author: Conley Byrd, Justice.

text:
    E. J. SPARKMAN, d/b/a E. J. Sparkman & Co. v. Margaret Renfro ETTER et al
    5-5236
    458 S. W. 2d 129
    Opinion delivered October 5, 1970

      Bethell, Stocks, Calloway & King, for appellant.

      Warner, Warner, Ragon if Smith and Garner & Parker, for appellees.
   Conley Byrd, Justice.

This litigation arises out of the rights and liabilities of appellant E. J. Sparkman d/b/a E. J. Sparkman & Co. as tenant and appellees Margaret Renfro Etter, Marion H. Helbing, Lawrence W. Lamm and Edward J. Lamm as landlords of the old S & Q building.. The record shows that appellant moved to Fort Smith in 1944, and began operating the S & Q Clothing Store at 622 Garrison Ave. in partnership with Sam Sheldon and Sol Lasky. At that time the business was being operated in a building 25 by 140 ft. long, owned by Rose Pappenheimer, now held by appellees Helbing and Lamm, At that time Merchants National Bank of Fort Smith was acting as trustee for appellee Margaret Renfro Etter. The. Etter estate owned a building 25 by 90 ft. immediately west and adjoining the Pappenheimer building in which a shoe store was being operated at the time Sparkman went to Fort Smith. Sparkman and his partners on Sept. 15, 1945, entered into a lease agreement with Merchants National Bank and with Rose Pappenheimer whereby the common party wall between the two buildings could be removed in accordance with architectural plans and specifications approved by both lessors.

The Pappenheimer lease, insofar as is here pertinent and as it was extended until July 31, 1966, provided:

“The tenant shall take good care of the premises and shall, at its own cost and expense, keep same in good condition, order and repair, both inside and outside, including all sidewalks, alleys, sewers and appurtenances and, at the end of the term, shall deliver up the demised premises in good order and condition.
* # *
The Landlord agrees that the Tenant may, at its own expense, from time to time during the term hereof, make such alterations and changes, structural or otherwise, to the demised premises as it finds necessary or convenient for its purpose — provided, however, that no such alterations or changes shall be made without the prior written approval and consent of the Landlord. Any such alteration and changes which shall remain on the demised premises at the end of the term of this lease,* or any extension thereof, shall be considered as improvements and become a part of the real estate. Tenant agrees that all alterations and changes made by it will be erected or made in a first-class,. workmanlike manner.
Any trade fixtures, equipment and other property installed in or attached to the demised premises by and at the expense of the Tenant shall remain the property of the Tenant; and the Landlord agrees that the Tenant shall have the right at any time, and from time to time, to remove any and all of its trade fixtures, equipment and other property which it may have stored or installed in the demised premises, including but not limiting the same to counters, shelving, showcases, mirrors, and air-conditioning, cooling and other movable machinery. The Landlord agrees not to mortgage or pledge the Tenant’s trade fixtures, equipment and other property.

The original lease with the Etter estate insofar as here pertinent provided as follows:

“. . . The Lessees shall have possession of said premises for the month of January 1946 without paying rent therefor, in order to permit Lessees to make the improvements hereinafter specified, and to install its furniture, fixtures, and stock of merchandise in the premises.
The~Lessees at their own expense are authorized to remodel the front of said building, and with the consent of the owner of the building located on the southwesterly half of said Lot 14, are authorized, at their own expense, to cut an opening or openings in the party wall between said two buildings, all of said work to be done in a good and workmanlike manner, and in such manner as not to endanger the structural safety of said buildings, and all of said work to be done at the risk and expense of the Lessees. At the end of the term of this lease the Lessees at their own expense and risk shall restore said opening or openings in said party wall in a good and workmanlike manner, and at their own expense and risk shall restore said front to its present condition as near as may be.
And it is agreed that said Lessees will well and truly pay said rent as aforesaid at the time and in the installments as stated; that said Lessees will keep the premises in good repair (except the roof, which will be kept in repair by Lessor) and at the end of the term hereof surrender the same in good order, condition arid repair as the same are now, ordinary wear and tear, and loss or damage by fire, storm, or other unavoidable casualty covered by extended insurance excepted..

This lease was subsequently extended for an additional five year period by a modification agreement dated May 25, 1950, with pertinent provisions as follows:

. . [I]n consideration of Lessees’ agreement to make valuable improvements to the demised premises in the manner and to the extent provided in paragraph numbered ‘2’ hereof;
NOW, THEREFORE, it is by the parties hereto mutually agreed that said Lease Agreement dated 15 September 1945, shall be, and the same is hereby extended for an additional term of five years beginning February 1, 1956, upon the same terms and conditions as provided in said original Lease except as follows:
[2] And the Lessees agree and contract, beginning not later than July 1st, 1950, to _, build and construct a basement under the demised premises at a cost of approximately $10,000.00; and said basement may be connected with any basement existing or excavated and constructed on adjoining premises provided, however, the Lessees agree and contract, on the expiration of the term as herein extended, to erect and construct a proper and adequate partition, party wall extending the entire length of such basement and separating completely the basement constructed on the demised premises from any basement on adjoining premises, and Lessees shall procure the execution and acknowledgment by adjoining owners of a party wall agreement sufficient and necessary to this end. All construction work done shall be performed in a good and workmanlike manner and so as to protect and preserve the structural safety of the improvements on, or put on, the premises; and all of said work shall be done at the sole risk and expense of the Lessees.”

On September 1, 1955, this lease was extended for an additional 10 years beginning February 1, 1956, the only change being $550 monthly rental instead of $300 as in the original lease. On January 14, 1966, and after difficulty arose between the parties, for a recited consideration of $2,200 cash paid, the lease was extended for an additional six months beginning February 1, 1966, at the same rental of $550 payable on the first day of each month beginning February 1, 1966.

Commencing around July 15 or 16, Sparkman moved his clothing store across the street into a building that he had built for that purpose. On August 1, appellee Etter inspected the premises and, being unhappy with the condition in which Sparkman had left the building, caused the premises to be inspected by city officials and locks thereon to be changed. As a result of city inspections, Mrs. Etter received letters advising her that the building had been inspected at her request, that the structure was in bad condition, including the electrical system, plumbing and heating, and that the structure would have to be renovated and brought up to date to meet all minimum city codes before it could be occupied again. On August 2, Mrs. Etter received from appellant Sparkman some architectural plans and specifications mailed on July 29, showing the work Sparkman proposed to do to comply with the terms of the lease as he understood it. The plans were also mailed to the Rose Pappenheimer heirs.

Appellee Etter originally brought this action at law against Sparkman demanding damages in the amount $55,000.00. Appellees Marion H. Helbing, Lawrence W. Lamm and Edward J. Lamm, the Pappenheimer heirs, intervened asking for damages of $20,000.00. Subsequently upon motion of the intervenors the matter was moved to Chancery. After hearing testimony and inspecting the building a number of times the Chancellor rendered a 41 page formal written opinion incorporated in the court’s order requiring specific performance in certain instances, allowing rent for holding over and damages totaling $3,800 to the Etters and $3,600 to the Pappenheimer heirs. In addition the trial court directed Sparkman to return a number of fixtures removed and in other instances to redecorate Walls where fixtures had been removed. For reversal appellant contends that the trial court erred in allowing rent after the end of the term of leases, in ordering the tenant to perform work not required by the leases, in admission of evidence of matters not properly pleaded and in granting relief not requested.

The record shows, according to the architectural plans and specifications used by contractor Don Bailey in 1946, that both buildings were completely renovated with false ceilings, lighting fixtures and heating and air-condition being put in by the tenants. As far as can be ascertained from the record only four walls were involved in either lease when the leases were signed.

Appellee Etter was born Feb. 14, 1932, and was 37 at the time of trial. She had no recollection of the building’s condition when the 1946 lease was signed. Mrs. Etter testified about debris she found cluttering the floor, bare walls left where fixtures had been removed and about removal of lighting fixtures and heating fixtures; all of which was shown by photographs taken on August 1, 1966, and introduced through her. She also testified that the building had been leased for an auction after Sparkman vacated the premises.

Mr. Don Bailey, the contractor who made the installations for appellant Sparkman in 1946, was called as a witness by appellees. He testified that he was a licensed contractor from 1948 through 1968. He had had in his possession prior to trial the plans and specifica-dons drawn up in 1946 by architect Chester Nelson and in addition had personally visited the buildings after the 1966 lease expired. Because of the passage of time Mr. Bailey could not recall the condition of the premises when he began his work in 1946. When he viewed the premises he made an estimate of the cost involved With respect thereto the record shows the following:

“Q. Don, when you viewed the premises prior to October 10, 1966, what did you do? Did you go in, walk in the door, and walk through the premises?
A. I went over the whole building, yes.
Q. Did you take measurements?
A. Yes.
Q. Did you make a pretty close observation of the premises at that time?
A. Yes, sir.
Q. From your observation and notes, did you make an estimate of what you thought it would take to restore the premises to a reasonably good condition?
A. I was told to make an estimate to put the building back in rentable or lease repair; where it could be either rented or leased, for all damages that had been done to the building. And that is what I did.
Q. What was the amount of that estimate?
MR. CALLAWAY: . . . The witness has not made an estimate that has any relevance.
* * *
A. At this time I was making an estimate on both sides of the building. That estimate was $50,-000.00.
Q. Was that a definite amount, or an approximate amount?
A. That was an approximate amount. It was only an estimate.”

At page 320 of the record the following occurred:

“THE COURT: Did you make an estimate, Mr. Bailey, to put these buildings back in the condition that they were in before?
A. No, I made an estimate to put these buildings in the condition that they could be leased or rented.”

On further redirect and recross-examination Mr. Bailey testified as follows:

“BY MR. HARRIS:
Q. You testified, Don, that the improvements made by Mr. Sparkman all during the course of his lease increased the value. Had that increased value been maintained up until the tíme you saw it after he had vacated the premises?
A. Let’s have that again.
Q. Was this value the same that he had increased it after he vacated the premises as it had been before? Did it have the same value?
A. I don’t know about that.
Q. Had he kept the premises up and maintained them?
A. I would have to say no in certain areas.
FURTHER RECROSS EXAMINATION
BY MR. CALLAWAY:
Q. Would you specify the particular areas, please?
A. A couple of restrooms for one thing. Just go look at them.
Q. What else?
A. The floor on the Helbing side. Where he drug the fixtures across.
Q. What else?
A. I guess I will quit at that.
Q. So actually what you are talking about that you say were not maintained are the floors on the Helbing side, and the bathrooms that he built?
A. Yes.
Q. What is the cost of repairing the bathrooms, please sir?
THE COURT: He has covered that already.
Q. $250.00?
A. I didn’t hear you.
Q. What is the cost of repairing the bathrooms, please?
A. I think I have $250.00 in that.
MR. HARRIS: Is that for half a side?
A. Yes, sir.
Q. Are the bathrooms on both sides that you refer to?
A. That is for one side. I figured those one side at a time.
Q. Is there a bathroom on each side of the building that you refer to?
A. I thought there was.
Q. Is there a bathroom downstairs and another one upstairs?
A. I don’t know.
Q. Now, the tile that you say has come loose. Is that tile still there?
A. Yes, it is scattered around there in spots.
Q. Is it still there in the immediate area where it has come unstuck?
A. Yes, sir.
Q. And could be stuck back?
A. No, sir.
Q. Why not?
A. It is torn up.”

Other testimony by Mr. Bailey went to the cost of making repairs set out in his estimate which included replacing the party wall, lighting fixtures, air-conditioning and heating, retiling floors and other redecoration such as painting and plastering. He also showed that some window panes had been broken out of the building and testified positively that had they been broken at the time he did his 1946 remodeling they would have been fixed.

Mr. Sparkman testified about the history of the negotiations leading up to the leases and the placement of the many fixtures into the building for his use and benefit. He admitted that the lighting fixtures, heating and air-conditioning and clothing racks had been removed from the old S & Q building and were being used in his new building. Mr. Sparkman reiterated his willingness, as set out in his pleadings, to restore the front of the building and the party wall and to revamp the electrical wiring so that each building would be wired independently.

POINT NO. I. We agree with appellant that the trial court erred in allowing damages for holding over under the lease. It will be recalled that the Etter lease specifically provides: “At the end of the term of this lease, the lessees at their own expense and risk shall restore said opening or openings in said party wall in a good and workmanlike manner and at their own expense and risk shall restore said front to its present condition as near as may be.” The authorities, see Davidson v. Crump Manufacturing Co., 99 Mich. 501, 58 N. W. 475 (1894), hold that “at the end of the term” means after the expiration of the term of the lease. Thus by the provisions of the Etter lease, under which both appellees claim, appellant would have a reasonable time after July 31, 1966, during which he could enter the premises to make the necessary alterations in accordance with the lease terms. According to appellees’ witness Mr. Bailey, this would be a period of three months. However, since the appellees took possession immediately — the next day — and have refused to approve the plans submitted, it follows that the appellant is entitled to three months from the date the mandate is filed in the trial court in which to perform his agreement.

Appellant’s right to re-enter for purpose of replacing the party wall, however did not relieve him from otherwise returning the premises in good order and condition as set out in the leases.

With respect to damages, Mr. Bailey testified that the clean-up and drayage would be $200.00 for each side of the building, $250.00 to repair the rest rooms on each side and that the tile should be repaired on the first floor on the Pappenheimer side. According to Mr. Bailey this would amount to 4,000 sq. ft. at 45<£ per sq. ft. or a total of $1,800.00. It was his opinion that the tile could not be matched.

Thus, appellee Etter was entitled to receive $250.00 for plumbing and $200.00 for drayage for a total of $450.00 as damages for failure to return the premises in good order and repair. Appellees Helbing and Lamm are entitled to $250.00 damages for plumbing, $200.00 for drayage and $1,800.00 for the floor, making a total of $2,250.00 damages for failure to return the premises in good order and condition.

POINT II. All of the testimony shows that the light fixtures, carpeting, heating and air-conditioning and display cases were installed by tenant Sparkman for his own use and benefit and not to enrich the freehold. In Romich v. Kempner Brothers Realty Co., 192 Ark. 454, 92 S. W. 2d 215 (1936), we pointed out that as between the landlord and his tenant, the tenant’s claim to have articles considered as personal property is received with the greatest latitude and indulgence. In that case we held that a tenant was entitled to remove a sprinkler system. In Arkansas Cold Storage & Ice Co. v. Fulbright, 171 Ark. 552, 285 S. W. 12 (1926), we upheld removal of machinery and equipment used in making ice cream and soft drinks. In doing so we held:

“The chancery court decided that the property in controversy constituted removable trade fixtures, and our conclusion is that this decision was correct. It is very generally held by the courts and text-writers that the rule as to removal of trade fixtures is more favorable where the relation of landlord and tenant exists than in regard to any other relationship of the parties (Ewell on Fixtures, p. 137), and this court has recognized that favorable aspect of the rule. Stone v. Suckle, 145 Ark. 387, 224 S. W. 735. The case of Choate v. Kimball, 56 Ark. 55, 19 S. W. 108, is a leading one in this court, and in that case we laid down, as the principal tests of removability, the intention of the party making the annexation and his situation and relation to the owner of the soil — whether the annexation was intended to be made as a permanent accession to the freehold or merely for the benefit of the party making it. It is apparent from the facts in this case that the property in controversy was placed in the building by the predecessors of appellees solely for their own use and benefit in the operation of the business in which they were then engaged, and that there was no intention to make the annexation for the purpose of improving the property. The annexation was therefore altogether for their own benefit and not for the benefit of the landlord. This is manifested by the fact that the building originally constructed by appellant and turned over to the tenants was of little value, and the additions thereto and annexations have been gradual, in accordance with the growth of the business, hence there was no material injury to the freehold by the removal of these fixtures.”

In Bennett v. Taylor, 185 Ark. 794, 49 S. W. 2d 608 (1932), we permitted the removal of a vault door installed by a bank, and in doing so we pointed out that, “[T]he modern trend of decisions is in favor of the removal of articles affixed to the freehold by the tenant unless, from their very nature, it appears the fixtures were intended to be permanent, or that such was the intention of the parties.”

Consequently, it follows that appellant had a right to remove the fixtures from the Etter building under the law and the Pappenheimer building by contract. His removal therefrom, which left a bare exposed wall in the same condition in which he found it at the time of his lease, does not constitute waste for which he can be held liable in damages under the terms of the leases here involved.

In view of our disposition of this litigation we need not discuss appellant’s last point for reversal.

Upon remand the trial court should direct appellant to replace the party wall, the front of the building and the electrical wiring in accordance with the plans and specifications submitted and explained by his architect; to remove the S & Q sign from the terrazzo. floor and from the front of the building; and to pay the damages set out under Point I above. Appellant is also obligated to replace any broken glass.

Reversed and remanded.


source: Caselaw Access Project

license: Public Domain

text:
    GENERAL ELECTRIC CREDIT CORP. v. BANKERS COMMERCIAL CORP.
    5-5309
    458 S. W. 2d 143
    Opinion delivered October 5, 1970

      Wootton, Land & Matthews, for appellant.

      Anderson & Anderson, for appellee.
   Conley Byrd, Justice.

General Electric Credit Corporation appeals from a judgment against it and its surety upon a replevin bond in favor of appellee-in-tervenor Bankers Commercial Corporation. For reversal appellant contends that it was not a party to any action pending in the circuit court at the time judgment was rendered against it and that appellee was not withheld from possession and had no cause of action against appellant. In the alternative appellant argues that damages if any should have been determined following a sale of the dragline involved and not based upon estimated value.

The record shows that General Electric Credit Corp. filed a replevin action against J. T. Arnold, III, to recover a dragline pursuant to a security agreement allegedly held by appellant. Arnold answered admitting that he had purchased a dragline from Southland Tractors, Inc., but stated that both appellant and ap-pellee were claiming a lien on the dragline through Southland and that he was willing to pay the party entitled to receive payment. Appellee Bankers did not elect to proceed to recover the dragline pursuant to Ark Stat. Ann. § 34-2111 (Repl. 1962), but instead filed an intervention in which it alleged that GECC’s security agreement was a forgery and asked that the security agreement executed in favor of Bankers be declared a lien on the dragline held by Arnold. The intervention also asked for foreclosure and sale of the dragline as against Arnold.

Pursuant to a trial on March 20, 1967, the trial court held that GECC’s claim was void as alleged by Bankers. In addition the trial court gave Bankers judgment against Arnold for $28,048.65 with interest and foreclosed Bankers’ lien on the dragline by ordering a public sale. Upon appeal to this court we affirmed the trial court’s action with respect to GECC, General Electric Credit Corp. v. Bankers Commercial Corp., 244 Ark. 984, 429 S. W. 2d 60 (1968), but on Arnold’s cross appeal we reversed the judgment in favor of Bankers in this language:

“On cross appeal Arnold is entitled to relief. Both GECC and Bankers sought to accelerate the maturity of their total claims, but their failure to reserve that power in the contracts precluded them from exercising it. Farnsworth v. Hoover, 66 Ark. 367, 50 S. W. 865 (1899). At best Bankers may be entitled to damages resulting from Arnold’s failure to make his payments when due — the measure of such damages presumably being interest at the legal rate and certainly not being the rents to accrue during the remaining life of the lease.”

Upon receipt of the mandate GECC tendered redelivery of the dragline to Arnold and filed motions to discharge the supersedeas and replevin bonds, to which both Arnold and Bankers filed a response. Thereafter, on February 5, 1969, the trial court entered an order of dismissal with prejudice as to Arnold. On February 28, 1969, Bankers filed an amendment to its original intervention claiming for the first time that possession of the equipment had been removed from intervenor and that intervenor was entitled to recover damages in the amount of $21,998.65 plus interest. The trial court overruled GECC’s motion to dismiss the amendment because no action was then pending against GECC and awarded judgment upon the proof submitted against GECC in the amount of $18,750.00. In addition possession of the dragline was awarded to Bankers to be disposed of under the provisions of the Uniform Commercial Code.

We agree with appellant GECC that at the time the amendment to the intervention was filed there was no cause of action pending against it in the circuit court of Phillips County. Consequently it follows that Bankers could not proceed against GECC without issuance of service of process.

It must be remembered that an action in replevin is a special proceeding for the possession of property only. Hurd v. Fidelity ir Guaranty Co., 116 Kan. 453, 227 P. 337 (1924). Our cases point out that damages for detention are but an incident to the right of return and that there cannot be a judgment for damages where there can be none for return, Neis v. Gillen, 27 Ark. 184 (1871). Furthermore the cases point out that the sureties on a replevin bond can discharge their liability by returning the property to the person who was dispossessed, Carroll v. Swicord, 177 Ark. 1193, 9 S. W. 2d 783 (1928).

Thus, as we read the record, including Bankers’ intervention and our former decision, Bankers was not entitled to return of the dragline at the time settlement was made by GECC with Arnold. Since Bankers had received all the relief it had requested both in the trial court and this court, the consent order dismissing with prejudice all of Arnold’s claims against GECC completely terminated the replevin action and discharged the court’s jurisdiction over GECC. It follows that the trial court should have dismissed Bankers’ amendment to the intervention for lack of jurisdiction over the parties.

Reversed.


text:
    Kenneth Howard HINKLE and William Glenn Hinkle v. Winthrop ROCKEFELLER, Governor et al
    5519
    458 S. W. 2d 371
    Opinion delivered October 5, 1970
    [Rehearing denied November 2, 1970.]

      W. Dent Gitchell, for petitioners.

      Joe Purcell, Attorney General; Mike Wilson, Asst. Atty. Gen., for respondents.
   Conley Byrd, Justice.

Petitioners William Glenn Hinkle and Kenneth Howard Hinkle were serving long prison sentences in a Texas penitentiary when they were extradited to Arkansas to stand trial for robbery. The extradition was carried out by an “executive agreement” between the governors of Arkansas and Texas. This agreement provides in essence that after petitioners’ trial on the robbery charges in Arkansas, petitioners would be returned to the Texas authorities at the expense of the State of Arkansas. Upon trial in Pulaski Circuit Court, petitioners were convicted of the robbery charges and sentenced to serve 15 years in the Arkansas penitentiary. To prevent their return to Texas before serving their Arkansas sentences, petitioners filed a petition for writ of habeas corpus in the circuit court alleging the invalidity of the "executive agreement”. For reversal of the trial court’s denial of the writ they rely upon the following points:

"I. The provisions of the “executive agreements” which provide for the return of the petitioners prior to serving their Arkansas sentences are in violation of Arkansas law.
II. The procedures contained in Arkansas’ extradition act, particularly the right to a judicial hearing, constitute the minimum standards of fair play and substantial justice necessary to satisfy the due process clause of the United States Constitution.
III. The "executive agreements” are interstate agreements made without the consent of Congress and are violative of Article 1, Section 10 of the Constitution of the United States.
IV. The “executive agreements” impose conditions upon rendition of persons wanted for crimes in other states which clearly violate the mandatory language of the Extradition Clause of the United States Constitution.”

We find no merit in petitioners’ contentions. Such executive agreements are not prohibited by the Extradition Act, Ark. Stat. Ann. §§ 43-3001 — 43-3028 (Repl. 1964), and are generally upheld among the several states and between the federal and state jurisdictions on the basis of comity. See Rau v. McCorkle, 131 A. 2d 895, 45 N. J. S. 191 (1957), aff’d. 135 A. 2d 224, 47 N. J. S. 36 (1957), and Ponzi v. Fessenden, 258 U. S. 254, 66 L. ed. 607, 42 S. Ct. 309, 22 A. L. R. 879 (1922). Furthermore such agreements are recognized as valid by the Congress of the United States. See 4 U. S. C. § 11 which provides:

“(a) The consent of Congress is hereby given to any two or more States to enter into agreements or compacts for cooperative effort and mutual assistance in the prevention of crime and in the enforcement of their respective criminal laws and policies, and to establish such agencies, joint or otherwise, as they may deem desirable for making effective such agreements and compacts.”

Neither do we find any denial of due process under the circumstances here. All issues of the petitioners’ identity and status as fugitives from Arkansas were determinable when the governor of Arkansas requested extradition from Texas. Petitioners’ identity and status had already been judicially determined by Texas authorities before confining petitioners to the Texas penitentiary. Thus the only inconvenience to petitioners is that it makes them subject to trial in Arkansas while witnesses are available and evidence is fresh. The agreement actually works in favor of some prisoners as it permits them to obtain a speedy trial rather than serve a penitentiary sentence with a “hold” which may later prove to be invalid. Consequently we can find no denial of petitioners’ rights of due process in permitting the state to also obtain a speedy trial.

Petition denied.


author: Frank Holt, Justice.

text:
    CACTUS DISTRIBUTING CO. of Phoenix, Arizona v. STATE of Arkansas
    5349
    458 S. W. 2d 149
    Opinion delivered October 5, 1970

      Stroud, Stroud, McClerkin ér Conway, for appellant.

      Joe Purcell, Attorney General; Garner L. Taylor, Jr., Asst. Atty. Gen., for appellee.

      Gary K. Nelson, Attorney General of Arizona; Malcolm P. Strohson, Asst. Atty. Gen., Amicus Curiae.
   Frank Holt, Justice.

This is an appeal from an order declaring a shipment of liquor to be contraband and directing its confiscation and sale.

Appellant is an Arizona corporation, having its principal place of business in Phoenix. It is licensed by the State of Arizona as a wholesale liquor distributor, and is also licensed by the State of Kentucky to purchase liquor from distilleries located there. Having ordered, in its regular course of business, a shipment of liquor from a Kentucky distillery, appellant entered into its customary written agreements with two Phoenix companies, Temco Truck Rental and Continental Drivers Service, whereby the former was to furnish a truck and the latter was to provide certified truck drivers for the transportation of the shipment from Kentucky to Arizona. By subsequent verbal agreements, Temco procured the use of a semi-trailer truck owned by a resident of Tennessee, and Continental arranged for Mr. Harry Landrith, also of Tennessee, to drive the rig. The driver and the rig were located near the origin of shipment.

Prior to shipment, tax stamps were placed on each bottle as required by federal law; and, on October 23, 1969, the liquor having been loaded into the trailer rig, Landrith began the haul from Kentucky to Arizona. The following day, the truck was stopped in Hemp-stead County, Arkansas, a dry county, for failure to have a vehicle permit for the transportation of liquor as required by Ark. Stat. Ann. § 48-404 (Repl. 1964). The shipment of liquor (997 cases having an estimated value of $40,000) was seized in accordance with §§ 48-925, -926. Appellant, as owner of the seized liquor, filed a petition for its release in the Municipal Court of Hope, Arkansas, as authorized by § 48-927. A hearing was held which resulted in an order declaring the shipment contraband and directing its sale as specified in § 48-929. Pursuant to § 48-928, an appeal was lodged in the Circuit Court and from that court’s affirmance of the confiscation order comes this appeal.

For reversal, appellant asserts numerous arguments. However, in the circumstances of this case, we deem it necessary to discuss only whether the confiscation of the shipment constitutes an unreasonable burden on interstate commerce.

A vehicle permit ($50.00) had not been secured from Arkansas authorities. Therefore, appellant’s shipment did not enjoy exempt passage through Arkansas and Landrith, driver of the truck, was properly apprehended and fined for being in possession of 997 cases of liquor in a dry county in violation of § 48-922.1. From these facts a rebuttable presumption arose that the liquor was to be illegally diverted into Hempstead County. Section 48-922. Consequently, seizure of the shipment was appropriate.

At the hearing to determine the propriety of the confiscation and sale, however, undisputed testimony from various witnesses established that appellant was duly licensed in Kentucky and Arizona and had met all federal license requirements; that for the past three years it had ordered and received cross-country shipments of liquor at least once each month; that this particular shipment was for distribution during the winter holidays and constituted approximately 40% of appellant’s annual business; that appellant’s prior purchases had never been transported in violation of any state or federal law; that it was the responsibility solely of Temco Truck Rental, an independent contractor, to determine the transportation route and to secure any necessary permits; that Landrith had been expressly directed by Temco not to drive through Arkansas; that the driver was the employee of Continental Driver Service, an independent contractor, under the agreement entered into between Cactus and Continental; that the rental company and driver service both agreed to observe all state laws; that in previous hauls which Temco had arranged for appellant, the designated truck routes were always followed and that here the driver had disobeyed instructions. There was also evidence to the effect that appellant would not have been able to secure a liquor transport permit itself since it is the policy of the Director of Alcoholic Beverage Control to issue such a permit only to the owner of the transporting vehicle. In view of these facts, it is obvious that an extremely harsh penalty has been imposed upon appellant in this interstate shipment, for a violation which was beyond its control, and despite its good faith efforts to comply with state and federal laws.

It is well established that a state may require, under penal sanction, the purchase of a permit as a prerequisite to the lawful transportation of alcoholic beverages through its territory. Duckworth v. State, 201 Ark. 1123, 148 S. W. 2d 656 (1941), aff’d, Duckworth v. Arkansas, 314 U. S. 390 (1941). This permit requirement like other liquor laws, is designed to prevent the illegal distribution or use of alcoholic beverages within the state. Effective enforcement of such statutes may in some instances justify or even compel confiscation of the alcoholic contraband. Ziffrin, Inc. v. Reeves, 308 U. S. 132 (1939); Chambless v. Cannon, 81 F. Supp. 885 (W. D. Ark. 1949); Welborn v. Morley, 219 Ark. 569, 243 S. W. 2d 635 (1951). This sanction of confiscation is more than a mere penalty incidental to the valid exercise of a state’s police power; it is the most efficient method for a state to assure that liquor illegally brought into its territory will not be unlawfully diverted or used therein. However, the application of such a penalty must be reasonable, and this requirement must be tested by the facts in each particular case.

In the case at bar, appellant conscientiously endeavored to comply with all the state and federal laws affecting the purchase, interstate transportation, and ultimate distribution of the seized shipment. The evidence clearly indicates that each of die 997 cases of liquor was destined for, and would have been delivered to, Phoenix, Arizona for lawful purposes. Therefore, confiscation in the instant case is not justified for purposes of punishment. Furthermore, appellant’s obvious attempt to comply with the regulations of the various states through which its shipment was to be transported is sufficient, in the particular circumstances of this case, to rebut the presumption (§ 48-922) that the liquor was intended for unlawful diversion in the county wherein it was seized. In Duckworth v. Arkansas, supra, the United States Supreme Court upheld this permit device and its penal sanction, which in that case was simply a fine, stating:

“It does not forbid or preclude the transportation, or interfere with the free flow of commerce among the states beyond what is reasonably necessary to protect the local public interest in preventing unlawful distribution or use of liquor within the state.”

Similarly, in Ziffrin, Inc. v. Reeves, supra, the confiscation of liquor was upheld as a legitimate exercise of a state’s police power because there seizure of the contraband was “* * * clearly appropriate for effectuating the policy of limiting traffic in order to minimize well-known evils * * In the case before us, however, confiscation is not appropriate to accomplish the valid objectives of the statute. This sanction, as applied here, constitutes an excessive exercise of police power and, as such, creátes an unreasonable burden on interstate commerce.

The judgment is reversed and the cause remanded with directions for proceedings not inconsistent with this opinion.


author: Carleton Harris, Chief Justice.

text:
    Eddie ROGERS v. STATE of Arkansas
    5525
    458 S. W. 2d 747
    Opinion delivered October 12, 1970
    [Rehearing denied November 16, 1970.]

      George Howard, Jr., for appellant.

      Joe Purcell, Attorney General; Milton Lueken, Asst. Atty. Gen., for appellee.
   Carleton Harris, Chief Justice.

Appellant, Eddie Rogers, was convicted of the crime of first degree rape, the jury fixing his punishment at confinement in the Department of Correction for fifty-five years. From such conviction, appellant brings this appeal. For reversal, six separate points are asserted which we proceed to discuss in the order listed.

It is first contended that the evidence was insufficient to support the verdict of the jury. Appellant’s defense is predicated on the contention that intercourse with the prosecuting witness was by consent; in fact, appellant testified that he had had sexual relations with the prosecutrix on three other occasions. The alleged victim said that she retired about 10 P.M., her husband being away. Her one year old child was in the bed with her and three other children were in another bed in the same room. About 3:30 A.M. she was awakened by a man standing by the bed, who said, “Be quiet and I won’t have to hurt you”. She testified that he kissed her on the lips “pretty hard”, bruising her lips, had intercourse with her, and then left. The witness said that she did not know her attacker. Admittedly, she did not cry out for help, and appellant argues that there was no force employed, and thus no rape; that there was a duty on the part of the alleged victim to resist the attack, and that the evidence was that this was not done. We do not agree with appellant in his interpretation of the applicable law. The prosecutrix testified that she did not make an outcry because she was “afraid to”, and was fearful that her assailant might hurt the children if they were awakened; that except for fear of the children’s safety, she would have endeavored to fight him.

This being true, rape was committed. We have said that if a woman assaulted failed to resist or to make outcry because she feared for her safety, the crime was against her will and would constitute rape. Threet v. State 110 Ark. 152, 161 S. W. 139, Hamm v. State 214 Ark. 171, 214 S. W. 2d 917.

Dr. Owen Griffin Blackwell testified that he examined the prosecuting witness several hours after the alleged occurrence, found sperm in the vagina, and swelling of the hymeneal ring, the latter condition not usually occurring after normal sex relations. He stated that penetration had taken place. Deputy Sheriff Earl May testified that when he went to the home of the prosecuting witness, he found her upper lip swollen, “swelled up and blue”, and Deputy Sheriff Mickey Ad-kinson, also present, testified that the prosecutrix was crying and “her lips seemed like they were busted”. As previously stated, appellant admitted the act of intercourse, but testified that it was by consent. The question of who was telling the truth was, of course, a jury question, and it was resolved against Rogers. The evidence was sufficient to sustain the conviction.

The next two points deal with the action of Officer May in taking articles of clothing and a bottle of powder from the home of appellant. Appellant says that these articles were inadmissible in evidence for the reason that Rogers was not under arrest at the time they were taken. According to the testimony of May, Rogers voluntarily gave him the clothing after a request for same had been made, and the powder was turned over voluntarily by the wife of appellant. May further testified that before obtaining any of this personal property, Rogers was advised of his constitutional rights, the officer reading to him from a card the warnings required to be given a suspect before interrogation, as set out in the case of Miranda v. Arizona 384 U. S. 436, 86 S. Ct. 1602, 16 L. Ed. 2d 694. There is no necessity to discuss whether the taking of the clothing and powder required a search warrant, for the admission of this testimony could not possibly have been prejudicial. Let it again be pointed out that there was no denial of the act of intercourse — only that the act was committed by force. There was nothing about the clothing nor the powder that added weight to the state’s argument that force had been used. It follows that there is no merit in this contention.

It is next asserted that appellant was deprived of his constitutional rights by failure of the officers to advise him of the rights under Miranda, mentioned in the preceding paragraph. This point is predicated on the fact that the “Miranda warning” card was not introduced into evidence, nor was the content read into the record to determine whether the card actually contained the necessary warnings. Mr. May testified that he did read a card containing these warnings to appellant; that he kept such a card with him at all times; that the card was either the same one that the witness produced at the trial, or was one just like it. Of course, defense counsel had the opportunity to examine the card which May was referring to during his testimony. The deputy answered to specific questions that appellant was told that he had a right to remain silent, that he had a right to talk to a lawyer, and that anything said by appellant could be used against him. Deputy Sheriff Adkinson’s testimony corroborated that of May. Rogers denied that he was advised of his constitutional rights.

Here again we have a conflict of the evidence, and it was a function of the jury to determine which witness was telling the truth. However, even if it were established that the warnings were not given, we see no prejudice, for Rogers maintained that intercourse had been by consent, and he made no admission to the officers that would indicate to the contrary.

It is contended that the court erred in permitting the witness to be asked the question “Did he tell you he would hurt you if you didn’t cooperate?” The assertion of error is based on the allegation that this was a leading question. Assuming, without deciding, that the argument is correct, there would still be no error for, though the objection to the question was overruled, the question was never answered; instead, the prosecuting attorney asked another question.

Finally, it is argued that there was an unconstitutional selection of the list of prospective jurors which included the petit jury that tried the appellant.

Let it first be stated that there was no challenge to the jury panel until after Rogers had been found guilty. The proof offered in support of this allegation was submitted during a hearing on a motion for a new trial held approximately two weeks after the verdict of guilty had been rendered. The state suggests' that the challenge to the panel came too late. It was so held in the federal case of Frazier v. United States, 69 S. Ct. 201, 335 U. S. 497, 93 L. Ed. 187. There, an. attack was made upon a panel of prospective jurors during the course of voir dire examination, defendant being charged with violation of the Federal Narcotics Act, and it ..being contended that he had been' denied trial by an impartial jury .because the jury was composed of government employees; that one of the jurors, and the wife of another, were employed in the Treasury Department (though, outside the Narcotics Bureau), the agency charged by law with enforcing the act. . The ' contention was rejected in an opinion by Justice Rutledge, the, decision resting on the ground that the challenge was not timely made.

Be that as it may, we prefer to rest our decision upon the basis that no discrimination was shown. What are the facts relied upon by appellant to establish discrimination? First, it appears from the figures, deduced by appellant from evidence offered, that the population of the Arkansas City District is approximately 55% Negro and 47% white. The petit jury list for the term for which appellant was tried reflects that thirty-eight persons were selected to the panel, thirty members of the white race, and eight members of the Negro race. This certainly does not establish discrimination, and really, is hardly a pertinent factor since, in Arkansas, only electors are eligible to serve on a petit jury. One becomes an elector by registering to vote. Proof reflects that there are 4,210 registered voters in the Arkansas City District, but the voter list does not show how many of these are white and how many are Negro. The only proof offered by appellant on this point was by the President of the Dumas Chapter of the NAACP, and also President of the Citizens Improvement Club. He stated that these organizations sponsor and encourage voter registration. The witness said that the activities of his organizations were not confined to any particular racial group; that effort was made to get all people who had not previously registered to do so. When asked how many Negroes had been encouraged to register, Simpkins replied, “I haven’t got an accurate account but I should say it would be close to one thousand, we have got close to a thousand”. Of course, the witness does not say that approximately one thousand were registered; he only says that many persons were encouraged to register. At any rate, it is readily apparent that this testimony does not establish discrimination. It was held in Cassell v. Texas, 339 U. S. 282, that a jury is not required to have proportional representation of races in order to assure equal protection of the law. In fact, it was held that proportional racial limitation, as such, is forbidden. In Cassell, jury commissioners in Dallas stated that the reason they did not select Negroes for the grand jury list was because they did not know any who were qualified, and it was also shown that the commissioner had consistently limited the selection of Negroes to not more than one on each grand jury. The United States Supreme Court reversed the case because of discrimination.

In the case before us, it appears that every effort, was made to insure proper racial representation on the jury panel. Under the provisions of Section 39-201 Ark. Stat. Ann. (1969 Supp.), the circuit judge appointed seven jury commissioners to select prospective jurors from among the voters of the Arkansas City District. Five of these commissioners were white persons, and two were Negroes. These two Negro members, according to their testimony, assisted in selecting the panel personnel. In what better way can qualified Negro jurors be ascertained, or selected, than by naming members of that race as jury commissioners? One of the Negro commissioners, a school principal, testified that he had lived in the district for thirty-five years. Though the precise question was not asked, it appears that the other, a farmer, had lived in the district for about forty years. Certainly these men were due to have a wide acquaintance among the members of their race. The evidence of four commissioners was to the effect that no one was excluded because of race, color, or creed; the rest were not asked this specific question but all testified that they endeavored to obtain a representative cross section of the community.

In questioning the composition of the panel, it is pointed out that the average age of the persons listed on the petit jury panel list for the term for which appellant was tried, was age fifty, and it is contended that there was a systematic exclusion of young people from this panel. In the first place, we might make the same comment that was made when a similar argument was presented in the case of Trotter and Harris v. State, 237 Ark. 820, 377 S. W. 2d 14. There, we said:

“Finally, appellants mention that several who have served as jurors were 65 years of age or over. We know of no case which holds that elderly people, merely because of their age, are disqualified from jury service. Under Arkansas law, Ark. Stat. Ann. § 39-104, (Repl. 1962), persons 65 years of age cannot be compelled to serve on a grand or petit jury, and the court is authorized to excuse those who may be selected for jury service who are over 60 years of age, but there is certainly no evidence in this record that any juror was compelled to serve. It is entirely logical that the commissioners would be more acquainted with the qualifications of elderly or middle aged Negroes, since these men would have had more opportunity to establish themselves in the community.”

Of course, persons 50 years of age are certainly not generally considered “old”, and it is interesting to note that this average age among the thirty-eight members of the panel was greatly influenced by the fact that two members of the panel were respectively, 74, and 78 years of age. Nine members were under 40, eight were between 40 and 50, so that nearly half were below the average herein mentioned. It is evident that there was no “systematic exclusion” of young persons, and, for that matter, the age of appellant is never shown in the record, and we have no idea of the age group to which he belongs. The record only reflects that he had a wife and five children.

It is then asserted that there was discrimination based on economic standing. However, the only evidence offered concerns the seven jury commissioners, appellant characterizing six of the seven as “self employed farmers with extensive land holdings”. One was a school teacher. Appellant overlooks the fact that one commissioner was an automobile dealer, but it seems only natural that the commissioners selected, would, in the main, be farmers, since there is only one town of any size in the Arkansas City District, the town of Dumas. At any rate, the attack is made upon the Jury Panel, and there is nothing in the record which re-fleets the vocation, occupation, or economic status of any member of that panel. We have no knowledge of whether they were farmers, school teachers, office workers, or common laborers. For that matter, it was pointed out in Thiel v. Southern Pacific Company, 238 U. S. 217, 66 S. Ct. 984, 90 L. Ed. 1181, that it is not necessary that every jury contain representatives of all the economic, social, religious, racial, political and geographical groups of the community. Rather, the requirement is that respective jurors shall be selected by court officials without systematic and intentional exclusion of any of these groups. It follows that there is no merit in this contention.

Finally, it is alleged that a “quota system” was used by the commission in selecting jurors, and such procedure (says appellant) is violative of the due process clause of the Fourteenth Amendment. This argument is based on the contention that the district was divided into townships and the commissioners made their selections from these various townships on a basis of population percentage. We do not agree that the record factually supports this allegation. Commissioner Peterson, whose testimony is relied upon by appellant, though first using the expression “percentage” subsequently stated that he had made a mistake in using that word and that the commissioners had decided to endeavor to approximately divide the jurors in accordance with the number of eligible voters that lived in a particular township; for example, that since Dumas was the largest town in the district, and there were a larger number of eligible persons in that locality, more people should be selected from Dumas than some smaller township. A reading of the testimony of this witness is rather convincing that the commissioners were earnestly trying to obtain a cross section from the district, this action being in compliance with the oath that they would “select jurors from a fair cross section of the community which this Court serves and you will not exclude or include any persons on account of race, color, religion, sex, national origin or economic status* * *”.

The contention is a bit unusual, since ordinarily the complaint relating to the geographical composition of a jury refers to members of a panel being picked from a particular and selected area, rather than from the entire district.

As set out herein, we find no prejudicial or reversible error in the record, and the judgment of the Desha County Circuit Court is accordingly affirmed.

It is so ordered.

      Whether this was actually done is not shown in the record. However, defense counsel, at the trial, stated: “Although the defendant was advised of his rights, I don’t think it has been established he was afforded those rights”.

       Present counsel for appellant did not represent Rogers at the original trial, but did represent him at the hearing on the motion for new trial.

       Appellant uses the figures 3,358 whites and 3,848 Negroes “who are eligible for jury duty assuming they meet other legitimate criteria”. Desha County is composed of two separate districts, one county seat being located at McGehee, and the other at Arkansas City.

       Formerly, the voter list designated the race of each elector, but this practice was discontinued with the passage of the Voter Registration act (Amendment 51 to the Arkansas Constitution). The designation of race had been commented on unfavorably by the United States Supreme Court which stated in Avery v. Georgia, 345 U. S. 559, “Obviously that practice makes it easier for those to discriminate who are of a mind to discriminate”.

       From appellant’s brief: “Appellant respectfully submits not only does this procedure do violence to the Arkansas law and the due process clause of the Fourteenth Amendment to the United States Constitution, but denies equal protection of the law to this appellant and every other person within the Arkansas City District who was not selected for jury duty.”


author: George Rose Smith, Justice. J. Fred Jones, Justice,

text:
    FARM BUREAU MUTUAL INSURANCE COMPANY of Arkansas, Inc. v. Danny Joe MITCHELL
    5-5313
    458 S. W. 2d 395
    Opinion delivered October 12, 1970

      Cockrill, Laser, McGehee, Sharp <ir Boswell, for appellant.

      Hall, Tucker & Lovell, for appellee.
   George Rose Smith, Justice.

This action was brought by the appellee, Danny Joe Mitchell, to recover for personal injuries and property damage sustained by him in a collision between his car and that of Sally A. Haley. Mrs. Haley proved to be an uninsured motorist within the coverage of a motor vehicle insurance policy issued by the appellant, Farm Bureau Mutual, to Danny Joe’s father. Danny Joe was an insured person under the policy. In his complaint Danny Joe sought $37,500 in tort damages from Mrs. Haley and $8,000 in contract damages from Farm Bureau Mutual, that being the extent of the insurer’s remaining liability under the uninsured motorist clause when the suit was filed. The insurance company denied liability and asserted that the collision was caused by Danny Joe’s negligence and by that of a third motorist who no longer plays any part in the litigation.

The jury found that Mrs. Haley’s negligence was the sole cause of the collision. The verdict in Danny Joe’s favor, against Mrs. Haley, was in the amount of $23,300. Farm Bureau Mutual admits its liability for $8,000 of that amount, but the insurer insists that the trial court erred in awarding Danny Joe a judgment for the statutory penalty and attorneys’ fee. That insistence presents the only question on appeal.

According to the complaint, Farm Bureau Mutual’s policy provided, among other coverages, “an uninsured motorist coverage, to pay for all sums which the insured . . . shall be legally entitled to recover for damages from the owner or operator of an uninsured highway vehicle because of bodily injuries sustained by the insured, caused by accident and arising out of the ownership, maintenance, or use of such uninsured highway vehicle.” In this court the appellant argues that such uninsured motorist coverage is not within the various types of insurance falling within our penalty and attorneys’ fee statute.

We do not find that argument to be sound. In Empire Life & Hosp. Ins. Co. v. Armorel Planting Co., 247 Ark. 994, 449 S. W. 2d 200, we looked to the definitions contained elsewhere in our Insurance Code in deciding whether a particular policy came within the purview of the penalty and attorneys’ fee section of the Code. Specifically, we held the policy in that case to be casualty insurance within the Code’s definition of that term.

So here. The penalty and attorneys’ fees are recoverable upon policies of casualty insurance. Ark. Stat. Ann. § 66-8238 (Repl. 1966). Casualty insurance includes vehicle insurance, which is defined to include insurance against accidental injury to individuals while in a vehicle, if the insurance is issued as an incidental part of insurance on the vehicle. Section 66-2405 (1) (a). To the same effect, coverage against accidental injury as incidental to and part of vehicle insurance is deemed to be vehicle insurance. Section 66-2405 (2). Thus under the unmistakable language of the Code the uninsured motorist coverage constitutes casualty insurance.

We are not impressed by the suggestion that Farm Bureau Mutual’s responsibility to its insured, Danny Joe Mitchell, was in the nature of a tort liability that did not become fixed or definite until the jury returned its verdict. That notion was rebutted by our holding in MFA Mutual Ins. Co. v. Bradshaw, 245 Ark. 95, 431 S. W. 2d 252 (1968), where we said: “The uninsured motorist provision is not intended to afford coverage to the uninsured motorist, but to provide protection to the insured against the perils of injury by an uninsured motorist.”

In the case at bar Farm Bureau Mutual did not insure Mrs. Haley, the uninsured motorist. Instead, its coverage was in the nature of accident insurance to protect Danny Joe Mitchell against bodily injuries for which the owner or operator of an uninsured highway vehicle was legally liable to Danny Joe. When Danny Joe was injured and asserted a claim against the company, the insurer was of course entitled to a reasonable time in which to make its necessary investigation. Taylor v. Mutual Life Ins. Co. of N. Y., 193 Ark. 251, 98 S. W. 2d 944 (1936). But when the insurance company decided that it was not liable and elected to defend the suit brought against it by its own insured, its decision carried with it the risk of having to pay the penalty and attorneys’ fee if the insured recovered the full amount of his demand under the contract. That possibility is what proved to be true.

Affirmed, with the appellee to recover an additional $750 for the services of his attorneys in this court.

Jones, J., dissents.

J. Fred Jones, Justice,

dissenting. I do not agree with the majority opinion in this case. The appellee’s right to recover attorney’s fees and penalty in this case depends on considerably more, in my opinion, than whether the uninsured motorist coverage under appel-lee’s policy is casualty insurance.

Ark. Stat. Ann. § 66-4003 (Repl. 1966) is as follows:

“No automobile liability insurance, covering liability arising out of the ownership, maintenance, or use of any motor vehicle shall be delivered or issued for delivery in this State with respect to any motor vehicle registered or principally garaged in this State unless coverage is provided therein or supplemental thereto, in not less than limits described in section 27 of Act 347 of 1953 [§ 75-1427], as amended, under provisions filed with and approved by the Insurance Commissioner, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness or disease, including death, resulting therefrom; provided, however, that the coverage required under this section shall not be applicable where any insured named in the policy shall reject the coverage.” (My emphasis).

By the plain wording of the statute, uninsured motorist coverage is not for the complete protection of persons insured thereunder against damages, but is only for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles.

Now the statute that provides for the attorney’s fees and penalty against insurance companies is Ark. Stat. Ann. § 66-3238 (Repl. 1966), and appears as follows:

“In all cases where loss occurs and the cargo, fire, marine, casualty, fidelity, surety, cyclone, tornado, life, health, accident, medical, hospital, or surgical benefit insurance company and fraternal benefit society or farmers’ mutual aid association liable therefor shall fail to pay the same within the time specified in the policy, after demand made therefor, such person, firm, corporation and/or association shall be liable to pay the holder of such policy or his assigns, in addition to the amount of such loss, twelve per cent (12%) damages upon the amount of such loss, together with all reasonable attorneys’ fees for the prosecution and collection of said loss; said attorney’s fee to be taxed by the court where the same is heard on original action, by appeal or otherwise, and to be taxed up as a part of the costs therein and collected as other costs are, or may be by law collected; and writs of attachment or garnishment filed or issued after proof of loss or death has been received by the company shall not defeat the provisions of this section, provided the company or association, desiring to pay the amount of the claim .as shown in the proof of loss or death may pay said amount into the registry of the court, after issuance of writs of attachment and garnishment in which event there shall be no further liability on the part of said company.” (Emphasis added).

It is obvious, that under the plain wording of this statute, an insurance company may avoid the penalty and attorney’s fee by paying the amount of the claim as shown in the proof of loss, into the registry of the court even after writs of attachment and garnishment have issued. This statute is penal in nature and is to be construed strictly. State Farm Mutual Automobile Ins. Co. v. Pennington, 215 F. Supp. 784. It has been held that where the insured sues for an amount less than previously demanded, or when the suit itself constitutes the original demand, and the insurance company confesses liability for the amount sued for, then the insured is not entitled to the allowance of a penalty or to an attorney’s fee. Tollett v. Phoenix Assur. Co. of New York, 147 F. Supp. 597.

If an insured demands more than he is entitled to recover, he is not entitled to attorney’s fees or penalty. Peacock & Peacock, Inc. v. Stuyvesant Ins. Co., 332 F. 2d 499; State Farm Mutual Automobile Ins. Co. v. Pennington, 215 F. Supp. 784; Farm Bureau Casualty Ins. Co. v. Brigance, 234 Ark. 172, 351 S. W. 2d 417. The main purpose of this penal statute is to reimburse the plaintiff for expenses incurred in enforcing the contract. Sun Life Assur. Co. v. Coker, 187 Ark. 602, 61 S. W. 2d 447. The above cases have to do with insurance contracts between the insurer and the insured under which the insurer agrees to pay to the insured the damage or loss he sustains by reason of the casualty insured against. In such case the insured simply files his claim asserting his loss and the insurer, after a reasonable time for investigation, either pays the amount of the loss or denies the claim. This type of insurance does not contemplate the necessity for court action at all; there are only two parties involved in the transaction, the insured and the insurance company, and there is nothing to be determined except the amount of the damage or loss. Section 66-3238, supra, refers only to such insurance where the policy or insurance contract fixes the liability as well as the insured’s legal right to recover, not from a third party tort-feasor, but directly from his insurance company under the insurance contract. Even then the insured is not entitled to attorney’s fees and penalty unless he finally proves his entitlement to as much or more than his original demand under his contract, and the insurance company may avoid penalty and attorney’s fees by payment even after attachment and garnishment writs have issued.

The situation is entirely different under an uninsured motorist contract where the insured is only entitled to recover from his own insurance carrier such amount of damages he is legally entitled to receive from a third party tort-feasor. Under such contract, not only is the amount of damages an important question, but the insured’s legal right to receive damages at all is an important question. Unless the insured sustains damages caused by another motorist; unless the other motorist is uninsured, and unless the insured is legally entitled to receive damages from the uninsured motorist, the insurer owes nothing to the insured under an uninsured motorist policy.

Certainly there is no way of knowing how much the insurer owes its insured, or whether the insured has demanded more than he is entitled to receive, until it has been determined that the insured is legally entitled to recover damages from the uninsured motorist and the amount of damages he is legally entitled to recover has been determined. In the California case of Firemen’s Ins. Co. of Newark, New Jersey v. Diskin, 63 Cal. Rptr. 177, the court had under consideration a statute containing practically the same language as our own, and there the court said:

“. . . It is readily apparent that the liability of the insurer (1) is secondary and derivative, and (2) is contingent on the insured’s right to legal recovery against the tortfeasor.”

Of course, in the case at bar, the appellant-insurer could have required in its policy provisions that the appellee-insured must first prove his claim against the tort-feasor; but, in my opinion, such provision in the contract would have added nothing to the law. Also, the insurer could have paid the amount of its maximum liability into the registry of the court, subject to the proof required on the part of the insured; but, under such procedure the insurer would lose the use of its money before its liability to pay any amount attached and before it knew what, if anything, it owed. In the case at bar the appellant insurance company put the appellee-insured to his proof as it had a perfect right to do under the only logical procedure for a determination of the damages the appellee was entitled to receive from the uninsured motorist, and the appellant cross claimed against a fourth party motorist as a joint tort-feasor. I agree that the trial court properly sustained the demurrer to the appellant’s cross complaint, but this was not the end of the matter. The appellee-in-sured also joined the fourth party as a joint tort-feasor defendant and prosecuted his claim to a final conclusion against the third and fourth party tort-feasors, obtaining his judgment only against the third party uninsured motorist tort-feasor. There is no evidence that the fourth party defendant was uninsured.

We are not concerned in this case with the ap-pellee’s right to a money judgment against the appellant, for the appellant admits its liability for the full amount of its coverage and offers to pay. We are not concerned here with the right of the insured to join his insurance carrier as a party defendant in a suit against the tort-feasor. We are not actually concerned here with whether it was necessary for the insured to sue the tort-feasor at all in order to prove his entitlement under the uninsured motorist statute. We are only concerned here with whether the insured-appellee is entitled to attorney’s fees and penalty against his insurance carrier for failure to pay before the appellant-carrier knew or has any way of knowing what, if anything, the appellee was entitled to receive.

If the judgment in this case had been for less than the amount of the uninsured motorist coverage, the appellant would have owed the amount of the judgment, but certainly no attorney’s fees or penalty. If the judgment had gone against the third party tort-feasor, (who apparently was insured) certainly the appellant would have owed nothing under the policy. As I see it, the majority opinion places a burden on the uninsured motorist insurance carrier to investigate a claim and determine not only the amount of damage sustained by the insured and the fact that the motorist who caused the damage was uninsured, but the company bears the additional burden of determining that the uninsured motorist and no one else was more than fifty per cent at fault in causing the insured’s damages; and that the insured is legally entitled to recover damages against the uninsured motorist and not some third party who was also involved. In other words, as I view the majority opinion, the uninsured motorist insurance carrier is charged with the duty of acting as judge and jury in the pre-trial of tort liability between its insured and third parties, and is penalized with pentalty and attorney’s fees in any event if it does not pay the face amount of its policy if an uninsured motorist is involved.

The appellee is not insured for the amount of his loss, he is only insured for the amount he is legally entitled to recover from the uninsured motorist and, in my opinion, the insured should not be entitled to more rights against his uninsured motorist insurance carrier under his derivative action than he would against the uninsured motorist from or through whom his right of action against his insurance carrier derives.

In the case of Hickey v. Insurance Company of North America, 239 F. Supp. 109, Hickey had uninsured motorist coverage and was injured in a collision with Mrs. Hill, who was an uninsured motorist. The parties were unable to agree on the amount of damages sustained by Hickey and whether Mrs. Hill was liable for all or any part of the damages. Suit was filed by Hickey to establish contractual liability against his insurance company with respect to the uninsured motorist provision in the contract, and also to establish tort liability against Mrs. Hill who admittedly was uninsured at the time of the accident. The insurance company contended that before the court could take jurisdiction of the case, Hickey was required to establish legal liability against Mrs. Hill by obtaining a judgment in a court having jurisdiction of the parties. In that case the court said:

“The parties have cited cases involving insurance policies having the uninsured motorist clause, in which the insured party first went into a court and established liability against the uninsured wrongdoer before instituting suit to establish liability against the insurance company. Only one case had been cited in the brief and that by counsel for the defendant in which the injured party was not required to sue the wrongdoer and obtain judgment against him before suing the insurance company.
In that case arbitration could not be had in the State of Arkansas. The insurance policy that was involved was likewise silent as to what course the injured party would have in the event he could not reach a settlement with the insurance company and in the event he was not able to arbitrate for one reason or another. The insurance company in that case made the same contention made here, namely, that the injured party should first be required to obtain judgment against the wrongdoer before proceeding against the insurance company.
The insurance company contended in that case, as here, that it cannot know how much to pay unless and until the amount thereof is established by the judgment in a court of law. That is one of the purposes of this suit, namely, to determine whether or not there is any legal liability against Mrs. Hill, the alleged wrongdoer.
If John Hickey, III has failed to establish legal liability against Mrs. Hill or her husband, one or both, then there can be no liability against the defendant insurance company. But if John Hickey, III can establish legal liability against Mrs. Hill —the driver of the automobile with which he collided, or against her husband, who held the legal title thereto — then this Court, like the Arkansas District Court, can see no reason why he should not be permitted to join the insurance company as defendant in this court.

In that connection, the Arkansas Court said:

Aside from the arbitration clause, I can find nothing in the contract which precludes the plaintiff from bringing this action. In fact, since the insured cannot be made to arbitrate, and the contract suggests that the intention of the parties is to determine the issues between themselves, it appears to the court that the intentions of the parties will best be served by an action in a court of law by the insured against the insurer; the Court, in effect, becomes the arbitrator.’

This Court concurs in that view.” (Emphasis added).

I do not contend that the insured must first obtain a judgment against an uninsured motorist before he can proceed against his uninsured motorist insurance carrier, but I do contend that he must prove what he is entitled to receive before he is entitled to receive it. Under the majority opinion, attorney’s fees and penalty are assessed against the appellee’s insurance carrier for its failure to pay, up to its limits, the amount of damages the insured is legally entitled to receive from, an uninsured motorist, before it is determined that the motorist is uninsured, or that he is legally liable to pay, or the amount of damages the insured is entitled to receive, or the amount the uninsured motorist is obligated to pay, or in this particular case, whether the uninsured motorist or the fourth party defendant caused the damage.

I would sustain the judgment for the $8,000, but I would reverse as to penalty and attorney’s fees.