author: John A. Fogleman, Justice.

text:
    Fred MASON v. L. J. FUNDERBURK et al
    5-4997
    446 S. W. 2d 543
    Opinion delivered November 3, 1969

      Terral, Raivlings, Matthews & Pur tie, for appellant.

      Smith, Williams, Friday & Bowen; By: Robert V. Light, for appellees.
   John A. Fogleman, Justice.

Appellant, plaintiff below, seeks reversal of a summary judgment, asserting error in the court’s finding that there was no genuine issue of material facts. We agree with the trial court that there were no genuine issues of fact as to some of the appellees; who were defendants below, but find that there are genuine issues of material facts as to others. In so holding, we -apply the well-established rules that the burden to show that there is no genuine issue of material fact is upon the moving party, that all doubts must be resolved against the judgment, that all presumptions and inferences must be resolved against the movant and that, in a case in which fair-minded men may honestly differ about the conclusions to be drawn from the testimony, a summary judgment should be denied.

Appellant was employed by appellee Field Enterprises Educational Corporation as its district manager by a contract entered into on June 19, 1963. He was employed to sell certain encyclopedias, dictionaries and other such publications, on a commission basis, in the northeastern part of the state. The contract was subject to cancellation upon thirty days’ notice in writing given by either party. The controversy from which this litigation arose began when appellant was elected to the Calico Bock School Board in 1966. Ultimately appellee Field Enterprises Educational Corporation acting through appellee L. J. Funderburk, its state manager, terminated the contract as of August 24, 1967.

Subsequently, appellant instituted this action against Funderburk; Field Enterprises Educational Corporation; Dr. Dale Hudson and John Kron, two of the other members of the Calico Bock School Board; Dr. Dean Hudson, Superintendent of the Mountain Home Public Schools and a brother of Dr. Dale Hudson; Neill Hudson, Principal of the Atkins High School, another brother of Dr. Dale Hudson; and Jack B. Con-nor, Principal of the Calico Bock Public Schools. The complaint is couched in broad general language alleging that appellees conspired to deprive him of his rights under the contract and to earn a livelihood, to injure him and to deprive him of his means of livelihood. He alleged damages as a result of conversations, letters and other activities of appellees which he alleged to be false and calculated to injure his character and reputation. He asserted that the appellees intentionally publicized false, malicious and slanderous material and wrote letters and held conversations by which they procured dismissal from his employment and caused him to be held up to public contempt, ridicule, embarrassment and humiliation.

Appellees filed a motion to require appellant to make his complaint more definite and certain but followed discovery procedures rather than pressing this motion. Other than the motion for summary judgment granted by the court, appellees have filed no other pleading.

Appellant has not, either in his pleadings or in his brief in this court, made any attempt to characterize or identify his cause of action. His brief here has been oE little assistance, .as it cites no authority to indicate what, if any, cause of action is supported by the facts disclosed. Appellees have characterized the cause of action as being one based upon the common law action for civil conspiracy or for defamation of character. We shall consider whether there are issues of material facts on the causes of action suggested by appellees, as well as a possible cause of action for damages for wrongful inducement to cause Field Enterprises not to continue a business or employment relationship with appellant.

A review of authorities pertaining to a cause of action for defamation would serve no useful purpose. Consideration of the rules of law governing the other causes of action, however, is advisable in determining whether appellees have clearly shown that there is no materia] issue of fact. Under Arkansas law, a malicious and wilful interference with contractual rights and relationships of another has been recognized as an actionable tort. Mahoney v. Roberts, 86 Ark. 130, 110 S. W. 225; Johns v. Patterson, 138 Ark. 420, 211 S. W. 387; Hogue v. Sparks, 146 Ark. 174, 225 S. W. 291; Ketcher v. Sheet Metal Workers International Association, 115 F. Supp. 802 (E. D. Ark. 1953); Tollett v. Mashburn, 183 F. Supp. 120 (W.D. Ark. 1960) aff’d. 291 F. 2d 89 (8th Cir. 1961). See also Dale v. Hall, 64 Ark. 221, 41 S. W. 761; Wakin v. Wakin, 119 Ark 509, 180 S. W. 471, According to the Supreme Court of the United States a cause of action based on interference with another’s contract with a third person without legal justification has been recognized at least since Lumley v. Gye, 2 El. Bl. 216, 118 Eng. Rep. 749 (Q. B. 1853). Arkansas v. Texas, 346 U. S. 368, 74 S. Ct. 109, 98 L. Ed. 80 (1953). The theory allowing the recovery of damages for unlawful interference with contractual relationships will also support the recovery of damages from one who, without a privilege to do so, induces or otherwise purposely causes a third person not to enter into or continue a business relation with another, at least where the means of inducement are tortious. See Restatement of Torts § 766, et seq., and Comments (1939); Calbom v. Knudtzon, 65 Wash. 2d 157, 396 P. 2d 148 (1964). This rule applies to situations in which a party induces or otherwise purposely causes another not to employ a third person as well as the situation in which the party induces or purposely causes an employer to terminate a relationship with an employee, even though the employment was at will. Restatement of Torts § 766, Comment c. (1939). It has long been recognized in many American jurisdictions that one who, maliciously and without justifiable cause by means of false statements, threats or putting in fear or, perhaps, by means of malevolent advice or persuasion, induces an employer to discharge an employee is liable in an action of tort to the employee for the damages thereby sustained, regardless of whether the employment was for an unexpired fixed term or terminable at the will of the employer. 2 Cooley on Torts 182, § 226 (4th Ed. 1932). We find the following language of the Supreme Court of Missouri in Downey v. United Weatherproofing, Inc. 363 Mo. 852, 253 S. W. 2d 976 (1953), to be justified:

“It has now come to be the view of a majority of courts in this country that one who maliciously or without justifiable cause induces a person to breach his contract with another may be held responsible to the latter for the damages resulting from such breach. The term ‘maliciously’ in this connection alludes to malice in its technical legal sense, that is, the intentional doing of a harmful act without justification or excuse, and does not necessarily include actual malice, that is, malice in the sense of spite or ill will.
The right to perform a contract and to reap the profits therefrom, and the right to performance by the other party, are property rights entitling each party to the fulfillment of the contract by performance. And the intentional interference with the contractual relation without just cause so as to effect a breach of the contract is a wrong for which the wrongdoer may he held accountable in damages. The right of recovery for inducing a breach of a contract is but one instance of the protection which the law affords against unjustified interference in business relations. An existing contract may be a basis for greater protection, but some protection is appropriate against unjustified interference with reasonable expectancies of commercial relations even where an existing contract is lacking. The unjustifiable character of the alleged wrongdoer’s conduct and the harm caused thereby may be equally clear in both instances, but the differentiation between them relates to the scope of the privileges, or the kind and amount of interference that is justifiable in view of the differences in the facts.”

The language of the Washington court in Calbom v. Knudtzon, 65 Wash. 2d 157, 396 P. 2d 148 (1964), is also appropriate: See also Russell v. Croteau, 98 N. H. 68, 94 A. 2d 376 (1953); Dukes v. Brotherhood of Painters, etc., 191 Tenn. 495, 235 S. W. 2d 7, 26 A. L. R. 2d 1223 (1950) ; Chipley v. Atkinson, 23 Fla. 206, 1 So. 934 (1887).

“Intentional and unjustified third-party interference with valid contractual relations or business expectancies constitutes a tort, with its taproot embedded in early decisions of the courts of England, * * * (Citations omitted.)
From and with the English decisions, the tort has become engraved upon American law, generally unsullied in principle, although with some case by case distinctions. * # * (Citations omitted.)
# # *
The fundamental premise of the tort — that a person has a right to pursue his valid contractual and business expectancies unmolested by the wrongful and officious intermeddling of a third party — has been crystallized and defined in Eestatement, Torts § 766, * * *
# # *
The basic elements going into a prima facie establishment of the tort are (1) the existence of a valid contractual relationship or business expectancy; (2) knowledge of the relationship or expectancy on the part of the interferor; (3) intentional interference inducing or causing. a breach or termination of the relationship or expectancy; and (4) resultant damage to the party whose relationship or expectancy has been disrupted.”

Neither the fact that a contract is not for a fixed period nor the fact that there is no cause of action against the person who is influenced to terminate the contract, or to refuse to perform the agreement is a bar to an action against such an action. Chipley v. Atkinson, supra: Wolf v. Perry, 65 N. M. 457, 339, P. 2d 679 (1959); Annot., 84 A. L. R. 43, 60 (1933), 26 A. L. R. 2d 1224, 1258 (1952). The reason for this rule is aptly stated by Mr. Justice Hughes in Truax v. Raich, 239 U. S. 33, 36 S. Ct. 7, 60 L. Ed. 131, 1916D L. R. A. 545, 1917B Ann. Cas. 283 (1915), when he said:

“* * * It is said that the bill does not show an employment for a term, and that under an employment at will the complainant could be discharged at any time, for any reason or for no reason, the motive of the employer being immaterial. The conclusion, however, that is sought to be drawn, is too broad. The fact that the employment is at the will of the parties, respectively, does not make it one at the will of the others. The employee has manifest interest in the freedom of the employer to exercise his judgment without illegal interference or compulsion and, by the weight of authority, the unjustified interference of third persons is actionable although the employment is at will. * * *” (Citations omitted.)

We are not unaware of our decision in Purtle v. Wilcox, 239 Ark. 988, 395 S. W. 2d 758, but this decision is not in conflict with the principles above stated or the authorities above cited. There, we held that the allegations of the complaint were insufficient to state a cause of action for conspiracy to interfere with a business relationship terminable at will.

Even though one may not be liable as a direct actor in interfering with existing contracts of employment, he may incur liability as a participant in a conspiracy which results in one or more overt acts by others constituting actionable interference. A civil conspiracy is a combination of two or more persons to accomplish a purpose that is unlawful or oppressive or to accomplish some purpose, not in itself unlawful, oppressive or immoral, by unlawful, oppressive or immoral means, to the injury of another. Southwestern Publishing Company v. Ney, 227 Ark. 852, 302 S. W. 2d 538. Such a conspiracy is not actionable in and of itself, but recovery may be had for damages caused by acts committed pursuant to the conspiracy. Ragsdale v. Watson, 201 F. Supp. 495 (W. D. Ark. 1962); 16 Am. Jur. 2d 149, Conspiracy, §§ 43 & 44 (1964). A conspiracy may be shown by direct evidence of an actual agreement or understanding between conspirators, but it may also be shown by circumstantial evidence. Chapline v. State, 77 Ark. 444, 95 S. W. 477. It also may be inferred from actions of alleged conspirators, if it be shown that they pursued the same unlawful object, each doing a part, so that their acts, although apparently independent, are in fact connected and cooperative, indicating .a closeness of personal association and a concurrence of sentiment. Wilson v. Davis, 138 Ark. 111, 211 S. W. 152; Stewart v. Hedrick, 205 Ark. 1063, 172 S. W. 2d 416; Chapline v. State, supra. Any act done or declaration made by one of the conspirators in furtherance, aid or perpetration of the alleged conspiracy may be shown as evidence against his fellow conspirators. Wilson v. Davis, supra; Chapline v. State, supra.

.Defamatory statements and false statements have been recognized as improper actions giving rise to a cause of action for interference with contractual relations. Imperial Ice Co. v. Rossier, 18 Cal. 2d 33, 112 P. 2d 631 (1941); Dukes v. Brotherhood of Painters, etc., 191 Tenn. 495, 235 S. W. 2d 7, 26 A. L. R. 2d 1223 (1950); 86 C. J. S. 957, 959, Torts §§ 43, 44 (1954); Annot., 29 A. L. R. 532, 539 (1924). We have held that words, written and published, prejudicing one in his employment, are .actionable. Obaugh v. Finn, 4 Ark. 110, 37 Am. Dec. 773. The fact that the language alleged to have induced a discharge of an employee might be set forth in the complaint in such a manner as to form the basis of an action for libel or slander does not prevent the employee from maintaining an action for wrongful interference with his contract of employment. Blender v. Superior Court of Los Angeles County, 55 Cal. App. 2d 24, 130 P. 2d 179 (1942). See also Downey v. United Weatherproofing, Inc., 363 Mo. 852, 253 S. W. 2d 976 (1953).

A cause of action such as this has been recognized in this state when we held that it did not survive and was not assignable. Arkansas Life Insurance Co. v. American National Life Insurance Co., 110 Ark. 130, 161 S. W. 136. So, if, on the basis of the matter before the court on appellees’ motion for summary judgment, it can be said that any inference could reasonably be drawn that any of the appellees committed any act, not in legitimate furtherance of his own interests or otherwise privileged, that caused Mason’s employer to terminate his contract, or that two or more of them conspired to accomplish that result, and one or more of them committed an act in furtherance of that conspiracy, it was error to grant a summary judgment as to any such appellee.

Appellees state in their brief that the most that can be said is that they, acting in concert, sought to persuade appellant’s employer to discharge him. We do not agree with the appellees, however, that no cause of action can be based on this conduct. The motion upon which the judgment was granted was heard upon answer of appellant to appellees’ interrogatories, answers of appellee Dr. Dale Hudson to appellant’s interrogatories, the affidavit of appellee Funderburk, with exhibits thereto, a discovery deposition of Funderburk, a discovery deposition of appellant, and an affidavit of appellant. When these are viewed in the light most favorable to appellees a trier of the facts might find:

Fred Mason was elected to the Calico Rock School Board in 1966. In November, 1966, Funderburk, the State Manager of Field Enterprises began to receive communications derogatory to appellant from certain of the appellees. The first was a letter from Dean Hudson, dated November 7,1966. In that letter, Dean Hudson stated his assumption that it was against company policy for Field’s sales personnel to be members of local school boards, and transmitted a report that Mason had promised to see that the superintendent, principal and some of the teachers at Calico Rock were fired and had intimated that some of the school board members there had profited financially from a building program. He stated his belief in the truth of the reports, his opinion that Mason’s actions were highly unethical, his desire to buy materials so that Mason would receive no commission and his request to other school administrators not to buy from Mason or sales people under his control. Funderburk later received a letter from Neill Hudson, dated January 23, 1967. In this letter Neill Hudson expressed the opinion that Funderburk would put a stop to the confusion and ill feeling being caused by Mason, if he knew of it. He also stated that he had heard his brother Dean express a doubt that the new library at the Mountain Home School would have the World Book Encyclopedia as long as the situation existed. He also said “Fred Mason is strictly a politician in the lowest sense of the word, and as long as he is on the Board he will keep things in confusion.” When Funderburk did not answer, Neill Hudson wrote again on March 4, 1967, requesting a reply. Funderburk responded to the letter of Dean Hudson by calling at his office and discussing the controversy.

On July 21, 1967, Dean Hudson called Funderburk by telephone advising that Mason and others had filed a suit against the superintendent of schools at Calico Rock. This conversation lasted about an hour. Funderburk also received a letter dated July 20 from John Kron in which Kron suggested that Mason be called off or discharged, accusing Mason of maliciously injuring the school system and of saying to a business man that, if he thought things were fouled up, give him (Mason) another year. Connor, the high school principal, also wrote Funderburk on July 20. He accused Mason of harassing the superintendent and of trying to get the superintendent and the board to do things that were illegal.

The filing of the suit by Mason had been brought to Funderburk’s attention by his office manager before Dean Hudson’s telephone call. Funderburk also received newspaper clippings through the mail and coverage given the filing of this suit in newspapers in Izard county and Little Rock also came to his attention. On July 25, 1967, Funderburk asked Mason to resign from his position with the company, and when Mason refused to do so, gave him written notice of termination of the contract of employment. In his affidavit Funderburk stated that his decision to terminate Mason’s employment was prompted by a controversy in which Mason had become involved with some member of the Calico Rock School Board, of which he first became aware by the letter from Dean Hudson dated November 7, 1966.

It is admitted that the only acts taken in this matter by the Field Enterprises Educational Corporation were through the acts of Funderburk. In answer to an interrogatory requesting that he list with particularity each and every unlawful act L. J. Funderburk committed or in which he participated that resulted in damage, Mason stated that he “wrote derogatory letters; made malicious statements; conspired with the codefendants to deprive the plaintiff of his constitutional rights, including, but not limited to having the plaintiff fired for malicious reasons.” None of the matters before the court on the motion for summary judgment supports these general conclusions. Masoii stated that he had no trouble with his employer until he found out that Dean Hudson had written to Funderburk. He stated that Funderburk refused to give him copies of the letters written by John Kron and Neill Hudson. Funderburk did request Mason not to call on Mr. Dean Hudson because of' the controversy. Although there is some dispute as to whether or not Mason received the full 30-day notice required for termination of his contract, this is not an action against Funderburk and Field Enterprises for breach of contract. We agree with the circuit judge that there is no genuine issue as to any material fact as between Mason and Funderburk and that the summary judgment in favor of Field and Funderburk was properly granted.

To hold otherwise, would be to say that because a conspiracy is successful or contractual relations have been unlawfully interfered with, the person persuaded to act, who is also a victim, is equally liable with the conspirators or interferers.

We have searched the record carefully for any evidence of any acts by Dr. Dale Hudson from which it could be said that he had interfered with appellant’s employment or from which it might reasonably be inferred that he entered into a conspiracy with that purpose in view. Dr. Hudson stated that he read a copy of a letter by Dean Hudson after it was written and presumably mailed. He also admitted that Neill Hudson told him of having written to Funderburk some six weeks after the letter was written. There is no other indication that Dr. Hudson even had knowledge of the acts of the others in this regard. This evidence is not sufficient to support any cause of action against him. The summary judgment in his favor must be affirmed.

We cannot agree that there is no genuine issue as to any material fact as to the other appellees or that the evidence before the court on the motion discloses that the actions of Dean Hudson, Neill Hudson, John Kron and Jack Connor do not, as a matter of law, constitute either an unlawful interference, an actionable civil conspiracy or actionable defamation. We find some evidence of acts by these parties which might be found to be a tortious interference with appellant’s employment and contractual relations with his employer, or at least support reasonable inferences that they entered into a conspiracy with that purpose. In arriving at this conclusion, we take into consideration that statements in letters written by these appellees might well be found to be defamatory in nature and might even support a cause of action for defamation. In this connection we refer to definitions of the word politician as follows:

WEBSTER’S NEW INTERNATIONAL DICTIONARY, 2nd EDITION

“1. a political person; a schemer; an intriguer
3. * * * often, more or less disparagingly, one primarily interested in political offices or the profits from them as a source of private gain; # * *
SYN. Politician, Statesman. In modern usage politician commonly implies activity in party politics, especially with a suggestion of artifice or intrigue.”

WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY

“b: one primarily interested in political offices or profits derived from them as a source of private gain — often used disparagingly

THE RANDOM HOUSE DICTIONARY OF THE ENGLISH LANGUAGE

“2. a seeker or holder of public office, who is more concerned about winning favor or retaining power than about maintaining principles.
6. a person who seeks to gain power or advancement within an organization in ways that are generally disparaged.
SYN. 4. Politician, Statesman * * * these terms differ particularly in their connotations; politician is more often derogatory * * * politician suggests the schemes and devices of one who engages in (esp. small) polities for party ends or his own advantage: a dishonest politician”

Other language used in letters written by appellees might well be found or shown to be the basis for at least a jury question as to a right of recovery for defamation. See, e. g., Obaugh v. Finn, 4 Ark. 110, 37 Am. Dec. 773; West Texas Utilities Co. v. Wills, 164 S. W. 2d 405 (Tex. Civ. App. 1942); Smith v. Pure Oil Co., 278 Ky. 430, 128 S. W. 2d 931 (1939); Chambers v. National Battery Company, 34 F. Supp. 834 (W. D. Mo. 1940); Scheidler v. Brochstein, 73 S. W. 2d 907 (Tex. Civ. App. 1934). See also Leflar, Legal Liability for the Exercise of Free Speech, 10 Ark. L. Rev. 155, 170, 171 (1956).

Appellees argue that decisions in New York Times v. Sullivan, 376 U. S. 254, 84 S. Ct. 710, 11 L. Ed. 2d 686 (1964), and St. Amant v. Thompson, 390 U. S. 727, 88 S. Ct. 1323, 20 L. Ed. 2d 262 (1968), require a holding sustaining the summary judgment as to any action for damages for defamation, because the statements relied upon relate to appellant in his capacity as a public official. We cannot say that the statements refer to Mason’s official conduct, as a matter of law. Nor can we say that any issue as to malice of the appellees, their knowledge of the falsity of the statements or their recklessness in making them, are foreclosed by the motion for summary judgment and the supporting material.

Appellees’ reliance upon the cases of Raycroft v. Tayntor, 68 Vt. 219, 35 A. 53, 33 L. R. A. 223, 54 Am. St. R. 882 (1896), and Orr v. Home Mutual Ins. Co., 12 La. Ann. 255, 68 Am. Dec. 770 (1857), to support the summary judgment is misplaced. The results in both cases are reached solely upon the basis that the parties sought to be charged were engaged in the exercise of their own lawful rights. In the former case, the court recognized the cause of action for interference with an employment contract terminable at will against one interfering without having any lawful right in the matter. In the latter, it was held that where the actors had a lawful right in the matter, no liability arose because of any conspiracy among them. It cannot be said as a matter of law that either Kron, Connor, Dean or Neill Hudson was engaged in the exercise of any lawful right.

The judgment is affirmed as to Funderburk, Field Enterprises Educational Corporation, and Dale Hudson. It is reversed and the cause remanded as to Dean Hudson, Neill Hudson, Kron and Connor.

      For general discussions of the tort of interference with existing or potential contractual, business or employment relationships, see 45 Am. Jur. 2d 277, Interference, §§ 1 — 65 (1967); 86 C. J. S. Torts 955, et seq., § 42 — 44 (1954) : 52 Am. Jur. 386, et seq., Torts § 42 — 44 (1944); Prosser on Torts, p. 950 et seq., §§ 123 & 124 (3rd Ed. 1964); Annot., 29 A. L. R. 532 (1924), 9 A. L. R. 2d 228 (1950).

      This was one of the publications appellant was employed to sell.


source: Caselaw Access Project

author: J. Fred Jones, Justice. John A. Fogleman, Justice,

license: Public Domain

text:
    ARKANSAS STATE HIGHWAY COMMISSION v. Ralph L. GEESLIN et ux
    5-4962
    446 S. W. 2d 245
    Opinion delivered November 3, 1969

      Thomas B. Keys and Billy Pease, for appellant.

      Felver A. Rowell, Jr., for appellees.
   J. Fred Jones, Justice.

This is an eminent domain case involving the taking by the Arkansas Highway Commission, for Interstate 40 right-of-way, a 16.72 acre strip of land running northeast and southwest across the north 80 acres of Mr. Geeslin’s 440 acre tract of land in Conway County, Arkansas.

Mr. Geeslin testified that the highest and best use of his land was for livestock farming; that it was worth $300 per acre before the taking and $200 per acre after the taking. He testified that his entire land had been damaged in the amount of $58,263 because of the taking. Mr. George Lyford testified as an expert for Mr. Geeslin. He testified that the 80 acre tract through which the right-of-way was taken was not damaged at all by the taking, but that the remainder was damaged in the amount of $39,425. Two experts testified for the Commission. Mr. Scott testified that the damage amounted to $2,750 and Mr. Hayes testified that it amounted to $1,-750. All the testimony pertaining to damages was based on the difference in the value of the land before and after the taking. The jury returned a verdict for $45,000 and although the Commission filed a motion for a new trial, the court overruled the motion and entered judgment for the amount of the verdict. The Commission has appealed and relies on the following points for reversal :

The trial court erred in overruling appellant’s motion for change of venue.
The trial court erred in not striking the value testimony of owner, Ralph L. Geeslin.
The trial court erred in not striking the value testimony of expert witness George Lyford.
The Court erred in overruling the appellant’s motion for a new trial.
The verdict is not based on substantial evidence and is excessive.”

We disagree with the Commission on its first point, but we agree with it on all the others.

The Commission filed a verified motion for a change of venue but the motion was not supported by the additional affidavits required by law and it was denied by tbe trial court. The Commission argues that the trial court abused its discretion in refusing to grant the motion and that Geeslin waived any deficiency in the lack of affidavits in support of the motion by failing to object at the trial. We do not agree with the Commission. It filed its motion under Ark. Stat. Ann. § 27-701 (Repl. 1962), the pertinent part of which is as follows:

“Any party to a civil action, trial by a jury, may obtain an order for a change of venue therein by motion upon a petition stating that he verily believes that he can not obtain a fair and impartial trial in said action in the county in which the same is pending, on account of the undue influence of his adversary, or of the undue prejudice against the petitioner or his cause of action or defense, in such county. The petition shall be signed by the party and verified as pleadings are required to be verified, and shall be supported by the affidavit of at least two [2] credible persons to the effect that the affiants believe the statements of the petition are true.”

The Commission calls attention to sixteen eminent domain cases from Conway County where jury awards totaled $470,550, when the highest damages testified to by the Commission’s expert witnesses totaled only $131,-550. The same argument was advanced in the case of Ark. State Highway Comm’n v. Duff, 246 Ark. 922, 440 S. W. 2d 563, and there we said: “Our statute requires not only that a motion or petition for change of venue be verified, but, in addition, that it be supported by the affidavit of at least two credible persons that they believe the statements of the petition are true.” We pursue the Commission’s first point no further, for if its argument was not answered in Duff, supra, it was completely answered, adversely to the Commission’s contentions, in Ark. State Highway Comm’n v. Leavell, 246 Ark. 1049, 441 S. W. 2d 99.

In considering the other points the Commission relies on, we shall not go into the separate objections made to the testimony and exhibits. All objections except one were overruled by the trial court and the evidence was submitted to the jury for what it was worth.

The entire tract of land involved in this lawsuit consists of 440 acres. Eighty acres of the tract, one-fourth mile wide and one-half mile long, extends north from the northeast 40 of the remaining 360 acres. The remaining 360 acres lie roughly, on the map exhibit, in the form of a rectangle slightly longer east and west than it is wide north and south. Cadron Creek runs from the northeast to the southwest. It slightly cuts the southeast cor ner of the 80 acre tract and forms the eastern boundary line of the remaining 360 acre tract. The 80 acre tract extends north into hill land from Cadron Creek, and the remaining 360 acres extends west from Cadron Creek and is referred to as “bottom land.” The right-of-way extends diagonally through the 80 acre tract leaving ■approximately half of the remainder of the 80 acres, roughly in the shape of a triangle, on the northeast side of the right-of-way, and the remaining half in the form of a triangle, still joining the 360 acres on the southwest side of the right-of-way.

The jury verdict was for $5,575 more than any witness, other than Mr. Geeslin, testified that the damage amounted to, so the verdict was obviously based on Mr. Geeslin’s testimony. We must reverse the judgment of the trial court for two reasons. Mr. Geeslin simply submitted no substantial evidence that his land, outside of the actual taking, was damaged one-third of its original value, and there is no substantial evidence that the land was worth $300 per acre. Mr. Geeslin purchased about half of his land in 1959 for $62 per acre and the remainder in 1962 for $91 per acre. He paid $33,000 for the entire tract. There is no evidence in the record that he has made any improvements on the land or that it has increased in value since he purchased it.

The owner of land may give his opinion in evidence as to the value of his land without qualifying as an expert in land values, but his opinion does not constitute substantial evidence unless based on facts that would justify his opinion. A properly qualified expert’s opinion, however, does constitute substantial evidence unless it be shown that his expert opinion is without reasonable basis.

Mr. Geeslin testified as to some flooding and inconvenient access to parts of the 80 acres across which the right-of-way runs.

“Q. You cannot get to this land in the north?
A. No, sir, you cannot get to that.
Q. What has it done to this 80 acres?
A. It has completely destroyed the value of the whole property.”

And as to the remaining 360 acres, Mr. Geeslin testified, in part, as follows:

“Q. The remaining part of the 440 .acres, less this 80, has it been damaged since the taking?
A. Yes, sir.
Q. Tell us how.
A. The highest and most profitable — What I was going to use the place for, and I have gotten with the SCS people many years ago, was stock farming. That was my sole intention. Without this high land to get the cattle up out of the bottom, you know, you run a chance of running cows and them getting down in the creek and can’t get back up. So, that land has been damaged.
Q. Mr. Geeslin, prior to August 30, (He means March) [sic], 1966, and immediately thereafter, were you familiar with the value of lands similar to yours lying along Cadron Creek?
A. Yes, sir, the only piece of property I consider of anyways near as valuable as mine, acreage or value wise, lies approximately—
Q. Go to the exhibit and show the jury where it is.
A. From my property line here it is three quarters of a mile and directly across the track, [sic] the same type land. It is bottom land, subject to more overflow than mine. Mine is approximately 5 feet higher than his.
Q. Whose is that?
A. J. W. Benefield to Garland Kazar.
Q. Do you know when that sold?
A. March 31, 1966?
Q. Have you talked to both the buyer and seller?
A. Yes, sir, both, and the figure they used was $400.00 an acre is what Mr. Kazar paid Mr. Benefield for his land.
Q. March 31, 1966?
A. Yes, sir.
Q. Based on your knowledge of the land and sales in this area, will you tell the jury what in your opinion the 440 acre tract was worth immediately before March 30, 1966, or before the highway went through?
A. I figured it was worth $300.00 an acre. I didn’t consider it hill land any less valuable than the other for the reason I was going to use it as a stock farm, and it had as much value as the other, for the reason I was going to use it for that.
Q. Prior to March 30, 1966, what was the 440 acres worth?
A. $132,000.00.
Q. What, in your opinion, Mr. Geeslin, was the land worth immediately after the taking?
A. I would say it is worth $200.00, or — $200.00 an acre, or $88,000.00 after that.
Q. All right.
A. Because of the devaluation for the stock farm.
Q. Based on the taking and damages what, in your opinion, have you been damaged in dollars and cents, Mr. Geeslin, and tell us why?
A. Okay, sir. The 16.82 acres I valued at $300.00 an acre, or $5,016.00. The rest of the 80 acres— this block here — less the amount of the highway Right of Way that is not accessible, 58 acres, at $300.00 an acre, or $17,448.00, less the value that I placed on it immediately after the taking — This part I can’t get to — a small tract of land, if you find somebody that would give $30.00 an acre, or a devaluation of the 80, $15,735.00. On the remaining, I considered damaged $100.00 an acre, $36,500.00, because I can’t use it for the high value of stock farming, and it is limited to strictly row cropping.
Q. What, in your opinion, was the property worth immediately after the taking!
A. Immediately after the taking the total value would be $73,736.00.
Q. Making your damage what, Mr. Geeslin, in your opinion!
A. In my opinion, I was damaged $58,263.00; and all of this I haven’t covered.”

Mr. Geeslin testified on cross-examination that his land is in the soil bank; that the taking of the right-of-way has damaged it for cattle grazing purposes and that it is now only fit for row crops. In arriving at the value he compared his land to a 700 acre rice and soy bean farm sold by Benefield to Kazar for $400 per acre. He compared his 80 acres through which the right-of-way was taken to some land sold by Wilcox and Bell to Hixon for less than $200 per acre. Yet he values his 80 acres of hill land, along with the rest of his land, at $300.

We conclude that the trial court erred in refusing to strike the value testimony of Mr. Geeslin because it was shown on direct as well as cross-examination, that he had no logical basis for the value of $300 per acre he placed on his land. Regardless of the value of _Mr. Geeslin’s land prior to the taking, he is without reasonable basis for his testimony that his land had been damaged in the amount of $100 per acre. Mr. Geeslin still has approximately half of his 80 acres in hill land connected as before to his remaining 360 acres bottom land. It is difficult to reconcile Mr. Geeslin’s testimony that his bottom land has been reduced by one-third in value by converting it from its intended use as pasture to being fit only for row cropping. The chance he would take “of running cows and them getting down in the creek and can’t get back up” does not constitute substantial evidence that his 440 acres of land was damaged $100 per acre or in any other amount. He would take the same chance of overflow in planting his land to row crops as he would in running it in pasture.

Mr. Geeslin’s expert witness, George Lyford, testified that 75 acres of the 80 acre tract was in the hills and that its market value before the taking, as well as after the taking, was $175 per acre. He testified that 5 acres of the 80 acre tract, as well as the remaining 360 acres, was bottom land which had a market value of $300 per acre before the taking.

“Q. What was the value before the taking?
A. The value of the whole tract before the taking was $122,625.00.
Q. How did you arrive at that value?
A. I used the price of $175.00 an acre on 75 acres of this north 80 — 5 acres of that north 80 included in the bottom land at $300.00 an acre, which made a total of 345 [sic] in the bottom and 75 acres in the hills.”

On direct examination Mr. Lyford testified that he used comparable land sales in arriving at his evaluation, but he only testified as to two of them. One was the sale of hill land for less than $200 per acre made some six months after the taking, and the other was the Benefield sale at $400 per acre testified to by Mr. Geeslin. As to the damage of $100 per acre to the 365 acres in bottom land, Mr. Lyford testified on direct examination as follows:

“A. We considered the highest and best use was permanent pasture, and he had 250 head of cattle there. He would have—
Q. If you had a cattle farm, if the water came up, then the cattle would have high ground to go up to?
A. No, sir.
Q. Did Mr. Geeslin have this high ground before?
A. Yes, sir.
Q. Where was it?
A. On the north side of the right-of-way.”
On cross-examination Mr. Lyford testified:
“Q. Mr. Lyford, this tract Benefield to Sevier, March 31, 1966, that was for how much?
A. $290,800.00.
Q. How many acres?
A. 727 acres with no improvements.
Q. That is how much an acre?
A. $400.00 an acre.
Q. Let’s talk about this a little bit, Where is this property?
A. Across the creek and about a mile north.
Q. Across the creek and north of the subject land?
A. Yes, sir.
Q. What is the topography of this land?
A. It is in the first bottom north of the ridge that runs west of Beaver Fork Lake.
Q. Is it suitable for cultivation?
A. Yes, sir.
Q. Is the land we took in this law suit suitable for cultivation?
A. The land you took? No, sir.
Q. How do you compare these sales?
A. I compared that as the whole of the property. Q. What do they grow on the Sevier land?
A. What kind of land—
Q. This other land?
A. Rice and soy beans.
Q. Did you consider that comparable to this land that had timber and scrub underbrush?
A. No, sir. I took that into consideration in the north 80 acres.”

We conclude that both on direct and cross-examination Mr. Lyford revealed that he had no sound basis for his opinion that Geeslin’s land had a before value of $300 per acre and -an after value of only $200. Even if the before value of the 365 acres of bottom land was worth $300 per acre before the taking, there is no substantial evidence that it was damaged $100 per acre because of the taking. Both the owner and his expert witness testified that 75 acres of the 80 acre tract is hill land and' the photograph exhibits 3 and 4 bear this out. The plat shows, and the testimony indicates, that about half of the hill land still remains on the southwest side of the right-of-way and connected to the main body of bottom land, and there is no testimony that all of the 365 acres in bottom land is ever inundated by overflow. There are no buildings or other improvements on the property which have been severed from the remainder by the right-of-way. If the 365 acres lost one-third of its value because it is subject to such overflow that would force cattle to leave it and seek refuge on the 80 acres of hill land, then certainly a 727 acre rice and bean farm, over the hill in another valley, would not be comparable to the 365 acres of such overflow land. If the two farms are comparable, then it is only reasonable that the highest and best use of both of them would be for either cattle grazing or rice and bean farming. If Mr. Geeslin is correct in his testimony that his land is now only fit for row cropping, it would .appear that it is now more comparable to the rice and bean farm than it was before the taking.

This case is reversed and remanded to the trial court for a new trial.

Reversed and remanded.

Fogleman and Holt, JJ., dissent.

John A. Fogleman, Justice,

dissenting. I do not agree that the landowner’s testimony should have been stricken. The motion was to strike his entire testimony with reference to comparable sales and did not relate to other matters treated in the majority opinion.

The motion to strike was based upon the grounds that (1) the testimony did not meet the criteria set down by law with reference to market value of land and (2) there was no similarity in the comparable sales given by this witness. Nothing was said .about his testimony as to difference in market value or his valuation of the land remaining after the taking. Consequently, the motion only went to the landowner’s testimony about comparable sales.

At the outset, it seems to me that the majority is endeavoring to say that an owner’s testimony and an expert’s testimony are to be treated differently in respect to their respective bases in that the burden is on an owner to demonstrate a reasonable basis for his testimony, while the opposing party must demonstrate the Jack of a reasonable basis for the opinions given by an expert. I do not so construe our cases. See, e. g., Arkansas State Highway Commission v. Clark, 247 Ark. 165, 444 S. W. 2d 702; Arkansas State Highway Commission v. Stobaugh, 247 Ark. 231, 445 S. W. 2d 511. The landowner is permitted to give value testimony because of his familiarity with the property. Arkansas State Highway Commission v. Russell, 240 Ark. 21, 398 S. W. 2d 201; Arkansas State Highway Commission v. Stobaugh, supra. The expert is permitted to do so because of his laiowledge of market values. Arkansas State Highway Commission v. Johns, 236 Ark. 585, 367 S. W. 2d 436. An owner’s lack of knowledge of market values goes only to the weight to be given to his testimony. Arkansas State Highway Commission v. Fowler, 240 Ark. 595, 401 S. W. 2d 1; Arkansas State Highway Commission v. Drennen, 241 Ark. 94, 406 S. W. 2d 327; Arkansas State Highway Commission v. Maus, 245 Ark. 357, 432 S. W. 2d 478. In Arkansas State Highway Commission v. Darr, 246 Ark. 204, 437 S. W. 2d 463, we only said that the testimony of the owner should be examined to determine whether he gave a satisfactory explanation for his conclusion in determining whether it is substantial, not whether it should be stricken. See Arkansas State Highway Commission v. Carter, 247 Ark. 272, 445 S. W. 2d 100.

The reason given in the majority opinion for sustaining the motion to strike is that Geeslin had no logical basis for his value of $300 per acre before the taking. This seems to be on the basis that Geeslin in considering his value figure used a sale by Benefield to Kazar one day after his land was taken. According to him, that land was the only land along Gadron Creek anywhere near as valuable as his own. He described it as the same type land, but subject to more overflow than his own because of a five-foot difference in elevation. He estimated that 70 percent of the Benefield land was open for cultivation as compared to 85 percent of his own land. The Benefield land sold for $400 per acre. He considered a sale of lands by Wilcox and Bell to Hickson at a little less than $200 per acre as being comparable to his hill land. Geeslin placed an overall value of $300 per acre on his entire tract. I cannot see how the fact that the Benefield farm was cultivated in rice and soybeans, while the bottom land of Geeslin was in the soil bank, makes Geeslin’s testimony subject to being stricken or insubstantial. No two tracts of land are identical. Reasonable latitude must be allowed in evaluating sales. Arkansas State Highway Commission v. Clark, supra; Arkansas State Highway Commission v. Sargent, 241 Ark. 783, 410 S. W. 2d 381. It seems to me that the owner’s testimony showed sufficient similarity that we cannot declare the two tracts so dissimilar as to preclude consideration of this sale or to say that the trial court committed reversible error in denying a motion to strike the testimony.

As the sole ground for striking, appellant makes the identical argument as to the testimony of George Lyford, i. e., that the Benefield-Kazar sale is not comparable. This argument is based to .a great extent upon the statement that the Benefield land had a rice allotment, but the Geeslin land did not. This witness, who had been in real estate and appraisal business for twenty years and had made appraisals for many governmental and lending agencies, said that the two tracts were comparable. He valued the 365 acres of bottom land on the Geeslin tract at $300, reducing the value $100 from the Benefield sale price because of the rice allotment. I find nothing to indicate that this adjustment was not reasonable. In my opinion there was no basis for striking Lyford’s testimony.

In determining that the testimony of these witnesses was not substantial, the majority seems to place its decision upon the following in addition to the alleged lack of comparability of the Benefield sale:

(1) Geeslin still has approximately half of his 80 acres in hill land connected as before to his 360 acres in bottom land.

(2) The value of $300 per acre is not substantially supported because Geeslin bought part of the land in 1959 for $62 per acre and the remainder for $91 per acre in 1962, and there is no evidence that the land has increased in value since he purchased it.

(3) There was no substantial evidence to support a reduction in value of remaining lands to the extent of $100 per acre.

I will treat these factors in the order listed.

(1) Geeslin’s testimony is to the contrary. He stated that the entire 80-acre tract had been rendered inaccessible to the remainder by reason of a little slough running through the property to Cadron Creek. While the slough was there before the highway construction, Geeslin testified, without contradiction, that the highway department had filled in and re-routed this slough. According to him, this change, without any drainage relief having been provided, caused water to back up and stand on his land so as to cut off that part of the remainder of the 80-acre tract south of the new highway as well as that north of it.

(2) I think undue emphasis has been placed upon the prices at which Geeslin purchased this land. We should take judicial notice that land values all over Arkansas have steadily increased during the last 30 years and that the increase has been at an accelerated rate during the past decade. An appraiser for appellant stated that land has been increasing in value, generally speaking, but very little in the hills. He increased his values over certain sales prices in preceding years. Geeslin stated that the price he paid for the land purchased in 1962 was fixed by an agreement made with the seller in 1955, but not then consummated. Geeslin stated without contradiction that the Benefield land was purchased in 1962 at $125 per acre and sold in 1966 for $400 per acre.

(3) In giving his values for the remainder after the taking Geeslin did not relate his testimony to comparable sales. He gave a plausible explanation for a change in highest and best use from a cattle operation to row cropping, in that the high land to which the cattle could have moved when water from Cadron Creek overflowed into the bottom lands had been isolated. He mentioned the fact that no drainage under the highway had been provided, so that water stood on portions of his land to an extent that timber thereon was dying. He considered that an isolated portion of the 80-acre tract was so inaccessible that finding a purchaser for it even at $30 an acre would be difficult. No inquiry was made of Lyford by appellant as to how he arrived at his <fafter taking” value.

It seems to me that the testimony of these witnesses was substantial enough to leave its weight and creditability to the jury. The expert witness was not required to state how he arrived at his values. The burden was upon appellant to demonstrate that there was no reasonable basis for the value testimony of these witnesses. I submit that it did not do so. Certainly, it was not demonstrated that Lyford’s testimony had no reasonable basis. I cannot help feeling that the majority has weighed the testimony.

Holt, J., joins in this dissent.

      Ark. State Highway Comm’n v. Muswick Cigar and Beverage Co., 231 Ark. 265, 329 S. W. 2d 173.

        Ark. State Highway Comm’n v. Darr, 246 Ark. 201, 437 S. W. 2d 463.

        Ark. State Highway Comm’n v. Duff, 246 Ark. 922, 440 S. W. 2d 563.

        Ark. State Highway Comm’n v. Johns, 236 Ark. 585, 367 S. W. 2d 436; Ark. State Highway Comm’n v. Dixon, 246 Ark. 731, 439 S. W. 2d 912; Ark. State Highway Comm’n v. Duff, supra.


author: Frank Holt, Justice. Conley Byrd, Justice,

text:
    Kenneth MADDOX v. STATE of Arkansas
    5429
    446 S. W. 2d 210
    Opinion delivered November 3, 1969

      Garner & Parker, for appellant.

      Joe Purcell,- Attorney General; Don Langston, Asst. Atty. Gen., for appellee.
   Frank Holt, Justice.

Appellant brings this appeal from the imposition of a sentence which followed a delayed acceptance of his plea. On December 2, 1968, he appeared with his .attorney and entered a plea of nolo contendere to a charge of possession of stolen property. The trial court followed the state’s recommendation that the acceptance of appellant’s plea be postponed for a period of one year, conditional upon appellant’s good behavior. About two months later the appellant was charged with burglary and grand larceny. After conducting evidentiary hearings upon the state’s petition to revoke appellant’s probation, the court accepted the plea appellant had previously entered and sentenced him to the penitentiary for a period of twelve years with six years suspended.

On appeal the appellant contends that the trial court could not sentence him for more than one year when the court accepted his plea during this probationary period. Appellant urges that since the acceptance of his plea was postponed for a period of one year, based upon his good behavior, it follows that his sentence could not exceed one year. Appellant cites Ark. Stat. Ann. § 43-2324 (Repl. 1964) and Canard v. State, 225 Ark. 559, 283 S. W. 2d 685 (1955). Appellant relies upon that part of the above cited statute which reads:

“* * * Such postponement shall be in the form of a suspended sentence for a definite number of years, running from the date of the plea or verdict of guilty and shall expire in like manner as if sentence had been pronounced; provided however, the Court having jurisdiction may at any time during the period of suspension revoke the same and order execution of the full sentence.”

We cannot .agree with appellant. He overlooks the first part of this statute which reads:

“Whenever, in criminal trials in all courts of record, .a plea of guilty shall have been accepted * * *, the Judge trying the case shall have authority, if he shall deem it best for the defendant and not harmful to society, to postpone the pronouncement of final sentence and judgment upon such conditions as he shall deem proper and reasonable as to probation of the person convicted, the restitution of the property involved, and the payment of the costs of the case.”

Thus, it is readily seen that the legislature has provided that whenever a plea is accepted, the trial court has the authority to impose a suspended sentence. We perceive no language in this statute nor in any case cited to us that limits the power and the discretion of the trial court to delay the acceptance of a plea. In the case at bar we cannot say that one year is an unreasonable length of time to defer .acceptance of a plea. We cannot accept the argument of the appellant that his one-year probation before accepting his plea amounted to a sentencing of one year within the meaning of § 43-2324. Nor do we construe this procedure to be an invasion of any of his constitutional rights.

In the case at bar the postponement of acceptance of appellant’s plea for a period of one year was on the recommendation of the state with the .approval of the appellant and his attorney. The trial court clearly detailed the conditions and benefits of probation in writing. The appellant was advised that upon his good behavior for a year, the charge of stolen property would be dismissed pursuant to the agreement with the prosecuting attorney. The court thoroughly explained to the appellant, who is 32 years of age, the benefits of not having a record of a felony conviction. It was outlined to the appellant how a felony conviction would result in tainting his future .and his citizenship rights. The conditions of his probation were in the form of a letter which appellant read and signed in the presence of his attorney acknowledging that he understood and accepted the conditions. Should we accept appellant’s argument we would circumscribe .and severely handicap our trial judges in their efforts to determine when their trust and compassion should be exercised for the ends of justice and the best interest of the public as well as the defendant. The future of deserving individuals, especially youthful offenders, who come before our sentencing courts should not be jeopardized by such a narrow construction as urged by the appellant. Nor do we agree with the appellant that the sentence imposed is excessive since it exceeded one year. The sentence was within the statutory limits which .are from' 1 to 21 years. § 41-3938 (Eepl. 1964).

Appellant also contends that the judgment is contrary to the evidence and, therefore, the trial court abused its discretion in granting the petition to revoke appellant’s probation. We cannot agree. Appellant’s one-year probation was given to him on December 2, 1968, upon condition of good behavior. The written conditions of his probation provided in part:

“You are to understand that until you have appeared before this court and have been officially released that you are under control of this court. If you fail to appear as scheduled, or if at any time you are found to have violated any of the conditions of your probation, the court may then reopen the proceedings, find you guilty ás charged, and issue an order to have you picked up and returned for sentencing.”

At the evidentiary hearings, the state adduced proof that on the night of December 2nd a local motel was burglarized and two color television sets were stolen from it. A twenty-year-old boy testified that he perpetrated this alleged offense after it was planned the night before by the appellant and himself. The manager of a nearby nightclub or private club testified that he is an ex-convict and that appellant was a patron and member of the club. He related that on the night of the alleged burglary of the motel and theft of the color television sets, the appellant and this twenty-year-old boy approached him at the club about a loan of $50 upon a television set. He said that he loaned $35 to them and received as security a black and white television set. This set had been recently stolen. He further testified that following this transaction, the appellant approached him about purchasing a color television set for $150 and that both the appellant and the boy told him there were two color sets for sale. Another witness, who worked for the club manager, stated that appellant and this boy were present in the club that night and the young boy appraoached her about buying a color television set. The next day these color sets were discovered in the boy’s car by his parents and they took him and the property to the police. The appellant denied complicity.

The appellant argues that the testimony of the individuals who implicated him is insufficient .and uncorroborated and that the court grossly abused its discretionary powers in the revocation of appellant’s proba tion.

In Calloway v. State, 201 Ark. 542, 145 S. W. 2d 353 (1940) we approved the rule that:

“The behavior of the defendant is a question of law to be passed on by the court, and the exercise of its discretion in this matter cannot be reviewed in the absence of gross abuse.”

See, also, Gross v. State, 240 Ark. 926, 403 S. W. 2d 75 (1966) and Smith v. State, 241 Ark. 958, 411 S. W. 2d 510 (1967).

In the case at bar we are of the view that the court did not .abuse its discretionary powers in the revocation of appellant’s probation.

Affirmed.

Byrd, J., dissents.

Conley Byrd, Justice,

dissenting. I disagree with the majority for two reasons: (1) The history of the statute and the prior constructions given thereto by this Court are contrary to the decision of the majority, and (2) The effect of the majority decision permits a trial court to convict and sentence a defendant without the benefit of a jury trial for the second offense and also leaves the defendant in the position of being subsequently prosecuted for the same offense and given another sentence — i. e., the subsequent revocation of the suspension violates both the man’s constitutional right to .a jury trial and his constitutional rights against double jeopardy.

In the case of Spears v. State, 194 Ark. 836, 109 S. W. 2d 926 (1937), Spears entered a plea of guilty to larceny at which time the court made this order: “Whereupon the Court doth order that the judgment rendered herein be and the same is hereby suspended during good behavior and payment of the Court cost in this suit, the Court retaining jurisdiction for all purposes until the next term of this Court. ’ ’ This order was entered at the July term of 1934, and no further action was taken against him until July 19, 1937, at which time the prosecuting attorney filed a petition praying that the suspended sentence be set aside. Upon a hearing the suspended sentence was set .aside and appellant was sentenced to the penitentiary. In holding that the trial court did not lose jurisdiction by the elapsing of the term of court we said:

“Appellants first contention is based upon language used in Hartley v. State, 184 Ark. 237, 42 S. W. (2d) 7, where it was said: ‘It was pleaded, and now argued, that the court lost jurisdiction to impose the sentence by the lapse of time. Not so. Neither the statute in question nor any other statute contains a time limitation. No limitation was fixed in the order. It was clearly a continuing order and remains in force and effect until changed or modified.’ It is contended here that there was a limitation fixed in the order suspending the sentence, that is, until the next term of court, and that after the next term, the court lost jurisdiction to change the order.
“Section 4053 of Pope’s Digest confers authority on circuit courts in criminal cases, ‘if he shall deem it best for the defendant and not harmful to society, to postpone the pronouncement of final sentence and judgment upon such conditions as he shall deem proper and reasonable as to probation of the person convicted, the restitution of the property invovlved, and the payment of the costs of the case.’ Section 4054 reads as follows: ‘Such judge shall have power, at any time the court may be in session, to revoke the suspension and postponement mentioned in § 4053, and to pronounce sentence and enter final judgment in such cause whenever that course shall be deemed for the best interests, of society and such convicted person. ’• Section 4055 provides for the collection of costs whether the sen tence be suspended or not. It will be noticed that. by § 4054 the court has the power at any time that it is in session to revoke the suspension of sentence, and to pronounce sentence and enter final judgment, ‘whenever that course shall be deemed for the best interests of society and such convicted person.’ So the court had power to revoke the suspended sentence at any time the court was in session. The fact that the court made an order, retaining jurisdiction for all purposes until the next term of court could not have the effect of abrogating the statute and thereafter depriving the court of the jurisdiction conferred upon it by the statute. That language in the order must be treated as surplusage. ...”

Following the Spears case the Legislature by Act 262 of 1945, repealed Section 4054 of Pope’s Digest and amended Section 4053. Act 262 is as follows:

“SECTION 1. That Section 4053 of Pope’s Digest be amended to read as follows: Whenever, in criminal trials in circuit court, a plea of guilty shall have been accepted or a verdict of guilty shall have been rendered, the judge trying the case shall have authority, if he shall deem it best for the defendant and not harmful to society, to postpone the pronouncement of final sentence and judgment upon such conditions as he shall deem proper and reasonable as to probation of the person convicted, the restitution of the property involved, and the payment of the costs of the case. Such postponement shall be in the form of a suspended sentence for a definite number of years, running from the date of the plea or verdict of guilty and shall expire in like manner as if sentence had been pronounced; provided however, the Court having jurisdiction may at anytime during the period of suspension revoke the same and order execution of the full sentence.
“SECTION 2. Section 4054 of Pope’s Digest is hereby repealed. ’ ’

By Acts 1949 No. 358, the Legislature provided that all postponements of final sentences under Section 503 of Pope’s Digest heretofore made and entered by the various judges of the Circuit Courts of this State shall run from the date of the plea or verdict of guilty and for the period of the statutes of limitation for each offense, and at the expiration of said period of limitation shall expire in like manner as if the sentence had been pronounced. Act 44 of the Acts of 1953, merely reenacted Section 1 of Act 262 of 1945, thus repealing the 49 Act. In Gerard v. State, 235 Ark. 1015, 363 S. W. 2d 916 (1963), the purpose of Act 44 of 1953 was stated by this Court in this language:

“. . . It is obvious that the primary purpose of the General Assembly, in passing Act 44, was to set a definite period of time in which a suspended sentence would operate; in other words, the Legislature had the intent to end the practice of a trial court postponing a sentence indefinitely. Here, the sentence was suspended for a definite period of time — one year, and the suspension was revoked within that time. It follows that this contention is without merit.”

For these reasons I would reverse and remand the case to the trial court with directions that the punishment could not extend for more than the one year set forth in the trial court’s postponement. The language added by the 1935 Act specifically provides that, “SUCH POSTPONEMENT SHALL BE IN THE FORM OF A SUSPENDED SENTENCE FOR A DEFINITE NUMBER OF YEARS.” Anything else ignores the plain meaning of the 1945 amendment.

Since the trial court upon the plea of guilty suspended or postponed the acceptance of the plea for a period of one year it is rather obvious that had he given the defendant a sentence at that time it would not have been for more than one year. Under the procedure here adopted by the trial court appellant was not entitled to a jury trial. However, the trial court after hearing testimony relative to the theft of the television sets sentenced the defendant to a period of 12 years with 6 years suspended. It must be remembered that the sentence is upon the plea of guilty to the original charge of possessing stolen property and technically does not amount to a finding of guilty of the theft of the television sets. Consequently, the defendant is sentenced to 11 years for stealing the television sets and yet remains subject to being charged with larceny for the theft. It is obvious to me that the procedure involved here violates both of his constitutional rights to a jury trial and against double jeopardy.

By some imagination beyond my comprehension the majority takes the view that Ark. Stat. Ann. § 43-2324 (Supp. 1967), is not controlling on the theory that the plea of guilty was never accepted by the trial court. For the record, I quote from the letter, the terms and conditions of which the trial court demanded that the defendant accept in writing. The letter provides:

“To Kenneth Maddux, . . .
‘ ‘ On this date, Dec. 2,1968, you have entered a plea of guilty to a felony. The court has not accepted your plea and instead has placed you on probation with all further proceedings postponed for a period of one year, conditioned upon your good behavior. . .
“You are to understand that until you have appeared before this court and have been officially released that you are under control of this court. If you fail to appear as scheduled, or if at any time you are found to have violated any of the conditions of your probation, the court may then reopen the proceedings, find you guilty as charged, and issue an- order to have you' picked up and returned for .sentencing. ■-
“You are being placed on probation because tbe court and others who are interested in you feel you realize you have made a grave mistake, that being arrested and brought before the court has made a lasting impression upon you, and that you can make good without being sent to the penitentiary as punishment. . . .
“You should deeply appreciate all that is being placed in you.
/s/ Paul Wolfe
CIRCUIT COURT
“I have read this in the presence of my lawyer, I understand it, and accept all conditions of the court.
“/s/ Kenneth Maddux
Defendant
Witness:
/s/ Douglas W. Parker
His Attorney”

In my humble opinion the letter of the trial court amounts to an acceptance of the plea within the meaning of Ark. Stat. Ann. § 43-2324 (Supp. 1967) for two reasons:

(1) Ark. Stat. § 43-1222 provides: ‘At any time before judgment, the court may permit the plea of guilty to be withdrawn and a plea of not guilty substituted.’ We have consistently held that the right to withdraw a plea is within the sound discretion of the trial court, Morris v. State, 226 Ark. 472, 290 S. W. 2d 624 (1956), under substantially similar circumstances, see Joiner v. State, 94 Ark. 108 (1910); and
(2) The letter, which the trial court demanded that defendant and his attorney accept in writing, specifically authorized the trial court in his sole discretion to accept the plea of guilty at any time and ex parte.

Furthermore, the plea of guilty has the force and effect of a verdict of guilty by a jury, Rader v. U. S., 288 F. 2d 452 (1961), and Ark. Stat. Ann. § 43-2324, certainly applies when a verdict of guilty has been rendered. The only logic or authority I can find that supports the proposition that Ark. Stat. Ann. § 43-2324, does not apply to the defendant here is simply their statement that it does not do so.

Do we not legislate as much when we write something out of a statute as we do when we write it in? The State’s policy was set by Ark. Stat. Ann. § 43-2324, requiring that “such postponement shall be in the form of a suspended sentence for a definite number of years. . . .’’It looks to me that we should at some point do more than pay lip service to the maxim, “that we are a nation of laws and not of men.”

For these reasons, I would reverse and remand with directions to. reduce the sentence to one year.


author: Cableton Habéis, Chief Justice.

text:
    Odell MILLER v. FAIRFIELD BAY, Inc. et al
    5-5013
    446 S. W. 2d 660
    Opinion delivered November 10, 1969

      Allan, Dahlen & Young, for appellant.

      Warner, Warner, Ragan & Smith, for appellees.
   Cableton Habéis, Chief Justice.

This appeal relates to the validity of an employment agreement between the employer, Fairfield Bay, Inc., one of the appellees herein, and the employee, Odell Miller, appellant herein. Fairfield Bay is a vacation-retirement development on Greers Ferry Lake in Yan Burén County, where appellant was employed as a real estate salesman, and while so employed, made numerous sales. This employment commenced in March, 1967, and on the ninth day of that month, an employment agreement was entered into between the parties. The remuneration (which was in the form of commissions) to be paid Miller was not a part of this contract, Section 2 reciting:

“The remuneration to be paid Employee has been agreed upon by the parties, and being subject to change, is not specified herein.”

Section 3 provides as follows:

“Employee agrees as a condition of this employment, that during the term of his employment and for a period of three years thereafter, he will not directly nor indirectly engage in competition with Employer in the sale or development of residential or commercial real estate within a fifty (50) mile radius of Greers Ferry Lake, Van Burén and Cleburne Counties, Arkansas. Employee further agrees as a condition of this non-competition clause, that he will not directly or indirectly purchase any real estate for investment or development within said area during the term of this non-competition agreement, without the express written consent of Employer. The term ‘direct or indirect’ as used herein, shall without limiting the generality of s.aid language, include participation by Employee or his spouse as a partner, shareholder, officer, employee, agent, consultant or in any other advisory or direct association with any partnership, corporation, firm or association or other business enterprise of any sort which is engaged in competition with Employer in the development of land in the above described area.”

Section 4 provides that the agreement may be terminated by any party at any time, but the terms of the no competition clause (Section 3) shall remain in full force and effect.

Several months after this employment, appellant was licensed with appellee Shirley Realty Company, hereafter called Shirley, under which employment, Miller made numerous other sales, also on a commission basis. Shirley is an affiliate of Fairfield, and was created in June of 1967 to handle the Fairfield Bay sales; Shirley sold nothing but Fairfield property. Miller’s remuneration, under both companies, was 1/3 of the initial down payment, and 1/5 of the monthly installments, this last continuing until he had received 10% of the total sale price. In November, 1968, appellant terminated his employment with Shirley, and licensed with another broker, within the prohibited radius, who was ta potential competitor of appellees.

The two companies thereafter refused to pay to Miller the commissions that had accrued from the payment of installments, and appellant instituted complaint against them for the amounts that he contended to be due, $5,113.10 from Fairfield, and $13,808.50 from Shirley. After the filing of an answer, the case was tried, and at the conclusion of the evidence, the court found that Miller was not entitled to these accruals, since he had breached his contract with the companies, the breach being material, and thus precluding him from recovery. From the decree so entered, Miller brings this appeal.

Miller, who had been employed at Cherokee Village before going to Fairfield, testified that the projects of those two companies were about the same, except that the commission given was a little different. He stated that very few customers lived within a 50-müe radius of Greers Ferry Lake, and he testified that he had not contacted a single customer of Fairfield relative to buying a lot from his new employer.

Fairfield’s operation was explained by George Jacobus, president and general manager of the company. He testified that most of the customers come from states that surround Arkansas, particularly Tennessee and Texas, and he said that the company conducts an advertising campaign to get the people into the area. Jacobus said that it was essential to have the non-competition clause in the contract, because:

“* * * when a man who knows what my advertising schedule is, who receives my pay while he finds out that and then sets up his office on the route that these customers are coming in, then he is damaging me.”_

The witness stated that the company used directories and telephone books for the “mail out,” and that the salesmen helped with the “mail out,” actually running some of the envelopes through the stamp machine, and carrying them to the post office. He said that the telephone directories of every city in the trade territory were'used in getting the names, and added that these telephone books belonged to the company, “we sent away and paid for them and then we edit them.”

As to the general duties of a salesman Jacobus said that, after the sale was effected, and the down payment made, it was the salesman’s “responsibility to contact these people if these folks should write a letter requesting some information or have a problem of some type it is up to the individual sales representative to answer this, to write a letter over his signature. We make a very important emphasis on the fact that every customer belongs to the sales representative who sold him that lot. He is the direct link between the company and that person. So, if these people get a little behind on their payments, the salesman is the one to contact them, he may be able to renegotiate a deal if they have had some hardship where they will still be able to protect their equity in the property, and if a salesman leaves then we have to do this at our expense.”

Admittedly, however, this is not a duty which is set forth in the employment agreement. From the record:

“Q. Now, on the salesman follow up with customers; of course, the salesman has an interest, I believe, in keeping the account going, in that he gets the renewal as long as they come in?
A. That is right, yes, sir.
Q. This is something you don’t put in the employment contract, they are glad to do it in order to get the sales to stay on track and completed, isn’t that right!
A. I don’t want to quibble about that, but they are not really glad to do it, they had to be urged; we have to keep having them follow up, but they do it, yes.
Q. This is no duty you put in any employment contract or in Mr. Miller’s contract!
A. No, sir.”

When interrogated as to the special knowledge and skill required of one who desires to work for his company, Mr. Jacobus replied that such an applicant would have to have sales ability, a real estate license, an automobile, a radio, “has to be presentable,” and have the ability to sell property.

Charles Coleman, comptroller for Fairfield Bay and its affiliated companies, testified that, as of September 30, 1968, Miller was owed $3,237.49, with deferred commissions of $8,275.96, if all contracts continued to pay.

We think the court erred in denying appellant any recovery. This denial, of course, was based on Miller’s breach of the non-competition clause of the agreement, and we are of the view that this provision was invalid.

Wé have pointed out that each case involving a restraint to compete must be determined by the facts of the particular case, and we have, accordingly, never laid down any rule governing provisions as to area or length of time. The case that seems to most closely parallel the facts of this litigation is McCumber v. Federated Mutual Implement and Hardware Insurance Company, 230 Ark. 13, 320 S. W. 2d 637. There, we held that a contract, restraining competition for two years after cessation of employment involving no trade secrets, was void as an unreasonable restraint on trade. This was an agreement entered into between an insurance company and one of its local agents, wherein McCumber agreed that he would not engage directly or indirectly as a competitor in the insurance business for a period of two years after terminating his employment. He quit the company, and commenced an insurance agency of his own; the insurance company instituted suit against him, alleging this provision of the contract, and seeking an injunction. While working with the company, McCumber’s territory covered the nine Central Arkansas counties, but, on hearing, the trial court enjoined McCumber from directly or indirectly engaging in competition with the company for a period of two years, but in Pulaski County only (the largest county in the nine county area). On appeal, we reversed the trial court, and, in doing so, stated:

“This case involves neither the sale of a business, nor an employment having trade secrets: so cases of those situations are not applicable. We have here merely a restrictive covenant for two years after cessation from a business, without trade secrets of any kind.”

The opinion pointed out that the case was similar to American Excelsior Laundry v. Derrisseaux, 204 Ark. 843, 165 S. W. 2d 598, in that no trade secrets were involved.

Here, as in McCumber, we have neither the sale of a business, nor an employment having trade secrets. It is also interesting to note that, in McCumber, the employee was only restrained from operating in one county, though his employment contract with Federated Mutual had included nine counties; nonetheless, we held that a two-year restraint for the one county was unreasonable, and therefore, void. The restraint for a 50-mile radius in the present instance, according to the Arkansas State Highway map for 1969, appears to include portions of 12 counties.

Miller obtained no trade secrets from his employment. He had previously worked for Cherokee Village, a development company, before entering upon his employment for appellee, Fairfield Bay, and the testimony reflects that the two operations were quite similar. Certainly, there were no trade secrets involved, as in Orkin Exterminating Company v. Murrell, 212 Ark. 449, 206 S. W. 2d 185, where a contract containing a similar restrictive clause was upheld. In that case, trade secrets were involved, the company maintaining a research department, wherein the nature and habits of insects and rodents were ascertained, and chemicals and compounds were prepared to be used in the destruction of these pests without danger to human beings or damage to furniture or woodwork. Chemicals were mixed and formulae reported. Those circumstances were, of course, vastly different from the circumstances in the case before us. Here, as in McCumber, telephone directories, were a major source utilized for compiling names of prospects. It is true, as mentioned by Mr. Jacobus, that the directories belonged to his company, but there was certainly nothing to prevent any other company, or salesmen, from likewise acquiring identical telephone books. In Orkin Exterminating Company v. Murrell, supra, though trade secrets were involved, the restriction imposed upon the employee was that he not compete for one year after leaving the employment. Here, the restriction is for three years, though no secret method of obtaining prospects was involved, nor any special training or skill required of the employee. In fact, as previously mentioned, Mr. Jacobus testified that a salesman would need sales ability, a real estate license, an, automobile, and a radio.

The period of three years is unreasonable. Even if the duties of the salesmen enabled them to ascertain what prospective customers were about to be interviewed, this information could only be of use for a few months; certainly, visits from prospects were not lined up for several years in advance, and the statement of Mr. Jacobus that a competitor could set up his office “on the route that these customers are coming in,” and thus damage him, does not appear exactly logical.

--We conclude that, under the facts of this case, the contract, because of the length of the restriction not to compete, and the right of the employer to terminate employment, is against public policy, and void.

The decree is, therefore, reversed, and the cause is remanded to the Van Burén County Chancery Court, with directions to determine the sum due Miller, based upon accruals resulting from sales made by him for the companies while in their employ.

It is so ordered.

      Fairfield and Shirley have common officers and directors, but no cross-ownership of stock.

      There Was also a controversy between Miller and one of the appellees relative to the sale of a house, and the court granted a recovery to appellant. Notice of cross-appeal was given by appellee, but the cross-appeal was not further pursued, and is not an issue in this litigation.

      Jacobus never did testify that sales made by Miller had to be “followed up” by some other employee of the company in order to obtain the monthly payments. As far as the record here is concerned, Miller’s customers voluntarily made their payments.

       This finding makes unnecessary a discussion of two interesting questions, which might well be pertinent, if we found the contract valid, viz., would the Shirley Company be entitled to the benefit of the no competition agreement that Miller entered into with Fair-field Bay, Shirley not even being in existence until after the questioned agreement was executed? Also, would the companies have the right to withhold monies due Miller as commissions from sales made for their companies, solely because he later violated the agreement not to compete, or would they simply be entitled to injunctive relief?

      According to the American Heritage Dictionary of the English Language (1969), a “trade secret” is: “A secret formula, method, or device that gives one an advantage over competitors.”


author: George Rose Smith, Justice.

text:
    Thurman VINES et ux v. ARKANSAS KRAFT CORPORATION et al
    5-5038
    446 S. W. 2d 669
    Opinion delivered November 10, 1969

      Donald Poe, for appellants.

      Harper, Young & Smith, for appellees.
   George Rose Smith, Justice.

This claim for death benefits under the workmen’s compensation act was filed by the appellants as the surviving parents of Johnny F. Vines, who was killed in the course of his employment. The Commission found that the claimants had been partly dependent upon their son’s earnings and awarded each of them $1.00 a week for 450 weeks, which was ordered to be paid at the rate of $10 a week for 45 weeks. The circuit court affirmed the award. For reversal the claimants insist that the award should be fixed at $10 each for the full term of 450 weeks.

The Commission determined that the decedent’s average earnings had been $25.00 a week, of which he had contributed about $15.00 to the support of his parents. That contribution represented about 16% of their total income. A wholly dependent parent is entitled to an award of 25% of the decedent’s average weekly wage. Ark. Stat. Ann. § 81-1315 (c) (4th) (Repl. 1960). In this case each parent was only 16% dependent; so the Commission reduced the award to 16% of 25% of the $25.00 weekly wage, or $1.00 a week for each parent. There is ample substantial testimony to support the Commission’s findings of fact; so the appeal involves issues of law only.

The claimants make two contentions. First, it is argued that the statute makes no distinction between total dependency and partial dependency. Therefore, it is said, the Commission should not have reduced the award in the ratio of dependency. That argument would have been sound under our original compensation law, which referred merely to dependency without reference to its extent. Act 319 of 1939, § 15 (c) (5); E. H. Noel Coal Co. v. Grilc, 215 Ark. 430, 221 S. W. 2d 49 (1949). But, as we shall explain in a moment, the 1948 revision of the law contains provisions with respect to partial dependency. Hence the authorities cited by the appellants are no longer controlling.

Second, the claimants insist that a 1965 amendment to the compensation act fixed the minimum compensation at $10 a week. Ark. Stat. Ann. § 81-1310.1 (Supp. 1967). Hence it is contended that the Commission should not have reduced each claimant’s award to $1.00 a week for 450 weeks.

This second point is the more difficult of the two. In determining the effect of the 1965 act, fixing minimum compensation at $10.00 a week, we must first examine the law as it existed at the time of the amendment.

Section 15 of the 1948 statute fixed the amount of compensation in death cases. Ark. Stat. Ann. § 81-1315. Subsection (c) contained a graduated scale of compensation for persons “wholly dependent” upon the deceased employee. With respect to partial dependency the 1948 revision added this new subsection:

(1) Partial dependency. (1) If the employee leaves dependents who are only partially dependent upon his earnings for support at the time of injury, the compensation payable for such partial dependency shall be in the proportion that the partial dependency bears to total dependency.
(2) In any claim for partial dependency where the average weekly contributions for support were not such as to entitle all dependents to compensation in the aggregate sum of seven dollars per week, such dependents shall receive compensation for a period not to exceed 450 weeks, in an amount not to exceed the amount of average weekly contributions of the deceased employee for the support of such dependents.

It will be seen that such section 15 (i) (2), just quoted, the legislature contemplated that partial dependents might receive less than the basic minimum compensation of $7.00 a week, with a proviso that the amount should not exceed the decedent’s weekly contributions to the support of his partial dependents. That the minimum compensation for partial dependents might be less than $7.00 was made absolutely clear by section 10 (b) of the same statute, which fixed the overall minimum of $7.00 —subject to the exception that we have italicized in this quotation from the statute:

(b) Death. Compensation payable to the dependents for the death of an employee shall not exceed sixty-five per centum of the employee’s average weekly wage at the time of the accident, and shall not be greater than thirty-five dollars per week, nor less than seven dollars per week ( except as provided by section 15 (i) (2) ). Ark. Stat. Ann. § 81-1310 (b).

Thus the explicit statement of an exception to the seven dollar minimum shows that the minimum was not intended to apply to a case in which the calculation of' compensation for partial dependency produces an award of less than seven dollars a week.

"VVe now turn to the 1965 amendment, which increased the overall minimum compensation from seven dollars a week to ten dollars a week. Act 54 of the First Extra Session of 1965; Ark. Stat. Ann. § 81-1310.1 (Supp. 1967). As we read that act, its sole purpose was to increase the maximum and minimum benefits under the workmen’s compensation law. That is what the title of the act says.. That is what the body of the act provides. That is what the emergency clause declares. The Commission so held.

We are unable to read into the 1965 act any legislative purpose to repeal that part of section 15 (i) (2) which makes it possible for partial dependents to receive less than the overall minimum compensation per week. To the contrary, the only effect of the 1965 statute upon section 15 (i) (2) was to substitute, by necessary implication, the sum of ten dollars per week for the preexisting sum of seven dollars per week.

Our interpretation of the 1965 act is confirmed by the practicalities of the situation. If the $10.00 minimum were applied inflexibly in every case, demonstrable inequalities would unavoidably occur. A partially dependent parent who had received only $1.00 a week from his son would be entitled to just as much compensation as another parent who had received ten times that much support from his son. Moreover, the minimum award of $10 a week might well exceed the decedent’s contributions to the support of his partial dependents, despite the express provision in section 15 (i) (2) that the award is not to exceed those contributions. We conclude that the appellants’ contentions cannot be sustained by even the most liberal construction of the. statute.


text:
    James A. BONDS v. Clint LITTRELL et al
    5-5040
    446 S. W. 2d 672
    Opinion delivered November 10, 1969

      Putman, Davis & Bassett, for appellant.

      W. Q. Hall, for appellees.
   George Rose Smith, Justice.

On June 13, 1967, the appellant Bonds signed an offer-and-acceptance contract by which he agreed to buy a farm from the appellees Littrell for $50,000, payable as follows: $5,000 earnest money upon the signing of the contract; $20,000 upon approval of the title, and $25,000 in ten equal annual installments. With the execution of the contract Bonds deposited his $5,000 earnest-money check with the sellers’ real estate agent, the appellee Carr.

Before the title had been approved Bonds stopped payment on the $5,000 check. The Littrells and Carr then brought this action upon the contract and check, asserting that under the contract they were entitled to retain the earnest money as liquidated damages. This appeal is from a summary judgment in their favor. For reversal Bonds contends that the motion for summary judgment should have been denied, because there were two issues of fact for the jury: One, the purchase was contingent upon the defendant’s obtaining the purchase money from Houston Milk Producers Credit Union; and, two, the contractual provision for a forfeiture of the earnest money was actually a stipulation for a penalty rather than for liquidated damages.

Upon the first point the trial court held that the parol evidence rule would eventually prevent Bonds from proving a collateral oral agreement by which the purchase was contingent upon his ability to obtain financing. We hold that the court’s ruling was reversible error.

At the outset the appellees insist that Bonds cannot rely upon the asserted collateral agreement, because he failed to plead that defense in his answer. It is true that Bonds’ answer to the complaint was merely a general denial, plus special pleas not now relevant. But in response to the plaintiffs’ requests for admissions of fact Bonds made this statement under oath: “Defendant admits that a written memorandum of said agreement was made and that a copy is attached to the complaint. . . Defendant states, however, that said agreement was contingent upon the defendant’s obtaining the purchase money from the Houston Milk Producers Credit Union.” In the face of that assertion, and without rebutting it, the plaintiffs filed their motion for summary judgment.

Ever since the adoption of our Civil Code a century ago it has been a basic and wholesome rule in civil cases that amendments to the pleadings are to be liberally allowed in furtherance of justice, that the court must disregard any defect not affecting the substantial rights of the adverse party, and that no variance between the pleadings and the proof is material unless it has actually misled the adverse party to his prejudice. Ark. Stat. Ann. §§ 27-1155 and -1160 (Repl. 1962). In harmony with those principles we have held that the trial court may permit the pleadings to be amended after the filing of a motion for summary judgment. Montgomery v. First Nat. Bk. of Newport, 242 Ark. 329, 414 S. W. 2d 109 (1967).

Under the Federal Rules of Civil Procedure, from which our summary judgment statute (§ 29-211) was copied, the better view is that affirmative defenses may, at least in some situations, be raised by affidavit as well as by answer. We agree with Moore’s statement of the two views: “There is authority that defenses not pleaded in defendant’s answer may not be raised by affidavits on his motion for summary judgment. This is highly technical and illiberal. Either the answer should be deemed amended to conform to the proof offered by the affidavits or a formal amendment permitted, the affidavits considered, and the motion for summary judgment decided under the usual rule pertaining to the adjudication of summary judgment motions.” 6 Moore’s Federal Practice § 56.11 [3] (1966).

Here the defendant’s position is so strong as to be unassailable, for either of two reasons. First, the assertion that the purchase of the farm was contingent upon its being financed by the credit union was a matter of record when the plaintiffs filed their motion for summary judgment; so they do not and could not plead surprise. Second, the court in effect treated the pleadings as having been amended to conform to the proof, by considering the admissibility of the oral collateral contract upon the merits. When the trial court permits the introduction of evidence in the face of an objection that the point at issue was not raised by the pleadings, the effect of its ruling is to treat the pleadings, as amended to conform to the proof. Warner v. Warner, 221 Ark. 939, 256 S. W. 2d 734 (1953); Smith v. Moschetti, 213 Ark. 968, 214 S. W. 2d 73 (1958). Likewise, when the court below ruled upon the adinissibility of the collateral oral agreement he necessarily treated the point as having been properly raised and ready for adjudication.

On the merits the court was mistaken about the admissibility of the oral agreement. Proof that a written contract is to be contingent upon the happening of a future event is not excluded by the parol evidence rule if there is nothing in the writing inconsistent with the oral agreement. Restatement, Contracts, § 241 (1932). “Even in the case of a written contract duly executed by both parties, this court has repeatedly held that pgrol evidence is admissible to prove that it was not to be a complete and binding agreement until certain conditions precedent have been fulfilled.” Southern Wooden Box v. Ozark Hardwood Mfg. Co., 226 Ark. 899, 294 S. W. 2d 761 (1956). There is also a related rule that an oral agreement is not superseded by a contemporaneous written agreement if the oral agreement is one that might naturally be made as a separate agreement in the circumstances. Restatement, Contracts, § 240; Magee v. Robinson, 218 Ark. 54, 234 S. W. 2d 27 (1950).. Thus it cannot be said on this record that proof of the asserted oral agreement would be inadmissible under the parol evidence rule. For a case almost identical with this one upon its facts, see Alexander v. Kerhulas, 151 S. C. 354, 149 S. E. 12 (1929).

With respect to the second point for reversal — the validity of the stipulation for $5,000 as liquidated damages — it is enough to say that the affidavits and other proof in the record have not explored that point, which will presumably be investigated when the case is heard on its merits.

Reversed.