parties for some $6,000 or $7,000 had been filed. In a hearing regarding attorneys’ fees to be paid by the receivership, attorney Pike testified that his client had been practically insolvent at the time. The defendant said that avoidance of bankruptcy and the welfare of the children were his reasons for contesting the divorce.

During the trial the husband produced testimony about the value of two farms — the Buckhorn farm in Lee County and the Brummitt farm. He said that the operation of the Buckhorn farm had been unprofitable and that he had unsuccessfully attempted to operate the Brummitt farm as a duck hunting club. He produced witnesses as to the value of the lands. None of them placed a value on the Buckhorn farm as high as that placed by the defendant himself which was $55 per acre or $117,150. He said that the first mortgage debt on this property was $130,000 plus $8,100 interest in addition to some debt of $6,500. The highest value placed on the Brummitt farm was $100 per acre or $60,800. An appraiser placed the value of the family residence, purchased for $15,000 in May 1946, at $25,000. It was subject to a mortgage balance of $12,000. His appraiser valued five or six lots in Stuttgart at $2,000, but the defendant said he had received an offer of $2,700 for them after he put them up for sale. His appraisal witness testified that the residential rental property was worth only $9,000. The rental income from it was $32.50 per week. Dr. Walton Champion said that he had no unmortgaged property and that the Forrest City Production Credit Association mortgage covered all real estate owned by him for an indebtedness of approximately $65,000. He said that he was paying $200 per month on a mortgage on his medical equipment. It appears that appellee was personally obligated on the real estate mortgages on the farms and the family residence. The defendant said that the income from the clinic was not sufficient for him to pay current bills after the divorce case was filed. He listed unsecured debts of more than $45,000. An agreed appraisal of various corporate stocks owned by him showed a total value of $3,792.50. This was also pledged to Forrest City Production Credit Association.

After the court directed the receiver to list the real property for sale in 1965, an offer of $685,000 was received for the Lee County land with the seller to pay a real estate commission of $30,000. The court directed the receiver to accept this offer. After the sale was closed the receiver’s report showed that he held a balance of $485,554.66 from the sale of the property after the payment of all debts of the estate and the real estate commission.

A petition signed and verified by appellee was filed on February 18, 1966, asking that her attorneys be allowed additional fees. On March 7, 1966, the court ordered distribution of $40,000 to each of the Champions on their joint petition. On March 15, 1966, the court ordered $10,000 paid to each of appellants by the receiver as partial fees, reserving their allocation, as well as determination of total fees, until a later date, and specifying that no provision of its order was to be construed as any determination or limitation of attorneys’ fees to be paid by appellee in addition to this allowance.

A further distribution of $130,000 to Dr. Walton Champion and $80,000 to Dr. Lucille Champion was ordered in October 1966, and the court directed that the disbursements to appellee be made payable to her and her attorneys. About this time, Mr. George E. Pike filed a petition for attorneys’ fees for services to the receivership, reciting 470 hours of work in 59 items and 18 court appearances and numerous conferences pertaining to the receivership and land sale. Dr. Walton Champion approved the payment of additional fees to his own attorney, but resisted allowance of additional fees to appellants, alleging that fees of approximately $25,000 previously paid to them were in excess of the value of their services. He was represented at this hearing, not only by his regularly employed attorney, but by John Dale Thweatt and James M. Thweatt. Appellee filed a verified response in which she alleged that it was understood by all parties that attorneys for both plaintiff and defendant would keep abreast of receivership activities and that both parties had received considerable benefit from the resulting procedures which had entailed considerable work by all the attorneys, in excess of what would have been otherwise required. She asked that her attorneys be awarded a proper fee and agreed that a part be allocated to the receivership.

In his opinion, at the time the divorce was granted, the chancellor had recited that the trial was the longest divorce trial he had ever had, that it was rather involved, that the evidence indicated such a bad financial condition that the defendant was unable to pay child support in accordance with the needs of the children, and that much time and effort had been expended by appellee’s attorneys prior to the beginning of the trial. He stated that the amount of attorneys’ fees allowed was not representative of the true and correct value of their services to appellee and that it was set upon consideration of the defendant’s financial condition.

The chancellor who had heard all previous proceedings conducted a three-day hearing on the matter of attorneys’ fees in the receivership, after which he allocated his previous allowances to charge one-half of the payment made by the receiver to each of the appellants to the receivership and the other one-half to Dr. Walton Champion, and allowed a fee of $12,000 to Pike to be charged as receivership expenses, in addition to $2,000 previously paid him. When appellee expressed dissatisfaction with the services of appellants during this hearing, the court permitted them to withdraw as her attorneys. In August 1967 the Champions asked approval of a settlement between them by joint petition. This settlement gave her fee title to two lots in Stuttgart, a plot of land 150 feet by 250 feet, the family residence, one-third of th# Empire Life Insurance Company stock, all sums previously distributed to her and all personalty in her possession. Walton Champion received all assets in the hands of the receiver and all other property. The agreement contained this recitation:

The charges made against each party directly or through the receivership by order of the Court respecting attorney fees, receivership fees and Court costs are ratified and confirmed by the parties so far as the same concern each of them.

He waived any interest in any amount appellee might recover from her attorneys for fees paid by her from her own funds. The joint petition also recited that:

* * * since the rendition of the divorce decree there have been almost innumerable hearings before the Court with respect to the handling of the defendant’s property and with respect to disputes and controversies between the parties concerning their individual interests in said property, the operation of the farm lands constituting a part of said property, the proper allocation of income and expenses in connection with the farm operations, and the propriety of certain attorneys’ fees, receivership fees, and as to which of the parties should be charged with same.
* * * there has been a dispute between the parties with regard to the distribution of the proceeds from the sale of the lands in Lee County and with respect to other funds and assets in the hands of the Receiver.
* * * there has been disagreement between the parties as to which party should be charged with certain disbursements made by the receiver and there has been general disagreement between the parties as to the distribution of charges between them for almost each and every disbursement made by the receiver since the inception of the receivership; that all such controversy between the parties has consisted of disputes not only with regard to the law and to the facts but also as to accounting.

At the commencement of this hearing, the chancellor commented that he had allowed a very “negligible” fee to appellee’s attorneys considering the time spent, because of the impression that Walton Champion was insolvent. Later he commented that the allowance was “measly.” He emphasized that he would not go into the matter of fees paid by appellee over and above the court awards. The chancellor who heard this suit on assignment found that there was a conflict of interest arising from the representation of the receiver by the attorneys representing the parties even though done with full knowledge of the court. For this reason he held that it was only fair that Mrs. Champion receive the benefit of the fees that were allowed to her attorneys in the receivership, amounting to $7,250. He said he considered himself bound by the court’s previous finding that these fees were reasonable. He found that a reasonable fee for the attorneys was $21,275 for appellant Daviss and $21,-175 for appellant Robinson, which he arrived at by allowing $20 per hour for 751M hours, $3,750 for the trial work and $2,500 each for the appeal to the supreme court. The difference between the two allowances was attributed to a $100 allowance to Daviss for a hearing before Robinson was employed. Judgment was rendered against appellants for the exact amount of the fees previously allowed them for services to the receivership, as confirmed by the chancellor at the conclusion of his findings.

There can be no doubt that the representation of the receivership by the attorneys representing the parties in the divorce case was done with the full approval of the chancellor who heard the divorce case and appointed the receiver. While it would certainly be the better practice in most cases for a receiver to have independent counsel, there are cases, such as this, in which the intimate knowledge of the attorneys representing the parties in the case can be of benefit to all concerned. Representation of the receiver by appellee’s attorneys did not in any way jeopardize her interests but probably was to her benefit. We have previously recognized that there are situations in which a practicing attorney may properly appear for more than a single client without being placed in the position of divided loyalty or exposed to the temptation to conciliate rather than vigorously espouse the rights of the clients he represents. We have recognized that this is the case in matters such as probate proceedings, corporate reorganizations, bills of interpleader, and litigation characterized as a free-for-all receivership. American-Canadian Oil & Drilling Corp. v. Aldridge & Stroud, Inc., 237 Ark. 407, 373 S. W. 2d 148.

Unfortunately, as pointed out by the chancellor, no records were kept by appellants in relation to their services, and their testimony in that regard had to be based upon recollection and estimates. Still, it seems to us that they justified the amount of fees paid to them. Appellee was relieved of personal liability on debts well in excess of $200,000. She received cash distributions of $120,000 and real estate valued at more than $25,000. It seems likely that, had she not entered into the settlement after withdrawal of the appellants, she would have received other property and funds which were then cleared of all indebtedness. When consideration is given to the fact that she was not found blameless and that her husband was considered to be insolvent at the time of the divorce, it seems that the results to her were as advantageous as anyone could possibly have dreamed. A forced sale of the property would have left little for either party. Avoidance of foreclosure was necessary.

Daviss estimated his pretrial work at 350 hours. During the period of the trial he estimated that he spent an additional 250 hours in preparation, conferences with witnesses, co-counsel and client and in research. Between the end of the trial and the entry of the decree, Daviss estimated that both he and Robinson spent 500 hours conferring with adversary counsel and their client and investigating the property, its value and susceptibility to division. Pike testified that there were numerous conferences among the attorneys and remarked that there were sometimes rather heated discussions. Daviss estimated that his time spent between the end of the trial and the entry of the decree averaged 20 hours per week. He said that he spent 50 hours working on the brief on appeal, but Robinson spent more time. It seems that Robinson and Daviss agreed that this would be a means of equalizing of time spent by the two attorneys after Daviss was first employed. Daviss estimated the time spent after the entry of the decree at 2,100 hours of which he allotted 540 to the receivership.

Robinson testified that while the trial was in progress he spent at least half of his time on this case, and estimated that this amounted to a total of 250 hours. He said that he spent 100 hours on the appellate brief and estimated that after May 1, 1963, he had spen't an average of 12 hours per week except for a four-week vacation period, or a total of 2,280 hours. Robinson stated that he spent almost his full time on the cáse from the time he was employed until the trial started. Since he had been employed after the case had been pending for some time, he thought that it was necessary that he review the case with Daviss and the client thoroughly and that he review his file in the previous case, interview witnesses and do research. He said that a conservative estimate of this time was 300 hours. He fixed his total time devoted to the matter, including services to the receiver, at 3,380 hours. He noted that the defendant had subpoenaed close to 100 witnesses, and said that he spent considerable time investigating to determine what their testimony would be. Some of these witnesses did not live in the community. He also said that he spent considerable time interviewing witnesses that his client brought to the office, most of whom either could not or would not be helpful in the case.

In considering the results we should not overlook the fact that child support of $350 per month had been paid in full at the time of the trial. This might not be significant except for the fact that all of the parties were convinced that Dr. Champion was unable to make the payments at the time of the divorce decree, and many delinquencies were enforced only when the appellants took steps to see that they were paid from funds in the hands of the receiver and charged to the defendant. Furthermore, it should be noted that, after the cash distributions were made, Walton Champion still owned the Brummitt farm, then appraised at $200 per acre, and 120 acres of land in Monroe County, both unencumbered. The last report of the receiver before the settlement made by the parties showed that he had on hand $151,969.24. Appellant Daviss testified that the settlement between the parties did not give appellee nearly what she was entitled to. While the propriety of the settlement is not in issue, it does seem that, after appellants withdrew, the settlement arrived at was certainly not more beneficial to appellee than it was to Walton Champion. Although there was no contract for any specific amount of compensation, and no one urges that compensation should be awarded on a contingency basis, certainly the availability of the remaining property for division is a matter to be considered in weighing the results obtained through the efforts of appellants.

It could well be that this litigation stemmed from a misunderstanding on the part of appellee, for which appellants may be partly to blame. In answers to interrogatories she stated that she felt that the results obtained by the attorneys should not have any bearing on their compensation. She also stated that she had received a considerable amount through the litigation, but felt that the attorneys were seeking compensation on a contingency basis, to which she objected. She had no idea how she came to be relieved of personal obligations on the mortgage debts. She could not remember signing many of the verified pleadings filed in her behalf. She made no protest about the payment of $5,000 each in March of 1966, probably because of the statements of the chancellor when the distribution was ordered. She did say that she thought the fees were high. While she said she told the attorneys that she thought they were awfully expensive when she paid them $10,000 each after the $80,000 distribution, she said she did not consider any other action and recalled that the chancellor had said that additional fees were not in the jurisdiction of the court. She attempted to minimize the time devoted to the case by the lawyers, but she offered no real contradiction to their testimony except to say that she only saw them a total of 15 or 16 times, that they only put three or four witnesses on the stand in the trial of the case and that a hearing on her petition to remove the children to California for which she paid a fee of $500 took only about four hours. She said that at one time she voluntarily paid $100, and at another $50, to her attorneys because they were working “so hard.”

Insofar as the services of the attorneys to the. receivers are concerned, the one person in the best position to evaluate this compensation was the chancellor before whom the entire proceedings were conducted. We give considerable weight to his findings in that regard, and find the evidence amply supports the allowance. In this regard, it is notable that no one objects to the payments made to Pike.

Appellants made court appearances and performed services for the receiver over and above those performed by Pike. For instance, they successfully contested a claim of Stuttgart Machine Works for more than $4,000 for improvements contracted for by Pike’s client. They also performed services in connection with the collection of money by Walton Champion that should have gone into the receivership and with the claims of his lessees. They regularly reviewed the bills submitted to the receiver by Walton Champion through Pike, along with other bills, and Pike agreed with them that there was a great deal of contention about these bills. All these attorneys agreed that two days’ preparation was required for each court appearance. Pike said that these appearances required from one hour to several hours. In addition, appellants spent a full day in closing the land sale by the receiver. The fee allowances for appellants’ services to the receiver were proper and reasonable, and we see no reason for appellee to have credit for them.

Even though it would have been much more satisfactory if some records had been made from time to time as to the services rendered by appellants, we feel that a preponderance of the evidence indicates that the fees paid them were not unreasonable or excessivé and that the judgment against them should be reversed. On the other hand, we cannot say that appellants have shown by a preponderance of the evidence that they are entitled to additional compensation, and the decree, insofar as this feature of the case is concerned, is affirmed.

George Rose Smith, J., dissents.

      In considering the overall compensation, it should be noted that Pike accepted employment for a fixed fee of $3,000 and that the Thweatts were paid a retainer of $5,000 upon their late entry into the case.


author: J. Fred Jones, Justice.

text:
    Larry HIGGINBOTHAM v. STATE of Arkansas
    5661
    475 S.W. 2d 522
    Opinion delivered January 24, 1972

      Proctor ir Proctor, for petitioner.

      Ray Thornton, Attorney General; John D. Bridgforth, Asst. Atty. Gen., for respondent.
   J. Fred Jones, Justice.

Larry Higginbotham was sentenced to six months in the penitentiary upon his conviction in the Cross County Circuit Court for the crime of night riding. His request for a hearing on a motion for a new trial was denied by the trial court and his request for an appeal was also denied.

The record is before us on certiorari and the facts appear as follows: The petitioner was convicted by jury verdict in the Cross County Circuit Court and judgment was entered thereon on February 10, 1971. On March 9, 1971, through counsel who represented him at trial, he filed a motion for a new trial in which he assigned thirteen errors and reasons why a new trial should be granted. In the alternative, he prayed an appeal to this court. No further action was taken in the matter until on September 15, 1971, through new attorneys, he filed a request in the Cross County Circuit Court for a hearing on his motion for a new trial and for the relief prayed in his original motion. The trial court entered an order filed on September 22, 1971, finding that the motion for a new trial was timely filed but was considered by the court as having been abandoned. The trial court found that the time for appeal had expired and the request for hearing on the motion was denied. The petitioner argues three points for reversal as follows:

“That the holding of the trial court that the motion for a new trial had been abandoned was error.
That the holding of the trial court that the time for appeal had expired was error.
That the order denying the request for a hearing was contrary to the facts and the law.”

We conclude that the trial court did not- err in denying the petitioner’s request for a hearing on his motion for a new trial. The petitioner was tried and the verdict rendered at the February term of the Cross County Circuit Court. The motion for a new trial was filed during the same term but the February term of court had expired and the September term had begun before the petitioner requested a hearing on his motion. (Ark. Stat. Ann. § 22-310 [Repl. 1962]). Ark. Stat. Ann. § 43-2202 (Repl. 1964) provides as follows:

‘The application for a new trial must be made at the same term at which the verdict is rendered, unless the judgment is postponed to another term, in which case it may be made at any time before judgment.”

We have held that unless judgment is postponed to a subsequent term of court, the trial court cannot grant a new trial at a subsequent term of court even though the motion was filed during the term in which the judgment was entered. See Corning v. Thompson, 113 Ark. 237, 168 S. W. 128; State v. Neil, 189 Ark. 324, 71 S. W. 2d 700.

The petitioner argues that he had no opportunity to request a hearing on the motion for a new trial because the February term of court had terminated before he filed the motion, and he seems to contend that his only next opportunity to ask for a hearing was at the September term of the court. This argument is not persuasive in the light of Ark. Stat. Ann. § 22-311 (Repl. 1962) which provides in part as follows:

“When any circuit court is duly convened for a regular term the same shall remain open for all criminal, civil or special proceedings until its next regular term, and may be in session at any time the judge thereof may deem necessary. . .” See also §§ 22-312 — 22-315.

As to the petitioner’s second point, the trial court did not err in holding that the time for appeal had expired when the petitioner filed his request for a hearing on his motion. The petitioner argues that the time for appeal should start running from the denial of a motion for a new trial and not from the date of judgment. The statute in effect when the petitioner was tried as well as our interpretation of it, does not agree with the petitioner’s contention. Ark. Stat. Ann. § 43-2701 (Repl. 1964) provides as follows:

“No appeals to the Supreme Court in a criminal case shall be granted, nor writs of error issued, except within sixty (60) days after rendition of the judgment of conviction in the case except that the trial judge with his discretion may by order entered prior to the expiration of said sixty (60) days extend the time for not to exceed an additional sixty (60) days.” See Garner v. State, 96 Ark. 145, 131 S. W. 338.

The judgment of the trial court is affirmed but without prejudice to any right the petitioner may have to a hearing on post-conviction relief under our Criminal Procedure Rule 1.

The judgment is affirmed.

Harris, C. J., and Byrd, J., dissent.

Fogleman, J., not participating.